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Last Man Standing schemes – the PPF’s re-invoicing plan

Published by Nick Griggs on

Lewys Curteis contributed to the writing of this blog post

The Pension Protection Fund (PPF) is re-invoicing schemes that had, in the past, been incorrectly identified as Last Man Standing (LMS). The PPF has clarified in its 2016/17 PPF levy consultation how it will contact these schemes.

LMS schemes are multi-employer schemes where the sponsoring employers bear increased responsibility for the pension scheme liabilities if one or all of the other sponsoring employers become insolvent. These schemes benefit from a reduction in PPF levy due to the lower risk that they pose to the PPF.

Our PPF Levy Survey 2015 showed broad support from trustee and company representatives for the PPF to recoup historic levy discounts given to schemes that were incorrectly identified as LMS in the past.

2015/2016 Levy Determination

Main changes in comparison to the previous levy year

Read more

PPF Levy - Surveys

Full results of the fifth PPF levy forum survey

Read more

PPF Levy - Advice

Understanding the calculations used to determine your PPF levy

Read more

Timescales for action

For schemes that notified the PPF of an incorrect LMS structure before 29 May 2015, the PPF will send a letter asking for confirmation of the scheme structure for the levy years 2008/09 to 2014/15.

The PPF will then consider any evidence provided, before confirming the amount that will be re-invoiced for the levy years 2008/09 to 2014/15.

We can help LMS schemes check the amount of an invoice received. We can also estimate the levy for 2016/17, and explore possible options to minimise the levy in future.

If no response is received, the PPF will assume that the scheme was not LMS for these levy years.

Later in the year, the PPF intends to contact those schemes that have not confirmed by 31 March 2016 that they have received legal advice supporting their identification as a LMS scheme. A similar process will then be followed, i.e. the PPF will determine the amount to be re-invoiced, having considered any evidence provided.

Schemes that are LMS but have not yet obtained legal advice to support this have until 31 March 2016 to do so, and to certify as such on the Pensions Regulator’s Exchange system.

Amount of invoice

Before the levy year 2015/16, the reduction for LMS schemes was 10% of the risk-based levy. Employers can therefore estimate the likely amount of the additional invoice.

The PPF will not be re-invoicing schemes in a PPF assessment period, or where it is not economic to do so. There is no indication as to the level the PPF might consider immaterial.

The PPF has the power to charge interest on levy invoices that remain unpaid after 28 days.

We can help LMS schemes check the amount of an invoice received. We can also estimate the levy for 2016/17, and explore possible options to minimise the levy in future.

Recent blog

PPF levy consultation – a blast from the past for Last Man Standing schemes?


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About the author

  • Nick Griggs

    Nick advises a range of UK businesses on DB pension issues including risk reduction exercises, scheme funding, pension benefit design and accounting disclosures. He also acts as Scheme Actuary to a number of clients.

    View Biography

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