Liberal Democrat Shadow Work and Pensions Secretary Steve Webb says the PPF could be “overwhelmed” by taking on more bankrupt schemes and may have to raise the levy for the remaining DB schemes.
According to the PPF 7800 index, the number of schemes in deficit in February stood at 7,017 compared with 6,924 schemes in January. The aggregate funding position (total assets minus total liabilities) of almost 7,800 DB funds is estimated to have worsened over the month to a deficit of £218.7bn at the end of February from a deficit of £190.6bn at the end of January.
Webb says: “The PPF risks being overwhelmed by bankrupt schemes and may have to raise the levy on the remaining open schemes. The PPF already has a deficit of £500m. If the recession forces many more schemes to close, ministers will have to explain how the pension lifeboat will be kept afloat.”