Pension Protection Fund (PPF) chair Lady Barbara Judge today dispelled any worries that DB pension scheme trustees may have over contingent assets and added that she would be "very glad" to discuss with trustees their use to help reduce the risk of insolvency and to reduce schemes' underfunding.

Speaking at the NAPF investment conference in Edinburgh, Judge said that any conflict between the PPF and the trustee only arises when the contingent asset that is offered is not consistent with the reduction in the levy that the trustee is looking for. She added that out of the 6,500 final salary DB schemes involved with the PPF, the lifeboat fund has "only rejected 20 contingent asset schemes".

Type A contingent assets involve parent or group company guarantees, type B contingent assets involve security over cash, UK real estate and securities and type C contingent assets involve bank guarantees.

Furthermore, Judge encouraged "early dialogue with the PPF" when using contingent assets so that trustees are confident of the levels of funding streams that will be provided.

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