TPT Retirement Solutions has raised “serious concerns” over the Pension Protection Fund’s (PPF) decision to continue charging a levy on superfunds, despite reducing the regular levy to zero.
The PPF announced plans last year to set the standard levy at zero in light of its £14bn reserve, but intends to retain the “alternative covenant scheme” (ACS) levy, which applies to schemes without a substantive employer covenant – including defined benefit (DB) superfunds.
In its response to the PPF’s 2026-27 levy consultation, which closes today (5 January), TPT said the continued application of the ACS levy did not proportionately reflect the risk posed by superfunds, arguing that schemes entering a superfund must demonstrate an increased probability of members receiving their benefits in full.
It argued that superfunds “by definition, represent less risk than regular DB schemes”, while the presence of a capital buffer would place them in a stronger funding position than traditional DB arrangements.
Protect innovation, superfund provider argues
The provider also raised concerns about fairness, noting that schemes and members moving into superfunds would continue to face levy charges despite having previously contributed to the PPF surplus while in a traditional DB structure. It said this could make entry into a superfund more expensive for members, pension schemes, and sponsors.
In October, TPT announced plans to launch a DB superfund aimed at pension schemes that want to run on and generate a surplus. Clara Pensions, the only other superfund currently in operation, markets itself as a “bridge to buyout”.
Ruari Grant, head of policy and external affairs at TPT Retirement Solutions, said: “The PPF’s decision to reduce the regular levy to zero makes complete sense, but there’s no reason the same logic can’t be applied for superfunds. These schemes are to be held to a very high level by the Pensions Regulator and will therefore pose minimal risk to the PPF.”
He added that the PPF should “take a more proportionate approach for the market that currently exists, and remain flexible in future – rather than risking stifling growth and innovation at the outset”.
SPP backs levy overhaul
Separately, the Society of Pension Professionals (SPP) welcomed the move towards a zero levy, highlighting its long-standing campaign for the PPF to have the flexibility to reduce the levy when funding allows. It also supported retaining standard contingent asset arrangements as a safeguard, while calling for greater clarity and efficiencies to reduce administrative costs.
However, the SPP cautioned that the developing superfund consolidator regime “could present challenges for the PPF”, particularly where new vehicles are not sectionalised or involve non-associated employers.
“We therefore suggest that the PPF consider the need for any levy methodologies to accommodate these evolving structures appropriately,” the organisation said in its response.
Jon Forsyth, chair of the SPP’s DB committee, said: “Whilst our consultation response highlights our support for a reduced levy, we have also taken the opportunity to highlight a number of issues to help improve administrative aspects of the regime.”
