The Department of Work & Pensions has withdrawn the planned 10 per cent increase in the general levy, due to take effect this April.
This levy is applied on all occupational and personal pension schemes to pay for regulators and the ombudsman.
Payments had been due to rise by 10 per cent in April, but this is been waived in light of the business disruption, and funding issues faced by a number of pension schemes.
Aegon’s head of pensions Kate Smith says: “In the current economic turmoil caused by Covid-19, we welcome the government’s decision to withdraw this planned increase in fees.
“Now is not the time to put more costs on to pensions schemes, which for some would have amounted to additional thousands of pounds this year.
“Once time allows, we recommend the government carries out a structural review of the general levy before making any further increases to ensure what schemes of different types are paying is fair and proportionate.”
Current the amount payable depends on the total number of active and deferred members, size of the scheme and whether it’s an occupational trust based scheme or a contract-based scheme.
There has been criticisms that this “pay per member” model places an unfair burden on the larger multi-employer master trusts – which might have many thousands of members paying just minimum AE contributions. These may be paying more than many occupational schemes that have far larger assets, but fewer active members.
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