PPF to keep levy stable for 2009/10

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Thursday, 25, Sep 2008 12:00

- PPF proposes 2009/10 levy estimate of £700m (£675m plus indexation)

- It also proposes a levy scaling factor of 2.22 which is unlikely to change

- D&B appointed as insolvency risk provider

- Proposals for long-term future of the levy to be unveiled in October

The Pension Protection Fund (PPF) today (Thursday) made three major announcements as part of its consultation on the 2009/10 pension protection levy.

In August 2007, the PPF said that it would set a levy estimate of £675 million for the next three years, indexed to wages, so long as there was no significant change in risk. It has confirmed this commitment by proposing a levy estimate for 2009/10 of £700 million.

As promised earlier in the year, the PPF has also proposed a levy scaling factor (which schemes can use to calculate their individual levy bills) of 2.22, in advance of the 2009/10 levy year. Although this figure is subject to consultation, the PPF does not expect it to change when it is confirmed in November.

Finally, it has confirmed that Dun & Bradstreet has been appointed as the PPF’s insolvency risk provider for three years, subject to contract.

PPF Chief Executive, Partha Dasgupta, said: “We have done what we said we would do and proposed the same levy estimate as last year, indexed against wages. This was not an easy decision but we believe it is one we had to take to help reduce the burden on levy payers, particularly during the current economic downturn.

“That is why we also have kept our promise to publish the levy scaling factor number in advance of the 2009/10 levy year. This will help levy payers with their financial planning and provide further certainty.”

He added: “D&B have been re-appointed following an exhaustive tendering process. We decided to reappoint as we believe that D&B fully meet the criteria that we and, more importantly, our stakeholders demanded – as well as providing best value for money.”

The levy estimate and scaling factor number published today are now subject to consultation - and pave the way for the PPF’s proposals for the long-term future of the levy which will be unveiled during October.

ends

Notes to editor

1.A copy of the document, ‘The 2009/10 Pension Protection Levy Consultation’, can be found on the PPF website along with the draft determination which sets out the proposed rules for the 2009/10 levy year. Go to http://www.pensionprotectionfund.org.uk/index/pension_protection_levy-2.htm

2.The Pension Protection Fund was set up under the provisions of the Pensions Act 2004 in April 2005 and is classified as a public financial corporation. It has been established to pay compensation to members of eligible defined benefit and hybrid pension schemes when there has been a qualifying insolvency event in relation to the employer, and where there are insufficient assets in the pension scheme to cover Pension Protection Fund levels of compensation.

For further press information contact: Richard Hunt on 0208 633 5931/0789 425 5561 or Ana Moreno on 020 8633 4932/ 07961 957 480