UK schemes face planning delay as PPF postpones insolvency score model

first_imgThe UK Pension Protection Fund (PPF) has confirmed a delay in publishing the model for insolvency scores in levy calculations after development with the new provider overran.In an update from its December 2013 statement to levy payers, the lifeboat fund said it was making steady progress with score provider Experian on the new model.However, chief executive of the PPF Alan Rubenstein said development work to create a bespoke model with Experian had taken longer than anticipated.As a result, levy payers will be unable to see their new scores in early 2014 as originally planned. “We are making steady progress with Experian but want to make sure any new model we consult on is robust and fit-for-purpose,” Rubenstein said.Experian will take over the provision of insolvency scores for the 2015-16 levy period after the PPF announced its decision to end its eight-year relationship with current provider Dun and Bradstreet (D&B).Joanne Shepard, senior consultant at Towers Watson, called the delay from the PPF frustrating, as schemes are trying to prepare for the years ahead.“This [model] change has already tied in with the second levy triennium for the framework, where the PPF might change some of the factors used to calculate the levy,” she said.“There are now a lot of reasons why we cannot estimate the 2015-16 levy for clients, which is frustrating and impacts on companies’ planning.“We do not know what the Experian scores will look like compared with D&B’s and will not now have any indication in February as expected. We will just have to wait longer to provide clients with any indication of what the impact will be.”Barnett Waddingham partner Nick Griggs conceded the delay was not ideal, but he said that, given D&B’s failures as a score provider, it was important for the PPF to find a new model.“It is more important that the new rating system be fit for purpose,” he said. “The PPF appears to be aware of levy payers’ concerns, and it is encouraging it has indicated that extra flexibility will be offered during the transition period.”This delay from the lifeboat fund added to an announcement in December from D&B that it would be altering its score-calculation methodology for the 2014-15 levy.Shepard said it was still difficult to know the impact.“Most companies will have already put a budget together for the 2014-15 levy, so the change is a bit too late,” she said. “If there is now a significant move, it could force a band movement, with a significant impact on the levy, which could reach up to 50%.”last_img read more