UK - The PPF levy is a potential crippling additional cost to some pension schemes, according to the latest annual pension schemes administration survey by Capita Hartshead.
Almost 74% of schemes said the highest increase in overheads were down to pension scheme management costs. An average increase of 20% was attributed directly to the raised PPF levy, but this rose to an additional 75% in added-on costs for some schemes.
The report stated: “Given the claims on the PPF, it can only be expected that the average levy sought will continue to rise over the year ahead.”
The survey also showed a huge 59% of surveyed companies closed defined benefit schemes to new entrants, up 4% on last year with around 64% opening defined contribution schemes.
A spokesman for the PPF countered that any risk-based levy such as this would be expected to behave like insurance with higher risk equalling higher premiums.
He added: "We have to ensure we have the funds to protect pensions and to provide compensation. To put this in context, £675m (US$1.3bn) represents just 2% of all employer contributions or 0.9% of all scheme assets."
A massive 63% of schemes said recent reforms would accelerate the closure of existing, better schemes in favour of new government plans.
The survey continued that under a third of schemes felt simplification, the Pensions Act 2004 and new age discrimination rules had been beneficial for either schemes or the pensions industry as a whole.
Around 90% said legislative changes had failed in helping member take-up or simplifying administration.
Worryingly for the government, 66% did not believe the changes had improved financial security which was one of the principal aims of the Pensions Act 2004.
This week's top stories include ITS' management buyout from Mercer, and The Pensions Regulator launching a probe into single-employer defined contribution schemes' default funds.
People retiring in the UK will on average outlive their pension savings by 10 years, according to research by the World Economic Forum (WEF).
Steps to improve auto-enrolment are uncontroversial and obvious, but the government is dawdling on introducing the necessary changes, argues Jack Jones.
Professional trustees will be expected to apply for accreditation as part of a framework intended to be launched on 1 July by the Professional Trustee Standards Working Group (PTSWG).