View more on these topics

PPF costs to grow over 300m

The cost of the Pension Protection Fund will be significantly higher than 300m a year after its calculations revealed the UK’s total pension deficit is 134bn.

The revised estimate will be announced at the end of November on the same day the Turner Commission is due to report.

The PPF last week unveiled the calculations behind the levy and also revealed it faces a maximum liability of 1tn should all final-salary pension schemes fail at once.

From April 6, 2006, companies are set to pay an 80 per cent risk-based levy, with the remainder being a flat fee based on the number of scheme members.

The PPF says even schemes with a surplus will have to pay a risk-based levy. From December, the PPF is introducing its own liability calculation – the PPF basis – which covers benefit levels, mortality risk and asset allocation. A company’s contributions will be capped at a maximum of 3 per cent of its risk-based levy liabilities.

Millfield head of pensions Graham Duckett says the PPF has to strike a balance so that well-funded schemes are not subsidising weak schemes but the demands on weak schemes are not so high that they tip them over the edge.

Duckett says: “The advent of PPF levies, however much they turn out to cost schemes, will accelerate the trend for employers to review their positions going forward. While past accrual cannot be tampered with, it has now become a damage limitation exercise to minimise the effects of future accrual.”

Recommended

A missed opportunity

Strange goings on at the ABI summer party last week when mid-bash an ABI-branded cake was produced to the bemusement of onlookers. Director general Stephen Haddrill cut a hefty slice before the party resumed. The cake was to celebrate it being 20 years old but there was no announcements to this effect. What a lost […]

Axa recruits two fund analysts

Axa Investment Managers has appointed Keith Robinson and Stephanie Walsh as fund management analysts. Robinson spent three years at Isis and Walsh spent four years at Morley FM.

ABI working with Rifkind on single pension scheme

The ABI is liaising with Shadow Secretary of State for Work and Pensions Sir Malcolm Rifkind on how to make it easier for individuals to keep paying into a single pension scheme. The ABI hopes its suggestions will be used in his forthcoming private members bill.ABI head of pensions and savings development Helen McCarthy says: […]

New Star appoints Wagstaff as retail md

New Star has confirmed Phil Wagstaffs appointment as managing director of its UK retail sales and marketing operation.Wagstaff will start in September and was most recently managing director of M&Gs UK retail business with 15bn under management. He will report to Mark Skinner, New Stars managing director of sales and marketing.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment