No general levy is paid until a scheme is in its third year, when the amount due is based on the number of members when the scheme was set up. Subsequent general levy payments are based on the membership at the last day of the previous scheme year.

2.The maximum amount per member of the compensation levy is 23p.

3. For 1998/99 - 2003/04 inclusive, however, the amount is nil because levies raised in 1997/98 substantially exceeded the value of claims to date

4. Following an application made by the Pensions Compensation Board (PCB) in October 2003 for extra funding (to cover the substantial drain on its funds created by the dishonest removal of assets from the Cheney Pension Scheme), the DWP confirmed on 3 March 2004 that the PCB would be raising a Compensation Levy for the first time since 1997, at the same 1997 maximum rate of 23p per member.

5. In fact the Pensions Compensation Board has only ever paid out three claims to date, viz. £42104.87 in three tranches (most recent December 2001) to the trustees of the Warwick Group Pension Scheme; £13,906.88 on 5.8.02 to Biltons Tableware Scheme; a total of £2,886,167, in seven tranches (the final payment of £2,376,754 on 22.12.04), to the independent trustee of the Cheney Pension Scheme (Independent Trustee Services Ltd, part of the Jardine Lloyd Thompson Group).

6. Compensation provisions only apply in cases where a fund has been diminished as a result of dishonesty or intent to defraud [SI 1997/665 Reg 3]

7. In May 2005, the PCB was still considering only a couple of schemes involving relatively inconsequential sums. Under the Pensions Act 2004 s.302, the PCB has now been dissolved and its duties taken over by the Board of the Pension Protection Fund from 22 September 2005 [SI 2005/2447].

Notes:

1. All UK-approvable OPSs and PPSs are liable to pay the appropriate levies, except
   (a) 1-person schemes; and
   (b) death-benefits-only schemes.
2. The General Levy is to pay for costs of the Pensions Ombudsman, the Register of Occupational and Personal Pension Schemes, the Pensions Advisory Service (OPAS), the Occupational Pensions Regulatory Authority (OPRA) and from April 2005, The Pensions Regulator. The Compensation Levy was for the Compensation Board (provision repealed from 1 April 2005). [PSA 1993 s.175 as amended by PA 1995 s.165 and Pensions Act 2004 s.320 & Sch 13, part 1; SI 2005/275]
3. Both levies were paid together to the Registrar of Occupational and Personal Pension Schemes, which was part of OPRA although operating from separate offices, in Newcastle upon Tyne. Trustees are liable for payment of the levies. The General Levy is now collected by The Pensions Regulator.
4. The levy was formerly paid in advance for 3 years at a time, ie 3 x the amount specified at the beginning of the first registration year in that period. This was later replaced by an annual payment in advance in respect of every 12 months period from 1 April 1997 [SI 1997/666].
5. In March 1998 the Regulations were amended so that no levy was henceforth payable until a scheme was in its third year, when the amount owing was based on the number of members when the scheme was set up. Subsequent payments were based on the membership on the last day of the previous scheme year. [SI 1998/600]
6. The term 'member' includes all active, deferred and pensioner members, plus ex-spouses with pension credit rights under the scheme [SI 2000/2692 Reg 7]; but not contingent pensioners such as widows, widower's or other dependants in receipt of a pension.
7. A scheme that was still in the process of winding-up as at 1.4.01 had to pay the full levy for the year to 31.3.2002, even if the winding-up was completed during this 12-month period. The only exception to this is that for money purchase schemes, both levies can be waived if there are insufficient assets to pay them and either there is no employer in relation to the scheme, or the employer is insolvent. Written approval from Opra confirming the waiver must be obtained using form PR11.
8. For more information see heading 'Pension Schemes Registry' under module 'Trusteeship & Pensions Act'.

2. The rates originally set, for the year commencing 1 April 2005 and continued for the year commencing 1 April 2006, were exactly the same as for the General Levy on all occupational pension schemes in 2005/06.

3. However, a 48% increase was applied for the year commencing 1 April 2007. Further increases of around 17% were applied in 2008.

4. The administration levy is waived where either the scheme based levy or the risk-based levy (see E. Pension Protection Levy, below) is also waived in respect of a scheme.

1. Comprised of two parts: a scheme-based levy and a risk-based levy.

2. The scheme-based levy has been set for the year commencing 1 April 2007* at L x 0.00014, where L = the amount of the scheme’s protected liabilities. (In 2006/07 the scheme-based levy was 0.014%)

3. The risk-based levy has been set for the year commencing 1 April 2007* is given by the formula U x P x 0.8 x 2.47 (2.47 is the ‘scaling factor’, which for the previous year was 0.53)

'U' is defined as follows:

(a) Where the value of a scheme’s assets is less than 120% of the amount of the scheme’s protected liabilities,
U = (protected liabilities x 1.21) - value of the scheme’s assets.

(b) Where the value of a scheme’s assets is equal to or greater than 120% but less than 125% of the amount of the scheme's protected liabilities,
U = 1% of such protected liabilities.

(c) Where the value of a scheme’s assets is equal to or greater than 125% but less than 130% of the amount of the scheme's protected liabilities,
U = 0.75% of such protected liabilities.

(d) Where the value of a scheme’s assets is equal to or greater than 130% but less than 135% of the amount of the scheme’s protected liabilities,
U = 0.50% of such protected liabilities.

(e) Where the value of a scheme’s assets is equal to or greater than 135% but less than 140% of the amount of the scheme’s protected liabilities,
U = 0.25% of such protected liabilities.

(f) where the value of the scheme's assets is equal to or greater than 140% of the amount of the scheme’s protected liabilities,
U = 0 (zero) in all cases.

P = the Pension Protection Fund assumed probability of insolvency associated with the Failure Score which applies to the employer (max = 0.15)

4. For 2008/09 in no case shall the risk-based levy in respect of a scheme exceed 1% (previously 1.25%) of that scheme’s protected liabilities.

* the multiplier and the scaling factor for the year commencing 1 April 2008 are expected to be published by the PPF in May 2008.

1. Payable by every registrable scheme on 1 April each year, commencing in 2006, at a rate of not more than 23p per member.

2. The Board of the PPF sets the rate and must notify this to the trustees or managers of each registrable scheme, in writing.