April 6, 2005

Pension protection moves to bonds

by brian_turner

The Pension Protection Fund comes into force today, which aims to protect pension funds.

The scheme is a form of insurance protection, that every pension scheme will have to pay into. In the event that the pension scheme is unable to make agreed pension payments, the PPF will try and take over.

The scheme aims to protect 100% of retired people’s pensions, and as much as 90% of the funds being paid into by existing workers.

As reported by the BBC, the scheme has immediate consequences, not least in that its implementation could see workers of already collapsed companies protected – such as at Allders.

Reuters also reports of notable changes in the investment market’s approach to pensions after high profile pension fund failures, with fund managers returning to buy into bonds and commodities as opposed to equities.

Story link: Pension protection moves to bonds

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