PPF to set up steering group for revising levy plans
UK - The Pension Protection Fund (PPF) is to establish a steering group to aid in the "refinement" of proposals for the development of the risk-based levy, following concerns over key areas such as long-term insolvency probabilities and the treatment of sophisticated investment strategies.
A consultation on plans to try and tailor the levy to the individual risk that schemes pose to the PPF was issued in November. After examination of the 63 responses, the PPF revealed in an update that while most supported the principal behind the proposals opinion was divided on how they should be implemented. (See earlier IPE article: New PPF levy won't alter investment strategies)
Alan Rubenstein, chief executive of the PPF, said the Board "remains convinced the current levy approach raises some real questions on fairness", but acknowledged the concerns raised in relation to the transparency of its long-term risk model and its use in generating long term insolvency probabilities; the balance of 'expected' versus 'unexpected' risk and the treatment of more sophisticated investment strategies.
He therefore stated in his foreword to the levy update: "I am convening a group of senior representatives of our diverse stakeholder base to help us in re-examining the issues and formulating revised proposals. This group will be supported by a group of technical experts, who will help us explore the practical issues of design."
It is expected the revised proposals will then be issued for further consultation in early 2010, although the PPF said it intends to defer implementation until at least 2012/13, instead of 2011/12 as earlier proposed.
Main areas of consideration for the new steering group could include:
Rubenstein added: "This group will not be tasked to achieve consensus on the current proposals. Instead, I want to use the expertise of those invited to consider the issues raised, incorporate their insights into our thinking and, I hope, come up with genuinely new ideas."
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