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How to reduce your levy

Even though many employers have made significant additional contributions to their schemes and actions have been taken to reduce risk, the PPF have not reduced their total levy target each year.

The PPF have explained that this is because short-term improvements only have a limited impact on the long-term risk, and that they need to be more cautious in their reserving for future uncertain events. This in effect means that, to reduce your levy, it may not be enough to just take some action, you need to do more than the average scheme i.e. doing nothing or only a little may actually result in your levy increasing as other schemes reduce theirs.

2010/11 Levy
The PPF has published its final "determination", setting out how it will calculate levies for the financial year 2010/11 (see here). Deadlines for submitting some of the information used in this calculation have already passed, but it is not too late to take some actions that could help mitigate the levy:

  • certify/re-certify contingent assets by 5pm on 31 March 2010 (more info);
  • certify deficit reduction contributions by 5pm on 9 April 2010;
  • Certify full block transfers that have taken place up to and including 31 March 2010 by 5pm on 30 June 2010

2011/12 Levy
There are also a number of other actions which can be taken to mitigate the size of the levy for the 2011/12 financial year.  In particular, the D&B failure score will be fixed for the calculation of the 2011/12 levy as at 31 March 2010 so you need to consider whether there is any action you could take to improve this score ahead of the deadline.  Please click here for a checklist of matters to consider. Alternatively please click here for further details of the services Barnett Waddingham can provide in this area. 

The PPF will use data submitted via Exchange on or before 31 March 2010 in the calculation of the 2011/12 levy so any relevant information would need to be submitted ahead of this deadline if it is to be reflected in the levy calculation.