The Pension Protection Fund’s chief executive Oliver Morley has said he is against introducing a monthly levy payment option for all schemes.
Giving evidence to the Work and Pensions Committee today, 6 June 2018, Morley noted that the current annual level collection process is “extremely successful at collecting the levy”.
“My view is that changing to a monthly collection system, will make that collection rate and the quality of collections more difficult, it will decrease our ability to make sure we can deliver that on time. He said this is because he thinks companies will default on payments.
However, he noted that currently they do have the option for schemes to pay in instalments if it is a very difficult time for them. “We do believe it’s important that schemes are in a position to pay our levy, and that in itself would start to worry us.”
However, chair of the committee Frank Field told Morley to think about making the process easier for smaller companies, rather than focusing on the difficulties the PPF would face if they changed the collection process.
In response, Morley said the PPF understands the challenge for companies, which is why they try to give them a long lead time on the levy they have to pay. He told the group of MPs that companies in difficulties should talk to the PPF about those challenges to see if they can pay in instalments.
“Having a formal monthly payment available to all, I think would be possibly a challenge too far in our ability to collect over the long-run.” However, Morley did commit to looking at introducing an “easy mechanism to have a proper dialogue” for businesses that are struggling.