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Levies: No Change for 2003/04
by Ian Neale 27/02/2003 Printer-friendly version of this page
Pensions Minister Ian McCartney today announced that, for the fourth year running, there would be no change to the rate of the General Levy and that, for the sixth year running, a Compensation Levy would not be raised in 2003/04.
The General Levy is payable annually in advance in respect of the 12 months period from 1 April by all UK-approvable occupational and personal pension schemes (except 1-person schemes and death-benefits-only schemes), once they are in their third year of operation. It meets the costs of the Occupational Pensions Regulatory Authority (Opra), the Pensions Ombudsman, the Pensions Advisory Service (OPAS) and the Pension Schemes Registry (run by Opra).
The General Levy rates for 2003/04 are as follows:
| GENERAL LEVY (PER YEAR) |
| No. Active Scheme Members | OPS | PPS |
| 2 - 11 | £12.00 per scheme | £5.20 per scheme |
| 12 - 99 | £1.25 per member | £0.50 per member |
| 100 - 999 | greater of £0.90 per member and £125 | £0.35 / £50 |
| 1,000 - 4,999 | greater of £0.70 per member and £900 | £0.30 / £350 |
| 5,000 - 9,999 | greater of £0.53 per member and £3,500 | £0.20 / £1,500 |
| 10,000 or more | greater of £0.37 per member and £5,300 | £0.15 / £2,000 |
Note that the term 'member' includes all active, deferred and pensioner members, plus ex-spouses with pension credit rights under the scheme.
(SI 1997/666 as amended by SI 2000/542)
The Compensation Levy covers the cost of expenditure by the Pensions Compensation Board. Compensation can be paid (up to a limit set out in legislation) to occupational schemes of insolvent employers who have suffered a reduction in their assets - but only if through dishonesty such as theft or fraud. It applies only to occupational schemes. The maximum amount per member of the compensation levy is 23p.
Compensation levies raised in its first year (1997/98) so substantially exceeded the value of claims to date that no more has had to be raised since. In fact the Pensions Compensation Board has only ever paid out three claims to date, viz. £42,104.87 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; and finally a total to date of £421,244.46, in five tranches (most recent 31.1.03), to the independent trustee of the Cheney Pension Scheme.
Both levies are paid together to the Registrar of Occupational and Personal Pension Schemes, which is part of Opra although operating from separate offices, in Newcastle upon Tyne. Trustees are liable for payment of the levies.
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