PPF can cope with Carillion but …
- Pension Protection Fund can cope with Carillion.
- Concern that a hard Brexit might lead to PPF facing difficulties.
The Carillion pensioners will see much of their pension replaced by the Pension Protection Fund (but future increases will be lower). However, those not yet at pension age or who took early retirement may lose at least 10-20% of their promised pension.
The PPF has budgeted for some big schemes to fail and can manage the onboarding of all Carillion’s pension schemes.
More worrying, however, would be if some of Britain’s largest manufacturing firms face failure as a result of a hard Brexit, which could undermine our automobile or chemical sectors in which defined benefit schemes have been prevalent. If too many of those businesses suffer as a result of leaving the Single Market and Customs Union then the PPF could face difficulties that might even result in reduced benefits for workers covered by the insurance it provides.
I hope the Carillion situation will be a wakeup call for the Government to take seriously the threats and risks of leaving the EU without securing the integrated supply chains and regulatory standards alignment that our large industrial companies depend on.
ENDS