PPF to offer extension to schemes struggling with levy amid Covid-19

The Pension Protection Fund (PPF) will give levy payers struggling as a result of the coronavirus pandemic up to 90 days interest free to pay their 2020/21 levy bill.

To be considered for the extension, applicants need to have completed an online ‘Covid-19 notification form’ and explain how they have been negatively impacted by the pandemic, after receiving their levy invoice.

They must also commit to paying their levy bill within 90 days before interest can be waived.

Normally, pension schemes have 28-days in which to pay the levy, with an interest charge that is five per cent above the Bank of England base rate applied to those who miss the deadline.

The PPF said schemes or sponsoring employers who ask to pay their levy in instalments over a period of more than 90 days would typically be charged a sliding scale of interest.

Under the PPFs usual payment plan policy, zero interest is accrued in the first 90 days, before increasing to 3 per cent rate for the next 60 days and a standard rate of 5 per cent above the Bank of England base rate applied thereafter.

PPF executive director and general counsel, David Taylor, commented: “We recognise that these are challenging times for many and so are offering our levy payers longer to pay their levy bill if they’ve been affected by the current crisis.

"We hope this new measure, along with our existing levy payment plan option, will be able to help our levy payers where they have been affected by the pandemic.”

The PPF previously confirmed that the impact of the Covid-19 crisis on levy bills would be "minimal", with no individual schemes asked to pay more than 0.5 per cent of liabiltiies, after industry experts warned that the amount companies pay into the PPF could see a threefold rise as a result of the pandemic.

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