“Today's announcement will mean that a number of firms will face substantial costs to meet the PPF levy payment. Small businesses that are already struggling to make good their deficits will be hit particularly hard.
“There is little in the proposals to help those businesses that are struggling to stave off insolvency. The PPF levy could tip some of the weakest firms over the edge. We needed to see a more flexible approach that made provisions for the Pensions Regulator to intervene in cases where firms simply cannot afford the levy payment.” The BCC did, however, acknowledge that the Board of the PPF had made some attempt to limit the impact on firms.
Mr Frost said: “Today’s proposals are an improvement on those published in July. The 0.5% cap is a big step forward from the original proposal of 3% and we welcome the fact that the PPF will take contingent assets into account when calculating the levy. Without such measures, the outlook for businesses would have been even worse.”
However, Mr Frost stressed that further steps should have been taken to reduce the cost of the PPF levy.
Mr Frost said: “In light of the high overall cost of the levy, we are disappointed that there has been no move to reduce the level of benefits that the PPF pays out. We urge the PPF Board to take action to reduce the benefits paid out and ease the pressure on businesses. Failure to do so could lead to real difficulties for existing pension schemes and their members in the years ahead.”