PPF announces new pension protection levy framework

The Pension Protection Fund (PPF) has announced that it intends to implement its new pension protection levy framework from 2012/13.

The move follows a consultation that closed on 20 December, and responds to calls from industry for an early announcement on the PPF’s intentions so schemes can take these into consideration when meeting deadlines for providing information needed to calculate future levies.

Because of the expected move to the framework, the new deadline for submitting scheme information for the 2012/13 levy is 31 March 2012.

There will be later deadlines for submitting deficit reduction certificates and block transfer information, again in 2012.

It is still important schemes provide up-to-date information by 31 March 2011 because the PPF will use it to set the levy scaling factor – which schemes use to calculate their individual levy bills – for the first three years under the new framework.

Also, if the PPF implements transitional protection, it will be based on employer insolvency scores as at 31 March 2011.

Sara Protheroe, co-director of strategy and policy at the PPF, said: “We were pleased with the response to the recent consultation on the new levy formula, which was broadly welcomed by most of our stakeholders.

“We are, therefore, happy to give an early indication of our direction of travel and provide schemes with clarity about the information they need to provide so we can calculate their levies correctly.

“Clearly, there are still details to be ironed out, including the need to publish draft guidance for those schemes carrying out their own assessment of investment risk. We will work with stakeholders on these issues and publish a detailed policy statement, including draft investment risk guidance, in the spring.”

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