CIPP comment The CIPP, along with other members of the NPAG, hopes that the government addresses the issue that they have pledged to fix sooner rather than later. The people that this anomaly affects are considered to be some of the most vulnerable, so it is imperative that a resolution is found to protect them and their pension funds. As always, as soon as there are any further updates, the CIPP will alert its members through News Online, so that you have the most up to date news relevant to payroll professionals.
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An increase to the Pensions Protection Funds levy for large employers expected in 2021 24 December 2019 The Pension Protection Fund (PPF) levy is paid by all eligible defined benefit schemes to help fund PPF protection. As a result of proposed amendments to the levy risk assessment model, larger payment may be required from some of the bigger companies, due to changes that will take effect from tax year 2021-2022. Pensions Expert reports that the PPF will no longer utilise Experian for its insolvency risk model but will start using Dun & Bradstreet (D&B) to model insolvency risk for levy calculations. The risk scores for the 2021-2022 levy will be amended to mirror actual insolvency experience. Although D&B’s new model is a modified version of the one initially used by Experian, tests that looked at its performance indicated that the scorecards originally used were incorrectly predicting the level of insolvencies. This trend was prevalent in the scorecards used for larger companies. The scorecard variables that will be used are to be adjusted accordingly, and this will see increased levies for bigger companies but will also mean decreases for smaller businesses and for not-for-profit establishments.
The PPF commented:
“We regard the case for recalibration as very strong, since otherwise smaller entities and not-for-profits would be subsidising the largest employers.”
According to the document, a third of schemes will see a similar amount of levy in 2021-22, with almost half of the schemes seeing a lower charge. One in five schemes will see an increase, in particular, those with employers on ‘scorecard 1’. The risk scores that have been calculated by D&B will be available for levy payers to view online, on a new digital portal, which will also offer the facility for those affected to ask questions online and also to engage in live webchat with customer service advisors.
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Guy Opperman to remain as minister for pensions and financial inclusion 25 December 2019
Guy Opperman, one of the main contributors to the Pensions Schemes Bill mentioned in both speeches delivered by the Queen this year, has retained his parliamentary seat of Hexham and has been reappointed as the minister for pensions and financial inclusion. Mr Opperman is the second-longest serving pensions minister behind Sir Steve Webb, who served between 2010 and 2015, as he took the role in June 2017 and so has over two years’ worth of service within this position. There is, however, speculation that there will be a major cabinet reshuffle in February 2020 after the proposals to officially leave the EU on January 31, so this could potentially jeopardise his future in the role.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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