PPF levy 2014/15: final rules

The PPF has confirmed the levy rules for 2014/15 will be substantially unchanged.  

16 December 2013

The PPF has confirmed the levy rules for 2014/15 will be substantially unchanged.  

It has postponed until 2015/16 a proposed tightening of the trustees' certificate of a contingent guarantor's financial strength.

In line with the consultation proposals, the PPF has settled on:

  • a levy estimate of £695 million
  • unchanged levy parameters, like the scaling factor and risk-based levy ceiling
  • not recalculating 2014/15 levies where DB liabilities increase because the new definition of DC benefits (from April 2014) re-classes certain benefits as DB.

Certificates of guarantor strength

The trustees' certificate of guarantor strength will continue to be the negative one that they have no reason to believe the guarantor could not meet the guarantee amount.

The stronger version would have required a positive statement that, after reasonable enquiries, they were reasonably satisfied the guarantor could pay in full.

The PPF continues to be concerned about the substance of the guarantees that some trustees have certified. It talks of the 'significant proportion' of 2013/14 cases where the trustees took what it considers to be too rosy a view.    

Failure scores

D&B's method of calculating failure scores will change in the new year. The PPF has only become aware of this recently.  In the circumstances it has decided to continue to use D&B scores but is unable to say how they might alter.    

D&B has a dedicated PPF helpline (0870 850 6209) but today was also unable to say even in general terms what effect its new approach might have.

It appears that employers may have little insight until they see their new monthly scores. D&B is, however, considering offering early information in individual cases (at a cost).   

The PPF had already decided to switch to Experian for failure scores from 2015/16.

DRCs

The PPF makes clear that deficit reduction contributions must be in cash. In the past this was unspoken.

If you would like more information, please contact Richard Knight.

Key contact

Richard Knight

Richard Knight Partner

  • Head of Pensions
  • Pensions Services
  • Pensions Legal Advice

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