Levy Policy Statement and Final Determination 2010/11 Published by the PPF
The PPF has confirmed its proposals for the 2010/11 pension protection levy following an industry consultation (see the October 2009 edition of Pensions Express). This is contained within the levy policy statement and final determination, available at www.pensionprotectionfund.org.uk/news/pages/details.aspx?itemID=147.
The majority of the provisions are unchanged from the proposals outlined in the consultation, with some exceptions.
The levy collection estimate has been set at £720 million for 2010/11 as planned, which is in line with the commitment made in August 2007 to index the initial estimate to earnings, subject to no significant changes in risk.
The PPF has also confirmed the final levy scaling factor of 1.64 (reduced from 2.22) and the scheme based multiplier of 0.000145 (reduced from 0.000162). The risk based levy cap (the maximum amount of risk based levy payable) has also been reduced from 1% to 0.5% in order to help protect the weakest 10% of schemes which pay the levy. This will mean a redistribution of schemes accounting for the total levy.
The PPF has changed the way in which insolvency probabilities are assigned to overseas companies. A table has been created by Dun amp&; Bradstreet (D&B) which allows overseas failure scores to be converted to a UK equivalent.
The PPF has confirmed, in a change from its proposal and decisions made last year, that certification of ‘material’ block transfers are no longer compulsory and the levy calculation for schemes with uncertified full transfers has been made more proportionate.
The deadline for certification of deficit reduction contributions is now 9 April 2010, in recognition of the Easter holidays.
