Part 5: Further provision relating to pension schemes The Pension Protection Fund Section 126: Modification of provisions relating to pensionable service
The compensation to which an individual is entitled from the Pension Protection Fund is determined in accordance with Schedule 7 to the 2004 Pensions Act and regulations made under it. "Pensionable service" (see paragraph 36 of Schedule 7) is fundamental to the calculation of pension compensation. Amongst other things, it governs the compensation payable to those under their scheme’s normal pension age, the total benefits which are subject to the compensation cap and the payment of survivors’ benefits indexation and revaluation.
	The policy intent, and the Pension Protection Fund practice, is, and has always been, that a pension which arose by virtue of a transfer payment to the scheme, where the initial amount of the pension was determined at the time of the transfer payment, is treated as attributable to the person’s pensionable service. But, in the case Anthony Beaton v the Pension Protection Fund [[2017] EWHC 2623], the High Court decided that, when applying the compensation cap (see paragraph 26 of Schedule 7), benefits derived from such a transfer-in could not be said to be attributable to pensionable service and could not be aggregated.
	The amendments made to the Pension Protection Fund (Compensation) Regulations 2005 (S.I. 2005/607) and the Pension Protection Fund Multi-employer Regulations 2005 (S.I. 2005/441) by the Pension Protection Fund (Pensionable Service) and Occupational Pension Schemes (Investment and Disclosure) Amendment and Modification Regulations 2018 (S.I. 2018/988) ("the 2018 Regulations") restore the policy intent prospectively. They enable a fixed pension to be treated as pensionable service for the purposes of calculating Pension Protection Fund compensation, except when aggregating benefits for the compensation cap. The Regulations do not apply to the cap following the CJEU decision in the case of the Grenville Hampshire v the Board of the Pension Protection Fund (C-17/17). This provided that individuals are entitled to receive compensation to at least 50% of the value of their accrued pension entitlement from the Pension Protection Fund (see the Explanatory Notes to the 2018 Regulations).
	Subsection (1) remedies certain consequences of the Beaton judgement so that the legislation supports the policy intent and past practice. It does this by treating the amendments made to the Pension Protection Fund (Compensation) Regulations 2005 by the 2018 Regulations as if those amendments always had effect so far as they apply to the Pensions Protection Fund, thereby covering payments which have already been made since the Pension Protection Fund was established.
	Sub-section (2) makes similar provision in relation to the definition of pensionable service in the Pension Protection Fund Multi-employer Regulations 2005 (It achieves this by treating the amendment made to those Regulations by the 2018 Regulations 2018 as if that amendment always had effect).
	The amendments made by subsection (1) form part of the law of Great Britain and also apply to Great Britain. The amendment in subsection (2) forms part of the law of the United Kingdom but its territorial application is to Great Britain. This is consistent with the territorial application of the Pension Protection Fund Multi-employer Regulations 2005.