A UK government-backed agency which pays pensions for workers whose employers go bust said on Tuesday it will keep the charge it levies on company pension schemes stable for the year 2010/2011 but warned it may have to charge more in the future.
The Pension Protection Fund (PPF), which charges schemes an annual levy partly based on how well each scheme is funded, said its 2010/11 levy would be 700 million pounds ($1.15 billion) plus inflation, in line with the commitment it made in 2007 to keep its levy stable for three years.
The inflation component will be known later this year.
PPF chief executive, Alan Rubenstein, a former Lehman Brothers banker recruited earlier this year, said: “Despite the economic climate deteriorating considerably since last year, we believe it’s important to stick to our commitment made in 2007.”
“But it is important for us to again make clear that, while we want to relieve some of the burden faced by employers and schemes during the recession, we will consider in the future raising the amount of levy we collect above the rate of inflation, if necessary, to meet our commitments.”
The PPF currently has assets of almost 3 billion pounds.
“With average compensation at 4,000 pounds a year per member, it has more than enough money to make compensation payments,” the agency said in a statement.