UK - As the consultation period on the pension protection levy draws to a close, industry commentators have highlighted the challenges still facing the Pension Protection Fund (PPF).
In August 2007, Global Pensions reported that the pension protection levy could be set for three years, following a consultation launched by the PPF. This consultation ends on 3 October 2007.
As a result, the PPF has proposed maintaining a stable levy estimate, index-linked, for the next three levy years. However, this would be subject to there being no significant change in long term risk.
Michael Berg, a partner at Lane Clark and Peacock actuaries and consultants, praised the PPF for its consultation, because he felt it showed the organisation was listening and learning from experience.
However, he observed that the PPF still faced a challenging task in ensuring that it had adequate resources to meet the obligations of funds where employers fail.
Berg added that the “devil was in the detail” and it was vital there were incentives from the PPF to reduce risk and give credit for reducing risk.
Wallace Wormley, managing director of OSPARA, an investment consultancy firm, said he believed the PPF would have wanted more consultation and was not confident the pension protection levy would be extended.
Wormley said: “There are so many issues on their agenda. Solvency and the coverage of liability issues are still things that require attention.”
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