Proposed changes to pension protection levy announced
The Pension Protection Fund (PPF) has announced proposals which would see the levy paid by eligible pension schemes become more tailored to the individual risk those schemes pose to the fund.
Among the suggestions made by the organisation were the assessment of the probability of a scheme's sponsoring employer going bust during a five-year-period and taking account of the risk that a scheme's investment strategy poses.
According to the PPF, taking account of more long-term risks would mean that the levy payers will be subject to fairer bills.
"Our levy payers have given us a strong message that the current system does not differentiate enough between schemes and that levy bills should be less volatile," stated PPF chief executive Partha Dasgupta.
There will now be a three-month consultation and, if the proposals are accepted, they will be implemented in 2011/12.
The PPF was established to provide compensation to members of eligible defined benefit pension schemes in the event that their employer becomes insolvent or there are insufficient funds.
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