Published by Chris Ramsey on
Lewys Curteis contributed to the writing of this blog post
It is critical that trustees thoroughly investigate the detail of any contingent asset, such as a parent company guarantee, if they want to avoid rejection.
The PPF has revised its briefing note to assist trustees with completing a guarantee certification for PPF levy purposes.
The PPF gives examples of more detailed issues that have arisen to give an idea of what employers and trustees should be considering. The issues will vary from scheme to scheme but this list is a good starting point for assessing how thorough any analysis should be.
A key area is the impact of insolvency events. For example, could the insolvency of the sponsoring employer result in difficulties for the guarantor? Would this be expected to lead to a lower amount being available to the scheme? Are there cash pooling arrangements which could be affected? Trustees will need to consider the employer’s business and structure thoroughly.
For the 2016/17 levy year, the certification – and any hard copies of documents – must be received by the PPF by midnight on 31 March 2016. Trustees and employers should therefore check that their contingent asset certification is likely to meet the PPF’s requirement as soon as possible.