Originally Posted by
babybaby
It’s bad enough at the best of times but dreadful timing with other airlines halting recruitment and I really hope news that their pensions might be at risk as their scheme is based on IOM is unfounded. The Pension Protection Fund is not as great as it sounds but is better than nothing. That really would be a galling prospect on top of that already inflicted.
Heart goes out to those at flybe.
The only information I can find on the pension scheme is this report in
The Telegraph:
https://www.telegraph.co.uk/business...ver-bid-fails/
...scheme members are not entitled to payments from the
Pension Protection Fund (PPF) in the event of an insolvency [because Flybe’s pension fund is registered in the Isle of Man, rather than the UK]. Flybe had a £11.6m pension shortfall in November 2018.
According to a breakdown at
the airline’s previous year-end, the fund has £170m of retirement liabilities.
This should not mean that the pension fund has no assets. Pension funds are periodically valued using a standard method, which makes assumptions about the return on the assets, and how much will need to be paid out (which depends on predictions of life expectancy). Under those assumptions, at the valuation reported, there is a shortfall of £11.6m, which is roughly 7% of the liabilities. It is, of course, more complicated than that, but at first sight*, it does not appear to be catastrophic - but certainly disappointing.
It may be that I have misunderstood the system, as
The Telegraph's reporting seems to be incorrect - my understanding is that the Flybe pensioners as a group are not 'risking losing all', but some could get substantially less than they expect.
It is a bad situation for those who have paid into the pension scheme, and I hope the outcome is not as bad as some have painted.
*In the event of a shortfall in a scheme where the company cannot put in more money as a result of bankruptcy, there is a pecking order for who gets money in UK-based pension schemes. The IOM might be different.