The PPF announces replacement of their insolvency risk assessor 25 September 2013

The Pension Protection Fund (PPF) has announced that Experian will replace Dun & Bradstreet (D&B) as their assessor of the insolvency risk posed by sponsoring employers from the 2015/16 levy year.

The D&B rating system resulted in many employers having to spend time challenging and correcting the data held by D&B to ensure that their failure score correctly reflects the risk they pose to the PPF.

The PPF are now working with Experian to develop a bespoke scoring system to be used to calculate insolvency risk, which could have significant consequences on future PPF levies incurred by employers. Insolvency risk is one of three main factors which are used to calculate the levy – the other two main factors are investment and underfunding risk.

The design of the bespoke scoring system is currently progressing in conjunction with comments from various stakeholders. It is not yet clear if there will be the same opportunities for employers to improve failure scores once the new system is implemented.

 
The Pensions Regulator publishes new guide for trustees
12 September 2013

The Pensions Regulator (TPR) has published a guide (Guide) for newly appointed trustees and those who are considering becoming a trustee.

Although trustees have six months in which to acquire the knowledge and understanding to perform the role of trustee, the Guide will be welcomed by both newly appointed trustees and those considering taking on the role, as the responsibilities of being a trustee are complex and diverse. In order to safeguard schemes’ assets for the benefit of members, pension scheme trustees must be familiar with not only the trust deed and rules but also pensions and trusts law.

In brief, the Guide outlines the fact that trustees must be prudent, responsible, honest and act in the best interests of members. It also outlines issues such as what are trustee boards and meetings, the role of the trustee advisor and conflicts of interest.

The Guide is part of TPR’s ‘Trustee Toolkit’ and both are available on TPR’s website.

Completion of the Kodak deal
12 September 2013

Further to the Hill Dickinson pensions update in May, the deal in which the Kodak Pension Plan (KPP) was to acquire the personalised imaging and document imaging businesses from Eastman Kodak Company (Deal) has now completed. The Deal received approval from The Pensions Regulator (TPR) in April and will see a new Kodak pension scheme established, thereby avoiding KPP entering the statutory Pension Protection Fund.

TPR’s interim chief executive, Stephen Soper, has stated that there are ‘… still matters to be resolved with the pension trustees and PPF, including monitoring and governance arrangements to provide appropriate safeguards going forward.’

 

The Pension Protection Fund publishes 2014/15 levy consultation document
12 September 2013

The Pension Protection Fund (PPF) has published a consultation document (Consultation) on calculation of the 2014/15 pension protection levy, although levy rules will remain mostly unchanged.

The PPF is seeking responses on issues such as whether the final levy calculation should include a recalculation provision, if a levy-paying scheme’s money-purchase benefits are ultimately re-categorised as defined benefits. This is as a result of a provision in the Pensions Act 2011 which changes the definition of ‘money purchase benefits’ and, as a consequence, some benefits which were thought to be money purchase may be regarded as defined benefit. The relevant provision in the Pensions Act 2011 to change the definition has not yet come into force.

The Consultation on the PPF levy is open until 24 October 2013 and can be found on the PPF’s website.

 

Department for Work and Pensions updates guidance on member tracing service
12 September 2013

The Department for Work and Pensions (DWP) has updated its guidance on member tracing, the service that is often used when occupational pension schemes are being wound up. For a small fee, the service means that the DWP will forward correspondence from a pension scheme or insurance company to untraceable individuals. Pension schemes should exhaust all other avenues of attempting to trace individuals before utilising the DWP’s tracing service.

The updated materials can be viewed on the DWP’s website.

 

Scheme trustees successfully challenge calculation of PPF levy
12 September 2013

The trustees of the West of England Ship Owners Insurance Services pension scheme (Scheme) have recently taken the Pension Protection Fund (PPF) to the PPF Ombudsman (Ombudsman), in an action against calculation of a statutory levy imposed against the Scheme.

The Scheme’s sponsor is based in Luxembourg and the trustees were not aware that the Scheme’s accounts therefore had to be submitted to Dun & Bradstreet, the PPF’s chosen company ratings agency, in Luxembourg as well as the UK. The trustees argued that the Scheme’s Dun & Bradstreet failure score, which measures how likely a company is to seek legal relief from creditors or cease operations over the next 12 months, was worse than it should have been as a result of the Scheme’s failure to do this. As a result of the failure score, the levy imposed on the Scheme was higher.

The PPF was criticised on the basis that it imposed a higher levy against the Scheme for failing to follow a procedure that the trustees of the Scheme were unaware of. In turn, the PPF argued that an obligation to inform pension schemes that overseas parents will also be assessed for the Dun & Bradstreet failure score would compromise their ability to handle their workload. However, there were counter arguments that communications from the PPF should have been much better.

This is an interesting decision as, to date, it has proven difficult for employers and trustees to challenge the PPF levy. However, we note that the PPF has indicated that it will lodge an appeal to the High Court and we shall keep a watching brief on this case.

 

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About truelabour

Investigative Journalist/Researcher for major media. Exposing the truth and police corruption with in UK police service.Certain forces say their motto is Honesty & Integrity One must ask is it lip service or genuinely meant. CO-OP Labour Party member questioning is the party standing for working class of Britain. Trade Union Activist & promoting diversity,community cohesion within multicultural Britain. Anti fascist speaks out against all foams of discrimination.
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