This is a summary of the significant changes to the PPF
"Last Man Standing" schemes
The PPF is introducing new information requirements for "Last Man Standing" (LMS) schemes. Broadly, a scheme will be a LMS scheme if its rules do not contain any requirement or discretion for the trustees to segregate assets on an employer ceasing to participate in the scheme. Generally, the way in which the PPF calculates the PPF levy is more favourable to "Last Man Standing" (LMS) schemes. The PPF is concerned that some schemes may be wrongly describing themselves as LMS on their scheme return. Accordingly, after 31 March 2015, all schemes that have described themselves as LMS on their scheme return will receive an e-mail from the Pensions Regulator requiring the trustees to confirm that they have received legal advice confirming that the current scheme rules do not contain any requirement or discretion for the trustees to segregate assets on cessation of participation of an employer. Schemes will have until 29 May 2015 to respond to the Pensions Regulator's e-mail. If the Regulator does not receive the required confirmation by this deadline, the scheme's levy will be calculated on the basis that it is not LMS.
Type A Contingent Assets
To have a "Type A" contingent asset (guarantee) recognised for levy purposes, trustees will be required to certify a specific amount which they are reasonably satisfied each certified guarantor could meet if called upon to do so. Trustees are required to certify that they have made reasonable enquiry into the financial position of each certified guarantor and have taken account of the likely impact that employer insolvency would have on a guarantor's ability to meet its obligations. Subsequent to publication of the Levy Determination itself, the PPF published a document highlighting issues trustees need to consider when assessing guarantor strength.
Insolvency risk scores: submitting information to Experian may reduce the risk it attributes to a recent mortgage
For the coming year the PPF has appointed Experian as its provider of insolvency risk scores in place of Dun & Bradstreet. Under Experian's methodology, in many cases the "mortgage age variable", which measures the age of the newest unsatisfied secured charge registered can have a significant effect on the employer's risk score (the more recent the charge, the greater the assessed risk of insolvency). There are certain circumstances in which in Experian will ignore a charge, but in many cases it is necessary for the employer to submit information to Experian by 5pm on 31 March 2015 in order for this to happen.
The PPF has also made changes to the treatment of asset-backed contribution arrangements (ABCs). The usual "hallmark" of an ABC is that it is a scheme funding arrangement which makes use of a Scottish limited partnership. When assessing scheme funding levels for levy purposes, the PPF's starting point will be to attribute no value to an ABC arrangement unless a professional valuation meeting detailed requirements has been submitted to it by 5pm on 31 March 2015. In some instances where a scheme has an ABC, it may be necessary to submit information to the PPF to avoid the PPF knocking 25% off the value of the scheme's assets when assessing the scheme's funding position.