Employers and consultants have given a cautious welcome to the Pension Protection Fund (PPF)’s revised proposals on the way that the levy is to be calculated.
The PPF, which was set up to protect pension scheme members from losing pension rights in the event of a organisation’s insolvency, is to increase the number of levy bands from 10 to 100 and to also include contingent assets, such as guarantees from parental companies in its levy calculations.
Previous PPF proposals had been criticised because the bands were too wide and could have ended up including companies with low risk levels alongside those with high risk ones.
John Rogers, pensions manager at Britannia Building Society, said: “My initial view is that this greater precision is to be welcomed but we need to be clear as to how this will be applied in practice.”
Despite welcoming the changes, Donald Duval, head of Aon Consulting’s actuarial practice, said: “We still believe the level of protection provided by the PPF is excessive. One key area is that pensions in payment are uncapped. [But], this is a government decision, not a PPF one.”