PPF Levy – have you thought of everything?
Clare Lloyd-Williams contributed to the writing of this blog post
The Pension Protection Fund (PPF) is currently writing to all PPF-eligible schemes with invoices for their 2015/16 levy. Most schemes will have received invoices in September, but those who have certified Type A contingent assets (unsecured group company guarantees) can expect a later invoice, around early November.
The final insolvency scores, bands and rates used to calculate the levy are available via the Experian/PPF portal and it is important that employers check their final scores and ensure they are happy with them, including the adjustment for a guarantor, if applicable.
An appealing prospect?
Employers may find it worth obtaining a levy estimate for the 2015/16 levy now, so they can check they are happy with the invoice when it arrives. It would also be beneficial in estimating any potential increase in the levy in future years to allow employers to budget for this.
At this stage, if you are not happy with your score, it is no longer possible to alter it as a result of an informal query. If you would like to change your score, a formal request must be made through the Experian Appeal process. The PPF have advised early appeal rather than waiting for a levy invoice, as it is expected that invoices will be paid within 28 days before interest charges are incurred. We are seeing successful appeals on the basis that data is incorrect.
Watch and wait?
When looking ahead to the next levy year, consider monitoring your score throughout the year so you can resolve issues as they arise, instead of waiting until the end of the year. The PPF portal is updated on a weekly basis, reflecting data such as new accounts, so employers can monitor their scores for the next levy year (2016/17).
The PPF have not yet finalised the rules on which the 2016/17 levy will be based. To calculate scores, Experian are scoring employers on the basis of the 2015/16 rules so they should only be considered indicative at this stage. However, we are not expecting any significant changes.
Where the score is impacted by a voluntary submission by the Company or Trustees the certification has been carried forward if there is no reason, at this point, to expect that it will need to be recertified. Where it is expected recertification will be needed, Experian have not carried forward certificates. This will have caused the disclosed score to worsen in April 2016 for some employers which can be reversed once the necessary certification is completed.
Is your guarantee cast-iron?
The PPF’s September consultation included information on certifying contingent assets, reflecting their briefing note issued earlier this year. Certificates for use for the 2016/17 levy will be available following publication of the final 2016/17 Levy Rules in December 2015.
We have recently launched our latest survey to allow our clients to have their say on the PPF levy. We are focusing on four key issues this year – insolvency risk, Type A guarantees, the discount given to Last Man Standing schemes and Asset Backed Contributions. We welcome your response.
If you would like an indication of the size of your levy for the 2016/17 levy year, we are able to provide an accurate estimate.
