Assessment period

A scheme will enter an assessment period if it satisfies the criteria of being an eligible scheme, and having undergone a qualifying insolvency event.

During the assessment period the Pension Protection Fund looks to determine whether a scheme is eligible for entry. During this period the scheme continues to be administered by its trustees, subject to various restrictions and controls.

During the assessment period the Pension Protection Fund will look to establish the answer to two main questions:

1. Can the scheme be rescued? (For example, can the original employer continue as a going concern, or is another employer going to take the original employer over and assume responsibility for the scheme); and
2. Can the scheme afford to secure benefits which are at least equal to the compensation that the Pension Protection Fund would pay if it assumed responsibility for the scheme?

If the answer to either of these questions is ‘yes’ then the Pension Protection Fund will cease to be involved with the scheme once the relevant processes and procedures have been completed.

However, if the answer to both the questions is ‘no’, and the relevant process and procedures have been completed, then the Pension Protection Fund will assume responsibility for the scheme and compensation will then become payable.

A Pension Protection Fund assessment period is likely to last a minimum of one year and could be longer, depending on the complexity of the financial situation of both the employer and the scheme, and the possibility of a scheme rescue.