DWP publishes departmental review of Pension Protection Fund

Overall, the report concluded that the PPF was functioning well and there was no need for any major changes to either its structure or remit. The report made a number of recommendations including:

• That the DWP and the PPF work together to explore whether it is feasible for the PPF’s skills and capabilities to be used in other ways for public benefit; for example, in managing investments for Government or acting as a consolidator or provider of aggregated scheme services for schemes which could benefit.
• That the DWP and the PPF work together to understand the implications of the PPF’s funding position in light of expected future developments in DB pension schemes and plan ahead for any legislative changes that might be needed; for example, to address what happens to any funding surplus.
• That the DWP ensures that the new PPF Chair has the chance to build her relationships with key senior people in the DWP, including the Minister for Pensions, the Permanent Secretary and the Director of Private Pensions Policy, potentially meeting twice a year, and more opportunities are found for the Executive Team at PPF to meet their counterparts at the DWP and spend time on future strategic challenges.
• That DWP and PPF reassess how their working relationship operates so as to ensure emerging issues are handled quickly and collaboratively.
• The PPF should seek to provide a levy calculator for schemes and their employers via its website so that they can work out what their risk-based levy would be.
• The PPF levy forms a diminishing element of the PPF's funding and it was recommended that the DWP and PPF ensure that any necessary changes are made so that the PPF annual levy can be reduced easily, if the PPF Board so decides, but also reintroduced if required should circumstances change.
• The administration levy, which the report concluded was an "unnecessary complexity", should be abolished. Once the existing reserve has been expended, the PPF should be permitted to recover its administrative costs via the levy which it collects itself.
• That the PPF should consider whether it would be appropriate to seek FCA authorisation and regulation for either the PPF itself or a dedicated subsidiary, given the increased significance of its investment management function.