Pension Protection Fund levy meaning

This Checklist This Checklist provides points to weigh up when preparing and seeking sign-off for a company voluntary arrangement (CVA) involving the Pension Protection Fund (PPF). It draws on PPF Guidance Note 5 issued in 2018 (see PPF Guidance Note 5: CVAs). When an employing company (or all participating employers in a last man standing scheme) files a CVA proposal with the court, a PPF assessment period begins. Under section 137 of the Pensions Act 2004, the PPF assumes the pension trustees’ voting entitlement (see Practice Note: The Pension Protection Fund—eligibility and entry). In practice, the PPF will typically cast a vote for or against the proposal rather than refrain. The PPF is consistently focused on avoiding any precedent that might allow pension schemes to be diluted where potential PPF entry could arise in the near future (the PPF observes that this has occurred in numerous prior CVAs). The PPF also anticipates that pension trustees will appoint their financial advisers to produce a report addressing the areas of concern...

What was the background to the PPF's consultation on the 2025/26 levy rules? The Pension Protection Fund (PPF) is financed through a levy charged to all defined benefit pension schemes. What each scheme pays depends partly on its size and partly on the likelihood of it entering the PPF, assessed by both the scheme’s funding position and the sponsoring employer’s insolvency risk. Every year, before the levy is applied, the PPF runs a consultation setting out proposals on the total levy it expects to collect and the approach for allocating charges to individual schemes. Although the core methodology typically remains broadly consistent year on year, the consultation details adjustments to key assumptions and identifies specific elements of the methodology that are being revised. What was the outcome? The consultation was conducted from 12 September to 23 October 2024, and the outcome was issued, a little later than first anticipated, on 30 January 2025...

In this issue: Spring Budget 2024 The Pensions Regulator Pensions taxation The Pension Protection Fund Investment Scheme governance Daily and weekly news alerts Dates for your diary Trackers Spring Budget 2024 Key pensions announcements and views from the market In the Spring Budget 2024, delivered on 6 March 2024, the Chancellor of the Exchequer, the Rt Hon Jeremy Hunt MP, outlined the government’s central objective: to stimulate growth by funnelling more capital into UK equity markets, improving the UK’s standing as a listing venue, and building on the Mansion House reforms announced in the Autumn Statement 2023. Key pensions measures include: expanding the regulatory remit of the Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) to enable the closure or winding-up of poorly performing defined contribution (DC) schemes, aligned with the reformed Value for Money (VFM) framework requiring DC funds to publish, by 2027, a public breakdown of...

In this issue: The Pensions Regulator Pension Protection Fund Pension Schemes Bill The pensions tax regime Pensions accounting Daily and weekly news alerts Dates for your diary Trackers The Pensions Regulator TPR publishes 2025 DC landscape report highlighting consolidation trends The Pensions Regulator (TPR) has released its 2025 overview of the UK occupational defined contribution (DC) market, confirming a continued move towards fewer, larger schemes and urging trustees, particularly those of smaller arrangements, to test value for savers and consolidate where it is lacking. The analysis shows DC scheme numbers fell by 15% to 790 in 2025, chiefly as schemes with fewer than 5,000 members left the market. Over the period, total assets rose 22% from £205bn to £249bn and memberships increased by 7%, reflecting consolidation. Master trusts now dominate, holding 30.1 million memberships (92%) and £208bn of assets (83%). TPR stressed that larger schemes are typically better positioned to deliver stronger investment performance and...

STOP PRESS : On 18 March 2026, the Pension Protection Fund (PPF) released its levy policy statement and the definitive rules for 2026/27, together with scheme guidance explaining how to comply with the levy framework and how the PPF intends to exercise discretion where the rules allow. These documents implement the PPF’s earlier message: no PPF levy will be charged to conventional schemes in 2026/27, while the proportionate, risk-based Alternative Covenant Schemes (ACS) levy will be retained. Although the current ACS framework is broadly unchanged, the PPF has pledged to fast-track a review of the ACS levy methodology so it remains proportionate from 2027/28 onwards. In the interim, a small suite of targeted refinements is being introduced, as consulted on, alongside a minor addition to the ACS Guidance reflecting consultation feedback. The PPF also draws attention to the closure of its insolvency risk portal from 1 April 2026 and advises schemes to download any data they may need for the future by 31 March 2026...

The Fraud Compensation Fund (FCF) was set up as a statutory fund under section 188 of the Pensions Act 2004 (PeA 2004) to provide compensation to trustees or scheme managers of occupational pension schemes where a scheme’s assets have been reduced due to an act or omission amounting to an offence of dishonesty. The FCF is administered by the Board of the Pension Protection Fund (PPF), which was created under PeA 2004, s 107. For details on the PPF’s general operations, see Practice Note: The Pension Protection Fund—an introduction. The obligation to make fraud compensation payments The PPF’s obligation to pay fraud compensation in respect of an occupational scheme arises under PeA 2004, Pt 2, Ch 4. The duty to make such payments is set out in PeA 2004, s 182. Under PeA 2004, s 182(1), the PPF must make one or more fraud compensation payments in relation to an occupational pension scheme if: the scheme is not a prescribed scheme or a scheme of...

Automatic enrolment Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2017 Under section 13 of the Pensions Act 2008 (PenA 2008), an individual’s qualifying earnings are those exceeding the amount in subsection (1)(a) and not surpassing the amount in subsection (1)(b). The earnings trigger for automatic enrolment and re-enrolment is the pay level at which employers must automatically place eligible jobholders into a qualifying workplace pension scheme. For money purchase arrangements, the qualifying earnings band identifies the slice of pay on which employers and workers must make at least the minimum contributions. Each tax year, the Secretary of State must review: the automatic enrolment earnings trigger the automatic re-enrolment earnings trigger the qualifying earnings band If the Secretary of State considers that any figures should be altered, they are amended by statutory instrument. Provisions under PenA 2008, sections 14 and 15A, permit, among other matters, increases to the amounts set out in section 13(1)(a) and (b)...