Flybe pension scheme members not entitled to PPF protection

Flybe pension scheme members will not be entitled to compensation from the Pension Protection Fund (PPF), following the airline’s collapse this morning (5 March).

The firm’s scheme, the British Regional Airlines Group (BRAG) pension scheme, is registered in the Isle of Man, not the UK, and is therefore not protected by the pensions lifeboat.

Commenting, a PPF spokesperson said: “We understand this must be a worrying time for Flybe employees and pension scheme members.

"The Flybe pension scheme is based in the Isle of Man under the jurisdiction of their government, which is separate from the UK government, meaning the scheme is not protected by the PPF.”

It is estimated that the scheme has liabilities of £170m across 1,350 members, with an overall deficit of £11.6m as of November 2018.

The BRAG scheme is a defined benefit occupational scheme, which is closed to new members and future accrual.

It was being administered by a corporate trustee, BRAL Trustees Limited.

Auditor EY has been placed in control as the administrator of the firm.

Lincoln Pensions managing director, Dan Mindel, commented: “There are a number of DB schemes where the fund or the principal employer is not registered in the UK and therefore do not qualify for protection from the PPF.

“This case, in particular, highlights the need for trustees of such schemes, especially where the sponsor is having difficulties, to consider taking the necessary steps to restructure the scheme to ensure the members have that lifeboat in case the worst happens.”

Flybe and EY have been contacted by Pensions Age for comment.

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