PPF Levy – Good news for most schemes: The PPF has published its levy rules for 2024-25 and has confirmed a levy estimate of £100million (which is half of the amount for the previous year). The PPF expects 99% of schemes will pay less this year. The PPF has admitted that it does not need to collect the levy, but legislation currently prevents levy increases of more than 25% each year. The PPFs view is that if it reduced the levy further, it would be difficult to raise it significantly if needed in the future. The DWP has agreed to revisit legislation as soon as parliamentary time allows, which would indicate that no changes can be expected for some time. Contingent asset certificates must be submitted on Exchange by 31st March. Deficit Reduction Certificates must be submitted by 30th April.
New Pensions Minister: In our December Newsletter, we reported that Paul Maynard had been made Pensions Minister. The Independent Parliamentary Standards Authority (IPSA) has received claims that Mr Maynard broke parliamentary rules by using taxpayer money to fund Conservative Party work and campaigning and has referred the matter to its compliance officer.
Pension Scheme Returns 2024: Annual scheme returns that are to be issued in Q1 will include questions relating to a scheme’s fiduciary manager (if applicable) and investment consultants. TPR will monitor compliance with regulations on the appointment of fiduciary managers by requesting information on date of appointment and whether a competitive tender was conducted. For investment consultants, schemes will need to give information about setting strategic objectives and the date of the next review.
New Notifiable Events – Uncertainty on introduction: Since 2021 the industry has been aware that two new employer-related ‘notifiable events’ were to be introduced. The two new events would require the employer to report to TPR where there is a) a decision in principle to sell a material proportion of the business, or assets of a sponsoring employer, and b) a decision in principle to grant or extend a relevant security in priority to scheme debt. The Chief Executive of TPR has said recently that the final regulations will be brought forward in due course, however there is no firm timescale given. When regulations are introduced, we will make all clients aware of this.
PPF Purple Book: In December, the PPF published the latest edition of its ‘Purple Book’ (DB pensions universe risk profile, which contains a wealth of data and analysis of UK DB schemes. Investments in bonds remains high, whilst the proportion invested in equities is now under 18% in aggregate. Aggregate funding has improved sharply since 2022 to 134% on the S179 PPF basis. Interestingly, the distribution of schemes by membership size has remained stable since the first Purple Book was issued in 2006, indicating that smaller schemes (with 1000 members or fewer) still account for the largest number of DB schemes. The Purple Book can be found here: The purple Book 2023 (ppf.co.uk)
Virgin Media Section 37 – Appeal date set: In the case of Virgin Media Ltd v NTL Pension Trustees in June 2023, the Court held that alterations to the rules of a contracted-out DB scheme were void if made without an actuarial S37 confirmation. This decision has potentially enormous consequences for all DB schemes and their sponsoring employers. Virgin Media will appeal the High Court’s decision. The date of the Court of Appeal hearing has been set for 25th and 26th June 2024.