The PPF has issued consultation on the development of the levy for 2011/20012 onwards.
The key proposed changes to the formula are:
- a new component to reflect long term risk (employer insolvency within five years);
- introducing investment risk as a factor in measuring underfunding; and
- changing the proportion of scheme based levy to reflect the new long term risk component.
These changes, if adopted, would change the distribution of the levy, not the total to be collected (this remains at £675m indexed to wage inflation). The PPF says that if the new formula had been used in 2008/2009 half of schemes would have had a higher levy - and half a lower levy. The PPF sees this reallocation as more accurately reflecting the risk schemes pose to the PPF. Responses to the consultation are invited before 13 February 2009.
The final version of the levy determination for 2009/2010 has also been published.