Pension Protection Fund

The fund which protects UK Pension schemes in the event of their insolvency. Of particular interest where a UK Pension Fund is party to an ISDA Master Agreement, because the PPF has wide discretionary powers to set aside contracts it doesn't like.

As a result much discussion around an Additional Termination Event specifically targeted at UK Pension Funds. See, for example, the PPF's proposal for a PPF Event ATE.

A solution was proposed from within the industry suggesting the inclusion of standard wording in agreements between the trustees and counterparties, without involvement of the PPF at that stage, and a consultation with stakeholders was commenced in March 2009. Following discussions with stakeholders, the following wording is proposed:

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PPF Event
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We would strongly encourage trustees and managers to adopt this wording in ISDA contracts which they enter into or which are entered into on their behalf by their fund managers.

Note Party B is the Bank in this case.