Atkin trustees, actuaries, consultants & administrators

PPF levy consultation October 2017

Overall, the levy that the PPF intends to collect next year is expected to fall by 10% compared to this year. Therefore, despite most companies seeing their assessed insolvency risks either increasing or staying the same, changes in the other parameters should mean that the levy reduces for most. The exception mainly being larger companies and, in particular, those in the ‘Non-subsidiaries £30m+ turnover/large subsidiaries’ scorecard or those that do not have a public credit rating.

Other proposed changes are;

• The risk based levy cap will be reduced from 0.75% to 0.5% of smoothed liabilities.

• Consideration of narrowing the range of levy rates used for Levy Bands 1-3 which would increase their assessed insolvency risk

• Simplifying the certification of DRCs to remove the allowance for investment expenses and allowing smaller schemes to “self-certify”

• Small tweaks to the methodology applied to some scorecards • Consideration of providing a high level estimate of the levy prior to invoicing

• Certification of “significant” parental guarantees will require an independent guarantor strength report

The new methodology has been uploaded on the Experian PPF score site and, therefore, it might be sensible to review whether your score has changed. Please note that this does not include the proposed narrowing of levy rates for Bands 1-3. 

The consultation period ends 1 November 2017 with the final determination issued in December.

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