Woolworths scheme to enter lifeboat fund

Date: 4 January 2012

Next week the Woolworths Group Pension Scheme is expected to finally enter the Pension Protection Fund more than three years after the well-known high street retailer collapsed.

The Woolworths Group’s administrators first approached the PPF at the end of 2008, shortly after the retailer was declared insolvent and the process of winding up the pension scheme started in August 2009.

The process has been long and complicated – largely due to the fact that the Woolworths Group was made up of several different employers who each went into administration on different dates.

Also, midway through the process, the government increased the statutory early retirement age from 50 to 55 which prompted hundreds of applications for early retirement from ex Woolworths employees.

The PPF is a lifeboat fund set up by the previous Labour government to compensate members of company pension schemes in cases where the employer becomes insolvent and there is a deficit in the pension fund.

Compensation levels in the PPF are currently 90% for scheme members under normal retirement age and 100% for members who are over retirement age.  Compensation is currently capped at £29,897 a year.

For more information about the PPF visit http://www.pensionprotectionfund.org.uk/.