Securing Benefits (HPF Section) | Aon Retirement Plan Support

Q&As: Securing benefits in full (HPF Section) (16236)

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Securing certain pensioners' benefits in full (HPF Section) (16251)

Here are answers to some HPF-specific questions about securing certain pensioners' benefits in full.

What does it mean to secure benefits in full with an insurer? (16278)

The ARP provides benefits to many of its members on a Defined Benefit basis.

To ensure the ARP is able to continue to do so in the future, the Trustee has secured the pensions for a selection of HPF members by buying an insurance policy. This is often referred to as a ‘buy-in’. Under this policy, the insurance company pays the Trustee the pension payments that need to be made by the ARP for the group of members covered.

Our plan is to convert this HPF policy into a ‘buy-out’. This means that the insurance company with whom benefits are secured would begin making payments directly to affected members. The same insurance company would take over the administration of those members' benefits and provide an individual annuity policy for each affected member.

This would not change the benefits you receive; you would just receive them from the insurance provider rather than the ARP.

Will this always be the case? (16279)

Yes, once the administration has changed to the insurance provider, all secured benefits in the future would be paid directly to affected members by the insurance company.

Why would the Trustee do this? (16280)

Insuring pensions reduces the risk of the ARP not having enough money in the future to pay these benefits. It also provides security for your pension benefits as insurance companies are subject to a strict regulatory regime.

What if something happens to the insurer? (16281)

UK insurers are subject to strong regulatory requirements which ensure they hold substantial capital to support all their commitments to policyholders.

Significant extra capital is held as a contingency, which supports the insurer’s ability to continue to be able to meet these commitments under extreme scenarios.

In the unlikely event that an insurer is unable to pay benefits, policyholders also benefit from the backing of the Financial Services Compensation Scheme.

What is the Financial Services Compensation Scheme? (16282)

The Financial Services Compensation Scheme is the UK's statutory compensation scheme for customers of UK-authorised financial services firms. This means it can step in to pay compensation if a firm is unable, or likely to be unable, to pay claims against it.

You can find out more at their website, visit www.fscs.org.uk.