Nearly 200,000 workplace pension scheme members are waiting to see whether their funds will need help from the Pension Protection Fund.
The PPF was set up by the Government up as a safety net for pension schemes whose sponsoring employer goes insolvent and which are subsequently struggling to meet their liabilities. The PPF is paid for via a levy on all final-salary pension schemes.
Since it began in 2005, 101 schemes have transferred to the PPF. However, a further 313 schemes with 192,679 members are in an "assessment period", which means they are waiting to find out if the PPF will accept the transfer. There are growing fears that if the schemes being assessed are accepted into the PPF it will raise the annual levy on still-solvent final salary schemes to an unsustainably high level.
"The costs fall on other employers who may be struggling with their own pension scheme without this extra burden," said Mark Frost, a partner at actuarial firm Barnett Waddingham. "With more than six times as many people waiting in the wings to join the PPF than in the scheme already, it's a worrying time for trustees and companies as they wait to hear details of the new PPF levy due later this year."
Final-salary schemes have hit the headlines in recent weeks with a host of large UK employers, including BP and Barclays, announcing their closure to current employees.Reuse content