The Society of Pension Professionals has raised concerns over proposed increases in costs for master trusts and personal pension providers when paying the General Levy.
The General Levy is a charge paid by most schemes to fund the regulatory bodies that oversee the industry, namely The Pensions Regulator, The Pensions Ombudsman, and the Money and Pensions Service.
In its response to the Department for Work and Pensions consultation on General Levy regulations, the SPP questioned the rationale for placing the largest levy increases on master trusts and personal pension providers, supposedly without clear evidence that they generate a higher regulatory burden.
The consultation on increasing the General Levy that pension schemes will be required to pay, from April next year to March 2030, could see the costs rise by as much as 9 per cent in this time period.
The SPP states that additional levy costs arrive alongside an “unprecedented wave” of government-led reforms within the Pension Schemes Act including dashboards, Value for Money assessments, small pots consolidation, decumulation, and market consolidation.
The SPP recommended consolidated reporting across all levy-funded bodies.
Madalena Cain, deputy chair of the SPP’s DC Committee, says: “The SPP fully supports steps to ensure our regulatory bodies are adequately funded in order to protect savers. However, any changes to the General Levy must be fair, proportionate, and transparent.
“Given the huge cumulative cost of ongoing government reforms, the government must ensure levies are carefully balanced with industry affordability.”
The SPP is the representative body for a wide range of providers of advice and services to pension schemes, trustees and employers.
The DWP has claimed that it is proposing higher rates to address a funding shortfall and cover the increasing costs of said regulation.