Written question asked by Mark Oaten (Liberal Democrat) on Tuesday, 31 January 2006, in the House of Commons. It was due for an answer on Monday, 6 February 2006. It was answered by Stephen Timms (Labour) on Monday, 6 February 2006 on behalf of the Department for Work and Pensions.

Pension Protection Fund Levy

Question: To ask the Secretary of State for Work and Pensions what assessment he has made of the likely impact of the pension protection fund levy on small businesses.

Answer: The regulatory impact assessment (RIA) that accompanied the Pensions Bill 2004 addressed the effect of the pension protection levy on businesses, and was agreed by Parliament when the Bill was passed.The RIA specifically considered the impact on businesses with fewer than 50 employees. It identified that impact on small businesses (i.e. those with fewer than 50 employees) will be limited overall by the fact that few such businesses run defined benefit pension schemes, and so are unlikely to be affected by the pension protection levy. The RIA estimates that less than 2.2 per cent. of the total cost of the Pension Protection Fund would be met by small businesses.Responsibility for consulting on and setting the level of the pension protection levy rests with the board of the Pension Protection Fund. Following 17 weeks of consultation two consultation documents were produced plus one update. The aim was to strike a balance between affordability and security. Representatives from small business were consulted as part of the process. This all resulted in a report on 16 December 2005, including an estimate of the pension protection levy amount. This is available on the Pension Protection Fund's website.

Secondary information

Type: Written question
Reference: 48803; 442 c877-8W;442 c877-8W
Session: 2005-06
Subjects: Protection Workplace pensions Pension funds Pension Protection Fund Small businesses
Contains statistics: Yes
Link: View this Written question on www.publications.parliament.uk