• Final levy rules for 2016/17 remain largely unchanged for second year of the triennium
• Amendments to the handling of mortgage certifications and recertification of ABCs
• PPF will reflect further on new Financial Reporting Standard FRS 102
• PPF encourages schemes to continue to put in place risk reduction measures
• Work on next levy triennium, commencing in 2018/19, already underway
Following the consultation launched in September, the Pension Protection Fund (PPF) today (Thursday) confirmed its levy rules for 2016/17.
David Taylor, Executive Director and General Counsel at the PPF, commented: “This year was our first for calculating levy invoices using the new Experian model. We are pleased that overall, consultation responses and feedback suggest the model is working well, and what schemes and employers desire now is stability.
“Our publication of the final levy rules for 2016/17 therefore shows limited change as we endeavour to keep rules as stable as we can for the next two years. Having listened to feedback, however, we have made it easier to certify some mortgage exclusions and asset backed structures”.
Details of these changes include:
- Certificates relating to investment grade credit ratings, pension scheme mortgages and rental deposit deeds to be carried forward, rather than needing to be recertified. The PPF will check that ratings previously certified continue to be investment grade
- Employer scores to show effect of recertification – and backdated to April – so schemes can see impact
- New companies able to submit interim accounts
- A lighter touch approach to recertification for ABCs
More substantial changes will be considered on a triennial basis. However, in advance of the next triennium, the PPF will also be carrying out analysis to see whether further changes to the rules are necessary for 2017/18, to reflect the introduction of the new Financial Reporting Standard FRS102.
David Taylor added: “The limited changes we have proposed have been well received. We are listening to feedback, which is extremely useful and we will continue to consult with stakeholders as we consider more substantial changes for the next triennium – work which is already under way.
“Finally, we would encourage schemes and employers to continue to assess whether they have the right risk reduction measures in place, such as making additional payments into the scheme or putting in place a contingent asset”.
The Determination confirms that the levy scaling factor and the scheme based levy multiplier will be 0.65 and 0.000021 respectively. These factors were those published in September supporting the levy estimate of £615m, compared to £635m in 2015/16.
Pension scheme trustees and employers can log on to view and check their data and scores at: https://www.ppfscore.co.uk/
A full list of the relevant deadlines for the 2016/17 levy year has been published alongside the final levy Determination.
Notes to editors
The Pension Protection Fund protects millions of people throughout the United Kingdom who belong to defined benefit pension schemes. If their employers go bust, and their pension schemes cannot afford to pay what they promised, the PPF will pay compensation for their lost pensions. Tens of thousands of people now receive compensation from the PPF and hundreds of thousands more will do so in the future. The PPF is a public corporation, set up by the Pensions Act 2004, and is run by an independent Board.
The deadline for submission of information for the 2016/17 levy is midnight on Thursday 31 March 2016, except as detailed below.
Monthly Experian Scores Between 30 April 2015 - 31 March 2016
Deadline for submission of data to Experian to impact on Monthly Experian Scores - One calendar month prior to the Score Measurement Date
Submit scheme returns on Exchange - By midnight, 31 March 2016
Reference period over which funding is smoothed - 5-year period to 31 March 2016
Contingent Asset Certificates to be submitted on Exchange and with hard copy documents as necessary to PPF - By midnight, 31 March 2016
ABC Certificate to be sent to PPF - By midnight, 31 March 2016
Mortgage Exclusion (‘Officers’) Certificates and supporting evidence to be sent to Experian - By midnight on 31 March 2016
Deficit-Reduction Contributions Certificates to be submitted on Exchange - By 5pm, 29 April 2016
Certification of full block transfers to be completed on Exchange or sent to PPF (in limited circumstances) - By 5pm, 30 June 2016
Invoicing starts - Autumn 2016
For further press information contact: