PPF reveals £343m deficit in first year accounts
THE PENSION PROTECTION FUND has published its annual report and accounts - revealing that it is responsible for the pensions of 43,000 individuals at the end of the first full year of its operation.
The protection fund said that between opening its doors on April 6 2005 and April 5 this year it accepted 98 pension schemes into its assessment period.
And it said that of the 43,000 scheme members that it is responsible for 10,000 are already receiving payments from their pension schemes at PPF levels of compensation.
PPF chairman Lawrence Churchill said: “The most significant outcome of our first year of operation is that over 43,000 individuals across the UK now have financial security in retirement which would not have existed without the creation of the PPF.
“Success could not have been achieved without the constructive engagement of our stakeholders. Through their feedback we have been able to develop and introduce the risk based levy, a world first, which has been widely judged to be fair, simple and proportionate, balancing the interests of scheme members with those of the levy payer.”
However Churchill added that the PPF had also accrued a deficit in its first year of operations.
He explained: “We indicated last year that we expected deficits in the early years of the fund's life. Our accounts currently show a deficit of £343m, which is in line with initial expectations.
“We have and will continue to have sufficient assets available to meet compensation payments as they fall due, and we aim to raise our solvency level of 86pc funded as the organisation and the Fund mature.”
Chief executive Partha Dasgupta added: “We will now focus on evolution, providing stability for our stakeholders as the first schemes transfer into the PPF.
“We have been pleased with the response from industry to the challenge we set last December when we announced our risk based levy incentives. As a direct result of their actions to reduce risk and provide improved scheme data, market movements and fixing the process for distributing the levy among schemes, the PPF now expects to collect around £324m in levy this year compared to our original estimate of £575m.”
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