Pension fund set for self-sufficiency

THE pensions safety net body announced yesterday it hoped to have generated enough money to become self-sufficient by 2030.

The Pension Protection Fund (PPF) pays benefits to people who lose their pension if their employer goes under.

It is funded through a levy paid by defined benefit schemes,

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as well as the assets of schemes that are transferred to it.

But concerns have been raised that as the number of defined benefit schemes, including final salary ones, continue to shrink, the levy will have to be met by a decreasing number of funds. But the PPF set out its plans to be self-sufficient by 2030, by building up a fund equivalent to 110 per cent of its estimated liabilities.

It plans to do this by investing the levy it receives each year alongside the assets of schemes that have been transferred to it and its own accumulated investment returns.

The PPF will continue to charge a levy to defined benefit schemes after 2030, but it hopes its plans will ensure this remains at a manageable level.