Pension Protection Fund, London, will collect £635 million ($1 billion) in levies from qualifying employers for the 2015-’16 fiscal year, almost 9% less than the 2014-‘15 year estimate, a statement from the fund said.
“(W)e will seek to collect a reduced amount in 2015/16 in line with changes in current risk that we have seen,” said Alan Rubenstein, CEO of the PPF, in the statement. “While the future is inevitably uncertain, levy estimates for the following two years appear likely to fall further rather than rise, based on the expected path of asset values and yields.”
The U.K.’s lifeboat fund, which pays out defined benefit obligations in the event of a sponsor insolvency, also released Monday its proposed and draft levy rules for the 2015-‘16 fiscal year.
The PPF said in a statement that there was “strong stakeholder support” for a move to a new model to assess insolvency risk. It has made changes including a revised approach to the treatment of asset-backed contributions.
“The PPF will now recognize all asset types, not just U.K. property, provided the (asset-backed contribution) is valued in a way that reflects the value to the PPF in the event of insolvency,” the statement said.
Starting Oct. 31, sponsors will also be subject to new rules for calculating a sponsor’s levy payment, according to scores that will be assigned by the Experian, the PPF’s new insolvency risk provider.
