The PPF has broadly confirmed changes to the calculation of insolvency risk scores for the purposes of calculating the pension protection levy for the 2021/22 levy year onwards. This affects scores starting from April 2020. The changes are expected to result in schemes of larger employers paying higher levies.
Dun & Bradstreet (D&B) has replaced Experian as provider of insolvency risk services to the PPF. D&B will use largely the same approach as Experian to calculating insolvency risk scores but scores will be recalibrated to reflect experience of insolvencies in practice.
Schemes of the largest employers are expected to be particularly adversely affected. The PPF earlier said:
"In terms of levy impact … a third of schemes see a similar amount of levy with almost a half of schemes seeing a lower levy. One in five of schemes see an increase in particular schemes with employers on scorecard 1. Currently, seven per cent seeing an increase of over 50 per cent – although some of these increases will reflect Experian having self-submitted data D&B don’t yet have." (sic)
This is an extract from our 81st issue of What's Happening in Pensions.
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