On 12th February 2004, the Secretary of State described The basic position (see DWP notes "What is the Pension Protection Fund?") as being:-

"The Pensions Act 2004 has established the Pension Protection Fund (PPF) to protect members of private sector defined benefit [ie final salary] schemes whose firms become insolvent with insufficient funds in their pension scheme. In this situation, members can be reassured they will still receive most of the benefits which they were expecting.

The PPF is "lifeboat" funded by levies on eligible occupational pension schemes.

A self-explanatory but separate "Fraud Compensation Fund" under the same management as the PPF is also set up under the Pensions Act 2004.