(This note is not part of the Order)
The Pension Protection Fund pays compensation to members of eligible occupational pension schemes when the employer becomes insolvent. The pension compensation is subject to a maximum cap – the compensation cap.
Section 50 of, and Schedule 20 to, the Pensions Act 2014 (c. 19) (“the 2014 Act”) provide for a revised (increased) compensation cap dependent on a person’s age and length of service when the person first becomes entitled to compensation.
Article 2 makes transitional provision relating to the coming into force of Schedule 20 to the 2014 Act in relation to pension sharing on divorce that is similar to the provisions of Part 3 of that Schedule (effect of change in transitional cases), with appropriate modifications, to deal amongst other things with the recalculation of pension compensation going forwards and the effect on old payments.
An impact assessment has not been produced for this Order as it has no impact on business or civil society organisations. An assessment has been made of the impact of the introduction of the Pension Protection Fund increased cap for long service. A copy may be obtained from the Better Regulation Unit of the Department for Work and Pensions, 2D, Caxton House, Tothill Street, London SW1H 9NA or from: https://www.gov.uk/government/publications/pensions-act-2014-impact-assessments-may-2014 (Annex J contains the assessment for the cap).