Joanne Shepard, director in Towers Watson’s Retirement business, WTW: “Not before time, the Government and the PPF are taking steps to stop collecting levies that the PPF is very unlikely to need. There have also been indications that some of the PPF’s war chest might be used to improve compensation. The question now is whether levy payers are told to be content with not having to pay more in future, or whether some of the money they overpaid should eventually be returned. It’s welcome that the PPF is not insisting that the Pension Schemes Bill receives Royal Assent before reducing levies to zero and that it is prepared to delay invoicing if necessary. If policymakers fail to give the PPF enough confidence that the law will change, charging £45 million that it is unlikely to need is better than charging £100 million, but the number could still be lower. Primary legislation is needed to allow the PPF to set a zero levy, but it could already set out to raise a token amount and trust that the Government would use regulations to allow an increase above 25% if that became necessary.”
David Hamilton, Chief Actuary at Broadstone, said: “It is fantastic news that the PPF and DWP have responded to the industry feedback and are materially reducing their levy for next year. It feels counter intuitive to continue to take £100m in levies to further increase surplus assets when the money could be used to directly improve pension scheme funding or allow greater investment by employers. We strongly encourage the DWP to move swiftly to give the PPF flexibility over their levy so that it can be reduced all the way to zero.”
PPF Levy Announcement
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