UK - The cost of introducing investment strategy as a separate risk factor would be disproportionate to the 3% reallocation of levy it would lead to, the Pension Protection Fund (PPF) has found.
In its consultation document on the issue, the PPF revealed that due to broad similarity in pension schemes’ investment strategies, only around 3% of the levy would be reallocated if investment strategy were to be included as a separate risk factor.
Due to this, the PPF claimed the cost to pension schemes would be disproportionate.
The initial view therefore outlined it was unlikely for an investment risk factor to be introduced into the risk based levy. However, the PPF said it will continue to monitor key trends that affect the impact of investment risk on the risks individual pension schemes pose to the it.
The consultation, which began today, will run until 29 January 2007.
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