By Ellie Bennett

10 October 2008

The Pension Protection Fund (PPF) has set out its long-term levy proposals at the NAPF Annual Conference and Exhibition 2008 in Glasgow, which are intended to offer greater fairness to pension schemes in the UK.

Among the proposals are a suggestion to add a component to the risk-based portion of the levy (representing 80 per cent of the total) to reflect a scheme’s contribution to the long-term risks faced by the PPF and to provide the ability to reduce the scheme-based element of the levy (representing 20 per cent of the total levy bill). The PPF has also stated an intention to offer greater year-on-year stability in individual bills and the continued recognition of the short-term risks that schemes pose.

The proposals are subject to a three month consultation, due to be published at the end of October.

Martin Clarke, director of financial risk at the PPF, said that the PPF now had a much better understanding of the risks and recognised that greater fairness is necessary when calculating the levy.

“We put forward some of our initial thinking last year,” said Clarke. “We have now developed that thinking and we will be announcing proposals later in October which we believe will make the levy fairer – and help provide the stability in individual bills that levy payers are calling for.”

- Pensions Age October 2008