Consulting Actuaries

The PPF proposes inflation busting levy increases for 2014/15

Royal London Consulting Actuaries

2 October 2013

The Pension Protection Fund (PPF) is consulting on the 2014/15 levy basis until 24 October 2013. 

The proposals and estimated results for the 2014/15 levy are as follows:

  • The PPF does not propose to amend the approach it will use to determine the 2014/15 levy.
  • Nevertheless, the PPF estimates that the total PPF levy it will collect for 2014/15 will increase by 10% to £695M.
  • The average increase to a scheme's levy bill will be more than 10% (as there will be fewer schemes to meet the total levy bill in 2014/15 than in 2013/14).
  • Around 4% of schemes will pay a reduced levy; around 50% of scheme levies will increase by more than 15% and around 20% of scheme levies will increase by over 25%.
  • Actual levies will depend on the circumstances of the individual scheme.

The PPF will confirm the approach it will use in December 2013.

The PPF is also proposing to simplify the process it uses to re-certify Contingent Assets and to modify the wording of the certificate trustees need to provide in relation to Type A Contingent Assets (a guarantor). This is intended to make the required certification easier for trustees to give.

The PPF has now begun to invoice for the 2013/14 levy and trustees should start to receive these in due course. Information on these invoices and the 2013/14 levy process can be found on the PPF website.

The PPF has also announced that they are to replace Dun and Bradstreet with Experian as their insolvency risk provider. However the change will not be effective until the 2015/16 levy. The change will therefore coincide with any changes to the PPF levy calculation introduced as part of its triennial review.

Click to read more about the change in insolvency risk provider

Click to read more about the PPF's triennial review of the PPF levy

How can Royal London Consulting Actuaries help?

We can provide several additional services in relation to the PPF levy.

  • We can check the 2013/14 levy invoice to ensure that the data it is based on is correct and the most up to date available.
  • In order to help with budgeting, or to provide an indication of the impact of taking a certain course of action, we can provide an estimate of the 2014/2015 levy.
  • We can assist with the review and insertion of information on to Exchange to make sure that it is correct and up to date.
  • If the Employer has been paying significant contributions to address a funding shortfall, contact the Scheme Actuary to ascertain if obtaining a Deficit Reduction Contribution Certificate could be beneficial.

Find out more

If you would like to discuss any of the topics raised, please contact us.