Defined benefit schemes – a ‘ticking time bomb’?
Following the news that no new buyer was interested in BHS and its £571 million pension deficit, a number of our clients with a working history in BHS got in touch with us to find out their position and options with regards to their future pensions. Unfortunately, it was too late as the window had closed. The BHS scheme got into the Pension Protection Fund, a statutory fund in the U.K., intended to protect pensioners if their pension fund becomes insolvent. What this means is that they are now locked in without any possibility of looking at alternatives and transferring out. For deferred members, this means a potential reduction in pension income as the PPF only compensates 90% of the income up to a certain cap.