We’ve announced the amount of levy we will collect in 2019/20 will be £500 million. This is down from £550 million in 2018/19.
Last year we saw the highest level of claims in our history with further large claims expected in the near future. However, our prudent approach to funding has allowed our Board to continue its policy of keeping the levy stable and predictable within each three-year cycle.
A number of new features were recently introduced as part of the more substantial triennial review of the levy. These changes are working well so only minor adjustments our proposed methodology for levying commercial consolidators. The approach is based on the methodology for calculating a levy for schemes without a substantive sponsor, with adjustments to reflect the specific risks posed by commercial consolidators. We expects our approach to evolve in coming years as the new regulatory framework for commercial consolidators is defined.
Through the consultation we are also:
- Exploring how we can better support schemes to plan levy payments.
- Reminding schemes with certain types of contingent assets to re-execute and certify their agreements on the new standard forms which were published in January 2018. If schemes do not do this they will not receive a levy credit for their asset.
David Taylor, General Counsel, commented: “Last year saw the highest ever level of claims on the PPF and we expect claims to remain high for the near-term. However, while we continue to face significant risks and uncertainty, our funding position is strong and we’re on track to achieve our long-term funding objective. We’ve therefore been able to leave the levy parameters unchanged for 2019/20 and expect to collect close to £500m. We continue to monitor the situation closely and, as we’ve always made clear, will adjust the levy in future years if necessary to respond to circumstances.
“We are grateful to stakeholders for their ongoing support and engagement and look forward to hearing their views on the consultation.”
The levy consultation will be open until 5pm on 25 October 2018. We will finalise the rules and publish the levy determination in December.