Pension Protection System (Administration Levies)

Steve Webb Excerpts

Monday 7th November 2011 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The administrative resource costs of the Pensions Advisory Service and the pensions ombudsman and some of the administrative resource costs of the pensions regulator are recovered by a general levy on pension schemes. The administration costs for the Pension Protection Fund are recovered through the PPF administration levy paid by eligible schemes. The rates for both levies are set in regulations and reviewed annually.

I am pleased to announce that for 2012-13 we are proposing that the rates for both the PPF administration levy and the general levy will be reduced from the levels that have remained unchanged since 2008-9. We propose that the PPF administration levy rates will reduce by at least 25%, and the general levy rates will reduce by at least 12%.

Levy rates in-year are set to avoid frequent changes and do not directly reflect forecast future costs, but also take into account accumulated deficits or surpluses in expected levy collection.

The proposed new rates for both levies meet forecast future administration costs for the respective pensions bodies. In proposing to reduce the rates, the Government are seeking to lessen cost pressures on pension schemes. This proposed reduction will be welcomed by levy payers, as well as pension scheme trustees, members and sponsoring employers.