- The PPF's strong funding position means levy rules remain stable for the 2022/23 levy year
- Improved scheme funding and stability in levy rules see total levies fall by £105 million – with levy estimate of £415 million
- 82% of schemes that pay a risk-based levy will see a reduction, though some with a worsening covenant may see increases
- Measures introduced in 2021/22 to support schemes through the pandemic will remain in place
The PPF has today announced in its 2022/23 levy consultation it expects to collect £415m from its levy payers, a reduction of £105m from the previous levy year.
The consultation document also reveals that 82 per cent of schemes that pay a risk-based levy will see a reduction, and that the PPF levy methodology will remain unchanged.
The PPF’s strong financial position throughout the pandemic, and defensive investment strategy, have been instrumental in its decision to allow the levy estimate to fall.
David Taylor, Executive Director and General Counsel at the PPF said: “Despite the ongoing risk of employer insolvency, our levy payers’ improved funding positions, together with our financial strength, mean we can avoid raising our levy pre-emptively and maintain stability in our proposed levy rules.”
The levy has been reduced due to improvements in scheme funding, an update in the way scheme underfunding will be calculated, and employers’ financial resilience despite recent economic challenges.
David Taylor said: “While we’re pleased to see an overall improvement in scheme funding, we’re mindful of uncertainties around future insolvency rates and the ongoing risk of claims, some of which could individually have a material impact on our reserves. It’s therefore vital we continue to collect sufficient levy so we can ensure we can continue to pay our current and future members the compensation they’re entitled to.”
The PPF also confirmed the measures introduced to help schemes and employers with the cost of the levy in 2021/22, including the Small Scheme Adjustment, lower cap on the risk-based levy and COVID-19 easement, will remain in place and the insolvency risk model is working well.
The levy consultation is open from 28 September to 9 November. To read and respond to the consultation, visit our Help shape our rules page.