19.04.2024
• PPF confirms Levy Estimate at £550 million for 2018/19
• PPF confirms Levy Scaling Factor (LSF) of 0.48 for 2018/19
• PPF implements proposed changes to insolvency measures and simplification for certifying deficit reducing payments
• Deadlines for schemes and employers to take steps to reduce their levies confirmed.
• PPF confirms Levy Scaling Factor (LSF) of 0.48 for 2018/19
• PPF implements proposed changes to insolvency measures and simplification for certifying deficit reducing payments
• Deadlines for schemes and employers to take steps to reduce their levies confirmed.
Following the consultation launched in September, the Pension Protection Fund (PPF) has today (Tuesday) published its final levy rules for the 2018/19 levy year.
The PPF has confirmed that for 2018/19 the Levy Scaling Factor (LSF) will be 0.48 and the Levy Estimate is £550m. This compares to the levy estimate of £615m for 2017/18, meaning the 2018/19 estimate is just over 10 per cent lower.
David Taylor, Executive Director and General Counsel at the PPF, commented: “This policy statement confirms our plans for the levy in 2018/19, the first year of the third levy triennium.
The levy we receive continues to play a vital role in our funding strategy. Despite significant risks, we’re on track to meet our long-term funding target which means we can set the levy at this level.
“Over the last two years we’ve worked with stakeholders to ensure the levy rules remain fit for purpose for the next three years. I’m grateful for all the feedback we’ve received. In particular we’ve taken the opportunity to review and update the PPF-Specific insolvency model, building on our experience of using it. We are also confirming today that we will use credit ratings where they are available, or a specific credit model for financial institutions, to assess insolvency risk.”
The PPF has also confirmed it will simplify the process for schemes to certify Deficit-Reduction Contributions (DRCs). Reflecting feedback to the September consultation, schemes will now be able to disregard all investment expenses in the calculation of their certifiable DRC. Smaller schemes also have the option to certify based on Recovery Plan payments.
David Taylor said: “I encourage schemes and employers to put in place risk reduction measures in the run up to the reporting deadlines in March and April 2018. We also intend to publish new documentation for contingent asset arrangements in January. The new approach for recognising deficit-reduction contributions provides a particular opportunity for schemes to gain more recognition for contributions made and so reduce their levies.”
The PPF has confirmed that for 2018/19 the Levy Scaling Factor (LSF) will be 0.48 and the Levy Estimate is £550m. This compares to the levy estimate of £615m for 2017/18, meaning the 2018/19 estimate is just over 10 per cent lower.
David Taylor, Executive Director and General Counsel at the PPF, commented: “This policy statement confirms our plans for the levy in 2018/19, the first year of the third levy triennium.
The levy we receive continues to play a vital role in our funding strategy. Despite significant risks, we’re on track to meet our long-term funding target which means we can set the levy at this level.
“Over the last two years we’ve worked with stakeholders to ensure the levy rules remain fit for purpose for the next three years. I’m grateful for all the feedback we’ve received. In particular we’ve taken the opportunity to review and update the PPF-Specific insolvency model, building on our experience of using it. We are also confirming today that we will use credit ratings where they are available, or a specific credit model for financial institutions, to assess insolvency risk.”
The PPF has also confirmed it will simplify the process for schemes to certify Deficit-Reduction Contributions (DRCs). Reflecting feedback to the September consultation, schemes will now be able to disregard all investment expenses in the calculation of their certifiable DRC. Smaller schemes also have the option to certify based on Recovery Plan payments.
David Taylor said: “I encourage schemes and employers to put in place risk reduction measures in the run up to the reporting deadlines in March and April 2018. We also intend to publish new documentation for contingent asset arrangements in January. The new approach for recognising deficit-reduction contributions provides a particular opportunity for schemes to gain more recognition for contributions made and so reduce their levies.”
Pension scheme trustees and employers can log on to view and check their insolvency data and scores at: https://www.ppfscore.co.uk/
A full list of the relevant deadlines for the 2018/19 levy year has been published alongside the Levy Determination.
Ends
Notes to editors
• The Levy Scaling Factor and the Scheme-based Levy Multiplier will be 0.48 and 0.000021 respectively.
• The Risk-Based Levy (RBL) cap will drop from 0.75% of smoothed liabilities in 2017/18 to 0.5% of smoothed liabilities in 2018/19
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.
Key dates
|
Item |
Key dates |
|
Monthly Experian Scores |
Between 31 October 2017 and 31 March 2018 |
|
Deadline for submission of data to Experian to impact on PPF-specific Monthly Scores |
One calendar month prior to the Score Measurement Date |
|
Submit scheme returns on Exchange |
By midnight, 31 March 2018 |
|
Reference period over which funding is smoothed |
5-year period to 31 March 2018 |
|
Contingent Asset Certificates to be submitted on Exchange |
By midnight, 31 March 2018 |
|
Contingent Asset hard copy documents to be submitted as necessary to PPF |
By 5pm, 29 March 2018 |
|
ABC Certificate to be sent by e-mail to PPF |
By midnight, 31 March 2018 |
|
Mortgage Exclusion (‘Officers’) Certificates and supporting evidence to be sent to Experian |
By midnight on 31 March 2018 |
|
Accounting Standard Change certificate |
By midnight on 31 March 2018 |
|
Special category employer certificate |
By midnight on 31 March 2018 |
|
DRCs Certificates to be submitted on Exchange |
By 5pm, 30 April 2018 |
|
Certification of full block transfers to be completed on Exchange or sent to PPF (in limited circumstances) |
By 5pm, 29 June 2018 (Exempt transfer application by 5pm 30 April 2018) |
|
Invoicing starts |
Autumn 2018 |
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