The pension protection levy is one of the ways that the PPF funds the compensation payable to members of schemes that transfer to the Pension Protection Fund.
On 30 March 2017 we published our final rules for Levy Year 2017/18 (see below).
Third Levy Triennium
On 23 March we published our consultation document for the third levy triennium (2018/19 to 2020/21).
The consultation outlines proposals for development of the insolvency risk model including two new scorecards and rebuilding of three existing scorecards. It also proposes to adopt the use of credit ratings for some of the largest employers and a specific methodology for regulated financial services entities.
Proposals are also made on the certification of deficit reduction contributions and parental guarantees (Type A contingent assets).
The consultation document also seeks views on a number of other areas including those suggested by the Work and Pensions Select Committee in its 2016 report, such as the possibility of a levy discount for good governance, and reducing the burden for smaller schemes.
Alongside the consultation document we are publishing a technical appendices document, draft insolvency risk rules and an independent review of the process of reviewing the PPF-specific model. All the documents can be found on the Third Triennium Consultation page
On 28 April we made some limited amendments to the consultation documents to ensure they were clear and consistent. The detail of the changes can be found here. Additionally, entities covered by the proposals on the use of credit ratings and the industry specific scorecards have been unable to see the proposed new score in the Portal. We are publishing some FAQs here to assist stakeholders in this situation.
The closing date for comments on the consultation is 5pm on 15 May.
On 30 March 2017 we published the Policy Statement for the additional 2017/18 Consultation on a levy rule for schemes without a substantial sponsor. We are also publishing the Final Levy Rules for 2017/18. The final levy rules are not substantively changed from those published in draft form in December, except to include the levy rule, as consulted on in February, for schemes which cease to have a substantive sponsor following a restructuring. The 2017/18 Determination page is here.
On 15 December we made available provisional rules for 2017/18 and the Pension Protection Levy Policy Statement. The Policy Statement can be found here.
Changes for 2017/18 levy are limited but include an opportunity to notify Experian where a change in accounting standards impacts the calculation of trend variables, which compare data on a new accounting standard in the most recent accounts to that on a different accounting standard in a previous year. This is to allow the comparison to be done on the same basis. Certification will be available for all trend variables. A Certificate and guidance on its use is available on the Pension Protection Score Portal.
We indicated in December 2016 that it was our firm intention that these provisional rules would not be altered, apart from to include additional rules relating to eligible schemes which cease to have a substantive employer after a restructuring of their pension arrangements. Schemes should therefore feel able to take appropriate steps based upon the provisional rules.
16 January 2017: We have now added the accounting standard change certificate and guidance to the 2017/18 Determination Page and have added to the Insolvency Risk guidance pages. We have also corrected two minor drafting errors – to the definition of the accounting standard change certificate in the main part of the Provisional Determination and to the year reference on the Rent Deposit Mortgage Exclusion Certificate for 2017/18.
20 February 2017: As we indicated in December 2016, we have now published an additional consultation document which is inviting comments solely on new rules for schemes without a substantive sponsor. The deadline for comments is 5pm on 6 March 2017 and we will publish finalised rules by 31 March 2017.
The guidance below reflects the 2017/18 rules except for those relating to invoicing and below which will be updated closer to the start of invoicing for 2017/18.
Levy Data Correction Principles
Guidance on ABCs
Guidance on Bespoke Investment Risk Calculation
Guidance on Block Transfers
Guidance on Contingent Assets
Guidance on Exclusion of Mortgages
Trustees and employers can check their Experian data and scores by logging on to the Pension Protection Score Portal