On 9 November, the PPF published proposals for the 2011/12 pension protection levy year which aim to improve the way the insolvency risk for sponsoring employers is assessed. The proposals reflect industry feedback and a review of methodology and insolvency probabilities carried out by Dun & Bradstreet (D&B).
The key changes include:
- D&B will collect accounts from the Charity Commission rather than relying on charities to provide their own accounts;
- a new attribute called “nationwide” will be introduced for businesses with three or more branches in different UK regions which will mean they are assessed as a national rather than a regional employer;
- PPF-compliant contingent assets will be excluded by D&B in their score as they reflect the financial position of the pension scheme and not the employer;
- when measuring the failure score of a subsidiary whose parent company is at substantial risk of becoming insolvent, the score of the subsidiary will be that of the parent; and
- employers that seek changes to their industry sector or geographical region will need to provide evidence to support that change.
The PPF is consulting on these changes now as they relate to failure scores which take effect from 31 March 2010 for the 2011/12 levy year. The consultation period ends on 14 December 2009. A further consultation on the 2011/12 levy will be carried out next year once the levy scaling factor is available for the 2011/12 determination. However, the PPF expects no major policy changes.
View the consultation paper. (pdf 334.51kb)