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PPF proposals to make levies “fairer”

The Pension Protection Fund has proposed using longer-term risk when calculating protection levies for pension schemes in a bid to make bills fairer.

Currently the PPF assesses the probability of a scheme’s sponsoring employer going bust during a one-year period.

But it wants to assess the probability over a five-year period as well, taking account of the risk a scheme’s investment strategy poses.

PPF chief executive Partha Dasgupta says: “Our levy payers have given us a strong message that the current system does not differentiate enough between schemes and that levy bills should be less volatile. These proposals will change the distribution of the levy among schemes to more accurately reflect the risks that we face – there are a similar number of schemes that will pay more as will pay less.”

If accepted, the proposals will be implemented in 2011/12.

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