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.
Latest News - 31 January - New Levy Framework Page and YouTube Channel
The PPF has launched its own YouTube channel with a video on the new levy framework for 2012/13. In it, Chief Policy Advisor Chris Collins explains the main levy changes and what schemes can do to ensure their bills are accurate and predictable.
You can view the video at http://www.youtube.com/watch?v=kdPBu5dXesk - we are happy to have questions left in the comments area.
Also, the New Levy Framework page has been updated and includes the following:
13 December - The 2012/13 Levy Rules
The Pension Protection Fund (PPF) today published the Determination which sets the Levy Rules for 2012/13. A press release has been issued to accompany this.
Alongside this is published the Policy Statement, following the September consultation on the 20112/13 levy, which summarises responses to the consultation and sets out the changes that have been made to the proposals set out in the consultation. It does not purport to be a full description of the New Levy Framework, being introduced from 2012/13, and should be read in conjunction with the Consultation Document.
The Policy Statement confirms that the Board of the PPF will:
- Aim to collect an annual levy of £550 million in 2012/13
- Set the risk-based levy scaling factor at 0.89 and the scheme-based levy multiplier at 0.000085,and
- Cap the risk-based levy at 0.75 per cent of liabilities.
The following documents are published with the final Determination:
- Block Transfers Guidance
- Contingent Asset Guidance
- Investment Risk Guidance
- Levy Practice Guidance
All documents are listed on the 2012/13 Levy Determination page.
24 November - Draft Contingent Asset Guidance
A draft of the Contingent Asset Guidance is available following stakeholder responses to the consultation on the draft 2012/13 Determination. A final version will be published shortly, alongside the final Determination. If there are any further issues that stakeholders consider it would be helpful to have clarified please draw these to our attention as soon as possible.
21 September - Consultation on the 2012/13 Draft Determination
The Pension Protection Fund (PPF) today (Wednesday 21 September) published its consultation on the draft Determination for 2012/13.
The consultation document announces that the Board of the PPF proposes to
- collect an annual levy of £550 million;
- set the risk-based levy scaling factor at 0.89 and the scheme-based levy multiplier at 0.000085; and
- cap the risk-based levy at 0.75 per cent of liabilities.
The 2012/13 Draft Determination also contains the detailed rules to give effect to the new levy framework, as confirmed in A New Framework: Policy Statement published in May 2011. A press release to accompany the consultation is available.
The consultation closed at 5pm on 2 November 2011.
The Draft Determination, its appendices and draft guidance on the Bespoke Calculation of Investment Risk, are available on the 2012/13 Levy Determination page.
The following documents will be published with the final Determination in December 2011:
• Block Transfers Guidance
• Contingent Asset Guidance
• Levy Practice Guidance
A draft of the Contingent Asset Guidance is available following stakeholder responses to the consultation on the draft 2012/13 Determination. A final version will be published shortly, alongside the final Determination. If there are any further issues that stakeholders consider it would be helpful to have clarified please draw these to our attention as soon as possible.
16 May
The Pension Protection Levy - A New Framework: Policy Statement
The Pension Protection Fund (PPF) today published its Policy Statement following the October consultation document, The Pension Protection Levy: A New Framework. The Policy Statement sets out the final design of the pension protection levy that will be effective from 2012/13. This follows comprehensive engagement with stakeholders including with our Steering Group.
The document confirms the Board’s intention to implement changes that will support greater stability and predictability in levies.
A draft Determination, including the levy parameters that will apply from 2012/13, will be published for consultation in autumn 2011.
A New Framework: Combined Annexes
The Combined Annexes contain technical material including impact analysis, an example of the levy calculation and other supporting analysis.
Consultation: Guidance for the Bespoke Calculation of Investment Risk
As part of the new levy formula, schemes with liabilities of £1.5 billion or more will be required to report the results of a bespoke analysis of their investment risk. Other schemes may elect to do so. We are publishing for consultation the guidance on how to calculate investment risk using this bespoke approach.