Block transfer certificates provide us with the estimated section 179 valuation positions of the schemes involved in a transfer of liabilities. We may use this valuation information in lieu of the formal section 179 valuation information to calculate the levy.

We define two categories of block transfers:

• a full transfer is one of 100 per cent of liabilities, resulting in the transferring scheme becoming exempt from the levy. (Note this includes a transfer to an insurance company.);
• a qualifying transfer exceeds £1.5million or is of more than 5 per cent of the assets of at least one scheme (but is less than a material block transfer).

Block transfers can be certified on Exchange for levy purposes, but there are different rules and deadlines for each category of block transfer.

For details of how to complete block transfer certificates for the 2010/11 and 2011/12 levy years, please refer to our Guidance for Calculating and Certifying Block Transfers.

Full transfers

When one scheme transfers all of its liabilities to another, we expect this to be certified to us so that those liabilities can be accounted for in the levy calculation.

If schemes fail to submit certificates for a whole-of-scheme transfer, the levy for the receiving scheme will be calculated as follows:

1) transform the transferring scheme’s assets and liabilities to the measurement date of 31 March 2008
2) reduce the assets by the greater of a) five per cent and b) 5 per cent per annum for the period from date of transfer to 30 June 2009
3) transform the receiving scheme’s assets and liabilities to the same date, then
4) add together the assets from (2) and (3)
5) add together the liabilities from (1) and (3).

Where there have been multiple full transfers, certified or not, into a single receiving scheme which has submitted a post-transfer valuation on time, we will use that valuation as normal with no reduction in asset value. 

Please note: if a scheme carries out a new section 179 valuation after a full transfer and submits it as part of the annual scheme return process, it will not be used until the following levy year (for example, a section 179 valuation submitted by 5pm on 31 March 2010 will be used from the 2011/12 levy year). Certification of the funding positions of the schemes post-transfer via the block transfer pages on Exchange is therefore necessary.

Qualifying transfers

Schemes have the option of certifying block transfers of at least:

a) 5 per cent of assets (of either scheme);
b) £1.5 million

Either of these may apply to either scheme involved in order for the transfer to be deemed as qualifying.

Qualifying transfers share the same deadlines as material transfers for certification (or for the submission of a new section 179 valuation).

An alternative to submitting block transfer certificates for a material block transfer is to submit a full new section 179 valuation, which must be done 12 months before the start of the levy year.

Deadlines for certification

For the 2010/11 levy

• 5pm on 30 June 2010 for full transfers
• 5pm on 30 June 2009 for qualifying transfers

For the 2011/12 levy

• 5pm on 30 June 2011 for full transfers
• 5pm on 30 June 2010 for qualifying transfers