The PPF Ombudsman has supported the decision of the PPF to decline to alter the amount of a levy invoice despite having discretion to do so as it was based on information which was “incorrect in a material respect”.

The D K Moriarty Limited Scheme had submitted two section 179 valuations, each showing a different asset value:

  • The first, submitted by the scheme actuary, showed an incorrect asset value as at 1 October 2006 – this was in fact the asset value for scheme funding purposes; and
  • The second, submitted by the trustees, gave the correct asset value as at 30 September 2006.

When the trustees challenged the error the PPF responded that, having received two section 179 valuations, it had used the most recent one in accordance with its published guidance. The trustees accepted that levy calculation, but objected when the incorrect figures were used again in the 2009/10 calculation.

The PPF’s Reconsideration Committee found that the information upon which the calculation was based was incorrect in a material respect, but did not exercise its discretion to review the amount of the levy for the following reasons:

  • There would be a risk of undercollection of the PPF levy if corrections were permitted on a significant scale;
  • This error was the consequence of the actions of a third party (the actuary), and the Committee did not think it appropriate for the PPF to bear the consequences of that error; and
  • There was nothing sufficiently exceptional on the facts of this case to distinguish it from the general run of such cases.

The deputy PPF Ombudsman found that the Reconsideration Committee had not misdirected itself and the decision should stand. She supported the view that as it had not been the PPF’s original mistake, the PPF was not bound to remedy it.

This case highlights a lack of flexibility on the part of the PPF to remedy levy amounts based on incorrectly entered information. It is difficult to understand why, where a genuine error is made, the levy cannot be corrected. The PPF looks for “exceptional circumstances” in order to make a correction, but seems unable ever to find them based on the published decisions.