The PPF was set up in 2004 to manage the defined benefit, or final salary, pension schemes of insolvent companies, and is backed by a levy from Britain's pensions industry.
Carillion's employees, past employees and pensioners are members of more than a dozen different schemes which collectively have 27,500 members and a deficit of around 900 million pounds, a PPF spokeswoman said, based on the cost of insuring the schemes with PPF-level benefits.
Following transfer to the PPF, the 13,000 Carillion pension scheme members who are already at retirement age will maintain their benefits in full, while those below retirement age will suffer a 10-percent cut to their pensions.
However, all policyholders could see a cut to the inflation rate to which their pension is indexed. PPF pensions are linked to the consumer price index (CPI), while many UK schemes are linked to the higher retail price index (RPI).
Spouses' benefits for Carillion pension scheme members are also likely to be less generous in the PPF, said Martin Hunter, principal at consultants Punter Southall.
UK defined benefit pension schemes total 1.5 trillion pounds in assets and are broadly in deficit, as years of low interest rates have made it harder for them to meet their pension liabilities.
(Reporting by Carolyn Cohn; Editing by Andrew Heavens)
