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Early Retirement Factors

A person entitled to, but not yet in receipt of, compensation from the Pension Protection Fund may be entitled to early payment (i.e. earlier than normal pension age/normal benefit age) of compensation.

The circumstances in which early payment is possible are set out in Regulation 2 of the Pension Protection Fund (Compensation) Regulations 2005.

For all PPF compensation determinations in respect of an early retirement calculated on or after 11 September 2006 the instructions below should be followed.

The amount of periodic compensation (i.e. pension) payable early is calculated according to Table 1.

The amount of lump sum compensation payable early (in circumstances where lump sum is a separate entitlement from pension under the scheme, rather than derived by commuting pension) is calculated according to Table 2.

The early retirement factor is applied to the compensation before the compensation cap is applied.

The early retirement factors will be reviewed from time to time and may be changed without notice.

For all PPF compensation determinations in respect of an early retirement calculated on or before 10 September 2006 the instructions below should be followed.

The early retirement factors originally published have now been revised. This will potentially affect all previous calculations (on or before 10 September 2006) of PPF compensation upon early retirement.

The amount of periodic compensation (i.e. pension) payable early should now be calculated according to Table 1.

The amount of lump sum compensation payable early (in circumstances where lump sum is a separate entitlement from pension under the scheme, rather than derived by commuting pension) should now be calculated according to Table 2.

The early retirement factor is applied to the compensation before the compensation cap is applied.

We acknowledge that this may involve a recalculation of compensation currently in payment and any other past quotations of compensation. If this revision causes problems for anyone please contact the Stakeholder Support Team on 0845 600 2541 or email information@ppf.gsi.gov.uk.