The Pension Protection Fund (PPF) has emphasised that whilst it expects to face "significant challenges" over the next three years, it will remain "ambitious" on behalf of members and levy payers, identifying four priorities to meet these challenges.

The lifeboat's strategic priorities for the next three years will focus on meeting new challenges with 'brilliant' service; excellence in asset and liability management; making a difference; and transforming ways of working using enhanced technology.

The PPF's Strategic Plan 2022-25 highlighted the “significant progress” already made by the lifeboat, particularly in relation to its funding position, and committed to completing the review of its funding strategy and publish the results this year (2022).

It also emphasised the importance of successfully implementing the PPF’s amended compensation regime following the recent Hampshire and Hughes court rulings, identifying the progression of a larger number of applications to the Fraud Compensation Fund as another “significant priority” for the next three years.

In addition to this, the lifeboat committed to developing and publishing a holistic sustainability strategy.

In particular, the document suggested that the lifeboat will be exploring more opportunities for sustainable investment in asset classes such as forestry and infrastructure as a priority, having already increased investment in forestry by 20 per cent to £1bn over the past year.

The continued evolution of its technology and digital solutions to improve the experience for its members, levy payers, and employees was highlighted a further priority, as the PPF reported a “significant increase” in the use of digital service seen, with 82 per cent of member transactions completed online.

PPF chief executive, Oliver Morley, commented: “Our strong performance against our 2019-22 strategic priorities, despite the challenges of the pandemic, has established a strong foundation for us to now build on.

"Our unique position allows us to continually look for new ways to innovate and exemplify best practice in pensions, asset management and customer service.

“Over the course of the next three years, we’ll continue to invest in, and improve, services to our members and levy payers so we can sustainably deliver high levels of satisfaction and remain as efficient as possible.

“We know our members have gone through a lot before they come to us, and so we’re never complacent about the help we offer them.

"With this in mind, we understand the recent court rulings have caused uncertainty for some around what they’re entitled to. Our priority is to ensure all our members are receiving the right compensation and are clear on what to expect both now and in the future.

“Our teams are excited to embrace the challenges and goals of the new Plan to deliver sustainable change and growth for the future while increasing our effectiveness and efficiency.

"Our strengthened financial position ensures we’re well placed to withstand higher levels of insolvency claims without risking the security of our members benefits. At the same time, we’ll continue to look for new ways to support our levy payers.

“We want to hold ourselves accountable for delivering on our new strategic priorities and we’ll transparently measure and report on their progress each year in our Annual Report and Accounts.”

The PPF's strategic report also confirmed that, assuming the lifeboat's funding position remains robust over the three year period, it will look to reduce how much levy it collects.

"As part of this we will identify where legislative change would be helpful to give us more flexibility in charging the levy in the future," it stated.

WTW head of PPF consulting, Joanne Shepard, suggested that this could indicate the PPF is preparing to lobby for a change to the law preventing it from raising the ‘levy estimate’, the amount is aims to collect through levies, by more than 25 per cent in a single year.

She explained: "This was put in place in 2004, against a background of scepticism about whether levies would be as low as the government projected and fears that the levy would rise quickly.

"In current conditions, when the PPF is well-funded and thinks it has a 95 per cent chance of hitting its self-sufficiency goal by 2030 but is still worried about what might lie around the corner, the law is more likely to act as a brake on levy cuts.

"The government has the power to increase the 25 per cent number but removing the restriction altogether would require primary legislation; that would be necessary if the PPF ever wanted to waive levies altogether for a year (or more) and still be able allowed to charge levies in future.”

Share Story: