We believe a well-designed levy should do three things:
- Provide a stable revenue stream for MaPS, TPO and TPR
- Place limits on cross subsidy; cross subsidy is an inevitable feature of levies and is in some cases desirable, but it should be limited. The costs of “greater good” regulation should not fall disproportionately on any one group of levy payers and schemes should generally fund the regulation of the benefits they offer.
- Be consistent with government policy for the pensions market. It should not focus on any one market sector or create perverse commercial incentives.
None of this will be a quick fix – meaningful change takes time and always requires consensus.
The time has come for the government and the pensions sector to talk frankly and constructively about a fair, sustainable way of delivering the General Levy across the long-term.
Gregg McClymont is director of policy at The People’s Pension