Pension Protection Fund
Salvus Master Trust has been appointed by the Pension Protection Fund as the defined contribution approved provider since 2009. This was initially a contract given to our sister Master Trust, Spinnaker which merged with Salvus in 2017.
The Pension Protection Fund’s main function is to provide compensation to members of eligible defined benefit pension schemes, when there is a qualifying insolvency event in relation to the employer, and where there are insufficient assets in the pension scheme to cover the Pension Protection Fund level of compensation.
The Pension Protection Fund is a statutory fund run by the Board of the Pension Protection Fund, a statutory corporation established under the provisions of the Pensions Act 2004.
Salvus has been working successfully with the PPF as a partner, since 2009.
Defined benefit schemes “eligible schemes”
The Pension Protection Fund covers certain defined benefit occupational pension schemes and defined benefit elements of hybrid schemes (these are schemes that have a blend of defined benefit and defined contribution benefits).
Defined contributions schemes “non-eligible schemes”
The PPF does not cover defined contribution occupational pension schemes, so should a sponsoring Employer suffer an insolvency event, a home needs to be found for the assets.
The existence of defined contribution benefits will, in most cases, be highlighted by the Insolvency Practitioner or the Scheme Trustee. The existence of defined contribution benefits will, in most cases, be highlighted early in the PPF assessment process
If your scheme is hybrid in nature (where part of the benefits are underpinned by defined contributions or has separate defined contribution section under the same Trust) those assets will not be accepted by the PPF.
Salvus Master Trust has a section that is specifically designed to help any pension scheme that is being considered for entry into the Pension Protection Fund (PPF), which also holds defined contribution assets.
There is no minimum fund value. As part of its arrangement with the PPF, the Salvus Master Trust will accept all defined contribution assets irrespective of size.
Additional Voluntary Contributions
As well as main scheme benefits, the Salvus Master Trust accepts stranded additional voluntary contributions (“AVCs”) where the financial institution will not assign the monies to the names of the individual members. Typically these are usually in the form of “cash-based” AVCs that may have at one time been invested in a Building Society or Bank.
Salvus deals directly with the PPF and the Insolvency Practitioner or Scheme Administrator to arrange the safe transfer of benefits.
Welcoming new members
Transferring members will receive a welcome pack shortly after the transfer that provides them with a full statement of their rights and options as a new member to Salvus, including the option to transfer to a scheme of their choice.
DC Scheme wind-up
Not all defined contribution schemes enter wind up due to an insolvency event. Schemes can wind up for a variety of reasons other than the insolvency of the sponsoring Employer; reasons such as the desire to remove the need for governance or an aim to reduce costs and concentrate on the core business.
We welcome approaches from Trustees, sponsoring Employers and their advisers who are currently winding up their defined contribution occupational pension scheme.