UK - The UK government has set the Pension Protection Fund levy ceiling at £718.75bn (€1.07bn) for next year.

The regulations were "laid before Parliament" by pensions minister James Purnell yesterday and come into force on November 6.

"For the first financial year after the transitional period, the reference in section 177(2) of the Act (amounts to be raised by the pension protection levies) to "the levy ceiling for the financial year" shall be read as if it were a reference to "£718,750,000", the wording runs.

David Everett, research partner at Lane Clark & Peacock, said: "Although this is 25% greater than this year's levy estimate, the actual potential for increase is far higher than 25% since the PPF is unlikely to have raised the £575m it set itself for this year.

"And at a scheme level of course, the increase will also depend on scheme and employer-specific factors.
 
"The ceiling is much lower as a proportion of the levy than had been mooted when the Pensions Act was going through Parliament, when it was suggested that in the first full year of operation the ceiling should be set at twice the levy.
 
"It had been thought that the PPF would have scope to make substantial increases year on year before hitting the levy ceiling but it now seems that the PPF's room for manoeuvre will be much more limited."
 

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