O & M Systems, through testing their new transfer analysis report on clients, believe that pensions which are referred to the Pension Protection Fund (PPF) will give investors much less than the 90% compensation that many expect.
The software tool offers advisers a predicted Pension Protection Fund figure to help advise clients whether they should move out of occupational schemes that are considered risky. Analysis from clients figures show that some of the high earners will only receive 21% of the value of their pensions from the PPF, while even low earners will only receive around 74%.
Out of the most recent 1,200 people reviewed by the new software, the company believe that the average that would be paid is only around 55% of the fund.
Our view
This is a difficult area to comment on. There are too many to blame, we suggest the actuarial advisers to schemes are probably the most at blame having not raised alarm bells earlier.