By Simon Challis

LONDON (Reuters) - Britain's Pension Protection Fund set its annual levy for the 2008-2009 financial year at 675 million pounds and expects it to remain at about that level until 2011, it said on Thursday.

Set up two years ago to protect the retirement benefits of staff in final salary pension schemes whose employers go bust, the PPF PPF.L, funded by levies on solvent company pension funds, has kept the levy at the same level as 2007-2008.

The levy will rise only in line with average wages until 2011 unless there is a significant change in risk faced by the PPF, which it regards as being unlikely.

The PPF has moved to setting a three-year levy from its previous annual funding figure to counter criticism from companies that they do not know how much they would be required to pay from year to year.

"This gives business and industry certainty over the overall cost of the PPF," its chief executive, Partha Dasgupta, told Reuters.

The PPF said it had sought to distribute payment of the levy more fairly across the 7,800 pension schemes under its remit, by raising thresholds at which well-funded schemes, which tend to be those managed by larger firms, pay little or no levy.

It raised the level at which schemes pay no levy to a funding level where a scheme's assets are 140 percent of its liabilities, from 125 percent.

It also raised the threshold at which schemes pay a lower levy to 120 percent from 104 percent.