Source · Select Committees · Work and Pensions Committee
Recommendation 20
20
Acknowledged
Paragraph: 142
Bring forward promised consultation on PPF levy changes and compensation levels for scheme members
Conclusion
We applaud the fact that the PPF is now reasonably confident that it has the funds it needs to meet potential claims on it. This is a significant achievement. There is now an opportunity to consider how the £12 billion in PPF reserves can be used to the benefit of PPF levy payers and scheme members. For scheme members, the priority is indexation on pre-1997 rights. DWP should bring forward its promised consultation on levy changes and PPF compensation levels without delay.
Government Response Summary
The government noted the PPF's reduced levy estimate and new rule provision for a zero levy pending legislative changes, and committed to considering and reflecting on feedback regarding compensation levels and pre-97 indexation, but did not commit to bringing forward the requested consultation.
Paragraph Reference:
142
Government Response
Acknowledged
HM Government
Acknowledged
The existing PPF reserves ensure that current and future members can be confident of the fund’s financial resilience and therefore its longer-term sustainability. However, we are aware of the issues raised by members of the PPF about the level of compensation offered, and the Minister for Pensions has met with stakeholders and affected members to discuss these issues in detail. The Pension Protection Board has announced that the levy estimate for 2025/26 will be £45m. This is less than half of the 2024/25 levy. In addition, the PPF has included a new provision in its rules that would enable the Board to calculate a zero levy if appropriate legislative changes that would give the PPF greater flexibility in setting the levy are brought forward. We are committed to consider and reflect on what we have heard on the issue of PPF and FAS rules on pre-97 indexation and recognise DB pension scheme members income in retirement may have been significantly eroded by the recent period of high inflation. These are complex matters requiring a balanced approach for those receiving compensation, levy payers and taxpayers.