UK - The Pension Protection Fund (PPF) reported deficits of £343m (€512m) and also accepted 98 pension schemes in its first full year of operation.
Lawrence Churchill, PPF chairman, stressed deficits accrued were well in line with initial expectations, and said the fund continued to have sufficient assets available to meet compensation payments as they fell due. "We aim to raise our solvency level of 86% funded as the organisation and the fund mature."
Churchill made the statement as part of the PPF's Annual Report and Accounts for the 2005/2006 financial year, which stated the fund had accepted 98 pension schemes into its assessment period and as a result taken responsibility for the pensions of 43 000 people.
Commenting on the report, Mercer Human Resource Consulting claimed that the risk related part of the levy could possibly double as the real cost of the fund emerged.
The figures showed that only £324m was likely to be collected in 2006/7, which was little over half of the £575m targeted. Mercer also pointed out that claims for 2005/6 were £485m, of which only a quarter (£138m) were covered by levies, and added there was "little sign" of lower claims for 2006/7.
Tim Keogh, worldwide partner at Mercer, said: "Scheme sponsors will be unhappy if their efforts to manage down their levies just result in an increase in the tax rate. The PPF will need to work hard to ensure that any increases are seen as fair, with the bulk of the burden falling on those schemes that pose the most risk. We could easily see the risk-related part of the levy doubling in the next year unless there is more effort to close loopholes."
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