The risk-based element of the levy paid by work-based pension schemes, which is designed to protect their members, is set to be fixed by the PPF for the next three levy years. Levy payers have emphasised the desire for stability in the levy estimate and in the calculation of their individual bills, as well as the importance of knowing the amount of their individual bills in advance of the start of the levy year.
As a result, the PPF has proposed to maintain a stable levy estimate, which is index-linked, for the next three years, subject to there being no significant change in long term exposure.
The proposals are set out by the PPF in a consultation paper titled ‘The Consultation on the Future Development of the Pension Protection Levy’. The paper aims to reconcile setting a levy which is fair and proportionate but which also protects those who are entitled to PPF compensation. However, there are concerns that a levy fixed for three years might not reflect improvements made in a scheme’s funding before the end of the three-year cycle.
View consultation paper (PDF 349.4 KB)