TPT Retirement Solutions has questioned whether superfunds should continue to pay a higher levy to the Pension Protection Fund than employer-sponsored schemes.
Its concerns were raised in a consultation run by the Pension Protection Fund on the 2026/ 2027 levy. For the first time the PPF is reducing the regular levy to zero, in response to a significant £14bn surplus — a move supported by TPT. However the PPF is proposing continuing to charge the Alternative Covenant Scheme (ASC) levy for schemes without a employer covenant, which includes the new superfund structures.
TPT says that schemes entering superfunds must be able to demonstrate an increased probability of benefits being paid in full. TPT argues that this means that superfunds “by definition, represent less risk than regular DB schemes”.
It adds that the availability of a capital buffer will “put schemes in superfunds in a stronger funding position than regular DB schemes”.
TPT said it opposes a continuation of the ACS levy on grounds of fairness, noting that regular schemes and members will now benefit from the zero levy, but those moving to a superfund will not – despite having paid the levy (helping accumulate the surplus) until the transaction.
It says this will make entry into a superfund more expensive for members, schemes, and sponsors alike.
Last year, TPT announced its intention to launch the UK’s first TPR-assessed run-on superfund. Since then, reports have suggested that a number of other workplace pension providers are also interested in the superfund space.
TPT Retirement Solutions head of policy and external affairs, Ruari Grant says: The PPF’s decision to reduce the regular levy to zero makes complete sense, but there’s no reason the same logic can’t be applied for superfunds.
“These schemes are to be held to a very high level by the regulator and will therefore pose minimal risk to the PPF.
“We are aware PPF is wary of future models emerging which may pose more risk, and of the risk were superfunds to reach ‘significant scale’.
“However, we’d urge them to take a more proportionate approach for the market that currently exists, and remain flexible in future – rather than risking stifling growth and innovation at the outset.”
