UPDATE 1-Thomas Cook pensions to be assessed by Britain's lifeboat fund

Carolyn Cohn

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LONDON, Sept 23 (Reuters) - Britain's Pension Protection Fund (PPF) said on Monday it would assess the funding levels of Thomas Cook's retirement schemes, following the collapse of the world's oldest travel firm.

PPF is an industry-funded scheme set up to protect the pensions of employees in failing companies.

"We await notification that the associated schemes have entered PPF assessment," a spokeswoman said in an emailed statement, adding PPF would protect the pensions of people on Thomas Cooks defined benefit, or final salary, schemes.

After the assessment, which typically lasts about 18-24 months, the pensions could enter the PPF or the risk could be taken over by an insurer.

Thomas Cook pension schemes have in aggregate a surplus of 100 million pounds ($124 million) above levels needed to secure PPF benefits, a spokesman for the Thomas Cook pension trustees said.

"The trustees therefore are hopeful that the PPF lifeboat will, once the assessment period has ended, not be called on and benefits in excess of PPF levels will be provided from outside the PPF," he said in an emailed statement.

Under PPF rules, existing pensioners receive their benefits in full. People under retirement age suffer a 10% cut to their pensions, subject to a cap which ensures they receive at least 50% of their entitlements.

($1 = 0.8042 pounds)

(Reporting by Carolyn Cohn Editing by Rachel Armstrong and Edmund Blair)