Pensions Minister, Torsten Bell, has confirmed the government's intent to abolish the Pension Protection Fund's (PPF) administration levy, with plans to include this as part of the next round of amendments to the Pension Schemes Bill.

The Liberal Democrats previously tabled an amendment to the bill that would abolish the Pension Protection Fund (PPF) administration levy at the start of this month, with backing from the Society of Pension Professionals.

Lib Dem MP, John Milne, raised the clause during the ongoing Pension Schemes Bill Committee hearings, describing it as "a small but meaningful reform that aligns with wider pension reforms that are all aimed at reducing red tape, simplifying funding and ensuring efficient use of scheme resources".

He also confirmed that "discussions with the PPF indicate that it has no objection to this proposal and would be content for its administration costs to be met from general reserves".

"Given industry support and PPF agreement, we feel that the government should implement this change without any further delay," he stated.

"The levy raises only a relatively small amount, but it adds unnecessary complexity and confusion to scheme finances and risks undermining broader reforms, especially efforts to reduce the risk-based levy to zero, which have been widely welcomed.

"Overall, this amendment provides the government with the necessary powers to eliminate an outdated levy, which would streamline pension scheme funding."

Responding during the debate, Bell acknowledged the ongoing concerns around this issue, admitting that "this is not a new issue; it has obviously been raised significantly by parts of the industry".

Despite this, Bell said that whilst he broadly supports the intent of the new clause, the amendment to section 116 of the Pensions Act 2004 is "unworkable" as it is currently drafted.

However, he confirmed that this is an issue that the government  is planning to address through future amendments, stating: "I give the hon. Member our assurance that we intend to lay amendments at a later stage that will achieve the same aim."

Milne subsequently withdrew the opposition amendment.

  

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