Shortly before the Christmas break, the Pension Protection Fund (“PPF”) published confirmation of certain key points, in advance of its full response to consultation on its levy for the year 2021/22. The full levy conclusions and final rules are due in January 2021.
The Pension Protection Fund replaces most of the benefits due to those whose defined benefit occupational pension schemes have been left underfunded when the sponsoring employer becomes insolvent. Its operation, and the benefits it provides, is funded from the assets of those occupational pension schemes, together with the proceeds of levies upon other occupational pension schemes.
Each year the PPF consults on a proposed approach to setting its total levies, together with specific rules, which may impact upon the levy bill for individual schemes too. The PPF says it expects to collect £520m from schemes in the 2021/22 levy billing process, which it estimates as a reduction of £100m from the equivalent figure in 2020/21. Invoices for 2021/22 will be issued to schemes in Autumn 2021.
Key points of the PPF’s statement for levy year 2021/22 include:
It is worth noting that the adjustments set out above may not be permanent features of the levy, and may change in future years.