UK - The Pension Protection Fund (PPF) has warned it will not be rushed into making disclosures on the eventual cost of providing protection for pensions.
The PPF was reacting to a call from global human resources firm, Hewitt, to clarify not only the cost of providing cover but also the details on how credit would be given for non-funding financial support such as asset-backed guarantees or contingent funding arrangements.
Paul Reynolds, head of communications at the PPF, said: “Estimating the pension protection levy based on current data is extremely difficult, and any answer will be sensitive to the assumptions contained on the model.
“The Pensions Regulator is collecting data from over 8000 defined benefit pension schemes over the summer. This will allow the PPF to accurately estimate the levy for 2006/07 taking into account information on corporate structure and scheme structure, information that is not currently readily available.”
Raj Mody, actuary in Hewitt’s corporate pensions consulting group, commented ted: “The PPF levy remains a big unknown as the 'scaling factor' to determine the actual cash amount of the PPF levy is yet to be specified. This means that scheme sponsors are left with a large degree of uncertainty about the amount they will pay. For some companies, the PPF levy could lead to a material increase in the pension expense charged through their accounts - which begs the question of whether the level of protection offered by the PPF is affordable in the long term.
The Pensions Regulator (TPR) has set out plans to use "new regulatory initiatives" with over 1,000 schemes as it aims to tighten its regulatory grip and boost member outcomes.
HM Revenue and Customs (HMRC) has announced it is delaying the provision of data that will enable pension schemes to confirm the guaranteed minimum pension (GMP) benefits to pay to members until the end of the year.
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