The Pensions Protection Fund (PPF) has confirmed that it is exploring options to ensure the fastest possible route to payment for eligible claims in relation to the Norton Motorcycles Pension Scheme, revealing that it has provided an 'in principle’ decision on the case.

Work and Pensions Committee (WPC) chair, Stephen Timms, previously wrote to the lifeboat to request further clarification as to whether it will be looking to provide access to the Fraud Compensation Fund (FCF) for members of the scheme.

Responding to this, PPF chief executive, Oliver Morley, noted that there are a number of eligibility conditions, as set out in legislation, which must be met before the PPF can receive and progress a formal application for FCF compensation, with a number of further requirements, including the need to make any recoveries of value, that must be met before compensation can be paid.

He also confirmed that, in the case of the Norton Motorcycles Pension Scheme, the conditions for an eligible claim are not yet met. Specifically, there has not been a qualifying insolvency event.

However, he revealed that the PPF is looking at ways to work flexibly and pragmatically, including looking at “innovative solutions”, to help progress to payment as quickly as possible.

In particular, Morley explained that all schemes are assigned an FCF Investigator, so that the trustees can provide the relevant information and input. As part of this, the PPF is able to offer trustees the option of an ‘in principle’ decision on dishonesty, if the eligibility conditions have not been met but it is thought that they could be.

Morley confirmed that Dalriada trustees provided the information for this in December 2021, with the PPF subsequently providing a formal ‘in principle’ decision that there are reasonable grounds for believing there have been scheme asset reductions attributable to dishonesty on 21 March 2023.

Morley suggested that this ‘in principle’ decision, as well as the PPF’s guidance on the required next steps, should give Dalriada the confidence to incur the necessary costs to establish an eligible claim, as well as allow for more rapid progress once an eligible claim can be submitted.

Morley stated: “I know that members of the schemes have been waiting some time for redress, with the scam having taken place in 2012. I understand the impact this uncertainty has had on members of the schemes. It is our aim to progress eligible claims as quickly as possible when they come to us.

“We are exploring options to ensure the fastest possible route to payment once an eligible claim is received. In particular, it may be possible for a claim to progress to payment despite having an outstanding potential recovery.

“We’d expect this to be possible, for example, where a potential recovery is of nil or low value, if it would take too long to recover, or if the costs of recovery would be disproportionate.

"However, the legislation is clear that, if there are recoveries to be made without disproportionate cost and within a reasonable time, the trustees must make those recoveries before any compensation can be paid.

“We work closely with trustees to understand the position of their scheme – in particular, we work with trustees to obtain information (including on costs) and input as to the recovery actions considered and taken.

"We are also working with trustees on the possibility of asset assignment – as you raise in your letter – that may allow us to progress more quickly to paying a claim whilst ensuring the FCF / FCF levy payers benefit from recovery in due course.

“However, we will only take an asset assignment by exception, where the prospects of recovery are low, and the value is minimal. I hope the information provided is useful in understanding our FCF process, the time it takes, and what we are proactively doing to speed up timescales.”

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