The PPF has confirmed that for 2018/19 the Levy Scaling Factor (LSF) will be 0.48 and the Levy Estimate is £550m. This compares to the levy estimate of £615m for 2017/18, meaning the 2018/19 estimate is just over 10 per cent lower.
David Taylor, Executive Director and General Counsel at the PPF, commented: “This policy statement confirms our plans for the levy in 2018/19, the first year of the third levy triennium.
The levy we receive 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.
“Over the last two years we’ve worked with stakeholders to ensure the levy rules remain fit for purpose for the next three years. I’m grateful for all the feedback we’ve received. In particular we’ve taken the opportunity to review and update the PPF-Specific insolvency model, building on our experience of using it. We are also confirming today that we will use credit ratings where they are available, or a specific credit model for financial institutions, to assess insolvency risk.”
The PPF has also confirmed it will simplify the process for schemes to certify Deficit-Reduction Contributions (DRCs). Reflecting feedback to the September consultation, schemes will now be able to disregard all investment expenses in the calculation of their certifiable DRC. Smaller schemes also have the option to certify based on Recovery Plan payments.
David Taylor said: “I encourage schemes and employers to put in place risk reduction measures in the run up to the reporting deadlines in March and April 2018. We also intend to publish new documentation for contingent asset arrangements in January. The new approach for recognising deficit-reduction contributions provides a particular opportunity for schemes to gain more recognition for contributions made and so reduce their levies.”
• PPF confirms Levy Estimate at £550 million for 2018/19
• PPF confirms Levy Scaling Factor (LSF) of 0.48 for 2018/19
• PPF implements proposed changes to insolvency measures and simplification for certifying deficit reducing payments
• Deadlines for schemes and employers to take steps to reduce their levies confirmed.
Pension scheme trustees and employers can log on to view and check their insolvency data and scores here
A full list of the relevant deadlines for the 2018/19 levy year has been published alongside the Levy Determination.
The full policy statement can be found here
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