The Pension Protection Fund (PPF) has said that it would welcome any government consideration of PPF and Financial Assistance Scheme (FAS) indexation rules, as concerns regarding the non-indexation of payments in respect of pre-1997 service persist.

The Work and Pensions Committee (WPC) recently wrote to the PPF to request an update on the estimated cost of indexing pre-1997 PPF compensation where scheme rules allowed, and for providing indexation on FAS compensation for pre-1997 rights, where scheme rules provided for this.

The PPF's response confirmed that it has continued to hear concerns regarding the non-indexation of payments in respect of pre-1997 service from individual members and member-led groups, such as the Deprived Pensioners Association (DPA) and Pensions Action Group (PAG), and through its regular member forum meetings.

"We share these concerns with government," PPF chief executive, Michelle Ostermann, wrote.

"While the committee will understand that, because our compensation levels are set out in legislation, any significant changes to them are ultimately a matter for government, we would welcome any further government consideration of PPF and FAS indexation rules."

PPF director of strategy and policy, David Shaw, also recently told Pensions Age that the PPF would welcome any steps by the government to look afresh at the lifeboat's indexation rules.

The WPC previously recommended that the government legislate to improve PPF compensation levels, after its inquiry found that, for PPF members, the priority was indexation of pre-1997 benefits, which have had a disproportionate impact on women and older scheme members.

It also argued that the same must apply, funded by the taxpayer, to FAS members, who tend to have more of their service before 1997.

The new members of the WPC have been quick to pick this work back up, as WPC chair, Debbie Abrahams, also wrote to the Secretary of State for Work and Pensions, Liz Kendall, to ask for a timescale within which the government expects to address issues relating to the PPF and FAS indexation rules.

In addition to this, Abrahams asked for a timescale on the government's work to address the WPC's recommendation that the DWP and The Pensions Regulator explore ways to ensure that scheme members’ reasonable expectations for benefit enhancement are met, particularly where there was a history of discretionary increases.

"Given the impact of having part of their income frozen, on scheme members who are disproportionately older, we would be grateful for an indication of the timescale for addressing both these issues," she stated.

Kendall previously confirmed that the government is working to provide a response to the WPC's report on defined benefit (DB) pensions "in the new year".

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