The Pension Protection Fund (PPF) has warned its deficit could increase as more organisations become insolvent during the economic downturn.
This will be a marked change from the 2007/08 financial year, during which it managed to reduce its deficit from £609m to £517m, according to the PPF’s annual report. Chairman Lawrence Churchill said: “The reduction in our deficit was a satisfactory result given the problems that have affected the capital and credit markets during the year. However, it is likely we will see an increase in the number of insolvencies as the downturn bites and with markets at current levels, associated deficits in schemes entering the assessment period may be higher than we have seen to date.”
The report also showed that by the end of April 2008, more than 3,600 people were receiving PPF compensation, and it had paid out more than £17 million and passed £1 billion of assets under management. By the end of March 2008, the PPF had also collected £361 million and expects to collect a total of £575 million in respect of the 2007/8 levy.
Partha Dasgupta, PPF chief executive, said: “We collected a levy which was significantly closer to our estimate than the previous year. We will be continuing our consultation on the long-term development of the pension protection levy, building on the work we carried out during 2007/08, and we welcome industry views about how to take forward our proposals.”