UK Pensions - Pension Protection Fund begins consultation over risk-based levy

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In a consultation document released in November, the Pension Protection Fund (PPF) announced a proposed adjustment to the risk-based portion of the levy that it charges UK defined benefit (DB) pension schemes. The new formula will take account of the longer-term deficit risk.

The current formula is calculated as the product of a one-year probability of default and the current underfunding level, multiplied by a so-called 'scaling factor'. "The fault of the (current) formula," said Martin Clarke,