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Levy doubles for occupational schemes

Occupational pension schemes will have to pay double their current Opra levies after the new Pensions Regulator comes in on April 6.

Industry sources claim the levy is too high and not supported by any cost breakdowns.

The increase – more than 30 times the rate of inflation – is effective for each band size. Schemes with 10,000-plus mem-bers face a minimum 10,600 levy. The cost per member is higher for smaller schemes.

The Pensions Regulator blames its wider remit and start-up costs but promises that the levy will be frozen for two years.

An industry source says: “It is surprising the levy has to double and without too much justification. I know the Pensions Regulator has to be more proactive but it is supposed to take a risk-based approach so should have been able to jettison some of Opra’s activities.”

Occupational schemes have not faced a levy increase since 2000/01. For the past three years, the total costs of Opra, the Pension Ombudsman and Opas have outweighed levy receipts but surpluses from earlier years offset this.

As with Opra, the Pensions Regulator will not be funded in any part by personal pensions or stakeholder, which come under the FSA’s jurisdiction.

Opra is welcoming comment on the levy increase until February 2.

NAPF spokesman Andy Fleming says: “We are looking at the justification for an increase of that size.”

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