UK – Members of Parliament are exempt from paying levies to the new Pension Protection Fund, it has emerged.

There has been criticism that the levies would bring an extra burden onto already hard-pressed occupational schemes.

The PPF said that schemes that were in wind-up before April 6 are not liable for the levies and that, “Certain schemes and certain types of scheme will also be exempt.”

These included “a scheme which provides pensions for Members of the House of Commons [the lower chamber of_Parliament]”. Also exempt are schemes which provide pensions to local government employees.

Carol Perry, head of pensions at the parliament, explained that the MPs’ scheme – the £260m (€390.6m) Parliamentary Contributory Pension Fund – is ultimately underwritten by the government, despite being a funded scheme. Thus it does not need to be covered by the PPF.

She said there was “quite a sensible logic” behind the move – and that the decision to exempt the MPs’ fund was not likely to be reviewed.

The PPF said that for the first year, 2005/6, an initial levy and an administration levy would be payable. For 2006/7 onwards schemes would have to pay the pension protection levy and an administration levy.