§ Lord Morris of Manchesterasked Her Majesty's Government:
In the context of the Pensions Bill, how they will ensure that the Pension Protection Fund levy is not a burden on individual pension scheme members. [HL2442]
§ The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)The Pension Protection Fund is just one of the measures the Government are taking to improve protection for members of occupational pension6WA schemes. Its purpose is to strengthen protection for the pensions of individual scheme members by being funded through a levy on schemes, but in such a way as to avoid overburdening levy payers.
Rather than being charged directly to individual scheme members the Pension Protection Fund levy will be charged to the defined benefit pension fund via the scheme's trustees. In this way, the levy will represent a debt on the employer in the first instance, although trustees will be left to judge how the levy could be shared as they see fit among employers and employees as one of the overall pensions costs.
We appreciate that the PPF levy represents an additional cost for business, but we are seeking to minimise this cost and ensure the levy is calculated in the fairest possible way, and are confident that the benefits will outweigh any burden.
Furthermore, the PPF forms part of a substantial and balanced package of measures seeking to ease the financial and administrative burden on employers while offering a sustainable system of protection to individuals. In this way, it is hoped that possible savings made elsewhere through simplification measures will contribute to reducing the effect of the PPF levy on business overall.