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Alexander Forbes hits out at rise in PPF levy

Alexander Forbes has slammed changes to the Pension Protection Fund levy which it warns will hit the industry hard.

Last week, the PPF confirmed it will increase the scaling factor, which affects the risk-based element of the levy, to 3.77 per cent from 2.47 per cent.

Alexander Forbes actuarial director Colin Mouque says: “The scaling factor, which accounts for 80 per cent of the total levy, was at 0.53 per cent in 2006/07, only to increase to a staggering 2.47 in 2007/08 but now, compared with the expected ‘relief’ forecast by the PPF itself earlier this year when it suggested it would go to 1.6, it will be again almost an unbearably high 3.77 for 2008/09.”

Mouque says the PPF fails to recognise that an increased levy could create even greater short-term and long-term difficulties for many sponsors of UK pension schemes.

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