The figure is double previous estimates and has been seen as evidence of
major flaws in a system designed to safeguard company pensions.
In some cases, corporates could be forced into administration to avoid the
fee levies, causing them to call on the PPF’s funds and adding to the funding
burden, a study compiled for RBC Capital Markets said.
The PPF levy is made of a flat-rate fee on each fund and a risk-based levy,
which accounts for 80% of the total. Last month the PPF said British firms
running final-salary retirement schemes, must pay a total of £675m next year to
the fund, up from the £320m due this year.
The forecast was that the majority of firms would see fees double in line
with the fee rise, but the report shows firms at risk of collapse will be
protected from a more severe hike by a funding cap.
Those employers at least risk of a funding shortfall, usually the most
profitable, will cut their levy fee by further cutting their own pension fund
deficits leaving the average employer faced with paying for the bulk of the rise
in the levy.
Independent pension consultant John Ralfe warned that any funding shortfall
would have knock-on effects for less prosperous employers.
‘If the bigger, better-funded companies continue to pay down their deficits
they will pay a smaller and smaller proportion of the risk-based levy. They will
leave those most at risk, and those which can ill-afford to pay to make up the
shortfall,’ he said.
Cendant chairman gets lengthy jail term
Walter Forbes, former chairman of real estate and travel group Cendant, has
been sentenced to 12 years and seven months in prison and ordered to pay $3.3bn
(£1.67bn) for his role in the massive accounting scandal at the company. In the
trial, prosecutors accused Forbes and former vice chairman Kirk Shelton of
overseeing an accounting scheme that overstated income at Cendant, formerly
known as Avis Budget Group, and at predecessor company CUC International.
The US district judge Alan Nevas called the restitution payment ‘a reasonable
estimate of the victims’ losses’.
It is not known how Forbes, 64, is expected to pay such a large sum.In
October 2006, Forbes was convicted on one count of conspiracy and two counts of
Misys cull claims FD’s scalp
Mike Lawrie, the new chief executive of Misys dismissed key members of the
board, including finance chief Howard Evans, for their part in a failed MBO last
year. The other casualties were Jasper McMahon, corporate development director
and Tom Skelton, head of its healthcare operation. Misys said: ‘The board has
agreed with Howard Evans and Jasper McMahon that they will step down from their
Evans will continue as FD as a company director until the end of the
financial year to ensure a successful transition to his successor, a search for
whom is underway.’ The three men, could collect a total of up to £2m plus any
cash they can extract from the company’s share options scheme.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements