The latest casualty of the poor economic climate is the PPF's "New Levy Framework", which was set in order to fix levy rules for three years. The PPF published 'The 2013/14 Pension Protection Levy Consultation Document' in September this year, which confirms that the levy estimate for the 2013/14 levy year will in fact increase to £630 million rather than staying at the £550 million at which it was originally set. The consultation closed on 2 November 2012.
We reported in our August 2012 newsletter that the Pension Protection Fund (Miscellaneous Amendments) Regulations 2012 alter the PPF entry process so that the PPF can make a "funding determination" rather than a formal section 143 valuation, and also so that a scheme which has been unsuccessful in entering the PPF can apply to be reconsidered without obtaining a protected benefits quotation from an insurance company, so long as the trustees can show that they have taken reasonable steps to obtain a quotation. The PPF's response to the July 2012 consultation promised a full statement outlining the PPF's approach to the new law, and this statement has now been published as Statement under section 143(5C) of the Pensions Act 2004 setting out how the Board of the Pension Protection Fund will make a Funding Determination under section 143(2)(a). In brief, the PPF will write to the trustees to tell them whether they will make a Determination or require a section 143 valuation. If the PPF is to make a Determination, the trustees must provide what the PPF calls "the Estimate", which must be based on the scheme's existing section 179 valuation or, if it would give a more reliable estimate, a "suitable alternative actuarial valuation". The trustees make the Estimate and provide a certificate, both of which must be signed by a Fellow of the Institute and Faculty of Actuaries. The PPF will make its Determination based on the Estimate and the certificate.
Click here for a link to the PPF's statement.
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