As mentioned above, pension schemes that potentially qualify for protection from the Pension Protection Fund (‘the PPF’) are required to pay a PPF levy, the calculation of which is partly based on the insolvency risk of the sponsoring employer of the pension scheme. In the November 2013 edition of Pensions Pieces we mentioned that the PPF was moving away from using Dunn & Bradstreet scores as a measure of this insolvency risk and instead would be using data provided by Experian.
The PPF has announced that it has developed a new PPF specific insolvency risk measure with Experian upon which it is proposing to consult for around 6 weeks, after work on incorporating the new scores based on that measure into the levy calculation, and an impact assessment have been completed (the PPF has suggested this will be the end of May). The consultation will also set out the PPF's plans for the next three levy years from 2015/16 to 2017/18. Subject to that consultation, the PPF has said that its plan is that the scores on the new basis will only be collected for use in the 2015/16 levy from 31 October 2014 onwards, to give schemes time to understand how the new scores are compiled. That will also mean that in the 2015/16 levy a six month average will be used in the levy calculation and though D&B scores will not be used after 31 March 2014, D&B will, through their call centre, still be available to support levy payers for scores collected up to that date.
This means that the PPF levies payable by pension schemes may well change but schemes and employers should be able to better gauge the possible impact once the detail in the consultation has been published.