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Pension Protection Levy 


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.

These pages contain information about who has to pay the levy, how it is calculated, how schemes can reduce their levy, and the invoicing process.

 

Pension Protection Levy Consultation - May 2014

 

On 29 May, the PPF launched a consultation on the introduction of a new, PPF-specific insolvency risk model for determining levy payments, developed with global information solutions company, Experian, and drawing on input and expertise from the pensions industry and employers’ representatives.

As well as covering the introduction of the PPF-specific model the consultation document includes proposals in other areas for the second triennium of the PPF levy covering levy years 2015/16 to 2017/18.

Please see the table below for links to the various consultation docs and YouTube videos.

Update 23 June: We have now added the Experian Governance Document (Developing a specific measure of insolvency risk for the Pension Protection Fund) and the Barnett Waddingham report on the PPF-specific model to provide additional background on the proposals. We have also made changes to the following to reflect the finalised version of the Experian Governance Document;

  • In the main consultation document to correct the Gini co-efficient quoted for the Commercial Delphi model
  • Annex A of the Combined Annex Document covering scorecard weightings (and a cross reference in the main consultation document) and the index of definitions has been updated and corrected
  • The draft Determination-  Extracts from the Main Body and Insolvency Risk Appendix have been updated. In the main these are tidying up changes but they do include changes to Table 2, in part 3, Parent Strength, of the Insolvency Risk Appendix.

Update 8 July: Regrettably, we accidentally deleted the example Asset Backed Contribution voluntary form (Annex F) from the Combined Annex document on 23 June. We have now re-instated theis voluntary form into the Combined Annex. The contents of the form have not been changed from their original publication and reflect the proposed drafting of the ABC Appendix and the policy proposals in the main consultation document, so we believe that stakeholders will be able to make any comments on the substantive issues within the existing deadline of 9 July. However, we did also ask for comments on the layout and contents of the form and are happy to accept comments on this up to an extended deadline of Wednesday 23 July. We apologise if this oversight has caused inconvenience.


 

 Document Details
Consultation on the second PPF Levy Triennium – 2015/16 to 2017/18

This consultation document sets out our plans for the pension protection levy over the next three years. 

 

Combined Annex to the Consultation

 

Includes definitions and scorecards, impact analysis, and example calculations and voluntary certificate.

Draft Determination 2015/16 - Extracts 

 

 

Draft Determination 2015/16 - ABC Appendix

 

 

Draft Determination 2015/16  - Insolvency Appendix 

 

 Experian Report - Developing a specific measure of insolvency risk for the Pension Protection Fund

 

The purpose of this paper is to document the creation of the PPF-specific Insolvency Risk Score created by Experian for the sole purpose of providing the PPF with an objective evaluation of the likelihood of any given eligible scheme employer or guarantor becoming insolvent during the next 12 months.

 PWC Report - Model Validation

The purpose of this report is to provide an independent review for the PPF on the Experian model.

 

Barnett Waddingham Report - Understanding the Impact of Change in Insolvency Risk Model

This report is intended to give an indication of the companies that are likely to see an improvement or worsening in relative insolvency risk score resulting from the differences between the Dun & Bradstreet failure score model (used prior to April 2014) and the PPF-Specific Insolvency Risk Model.

 

Webinar with the PPF and Experian

 

47-minute video with key figures from PPF and Experian explaining the key issues behind the levy proposals, and taking questions.
Webinar Q&As

 

Answers to questions that were submitted during and after the webinar.

 YouTube video - Martin Clarke

 

Our Director of Financial Risk summarises the main points of the consultation in a three-minute video.
 YouTube video -  Chris Collins

Our Chief Policy Advisor looks at the key issues in more detail.

 

 

 

The following links may also be useful for further information on the levy:

Details  Page/Document

On 17 December 2012, the PPF published its Policy Statement on the 2013/14 levy. This was accompanied by the Levy Rules and appendices,  guidance on levy practice, block transfers, bespoke investment risk calculation and contingent assets. standard form contingent asset agreements are also on this page.

 

Levy Determination 2013/14

This booklet, produced by the PPF and CBI, explains how the levy works. It also sets out the actions you can take to reduce your individual levy bills and the deadlines you must meet to make sure these actions are taken into account.

How to Reduce Your Levy

This page contains links to all levy-related documents going back to 2005. Some of these documents have been superseded and are included for historic interest.

All Levy Documents