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UK PPF to review levy calculation for 2008/9

UK - The Pension Protection Fund says it plans a "full review" of how it calculates the levy it charges pension schemes for the 2008/9 levy year.

It comes in the light of changes in the amount and distribution of risk at pension funds.

"The board intends to undertake a comprehensive review of all aspects of the levy calculation in preparation for the 2008/09 levy year," the PPF said.

"We currently intend to publish the 2008/09 Pension Protection Levy Consultation Document in early February 2007 and will follow the publication of this document with a 12 week consultation period."

The move would "recognise the importance of reflecting changes in the amount and distribution of risk, both short term and long term, and the continued need for consultation," said chief executive Partha Dasgupta.

The PPF also amended how its levies for levies for 2007/08 should be determined for multi-employer pension schemes.

Aon Consulting said the proposal "could lead to costly burdens being placed on pension schemes".

"According to the initial findings released from the Pensions Regulator, many of the top 500 pension schemes in the UK are multi-employer schemes with over 100,000 participating sponsoring employers between them," Aon's Dave Stewart.

"The PPF levy bills for some of these schemes have, to date, been calculated using the D&B score of the largest (in terms of scheme members) employer only. 

"Whilst this very simple approach was understandable at a time when the PPF was in its infancy, it is clear this approach will have resulted in levies that were disproportionately low for some schemes whose largest employer was financially sound but whose other employers have a poor financial standing."

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