The government has tabled several further amendments to the Pension Schemes Bill as it begins the report stage and third reading in the House of Commons, including amendments to index for inflation on pre-97 benefits in the Pension Protection Fund (PPF) and to remove the PPF admin levy.

The government previously confirmed that it would include measures to provide the PPF more flexibility when setting its levy as part of the Pension Schemes Bill, later confirming that it would also include measures to remove the admin levy altogether.

The latest amendment paper for the bill confirmed the detail behind these changes, with an amendment from Work and Pensions Secretary of State, Pat McFadden, designed to enable administrative expenses of the PPF board to be paid out of the PPF and the Fraud Compensation Fund.

This also removes the existing administration levy mechanism, and clarifies that no administration levy is payable for 2023/24 or 2024/25.

In addition to this, a separate amendment has been tabled to enable the expenditure of the ombudsman for the PPF board to be paid from money raised by the general levy payable by occupational pension schemes, removing the power to impose a separate levy to meet this expenditure.

McFadden also tabled amendments intended to deliver on Chancellor, Rachel Reeves', promise to index for inflation on pensions accrued before 1997 in the PPF and the Financial Assistance Scheme (FAS).

The new clause, which is more than 2,600 words long, makes provision for certain compensation paid by the Pension Protection Fund in respect of a person’s pre-1997 pensionable service under legislation extending to England and Wales and Scotland to be increased annually, with a separate clause tabled to make similar changes in Northern Ireland.

In addition to this, he tabled a further lengthy clause, making provision for certain assistance paid under the Financial Assistance Scheme Regulations 2005 in respect of a person’s pre-1997 pensionable service to be increased annually.

McFadden also shared a new clause, intended to replace clause four in the current drafting of the bill, which amends the Procurement Act 2023 to create a new category of exempted contract covering certain investment management contracts between a local government scheme manager and the asset pool company.

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