When an employer ceases to participate in a multi-employer scheme and there is no segregation of part of the scheme assets to provide benefits for affected members, this is a last man standing (LMS) scheme.

Under the previous PPF regime, LMS schemes benefitted from a ten per cent reduction on the levy payable relative to a comparable segregated arrangement. Following concerns that schemes were misrepresenting the scheme structure in order to benefit from the reduction, the PPF has confirmed that it will require certification from the trustees that they have received legal advice that their scheme is a valid last man standing scheme. In addition, the flat rate reduction will no longer apply for associated employers and will now be based on “member concentration”. The more dispersed the membership, the higher the discount, up to 10%, will be given by the PPF.

For 2015/16, schemes must identify themselves as LMS in their scheme returns and confirm that they have received legal advice to this effect. As long as the structure of the scheme is not changed, this advice need not be repeated in the future. The advice must be confirmed to the Regulator via scheme returns by 31 May 2015.