The Pension 2 Protection Fund invests primarily in long-dated government gilts. This Fund has a completely different aim from the other investment-linked funds. It offers an investment which will rise and fall in value broadly in line with long term interest rates, one of the main determinants of the cost of an annuity. It therefore offers plan holders approaching retirement the opportunity to switch into a fund which aims to minimise any changes in the level of pension income at retirement resulting from changes in the cost of purchasing an annuity in the period before retirement.
Note that the Pension 2 Protection Fund does not offer any guarantee of the amount of pension available at retirement or in the cost of purchasing pensions at retirement. The Fund may not be effective for those who intend to purchase a pension which increases each year at a rate linked to inflation.