Following the consultation launched in September, the Pension Protection Fund (PPF) has today published its final levy rules for the 2019/20 levy year.
The total levy the PPF expects to collect is confirmed at £500 million, down from the £550 million estimate for 2018/19.
The levy rules will remain largely unchanged from the proposals set out in September’s consultation, as the majority of respondents supported the PPF’s view that the core methodology is working well.
The consultation also set out the PPF's methodology for calculating a levy for commercial consolidators. Responses have helped the PPF refine proposals to establish a workable rule for 2019/20. The PPF’s approach will develop in subsequent years as the market and regulation take shape.
David Taylor, Executive Director and General Counsel at the PPF, commented: “This policy statement confirms our plans for the levy in 2019/20, the second year of our current three year cycle. As one of the PPF’s four sources of funding, the levy 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.
“I’m grateful for all the feedback we’ve received from our stakeholders to help us reach this point. We’re pleased that respondents were generally supportive of our approach, and there was specific feedback on certain areas that has been reflected in the final rules.
“In particular we’ve taken on board comments around our approach to commercial consolidators. The Department for Work and Pensions and the Pensions Regulator outlined their approaches last week; the levy rule we are publishing today dovetails with this. Our thinking on this will continue to evolve as the regulatory framework becomes clearer, but feedback has helped us establish a workable, risk-reflective rule for the 2019/20 levy year.
“Consultation responses have also helped us identify some immediate steps we can take to improve support to DB pension schemes generally in relation to paying the levy. We will continue to engage with them as we explore some of the longer term options.”
Pension scheme trustees and employers can log on to view and check their insolvency data and scores at: www.ppfscore.co.uk
A full list of the relevant deadlines for the 2019/20 levy year has been published alongside the levy determination.
Notes to editors
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. More than 130,000 people now receive compensation from the PPF and many more are expected to 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.
For further press information contact:
PPF Press Office
020 7566 9775