PPF Event - 1992 ISDA Provision

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1992 ISDA Master Agreement
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Section PPF Event in a Nutshell

Use at your own risk, campers!
PPF Event: It will be an Additional Termination Event where [Pension Fund] is the Affected Party and all Transactions are Affected Transactions) if, for the purposes of the Pensions Act 2004 the Board of the Pension Protection Fund (“PPF”):
(a) verifies that [Pension Fund Party]’s protected liabilities exceed its assets (or approves an actuarial valuation to that effect; or
(b) determines it must accept responsibility for the Scheme.
However it will not be Additional Termination Event if before the Non-Affected Party terminates the Affected Transactions[1] by Non-Affected Party the PPF has delivered a deed to the Non-Affected Party committing not to use its powers to amend or terminate any part of this Agreement (other than as is permitted under its express terms).

Full text of Section PPF Event

PPF Event: It shall be an Additional Termination Event (and Party A[2] shall be the Affected Party and all Transactions shall be Affected Transactions) when:
(a) the Board of the Pension Protection Fund (“PPF”) approves under section 144 of the Pensions Act 2004 (the “Act”) a valuation under section 143 of the Act which verifies that Party A’s protected liabilities (within the meaning of section 131 of the Act) exceed its assets;
(b) the PPF determines under section 152(2) that it must accept responsibility for the Scheme; or
(c) the PPF approves under section 158(3) of the Act an actuarial valuation which verifies that Party A’s protected liabilities exceed its assets;
provided that in each case there shall be no Additional Termination Event if the PPF prior to termination by Party B has executed and issued a deed to Party B that it will not, following the issue of a transfer notice pursuant to section 160 of the Act, use its powers under section 161 of the Act (or any regulations made thereunder) to disapply or amend any terms or conditions of this Agreement or terminate this Agreement (unless such disapplication, or termination is permitted under the express terms of the Agreement).

Related agreements and comparisons

Related Agreements
Click here for the text of Section PPF Event in the 2002 ISDA
The two versions are identical

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Content and comparisons

Same language works for 1992 ISDA and 2002 ISDA.



The Pension Protection Fund protects UK Pension Schemes upon their insolvency. This is 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 and that can play havoc with your close-out netting analysis.

As a result much discussion around an Additional Termination Event specifically targeted at UK Pension Funds. See, for example, the PPF’s proposal — rather crappily drafted, we are bound to say — for a PPF Event ATE. (Note, unusually, they have decided that Party A is the Pension Fund, and not Party B, as will be most dealers’ preference (and generally the dealers prepare the docs).

“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: [see panel]

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.”


General discussion

Template:M gen 1992 ISDA PPF Event


See also



  1. The drafting is lax here: not clear whether this is designates an Early Termination Date or actually completes termination of all Affected Transactions.
  2. The drafting assumes the Pension Fund is Party A. Usually it will be Party B.