Following a consultation launched in September, the Pension Protection Fund (PPF) today (Monday) confirmed that the 2013/14 pension protection levy estimate will be £630 million, as originally proposed.
It also published at the same time the 2013/14 Levy Determination which sets out the Levy Rules.
The PPF also confirmed that it will reduce the levy scaling factor from 0.89 to 0.73, and the scheme based levy multiplier from 0.000085 to 0.000056, to raise this amount. This means that fewer schemes will have their levy capped.
The other rules used to set the levy will remain the same, except for a relaxation in the requirements for a guarantee from a bank, or from a custodian, so that in future an A- credit rating will be sufficient.
Alongside the Levy Rules, the PPF has updated guidance for putting in place contingent assets following informal consultation with stakeholders, to give a better steer to schemes on what to consider when planning to use guarantees as contingent assets.
All eligible schemes are now reminded of the key dates and deadlines for the 2013/14 levy year.
♦ Information from scheme returns submitted by 5pm on 28 March 2013 will be used to calculate individual levies.
♦ The Pensions Regulator’s Exchange system will continue to be the sole point of data submission for the purposes of the PPF levy – and submissions can now be made.
♦Insolvency risk will be measured using the average annual Failure Score of each sponsoring employer measured on the last working day of each month, from 30 April 2012 to 28 March 2013.
♦The deadline for certification and/or re-certification of contingent assets will be 5pm on 28 March 2013.
♦ Deficit reduction contributions that have been made up to and including 31 March 2013 must be certified by 5pm on 30 April 2013.
♦ Full block transfers that have taken place up to and including 31 March 2013 must be certified by 5pm on 28 June 2013.
♦ We will use market data over five years to smooth funding levels. For levy year 2013/14, we will use market data for each week day in the five-year period up to 31 March 2013.
♦ The date to which we will transform section 179 valuations is 31 March 2013. These transformed values will be subject to smoothing and stressing
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