NAPF: Cap reform will mean 'vast majority' of schemes will pay more PPF levy

Jonathan Stapleton
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The "vast majority" of schemes will pay more levy under rules laid down by the Pension Protection Fund last week, the National Association of Pension Funds says.

The trade body said the lifeboat fund's 2010/11 pension protection levy policy statement - published on Friday - was "mixed news" for most levy-paying schemes even though the overall levy would remain stable.

National Association of Pension Funds chief executive Joanne Segars said the announcement was "mixed news" for most levy-paying schemes - but welcomed the statement the overall levy would remain stable.

She said: "It is disappointing that the PPF is going ahead with its reforms of the cap which mean the vast majority of schemes will pay more levy.

"While the PPF has said this will be a temporary measure there has been no indication of just how temporary."

The PPF's statement confirmed it is aiming to collect an overall levy of £720m in the 2010/11 year and confirmed a levy scaling factor of 1.64.

It also confirmed a risk-based levy cap of 0.5% of liabilities, to protect the most vulnerable 10% of schemes.

In addition to this is said it would change the way probabilities of insolvency for foreign employers are calculated - and also made changes to the requirements for certification of block transfers.

The PPF set an April 9 deadline for the certification of deficit reduction contributions.

The PPF has also published the final levy determination for 2010/11. All documents associated with this can be found on the PPF's 2010/11 determination page.

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