21.10.2026
The move means that around 4,800 conventional DB schemes will not be charged a levy in 2027/28. Pausing the ACS levy for one year will allow time for the PPF to complete its review of the ACS methodology. This will help to ensure a risk proportionate approach that reflects key developments including the final shape of the regulatory regime being put in place by Government.
The pause does not permanently remove the ACS levy. Any future charging decisions will be informed by market developments and the outcome of the PPF’s wider review.
Commenting on the levy announcements, Aaron Pang, Acting Chief Actuary at the PPF, said: “Not imposing a levy for conventional DB schemes reflects the PPF’s financial position and evidence-based approach to levy setting. Pausing the ACS levy will allow us to refine the long-term framework for Alternative Covenant Schemes, ensuring it remains risk-proportionate, practical and responsive to market developments while continuing to protect our current and future members.”
Section 143 and s179 valuation assumptions
Alongside the levy announcement, the PPF has published its response to the consultation on updated actuarial assumptions for valuations carried out under sections 143 and 179 of the Pensions Act 2004. The consultation launched in July and ran for seven weeks. It followed a review of bulk annuity market pricing, which found pricing had become more competitive since the PPF’s last detailed review.
The main changes affect discount rates and mortality assumptions, keeping them aligned with current buy-out pricing. They are expected to reduce estimated liabilities under the valuation bases, although the impact will vary by scheme.
Following consultation feedback, the PPF will implement the proposed assumptions for sections 143 and 179, with a revised effective date for section 179 valuations. The new section 143 assumptions will take effect from 31 May 2026, while the revised section 179 assumptions will apply to valuations with an effective date on or after 30 November 2026. This will provide certainty for valuations already in progress.
The PPF will publish updated valuation guidance documents later in the year, following the publication of secondary legislation to the Pension Schemes Act 2026. These documents will specify the date from which section 143, section 179, and similar valuations should include pre-1997 indexation of PPF compensation and how this indexation should be allowed for. Until this guidance is published, valuations do not need to include it.
The updated section 179 assumptions guidance will also specify that, for superfunds assessed by The Pensions Regulator, the financial and mortality assumptions used for section 179 valuations will be those in force for section 143 valuations at the time. This approach is intended to produce a more accurate assessment of liabilities and will be relevant both to ACS levy calculations and the default superfund wind-up trigger.
Commenting on the consultation response, Aaron Pang added: “We have listened carefully to the points raised by respondents to the consultation, particularly around timing for section 179 valuations. Applying the revised assumptions to valuations with an effective date on or after 30 November 2026 will provide more certainty and avoid unnecessary disruption for valuations already in progress.
“For Alternative Covenant Schemes, the combination of a one-year levy pause and a more appropriate valuation approach provides a stable basis while we develop the longer-term framework in consultation with stakeholders. Aligning the relevant section 179 assumptions with the section 143 basis will also support a more accurate assessment of superfund liabilities.”
Section 179 valuations
The PPF recognises stakeholders’ views on the ongoing purpose and relevance of section 179 valuations, particularly while the conventional levy is set at zero, and is mindful of the associated costs for industry. Section 179 valuations continue to serve important purposes beyond calculating the conventional PPF levy. They are a legislative requirement and provide a consistent measure of funding across the defined benefit landscape, support the PPF’s risk assessment and modelling, and inform publications including the Purple Book and PPF 7800 Index. The PPF recognises the points raised by stakeholders about proportionality and will keep these under review.
-ENDS-
Notes to Editors:
- This is the third consecutive year that the PPF will not impose a levy for conventional schemes.
- ‘Conventional’ refers to DB schemes with a substantive sponsoring employer. Almost all of the around 4,800 DB schemes protected by the PPF are conventional schemes.
- Alternative Covenant Schemes are arrangements, such as superfunds, where member security relies on covenant support other than a conventional sponsoring employer. The ACS levy is a charge that can apply to these schemes to reflect the risk they present to the PPF.
- Section 143 valuations are used to assess whether a pension scheme in a PPF assessment period has sufficient assets to secure benefits at least equal to PPF compensation levels outside the PPF.
- Section 179 of the Pensions Act 2004 requires every eligible scheme to undertake a Pension Protection Fund valuation to establish the level of the scheme’s assets and liabilities. These valuations are used in the PPF’s Purple Book and 7800 Index publications, as well as the PPF’s internal risk modelling, and were previously used in the PPF’s conventional levy calculations. Section 179 assumptions are currently also used to determine alternative covenant scheme levies and the default superfund wind-up trigger.
- The updated assumptions guidance documents are now available on the PPF website: https://www.ppf.co.uk/trustees-advisers/valuation-guidance. The full consultation response sets out a summary of the responses received and the PPF’s decisions following the consultation.
About the PPF
The Pension Protection Fund (PPF) is a public corporation, set up by the Pensions Act 2004, and has been protecting members of eligible defined benefit (DB) pension schemes across the UK since 2005.
The PPF is run by an independent Board and accountable to Parliament through the Secretary of State for the Department for Work and Pensions. It protects 8.6 million members belonging to more than 4,800 pension schemes. If an employer collapses and its DB pension scheme cannot pay members what they were promised, the PPF pays compensation for their lost pensions. The PPF is now funded principally through assets from transferring schemes, recoveries, and investment returns. For its first 20 years it collected a compulsory levy from all DB schemes.
The PPF is one of the UK’s largest asset owners with £31.5 billion of assets under management. It also administers the Fraud Compensation Fund (FCF), the Government’s Financial Assistance Scheme (FAS) and across both the PPF and FAS looks after over 420,000 members.
For further press information contact:
PPF Press Office
020 8406 2107
[email protected]
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PPF Press Office
020 8406 2107
[email protected]
Follow us on X and LinkedIn
