Administration levy for 2007/2008 set
Under the Occupational Pension Schemes (Levies) (Amendment) Regulations 2007 (the "Regulations"), all references to PPF Ombudsman levy are removed. This levy was for meeting the expenditure relating to the Ombudsman for the Board of the Pension Protection Fund (the "Board"). Only the administration levy is now payable, that is the expenditure in connection with the establishment of the Board and its administration. The rates used to calculate the administration levy will be increased for 2007/2008 in the range of 45% to 49%. The Regulations will be in force from 1 April 2007.
Levy ceiling for 2007/2008 set
The Occupational Pension Schemes (Levy Ceiling) Order 2007 (the "Order") sets the levy ceiling (the amounts to be raised by the pension protection levies) for 2007/2008 at £804,450,000. This is calculated in line with the increase in the general level of earnings (3.8%). However, since 2007/2008 will be the first year after the transitional period, under section 177(4) of the Pensions Act 2004, the ceiling will be set at a lower amount, prescribed under the Pension Protection Fund (Levy Ceiling) Regulations 2006 and will be £718,500,000.
Compensation cap set at £29 million
The Pension Protection Fund (Pension Compensation Cap) Order 2007, coming into force 1 April 2007, will set the compensation cap at £29,928.56. That is the amount used by the Board of the Pension Protection Fund to determine the level of compensation payable to members of certain occupational pension schemes in the event of the insolvency of the scheme’s sponsoring employer and where the scheme is underfunded on the statutory basis.