The government will use the Pension Schemes Bill to abolish the Pension Protection Fund’s (PPF) administration levy – but has called for an amendment aimed at doing this to be withdrawn.
During discussions on the bill last week, Liberal Democrat MP John Milne tabled an amendment drafted by the Society of Pension Professionals that would scrap the admin levy.
This charge – separate from the scheme-based and risk-based levies – had been suspended but was reintroduced earlier this year, landing many defined benefit pension schemes with unexpected bills.
Milne said: “Discussions with the PPF indicate that it has no objection to this proposal and would be content for its administration costs to be met from general reserves. Given industry support and PPF agreement, we feel that the government should implement this change without any further delay.
“The levy raises only a relatively small amount, but it adds unnecessary complexity and confusion to scheme finances and risks undermining broader reforms, especially efforts to reduce the risk-based levy to zero, which have been widely welcomed.”
Milne added that the “small but meaningful” change would align with other pension reforms “aimed at reducing red tape, simplifying funding and ensuring efficient use of scheme resources”.
Pensions minister Torsten Bell said he supported the “intent” of the amendment, but said it was “unworkable as currently drafted”.
However, Bell added: “I give… our assurance that we intend to lay amendments at a later stage that will achieve the same aim.”
Milne has now withdrawn the amendment.
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More than 270 amendments to the Pension Schemes Bill have been put forward for consideration by a parliamentary committee. Pensions Expert looks at some of the most significant proposals.
