UK - Pension funds have been warned to expect levy notices in the post later this month as the PPF begins its annual round of tariff collection to raise compensation funds for failed schemes.
The levy notices, calculated by the risk of a scheme becoming insolvent, can be appealed against if a scheme believes the amount to be unfair or based on incomplete information. The appeal window lasts 28 days from the receipt of the notice.
A spokesperson for the PPF said: “If they think they deserve it, they can appeal.”
The PPF hopes to raise £675m in compensation funds for 2007-08 through the scheme as a guarantee against pension funds that go insolvent or default on payments. The levy is comprised of a 20% flat fee and 80% charge based on the Failure Score, calculated by ratings agency Dun & Bradstreet, although a cap on smaller schemes means they would be charged only 1.25% of liabilities.
Jim Aitken, marketing director, SBJ Benefit Consultants, warned there had been instances in the past where pension scheme sponsors had disagreed with the levies.
Speaking to Global Pensions, he said: “We would watch out for invoices coming in and where appropriate we’d challenge them. Maybe calling them mistakes is a bit harsh but there have been quite a few adjustments made.”
Paul McGlone, principal and actuary, AON Consulting, said: “For schemes and companies prepared to devote energy to this issue, there are considerable savings to be made.”
Aitken added that the levy scheme was still in its infancy and the PPF was consulting on ways of improving it, but the process was “still in its early days”.
MPs failed to place legislation into the Financial Guidance and Claims bill that would have made pension guidance default, which Just Group director Stephen Lowe said left a "bitter taste".
Aegon has called for the government to double the tax exemption on employer-arranged pension advice, up from £500 to £1,000.
Institutional investor confidence in Europe rose by 8.9 points in April with each region showing growing appetite for risk, according to State Street Global Exchange.
It has again been suggested self-employed workers could enjoy pension provision through the tax return process. James Phillips explores the latest proposals.