The Pensions Management Institute (PMI) is the UK’s leading professional body for pensions trustees, managers, and advisers. We welcome the opportunity to respond to the PPF’s consultation on levy rules for 2026/27. PMI is committed to supporting reforms that strengthen scheme resilience, safeguard member outcomes, and ensure the sustainability of the UK pensions landscape. 

This reflects the strength of the PPF’s reserves and the improved funding position of defined benefit (DB) schemes. It is a proportionate and evidence-based decision that will be warmly received across the sector. Our response reflects the perspectives of our members and our commitment to clarity, fairness, and member empowerment.

Key points in our response: 

• Support for zero levy: The PPF’s strong reserves and improved scheme funding mean a material levy is not required. 

• Positive impact for DB schemes: Maintaining a zero levy reduces financial pressure, allowing schemes to focus on member outcomes. 

• Future considerations: the PMI seeks clarity on how the Budget’s changes to pre1997 increases may affect scheme liabilities and, in turn, future levy policy. 

• Commitment to collaboration: PMI stands ready to work with the PPF and stakeholders to ensure levy policy remains transparent, sustainable, and supportive of member security. 

Support for maintaining a zero levy 

The PMI strongly supports the PPF’s intention to maintain a zero levy for 2026/27. This decision reflects both the robust financial position of the PPF’s reserves and the ongoing improvements in scheme funding across the DB sector. 

• PPF reserves: The Fund’s healthy balance sheet provides confidence that it can continue to meet obligations without recourse to levy income. 

• Improved scheme funding: Higher interest rates, proactive risk management, and regulatory oversight have materially strengthened scheme funding levels. 

• Positive impact for DB schemes: Maintaining a zero levy will be a welcome announcement for DB schemes, reducing financial pressure and enabling trustees to focus resources on member benefits and long-term funding strategies. 

The PMI believes this approach is proportionate, evidence-based, and aligned with the PPF’s statutory objectives. 

Future considerations – pre1997 increases 

While PMI supports the current proposal, we note the recent Budget announcement regarding pre1997 increases. Whilst the PPF stated that it was confident it could absorb the change without compromising member security or its plans for a zero levy next year it also estimated that applying CPI-linked increases to pre-1997 benefits would increase liabilities by £1.7bn, which is a material increase. These changes have the potential to alter scheme liabilities and, in turn, may influence the PPF’s future funding position and levy requirements. 

The PMI would be particularly interested to understand: 

• How the PPF intends to assess the impact of pre1997 increases on scheme liabilities. 

• Whether these changes could affect the sustainability of a zero levy in future years. 

• How any adjustments might be communicated to levy payers to ensure transparency and predictability. 

We encourage the PPF to provide clarity on its modelling assumptions and to engage with stakeholders on how these reforms may shape levy policy in the medium term. 

Wider Context 

The PPF levy has historically played an important role in underpinning the PPF’s financial resilience. The decision to maintain a zero levy demonstrates confidence in the Fund’s current position and the maturity of the DB sector. However, it will be important to: 

• Monitor external risks, including economic volatility and employer covenant strength. 

• Ensure that any future reintroduction of the levy is proportionate, predictable, and communicated clearly to levy payers. 

• Continue to engage with the sector to maintain trust and transparency in levy policy. 

Conclusion 

The PMI welcomes the PPF’s proposal to maintain a zero levy for 2026/27. This decision reflects the strength of the Fund’s reserves and the resilience of DB scheme funding, and it will be warmly received across the sector. At the same time, PMI urges the PPF to consider the implications of the Budget’s pre1997 increases reforms and to share its assessment of how these may affect levy policy in future. 

The PMI remains committed to working collaboratively with the PPF and other stakeholders to ensure that levy policy continues to support scheme sustainability, member security, and the long-term health of the UK pensions system.