PPF levy places importance on credit rating, over deficit

Research suggests companies are focusing on reducing their PPF levies as it can be done quickly and at whereas while dealing with a pension deficit is a much heavier financial burden, and in some cases has little or no effect on the levy a pension scheme can expect to pay. For example, if a company’s credit rating is 'risk band two', with a pension deficit of £140m, the estimated total levy for 2006/7 will be £850,000, according to the study, however, if it reduces its deficit by £20m to £120m, but stays in the same risk band, its levy will be reduced just 12% to £748,000. However, if th...