Question to the Department for Work and Pensions:

To ask His Majesty's Government what assessment they have made of the consistency of current policy to count the Pension Protection Fund (PPF) reserves towards the Public Sector Net Fiscal Liability with the statutory purposes of the Pensions Act 2004; and whether they have sought legal advice on whether treating PPF assets as part of the public sector balance sheet for fiscal rule purposes is compatible with the statutory framework.

Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)

The Office for National Statistics (ONE) is the independent body responsible for economic classification decisions in the UK. Following international statistical guidance, the ONS has classified the PPF as a public pension fund, while the levies to fund the PPF are classified as taxes.

The way the PPF Board’s assets and liabilities are treated within the public finances does not affect the legal separation of the property of the Crown and Board as set out in the Pensions Act 2004.

Question to the Department for Work and Pensions:

To ask His Majesty's Government what representations they have made, if any, to the Office for National Statistics about the classification of Pension Protection Fund assets.

Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)

The Office for National Statistics (ONE) is the independent body responsible for economic classification decisions in the UK. Following international statistical guidance, the ONS has classified the PPF as a public pension fund, while the levies to fund the PPF are classified as taxes.

The way the PPF Board’s assets and liabilities are treated within the public finances does not affect the legal separation of the property of the Crown and Board as set out in the Pensions Act 2004.

Question to the Department for Work and Pensions:

To ask His Majesty's Government what communication they have had with the Pension Protection Fund and its board about the levels of surplus or excess reserves and use of these excess assets for enhancing member compensation payments.

Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)

The Pension Protection Fund (PPF) is a statutory public corporation, and the Department for Work and Pensions works closely with PPF and its Board across a broad range of topics, including member compensation levels and PPF reserves.

Question to the HM Treasury:

To ask His Majesty's Government, in the light of their legislative plans to cap salary sacrificed pension contributions, whether both workers and employers will have to pay national insurance on pension contributions above the £2,000 limit, or whether only workers will have to pay additional national insurance.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government announced at the Budget last year that salary sacrificed in favour of employer pension contributions will be chargeable to employee and employer NICs from April 2029, but only on amounts exceeding £2,000. This £2,000 threshold ensures that those on higher incomes do not get a disproportionate benefit, whilst protecting lower income employees and their employers making typical contributions.

Saving into a pension, including through salary sacrifice, remains highly tax advantageous. The Government continues to provide over £70 billion of income tax and NICs relief on pension contributions each year.