In August 2007 the Pension Protection Fund published two important documents: Modelling Uncertainty: An introduction to the PPF Long Term Risk Model; and The Consultation on the Future Development of the Pension Protection Levy (the consultation document).
This article is mainly concerned with the impact of the latter on UK pension schemes and their sponsors in the event that the changes it proposes are accepted after the consultation, which is due for completion on 3 October. These changes are far-reaching, with potentially significant consequences. We also briefly describe the long-term risk model, since its output is driving some of the levy changes proposed by the PPF.
This article does not attempt to summarise all the subjects dealt with in either the consultation document or the long-term risk model paper – for example, we do not comment on multi-employer schemes, schemes with international employers and schemes funded above 104% of PPF liabilities.
