The PPF has confirmed that it has set a pension protection levy estimate of £700 million for 2009/10. This is in line with a commitment the PPF made in August 2007 when it said it would set a levy estimate of £675 million for the next three years, indexed to wages, so long as there was no significant change in risk.
The PPF hopes that the decision to keep the same levy estimate as last year (after taking account of indexation) will help to reduce the burden on levy payers, particularly during the current economic downturn.
The Determination confirms that:
- the risk-based levy for each scheme will be calculated with reference to its shortfall against a 121 per cent section 179 funding level. Scheme which have funding levels higher than 140 per cent will avoid the risk-based element altogether and a tapering system will operate for those schemes with funding levels between 121 and 140 per cent;
- the cap on the risk-based element of the levy will be 1 per cent of section 179 liabilities; and
- the scaling factor used to calculate the risk-based levy will be 2.22 - a reduction from 3.77 in 2008/09.
The final version of the 2009/10 Determination which sets out the rules for calculating the pension protection levy as required under section 175 of the Pensions Act 2004, is now available on the PPF website.
The following submission deadlines for information to be recognised for the 2009/10 levy year have been confirmed:
- contingent asset voluntary certificates - 5pm on 31 March 2009;
- deficit reduction certificates - 5pm on 7 April 2009;
- notification of full or partial block transfers - 5pm on 7 April 2009; and
- finalisation of block transfer certificates - 5pm on 30 June 2009.
Comment: with the deadline for submission of contingent asset voluntary certificates (or re-certifications) now confirmed as 5pm on 31 March 2009, trustees and employers may now wish to consider putting such assets in place, or renewing existing contingent asset documentation, in order to reduce the risk-based element of next year’s levy.
View the Determination (pdf)(63.8KB)