The National Association of Pension Funds (NAPF) welcomes the Pension Protection Funds' (PPF) efforts to stabilise its levy arrangements over the next three years.
Earlier today the PPF estimated it needs to collect £675m in pension protection levies in 2008 to 2009, a figure unchanged from 2007 to 2008.
The PPF says the estimate will remain stable for the next three financial years unless its faces a significant change risk levels, although it will index the estimate against average earnings.
The PPF has also raised the funding level at which schemes pay no risk-based levy from 125% to 140% to ensure schemes pay a levy which more accurately reflects the long-term risk they pose to the PPF. The body says it should also give schemes the right incentives to reduce that risk.
The NAPF says it would like to see a charges balance between well-funded and under-funded schemes reviewed so the levy falls fairly on all schemes.
Joanne Segars, chief executive of NAPF, says: “The changes made to the levy calculations and the future levy estimates strike a fair balance between keeping costs to a minimum and ensuring the PPF is well-funded and able to pay members’ benefits.
“Over the long-term though, as schemes reduce any funding deficits, the balance between levies charged to well-funded and under-funded schemes must be kept under review. It is important that well-funded schemes should feel they are being treated fairly.”
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