Pensions UK raises process concerns and seeks reform of the PPF administration levy

Pensions UK wants to see the administration levy abolished through an amendment to the current Pension Schemes Bill.

In recent weeks, in a move that has surprised the sector, the administration levy has begun to be re-billed to schemes following a two-year pause.

This has left many facing significant unbudgeted costs – which undo some of the very welcome benefits of reforms in the Pension Schemes Bill to allow the risk-based PPF levy to be reduced to zero.

The administration levy is collected separately by The Pensions Regulator alongside the general levy on pension schemes and then passed to the DWP, which in turn makes a grant to the PPF to cover a proportion of its administrative expenditure.

An independent review of the PPF in 2022 found that the levy ‘appears to be an unnecessary complication for both the PPF and its stakeholders’ and recommended it was abolished, once the surplus in the fund was expended.

Pensions UK is asking Government to take the opportunity within the Pensions Schemes Bill to implement the Independent Reviewer’s recommendations and abolish the admin levy, and permit the PPF to meet the operating costs covered by it through its own Fund and substantial surplus.

Zoe Alexander, Director of Policy and Advocacy at Pensions UK said: “There has clearly been a breakdown in process around the re-introduction of the PPF administration levy. We welcome Government’s efforts in the Bill to reduce the risk-based PPF levy to zero. Now is the time to grasp the opportunity presented by the Bill to also implement the outstanding recommendation of the 2022 review of the PPF and abolish the administration levy.”

Mark Smith, Head of Media Relations
020 7601 1726 | [email protected]

Cali Sullivan, Senior PR Manager
020 7601 1761 | [email protected]