PPF levy cut is a significant saving for defined benefit funds

The levy is paid by defined benefit schemes to fund the operation of the PPF, which was set up to protect pension members in the result of an employer insolvency.

With more than £13bn in surplus, the PPF’s ability to withstand claims is unquestionably secure, reflecting the success of its management. Meanwhile, claims remain low – just 14 claims totalling £13.5m were paid in 2022/23 – and DB scheme funding levels are at record highs.

Given the health of the PPF and the strong funding position of defined benefit funds, the PLSA has been calling for the levy to be reduced to zero.

Today’s announcement provides a significant saving on a currently unnecessary cost for pension schemes and their employers, with the potential for further reduction.

Zoe Alexander, Director of Policy and Advocacy at the PLSA, said: “The PPF’s decision to cut the levy from £100m to £45m, and potentially to zero, is really good news for defined benefit pension funds and their sponsors.

“The strong signal of intent from the Government to change the rules to allow the PPF more flexibility to reduce the levy further suggests a solution could be included in the upcoming Pension Schemes Bill.”

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

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