THE collapse of Britain’s second-biggest construction company may mean that many of the firm’s workers lose their jobs. But the pension rights of Carillion’s 20000 Britain-based employees should largely be preserved,thanks to the Pension Protection Fund (PPF), a private scheme funded by a levy on member companies. When a firm with a salary-linked pension scheme goes to the wall without enough assets to carry on paying pensioners, and the PPF steps in to bail the workers out.
Those already in retirement get their pensions met in full,although future increases may be lower than the inflation rate. Those who enjoy yet to reach retirement age, meanwhile, and receive 90% of their benefits,up to a cap of around £35000 ($48000) a year. None of this applies to workers with a defined contribution pension, where benefits are not promised by the company; their pension pots will be totally untouched.
Carillion has a complex structure covering 14 different pension schemes. whether all...
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Source: economist.com