The annual levy on business to fund the pensions lifeboat will become fairer, the Pension Protection Fund (PPF) said yesterday.

The annual levy on business to fund the pensions lifeboat will become fairer, the Pension Protection Fund (PPF) said yesterday.

Amid fears that the burden on firms is set to rise as pension fund deficits widen and insolvencies loom, the PPF's director of financial risk Martin Clarke sought to reassure yesterday at the annual conference in Glasgow of the National Association of Pension Funds (NAPF).

Clarke said the PPF would publish proposals later this month which also aimed to bring about greater stability in individual levy bills.

"When we first introduced the levy, we tried to make it simple as its implementation represented a major challenge for us, particularly as we had limited information about the risks we were exposed to. We now have a far better understanding of those risks - and this has led to a recognition that we need to achieve greater fairness when we calculate the levy."

He said the overhauled regime would continue to recognise the short-term risks that schemes pose to the PPF, but would build into the risk-based element of the levy a recognition of "a scheme's contribution to the long-term risks that PPF faces, even from well-funded schemes".

This would include taking into account a scheme's investment strategy and credit risk over time. It offered the potential to reduce the scheme-based element of the levy, and offered greater consistency in annual bills "because the levy will become less sensitive to short-term changes in insolvency ratings and levels of underfunding".

The NAPF meanwhile has launched a "quality mark" for pensions from next year. It will recognise schemes with 10% contribution rates including 6% from the employer (twice the statutory minimum) and sound governance and communications.

A survey published yesterday by Standard Life revealed a massive drop in the number of people agreeing it is a good time to invest in a pension. In September, only 40% of those surveyed agreed compared with 56% in June and 73% in June 2007.

Jim Connolly, head of pensions at Standard Life, said: "We would strongly caution that current weakness in investment markets should not deter people from investing in pensions."