Partnerships and particularly limited liability partnerships (LLPs) could face unnecessarily high bills for the pension levy, it was claimed this week.

In order to build up the pension protection fund, which is designed to be a central pot of money to meet defined benefit (or final salary) pension scheme liabilities in the event of a company's failure, a pension levy is to be introduced from April.


The levy amount is split into two elements: a scheme-based levy - apportioned across all eligible schemes - and a risk-based levy, which is calculated through a financial risk assessment of individual schemes on the available information.



According to accountants Grant Thornton, partnerships and LLPs may be unfairly disadvantaged if the risk assessment is based on incomplete or inaccurately interpreted information - such as the assumption that the business is a start-up because of a recent conversion to LLP status from a partnership, meaning only one year's accounts have been filed at Companies House.


Roger Zair, head of the professional partnerships group at Grant Thornton, said: 'Partnerships and LLPs with defined benefit schemes should check that their pension levy assessment is based on the firm's full historical financial record and that they have provided all the information required. If they don't do that, they may well end up paying more pension levy than they need.'


Mr Zair advised all firms to contact the risk assessor to ensure the information held on file for them is correct. The fund has appointed business information provider Dun & Bradstreet to conduct the assessments.


The levy is payable annually and is a pension scheme liability. It replaces a transitional levy last year which was modest by comparison. The March 2006 levy, which is understood to relate to the year to 31 March 2007, is expected to be invoiced to scheme trustees in late summer. Schemes will have 28 days to pay.


Links: www.pensionprotectionfund. org.uk