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Pensions Bill: Pension Protection Fund

House of Lords written question – answered on 4th May 2004.

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Photo of Lord Morris of Manchester Lord Morris of Manchester Labour

asked Her Majesty's Government:

From where, if the Pensions Bill becomes law as now drafted, the extra resources required by final salary pension schemes to pay the Pension Protection Fund levy are to come.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

The PPF forms part of a substantial and balanced package of measures seeking to ease the financial and administrative burden on employers while offering a sustainable system of protection to individuals. In this way, it is hoped that possible savings made elsewhere through simplification measures will contribute to reducing the effect of the PPF levy on business overall.

As explained in PQ/04/2442, the requirement to pay the levy will fall on the trustees of the scheme, who will be left to judge how the levy charge could then be shared as they see fit among employers and employees as one of the overall pension costs. Therefore, if any extra resources are required, they may be shared fairly between both the employer and active members.

The Government want to take action to increase member protection without overburdening levy payers, which is why care is being taken to calculate the levy in the fairest possible way and minimise the burden on schemes.

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