Question to the Department for Work and Pensions:

To ask His Majesty's Government what assessment they have made of (1) the sale of the Boots Pension scheme to an insurance company and (2) the effect of this sale on the protection provided to the pensions held in the Boots Pension scheme by the Pension Protection Fund.

When a Defined Benefit pension scheme transfers responsibility for paying some or all of its members’ benefits to an insurer, the scheme pays a premium to the insurance company, which then takes on responsibility for paying the promised benefits. This is a well-established approach used by pension scheme trustees to secure the promised pensions for members with an insurance company.

Arrangements to provide pension benefits to some or all scheme members with an insurer are secure and offer long term protection for member benefits. Insurance companies are regulated by the Prudential Regulation Authority and their policy holders are protected by the Financial Services Compensation Scheme.

Pension Protection Fund protection is retained until the whole scheme is transferred to an insurer, and both the sponsor and the trustees are discharged. At that point the members are no longer protected by the Pension Protection Fund. This is because all benefits are now secured with an insurance company.

No assessments of individual schemes are made by Government.