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| PPF
to remain true to three-year stable levy promise
By Sophie Baker |
| The
Pension Protection Fund (PPF) has revealed that its 2010/11 pension
protection levy estimate has been set at £700million, indexed
to wages. The early announcement has been made to help ease levy payers’ uncertainty, and the PPF says it fulfils its 2007 commitment to keep the levy stable for three years. Alan Rubenstein, the PPF’s chief executive, said: “Despite the economic climate deteriorating considerably since last year, we believe it’s important to stick to our commitment made in 2007 to keep the total amount of levy we aim to collect stable for three years. “While pension schemes won’t be able to calculate their individual levy bills until later in 2009, we felt it was important that we recognise now the financial difficulties that many employers and pension schemes are experiencing and to reassure them that we won’t be raising in real terms the total levy we want to collect during 2010/11.” He added that the PPF wants to make it clear that they will consider raising the levy they collect above the rate of inflation in the future, in order to meet their commitments. However, he also reassured members of schemes that have had to be taken under the PPF’s wing that this announcement does not affect their ability to pay out the compensation these members are due. The PPF’s statement says: ‘The PPF currently has assets of almost £3bn and, with average compensation at £4,000 a year per member, has more than enough money to make compensation payments’. The actual levy estimate will be confirmed by the PPF when the Office for National Statistics (ONS) publishes its wages indexation figures in September, and the levy scaling factor, which will allow schemes to work out their individual levies, will be announced in the autumn. The National Association of Pension Funds (NAPF) has welcomed the levy freeze, but believes a ceiling should be introduced for the long-term. Nigel Peaple, director of policy at the NAPF, said: “As we argued earlier this year, we believe the Government should make the ceiling a permanent measure and acknowledge that over the very long-term only the Government can act as the ultimate guarantor of the levy.” - Pensions Age June 2009
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