On the go: The legal challenge against the solutions implemented by the Pension Protection Fund in the Hampshire case will be heard by the High Court in May.
The claimants are seeking to challenge, among other things, the pensions lifeboat's approach for calculating any increases due to its members.
The High Court had postponed the hearing at the request of the claimants, but has now confirmed that this will take place in the week beginning May 11, the PPF stated.
The Hampshire case ruling from the Court of Justice of the European Union, handed down in September 2018, determined that PPF members should not receive less than 50 per cent of their entitled benefits in the event of the insolvency of their employer.
UK law establishes that the pensions lifeboat will pay 90 per cent of a scheme member's benefits if they have not reached the normal retirement age of the scheme when they are transferred into the pensions lifeboat.
But there is a cap on the total amount to be paid each year, currently £40,000 at age 65, which means that previously to the judgement, high-earners could have effectively ended with a pension worth less than 90 per cent of their benefits.
The PPF has been progressing with the increase in payments to affected members and is now addressing pensioners.
However, the pensions lifeboat will not pay arrears at this moment due to the outstanding legal case, as it does not want to risk making overpayments.
According to David Everett, partner at Lane Clark & Peacock, there is progress in paying those affected by the Hampshire case the right PPF compensation, “but uncertainty surrounding both the available data and the legal position makes this a difficult exercise”.
“The PPF is targeting 90 per cent of those entitled to an increase receiving one by the end of March 2021, but it may be some time longer before the necessary arrears are settled.”
