The Pension Protection Fund (PPF) has launched a consultation on how levies will be calculated for 2020/2021, with an expected 8% increase in its levy collection compared to this year.
While stating it intends to make "no substantive changes", the PPF's consultation - launched on 25 September - noted that it will collect £620m in 2020/2021 - an increase on the £575m expected to be collected in the 2019/20 levy year.
The lifeboat fund said that this rise "reflects the expected increases in scheme risks", adding that, in particular, "scheme funding is expected to have deteriorated due to a significant reduction in gilt yields in recent months which will have increased scheme liabilities".
And, this year's expected levy collection of £575m is higher than the PPF had initially estimated. When the final decision for 2019/20 was published, the lifeboat fund predicted this would amount to £500m.
The PPF is also inviting stakeholders to comment on how levy rules might need to be developed in the future for schemes without a substantive sponsor and commercial consolidators.
Stakeholders have also been asked to provide feedback on revised guidance for completing contingent asset guarantor strength reports, it added.
Executive director and general counsel David Taylor said: "I am pleased to confirm that we plan to use the same approach to calculating the levy in 2020/21 that we have been using this year.
"However, the environment in which we are operating has changed. In particular, we have seen significant increases in scheme underfunding driven by declines in the yields on gilts.
"This represents an increase in risk to us and, although we smooth scheme funding over five years, we do still expect levy collections to increase as a consequence."
He further stated that, as the PPF is not changing the rules, and bills are based on the actual risk of individual schemes, the impact on individual schemes will depend on their specific circumstances.
Taylor added: "While our reserves decreased from £6.7bn to £6.1bn in the last financial year and we continue to face significant risks and uncertainty, our funding position remains strong and we're on track to achieve our long-term funding objective.
"We continue to monitor the situation closely and, as we've always made clear, will adjust the levy in future years if necessary to respond to circumstances."
The aggregate defined benefit scheme funding level plummeted by 3.5 percentage points over the course of August as gilt yields collapsed, while total liabilities were recorded at £1.9trn, according to the PPF's 7800 index published at the start of the month.
Commenting on the consultation, XPS Pensions senior consultant Emily Sturgess said: "While the increase is understandable, levy-payers need to make sure they don't end up paying large increases unnecessarily.
"A number of schemes may have introduced hedging and there are actions they can take to ensure that the PPF reflects this in their levy. Those that have protected against interest rate falls should not pay any more than required."
The consultation closes on 5 November.
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