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Jarvis & Catalis Administrations Pensions – BRASS and the Pension Protection Fund (PPF)

16 December 2010

The Railway Pensions Scheme (RPS) administrator rpmi has now confirmed to TSSA that BRASS benefits are separate to the other assets of the Jarvis and Catalis sections of the RPS, and that it is therefore expected that the full BRASS funds will be available to all members in all circumstances.

For those members who have not taken their benefits before the end of the current assessment period, their BRASS funds will be secured in full separately from the Pension Protection Fund (PPF).

However, it must be understood the RPS Trustee will need to wait for the PPF to provide confirmation on some points of detail before members can be provided with a definitive statement.

Once the three Jarvis sections and the Catalis section of the RPS are formally transferred to the PPF at the end of the current assessment period, the treatment regarding the payment of BRASS benefits may change slightly, reflecting the fact that they will be secured separately from the benefits paid from the PPF. Examples of this are:
- It may be possible for members to access their BRASS benefits before their PPF compensation in respect of the main scheme benefits.
- If as a result of their own and employer matching contributions (plus returns on these), for example, someone has a BRASS fund valued at £25,000, the full £25,000 should be available to take as a lump sum and/or to provide an annuity (pension).

rpmi has stated that the one scenario where there is some remaining uncertainty is for those members who take benefits before the end of the current assessment period and are required to convert some of their BRASS funds to provide additional pension because of HMRC limits, restricting the amount they are able to take as a cash lump sum. For these members, the amount paid as a cash lump sum will not be subject to any PPF restrictions or scaling back and the Trustee has received legal advice that the amount to be converted to provide additional pension should also not be subject to any restrictions or scaling back. However, the RPS Trustee is awaiting the PPF’s confirmation that the legal advice received by the Trustee is acceptable to them.

TSSA is continuing to make representations to rpmi in order to protect the interests of members affected by the liquidation of Jarvis and Catalis. It is regrettable that it is still not possible to give precise assurances regarding members’ BRASS funds, but the union believes that the above information goes a long way to allaying members’ worst fears regarding the security of these funds. The union has made both the RPS Trustee and rpmi fully aware of members concerns, including concerns about their BRASS funds, and has been assured that they will contact members as soon as they can confirm the position. There is currently no indication from the PPF regarding when they will be able to confirm the position.

TSSA is also continuing discussions with the RPS Trustee regarding the implications of recent court cases involving BT, Lehman Brothers, and Nortel Networks, and will issue a further circular when a clear position emerges.

Further information regarding the Pension Protection Fund is available from their website at: www.pensionprotectionfund.org.uk

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