The PPF may pay compensation when:

• An employer of a UK DB scheme or hybrid scheme becomes insolvent AND the scheme is underfunded.
• The funds of a DB or hybrid scheme have been misappropriated through fraud

The PFF will step in if:

• the scheme must not be a money purchase scheme;
• it must not have commenced wind-up before 6 April 2005;
• an ‘insolvency event’ must have occurred in relation to the scheme’s employer, which is a qualifying insolvency event, e.g. an insolvency practitioner has notified the Board that the employer sponsoring the scheme is in administration;
• there must be no chance that the scheme can be rescued; and
• there must be insufficient assets in the scheme to secure benefits on wind-up that are at least equal to the compensation that the PPF would pay if it assumed responsibility for the scheme.