PPF levies: case 1

The scheme’s trustees referred a decision to us relating to the calculation of their scheme’s risk-based levy.

The sponsoring employer had made additional contributions to strengthen the scheme’s funding position, but this had not been taken into account when the levy was calculated.

There was provision within the levy calculation rules for deficit reduction contributions to be taken into account. However, there was a strict deadline for submission of a deficit reduction certificate to the PPF.

The contributions had been paid prior to the cut-off date and the certificate had been completed, but it had not been submitted until five months after the relevant date. This was attributed to a problem at the scheme’s professional advisers.

The trustees referred the PPF’s decision to us on the basis that the information used to calculate the levy was “incorrect in a material respect”. If that were the case, there was provision in the Levy Determination for the PPF to review the levy calculation.

However, the Levy Determination also said that data was not to be considered incorrect in a material respect where there was the option for different or additional data to be submitted which might have resulted in the levy being lower.

The submission of a deficit reduction contribution certificate was optional.

We did not uphold the case. We decided that the PPF had interpreted the Levy Determination correctly and, whilst there was provision for the exercise of certain discretions to review a levy, they had reasonably decided that the relevant circumstances did not arise in this case.

So the risk-based levy could be legitimately calculated without reference to the deficit reduction contribution.