Cash point

TOUR firm Thomas Cook’s collapse into liquidation will leave many workers worried about their future.

But there is some good news for those who are members of the firm’s defined-benefit pension schemes – these benefits remain protected by the Pension Protection Fund.

But what level of protection does the PPF offer, and to whom?

The PPF was set up in April 2005 to provide all employees with definedbenefit (final-salary) pensions some financial security should their employer go bust. Members aged over the normal pension age of a scheme, or those in receipt of a spouse’s, dependant’s or ill-health pension, continue to receive 100% of the pension already in payment.

However, those who retire early or members under the normal pension age of the scheme, will receive 90 per cent of what they were promised, capped at £40,000 at age 65 (£36,000 after cap is applied).

If someone’s benefits fall below half of their promised pension, the amount will be uplifted so they receive at least 50 per cent of the amount.

Oliver Morley, chief executive of the PPF said: “No one likes to see an employer fail but situations like the liquidation of Thomas Cook are exactly why the PPF was set up.

“We are here to protect the financial futures of members belonging to defined benefit-pension schemes and they should take comfort knowing we protect them.”