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WORK AND PENSIONS

Pensions Levies 2006–07

The Secretary of State for Work and Pensions (Mr. John Hutton): I am pleased to announce that there will be no increase in either the Pensions Regulator General Levy rates or the Pension Protection Fund Administration Levy rates for 2006–07. Rates will remain at the 2005–06 level as set out in the tables below.

The General Levy meets the cost of the Pensions Regulator (TPR) whose objective is to protect the benefits of members of occupational and private pension schemes; to reduce risks that lead to calls on the
 
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Pension Protection Fund and to promote and improve understanding of, the good administration of work based pension schemes. It also meets the cost of the Pensions Ombudsman and the Pensions Advisory Service which provide scheme members with help, advice and information.

The Pension Protection Administration Levy meets the cost of administrating the Pension Protection Fund. This cost is initially met by money provided by Parliament, then recouped through this levy. The Pension Protection Fund which provides compensation to members of non money purchase pension schemes where the employer in respect of the scheme becomes insolvent later than 6 April 2005, and where the scheme is under-funded and is unable to purchase benefits for members above the level that the Pension Protection Fund would provide.

The provisions for the General Levy are in existing secondary legislation (S.I. 2005/626). The proposed provisions for the PPF Administration Levy are in draft regulations which will be debated in both Houses of Parliament.
 
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General Levy Rates for 2006–07

Number ofMembersOccupational Pension LevyPersonal/Stakeholder Pension Levy
2–11£24.00 per scheme£10.40 per scheme
12–99£2.50 per member£1.00 per member
100–999Max (1.80 per member, £250)Max (£0.70 per member, £100)
1,000–4,999Max (£1.40 per member, £1,800)Max (0.60 per member, £700)
5,000–9,999Max (£1.06 per member, £7,000)Max (£0.40 per member, £3,000)
10,000+Max (£0.74 per member, £10,600)Max (£0.30 per member, £4,000)


Pension Protection Administration Levy Rates for 2006–07

Number of membersAmount of levy for a scheme with M membersMinimumamount of levy
2– 11£24
12–99£2.50 x M
100–999£1.80 x M£250
1,000–4999£1.40 x M£1,800
5,000– 9,999£1.06 x M£7,000
10,000 or more£0.74 x M£10,600