PPF announces £105m levy estimate fall for 2022/23

Lifeboat fund says 82% of schemes paying its risk-based levy should see a reduction

Jonathan Stapleton
clock • 1 min read
PPF executive director David Taylor
Image:

PPF executive director David Taylor

The Pension Protection Fund (PPF) has published its 2022/23 levy consultation, revealing a £105m reduction in the amount it expects to collect from levy payers.

The lifeboat fund's consultation document estimated that 82% of schemes that pay a risk-based levy will see a reduction. It said its levy methodology will remain unchanged.

The PPF said its strong financial position throughout the pandemic and its defensive investment strategy were "instrumental" in its decision to allow the levy estimate to fall.

PPF executive director and general counsel David Taylor said: "Despite the ongoing risk of employer insolvency, our levy payers' improved funding positions, together with our financial strength, mean we can avoid raising our levy pre-emptively and maintain stability in our proposed levy rules."

The PPF said the levy has also been reduced due to improvements in scheme funding, an update in the way scheme underfunding will be calculated, and employers' financial resilience despite recent economic challenges - but it warned uncertainties still lay ahead.

Taylor explained: "While we're pleased to see an overall improvement in scheme funding, we're mindful of uncertainties around future insolvency rates and the ongoing risk of claims, some of which could individually have a material impact on our reserves. It's therefore vital we continue to collect sufficient levy so we can ensure we can continue to pay our current and future members the compensation they're entitled to."

The PPF also confirmed the measures introduced to help schemes and employers with the cost of the levy in 2021/22 - including the small scheme adjustment, lower cap on the risk-based levy and Covid-19 easement - would remain in place.

The PPF's levy consultation is open from 28 September to 9 November. To read and respond to the consultation visit: ppf.co.uk/levy-payers/help-shape-our-rules

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