Levy to aid pension fund losers

HEALTHY company pension schemes face a 'flat rate' levy to rescue weaker schemes from 2005, under the Pensions Bill to be published today.

Pensions Secretary Andrew Smith plans a rescue fund for those whose pensions were slashed when their firms collapsed. Rescuing these is estimated at £100m a year.

An initial levy on pension schemes could be £10 per member. If a major scheme goes under, the bill could rocket. Critics point to the US Pension Benefit Guaranty Fund, with a £4.7bn deficit.

Many think a rescue plan necessary, but argue that well-funded schemes should pay less. The Department of Work and Pensions is ready to devise a 'risk-adjusted' levy, but it could take up to three years to work out.