The Pensions Protection Fund has launched a consultation relating to contingent assets in the PPF levy.

The lifeboat fund said it will be of interest to schemes and employers that are considering putting a contingent asset in place, those who currently have one in place, and those who advise on them.

In March 2017, the PPF issued the first consultation on its approach to calculating the levy over the next three-year period (2018/19 to 2020/21).

“We highlighted that we had become aware of an interpretation of the wording in some of the standard form contingent asset agreements that might be regarded as limiting the obligations in those agreements,” the PPF said.

As indicated in the September consultation document for 2018/19, after reviewing the wider policy underlying these agreements and in light of responses from stakeholders, the PPF has decided to consult further before finalising its approach.

Therefore, the PPF is now seeking views on proposals to update the wording to provide greater clarity both in respect of the identified interpretation question, and also in respect of how the caps on guarantor/chargor obligations in the standard forms should operate in future. The intention is that the revised documentation will then come into use from early in January.

The PPF expects new agreements entered into after that date to be on the new form, but existing agreements will only need to move to the new basis from March 2019, in order for them to be taken into account in the levy from 2019/20 onwards.

The consultation document can be found here and the consultation runs until 21 November.

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