PPF could be new 'poll tax'
13 February 2004
Eight million workers in final salary pension schemes will pay a £40-a-year stealth tax under a new scheme to encourage long-term savings, it was claimed yesterday.
Experts say the proposals, which call for a £300 million-a-year pension protection fund (PPF), will cause many ailing pension schemes to close.
But Andrew Smith, secretary of state for work and pensions, said the proposals, designed to guard pension rights and pay out on collapsed schemes, would save £130 million a year.
The department also claims that schemes will collect £370 million from a new rule allowing them to scale back the inflation protection they offer to scheme members.
But Gordon Pollock, chairman of the Association of Consulting Actuaries, told The Times: "Whilst there are simplification measures within the Bill that we welcome, it is now difficult to see any major savings set against a whole raft of new extra costs."
Lord Oakeshott of Seagrove Bay, the Liberal Democrats pensions spokesman, said the PPF threatened to become a "poll tax" on pension funds.