In 2007, the PPF said it would set a levy estimate of £675m for the next three years, indexed to wages, so long as there was no significant change in risk. Today, the PPF announced that this figure would remain at £700m, £675m plus indexation.
In addition it has also proposed a levy scaling factor of 2.22, in advance of the 2009/2010 levy year. This figure is subject to consultation but is unlikely to change when it is confirmed in November.
Reaction to the news has been largely postitive. John Ball, head of defined benefit consulting at Watson Wyatt, says that the PPF has “clearly learnt from last year’s experience when its unexpected increase in the scaling factor caused the large jump in the levy that pension schemes were forced to pay”.
He adds that employers will welcome the intention to hold the levy at broadly the same level, particularly given comments made a few months ago that the credit crunch might give the PPF an excuse to increase the levy.