The Pensions Protection Fund (PPF) has said it is aiming to conclude the first set of compensation payments, for those affected by the Court of Justice of the European Union (CJEU) ruling, by April 2019.
In an update on the case, delivered on 21 December 2018, the PPF said it will start making payments to those affected in the new year, as it continues to work out the methodology for calculating benefits to Financial Assistance Scheme (FAS) benefits.
In September, the CJEU ruled that the PPF must pay at least 50 per cent of members pensions entitlement to individuals whose employers have fallen into the fund after its employer became insolvent.
The PPF said it will prioritise members who are impacted by the long service cap, then those who are impacted by the cap, followed by everybody else.
Prior to legislation coming into place, the PPF said that where compensation levels are below 50 per cent it will ensure the headline value is at least equal, which it anticipates will be a one off change.
Delivering an update, the PPF said: “Once we have this we can start to recreate scheme benefits so the comparison against compensation/assistance can be undertaken and increases paid where appropriate.
"We hope to start making payments in the New Year, and expect to conclude by the end of April 2019 providing we have the necessary information to allow us to do this.”
According to the PPF, once it has dealt with those impacted by the long-service cap, it will work with PPF and FAS capped members, which it expects to complete in the summer of 2019.
The lifeboat said it will publish more information in due course.
Currently, employees who have not yet reached pension age are entitled to up to 90 per cent of their accrued benefits, but are not offered inflationary increases, for this to fall below 50 percent would be illegal, the CJEU ruled.
The PPF initially estimated the ruling to increase its liabilities by 1 per cent. It is currently 122.8 per cent funded and has a surplus of £6.7bn.
Grenville Hampshire initially brought the case to the Court of Appeal in July 2016, claiming that his pension was cut by 67 per cent when his company scheme was transferred into the PPF.