The Society of Pension Professionals (SPP) has welcomed an amendment to the Pension Schemes Bill that would abolish the Pension Protection Fund (PPF) administration levy, tabled by Liberal Democrat MPs Steve Darling and John Milne at the start of the month.

The amendment, which would make changes to the Pensions Act 2004, aims to remove the administration levy and shift responsibilities instead to the PPF’s general funds, while also enabling the Fraud Compensation Fund’s (FCF) expenses to be covered by its own levy.

At present, the administration levies funds to cover the administrative costs of both the PPF and the FCF via a grant-in-aid mechanism.

Although it was suspended for two years following a 2022 departmental review, the levy returned on 1 April 2025, potentially costing defined benefit (DB) schemes more than £15m in extra fees, a burden that SPP said many employers could “certainly” do without.

The return of the levy had already prompted Pensions UK to call for the government to take advantage of the Pension Schemes Bill to abolish the charge and instead allow the PPF to cover its operating costs through its own fund and “substantial” surplus.

Since June 2025, SPP’s Legislation Committee, led by Shayala McRae, has also campaigned for abolition.

“Legislative change is needed, the Pension Schemes Bill provides a good opportunity for this change to take place, and SPP is pleased to have received cross-party backing for the solution that we have put forward,” McRae said.

“If the amendment is not accepted during its current stage in the House of Commons, we are hopeful it will be tabled again as it passes through the House of Lords. We are always keen to ensure the best possible outcome for schemes and savers, and abolition of an unnecessary levy certainly meets that criteria.”

Milne, who sits on the Work and Pensions Select Committee, echoed these sentiments, stating: “The Liberal Democrats are keen to remove unnecessary bureaucracy and costs, so we are happy to table an amendment that seeks to abolish the pensions administration levy.

"Abolition will reduce the administrative burden on pension schemes - and cut costs. That means better pension outcomes for everyone.”

This is one of several amendments to the bill that have been tabled as it progresses through the committee stage, with debate on these issues taking place last week.

SPP previously highlighted areas for improvement in August, calling for greater clarity on proposed government powers to mandate private-market investments for defined contribution (DC) funds.

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