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Levy payable by each Scheme

The PPF levy payable by each scheme is currently related to:

  • the size of the scheme (total liability value)
  • the amount of surplus or deficit in the scheme, using prescribed PPF assumptions (more info)
  • the Dun & Bradstreet ratings of the employers in the scheme (more info)
  • any contingent assets accepted by the PPF that the scheme has in place
  • PPF's Scaling Factor
The dates at which these factors are assessed can get very confusing.  Click here for a document summarising this information.

The PPF is also making changes to the way the levy is calculated and is like to include the scheme’s investment strategy as a factor for determining the levy (see Longer term proposals).

Using the above indicators, the PPF determines how "risky" a scheme is, and sets the levy accordingly. 80% of the levy is related to risk, and 20% is related only to the size of the scheme. The proportion based on scheme size is likely to decrease in the future (see Longer term proposals).

Over the years the PPF have also altered how the levy will be shared out between different schemes. Each year the PPF has changed the principles underlying the apportionment of levy between schemes, causing different schemes to be affected in different ways.

Schemes will be invoiced in late 2011/early 2012. Specific details on how the 2011/12 levy invoice will be calculated can be found here. 

The formula for 2011/12 will be similar to 2010/11 but the “Scaling Factors” which are set so that the PPF get the overall amount that they want will differ. For further details see here.