The SPP amendment was tabled by Liberal Democrats Steve Darling MP and John Milne MP. The new clause abolishes the administration levy and provides for the expenses of the Pension Protection Fund (PPF) and the Fraud Compensation Fund (FCF) to be met out of their general funds. It would also enable FCF expenses to be covered by the FCF levy.
The PPF administration levy is separate to the main PPF levy. It currently funds both a proportion of PPF administrative costs and the FCF (Fraud Compensation Fund) administrative costs - more accurately they are funded through grant in aid from DWP using the administration levy collected.
A DWP departmental review in 2022 concluded that it should be abolished, the PPF says it should be abolished and the SPP has long said it should be abolished too. However, instead of being scrapped, it was suspended for two years. The levy made a return this year and it is estimated that DB schemes will be required to pay over £15m as a result. This is an additional cost that most employers could certainly do without.
Shayala McRae, Chair of the SPP’s Legislation Committee, who has led SPP’s work on this issue since June 2025 explained: “Legislative change is needed, the Pension Schemes Bill provides a good opportunity for this change to take place and SPP is pleased to have received cross-party backing for the solution that we have put forward. If the amendment is not accepted during its current stage in the House of Commons, we are hopeful it will be tabled again as it passes through the House of Lords. We are always keen to ensure the best possible outcome for schemes and savers and abolition of an unnecessary levy certainly meets that criteria.”
Liberal Democrat John Milne MP, a member of the Work & Pensions Select Committee, added: “The Liberal Democrats are keen to remove unnecessary bureaucracy and costs, so we are happy to table an amendment that seeks to abolish the Pensions Administration Levy. Abolition will reduce the administrative burden on pension schemes and cut costs. That means better pension outcomes for everyone.”
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