Zero PPF levy confirmed for 2026/27

On 26 February the PPF published a statement, confirming that for conventional DB schemes, it will be proceeding with the proposals set out in its December 2025 consultation, and will not be charging a levy for 2026/27.

The decision has come later than usual in the cycle, with the PPF having deferred a decision for as long as possible. This was to allow the Pension Schemes Bill, which includes the legal changes the PPF requires to allow it not to charge a levy this year, to make as much progress as possible through the parliamentary process. With the Bill now having reached the report stage in the House of Lords, and without significant opposition having been voiced to the PPF levy amendments, the PPF has now confirmed its zero-levy decision for 2026/27, the second year where conventional DB schemes will pay no levy.

As the press release highlights, alternative covenant schemes (broadly these are DB superfunds – schemes not supported by a conventional sponsoring employer covenant) will still pay a levy this year.

The final levy rules and policy statement will follow later this month, before the end of the current financial year. In the meantime, the PPF has published a helpful FAQ document.

Actions required

The statement and FAQs document together confirm that:

• Scheme returns still need to be filed via Exchange in the usual way – this includes information in respect of s179 valuations (which remain a legal requirement) and asset backed contributions. The FAQs document highlights that TPR’s requirements for contingent assets in respect of covenant information / the scheme’s Statement of Strategy remain unchanged and these should be provided in the usual way. The scheme return deadline is 31 March 2026.
• Where in the past schemes have voluntarily supplied information solely for the purpose of obtaining a levy saving they no longer need to do so. This includes deficit reduction contribution and contingent asset information.
• As the D&B insolvency risk portal will close from 1 April 2026, schemes should download any information they may require in future from the portal before 31 March 2026.

Re-certifying contingent assets – an outstanding query

We note the helpful wording in the statement in relation to contingent assets and that schemes no longer need to provide information that was submitted purely to obtain a levy saving, including contingent asset certifications.

However, in recent years the levy rules have required schemes to go through the more involved first certification process if it has been more than 5 years since the asset was last re-certified. The PPF has not confirmed whether this 5 year limit will be extended this year, so that schemes do not need to re-certify existing contingent assets this year (when there is no levy saving to be made) purely in order to preserve the option to do so in future but we would be grateful for confirmation. 

We may not have confirmation as to whether or not the 5 year limit has been extended, until the final levy rules and documentation are published later this month. However, given the work involved in re-certifying, which may involve obtaining updated valuations of assets, any scheme approaching that 5 year limit this year will need to decide very soon whether they wish to recertify the asset to preserve the option to do so in future, notwithstanding that there would be no levy saving this year. This is likely to turn on a cost benefit analysis on a scheme by scheme basis.

If you have any questions about this year’s scheme return, PPF levy or contingent asset requirements, please do get in touch with your usual Burges Salmon pensions team contact.