Pension Protection Fund levies set to rise in 2011

Charity Finance Directors' Group issues warning

Charity members of the Pension Protection Fund could be paying higher levies from next April, a member of the Charity Finance Directors' Group committee on pensions has warned.

Kevin Barnes, finance director of Barnardo's, said the PPF, which provides compensation to members of defined-benefit schemes if their employers become insolvent, had altered the way it calculated organisations' insolvency risks.

He said the change meant the PPF's 'insolvency rating' - the likelihood of an organisation going bankrupt - had tripled for the lowest-risk organisations, including most charities. As a consequence, their contributions were likely to increase, he said.

"Most charities are very safe, so these changes will affect them adversely," he said.

A spokesman for the PPF confirmed that it had changed the way it calculated the risk of insolvency, but said that total contributions from all members of the fund would not change.

Many charities in the scheme would not pay higher levies, he said.

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