Who will pay PPF levy PLSA’s proposed DB superfunds? | KPMG | UK

Who will pay the PPF levy on PLSA’s proposed DB superfunds?

Who will pay PPF levy PLSA’s proposed DB superfunds?

Commenting on the PLSA Defined Benefit (DB) task force’s suggestion to create superfunds to consolidate small defined benefit schemes, David Fairs, Pensions Partner, KPMG UK, says:

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“The PLSA’s efforts to simplify and standardise defined benefit schemes would be welcome across all schemes, regardless of size. Successive legislation has resulted in complexity which has significantly increased administration costs, buy out costs and led to a lack of understanding amongst scheme members.

“Creating superfunds with different reserving requirementsto those of insurance companies is an interesting concept but will require significant risk capital to be put up by those running the funds.  The suggestion that the PPF should stand behind the superfunds begs the question of who will pay the levy to the PPF to support the arrangements? This is a particularly potent question as the PLSA is predicting that up to half of DB pension schemes might otherwise fail.”

-ENDS-

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