The Board of the Pension Protection Fund (the PPF ) Levy Data Correction Principles

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1 The Board of the Pension Protection Fund (the PPF ) Levy Data Correction Principles This document sets out the key principles that the PPF will apply when considering a data correction request. It is directed at requests for corrections by schemes and advisers; where the PPF has identified an error that, if uncorrected, could lead to an underpayment of levy, we will normally expect to correct the error except in exceptional circumstances. Schemes and their advisers should note that this document does not form part of the levy Determination, and that the principles set out in this document will remain subject to the provisions of the Determination. We may update this document from time to time. Whilst our fundamental aim is that levies are based on accurate information, this does not mean that all data corrections will be allowed. Schemes and their advisors are ultimately best placed to ensure that their data is correct, and bear primary responsibility for ensuring that their levy is based on correct data. Routinely allowing data corrections is likely to involve significant PPF time and resource, to the detriment of all levy payers, and may disincentivise the maintenance of high standards of data quality. We therefore seek to strike a balance between the general desirability of invoices being based on correct information, the efficient achieving of this aim, and the need to ensure that the responsibility for providing correct information remains with schemes. We do this in the following ways: - Setting a firm deadline for data submission. The fundamental basis of the calculation of the levies will be the data submitted by schemes on the Pension Regulator s Exchange system, together with the data provided either to the PPF or to Experian at the relevant Measurement Time specified in our levy rules. This firm deadline enables us to efficiently extract and process data and issue invoices in the knowledge that those invoices should be based on reliable information - Making it clear that schemes and their advisers are ultimately responsible for ensuring that their data is correct. - Only correcting data after the Measurement Time where we feel the particular circumstances merit it, rather than routinely. This creates an incentive for schemes and their advisors to make sure their data is correct, rather than to rely on our discretionary powers. Pension Protection Fund 1 August 2016

2 - Seeking to address corrections in a way that minimises undue administrative impact on the PPF. Whilst recognising that some cases will be most appropriately dealt with post-invoice through the statutory reviews process, our approach encourages correction of data at early stages, in particular prior to the initial calculation of a scheme s levy. When making a correction decision, we seek to balance the wider policy considerations (aimed partly at incentivising behaviour that improves data quality) with the individual considerations that arise in a particular case. We do recognise that sometimes incorrect data is submitted, and that there will be circumstances where the fairest and most appropriate outcome will be for us to correct the data after the Measurement Time. The levy Determination therefore includes some discretions enabling us to do so, in particular Rule B2, which enables the PPF to correct if it appears to the PPF that either: (a) (b) (c) the information supplied for or used in the calculation of the Levies (including information contained in any data Submitted, if that information was incorrect at the time when it was Submitted) is incorrect in a material respect; a notification required by or under a certificate in relation to Contingent Assets has not been duly given; or a confirmation, certificate of declaration given for the purposes of these Rules was improperly given or contained information which was incorrect in a material respect. The Board s policy and approach may be informed by the timing of a correction request. The consideration of correction requests post-invoicing is more resourceintensive for us than at the pre-invoicing stage, because of the post-invoice statutory reviews process, and the need to generate a credit note and revised invoice if the request is accepted. Conversely, where the data error has been identified as part of the Board s data cleaning activities, a correction is more likely to be made, especially where the correction is required to enable the levy calculation to take place. Schemes should also note that we will only consider corrections, not updates. If the data as at the Measurement Time, was correct and legitimate in itself, but it was open to the scheme to supply some different or additional information which might have caused the levy rules to be applied differently, we do not consider the data to be incorrect in itself. So, for example, if a scheme had produced a new s179 valuation Pension Protection Fund 2 August 2016

3 before the Measurement Time but not submitted it on Exchange, the old s179 valuation is not in itself incorrect. When considering an individual corrections case, the Board s general policy is informed by the timing of the request as set out above, but the following considerations are also likely to be relevant in the individual exercise of discretion. The relevant factors, and the balance between them, will vary from case to case, so the below factors are only an indication of the Board s approach. All relevant circumstances of a particular case will be considered. A common thread running through most of the factors is that in cases where we find in favour of correcting, it is likely to be on the basis that the scheme is acting in line with the Board s desired behaviours, and a correction of the data in such circumstances would be unlikely to undermine the incentive for schemes to maintain good data quality. (a) The timing of a correction request, in particular the speed with which the error was identified by the scheme. This factor may in particular be relevant in a case where the prompt-identification of an error was demonstrative of a well-run scheme where data quality could be expected to be high. (b) Where the responsibility for the error sits, and the culpability or otherwise of the scheme (including its professional advisers). If a scheme has made demonstrable efforts to ensure that its data is correct, an error in those circumstances is less likely to be indicative of poor administrative standards. Particular situations might include: (i) whether the incorrect data relates to a complex or new area of our rules (where the scheme may reasonably have been uncertain about what data to submit), or whether the data was straightforward, such that the scheme could reasonably have been expected to have submitted correctly. (ii) the size of the scheme, and the resources available to it. For example, a smaller scheme may have more limited access to administrative and advisory resources than a larger scheme, and a data error may not be demonstrative of poor scheme administration or low data quality standards. A larger scheme may also be betterplaced to engage professional advisers (and if those advisers are responsible for an error, the scheme may be able to have recourse to them for recompense for the effect of the error). (iii) whether there were any external factors which prevented the scheme from submitting correct data on time, for example technical Pension Protection Fund 3 August 2016

4 issues. An example is where a scheme was unable to meet a deadline through technical issues for example, but notified the PPF of this as soon as reasonably practicable following the deadline. (c) The likely impact on the levy. This factor may in particular be relevant where the impact on a scheme s levy is very large, either in absolute terms or relative to the size of the scheme, and the nature and culpability of the error is such that the PPF regards it as disproportionate or unfair for the scheme to pay the higher levy. (d) The extent to which the scheme has taken or planned steps to ensure that the same or a similar mistake will not happen again, including the extent to which the scheme has been frank and open with the PPF about the circumstances in which the error occurred. (e) For Experian scores, requests for corrections to data held by Experian before the publication of mean scores should be raised to them for their resolution. After mean scores have been published, an appeal must be raised with Experian in the first instance. Schemes should note that Experian do not have the same discretion as the PPF to correct and the matter may need to be brought to the PPF for resolution, for example by a request for an informal review (or, following invoicing, a formal levy review) following an Experian appeal decision. Pre-invoice correction requests should be sent via to information@ppf.gsi.gov.uk. You will receive an acknowledgment of receipt, setting out the timeframe in which we will aim to respond to you. If you believe the financial information Experian holds on your organisation is incorrect you can contact Experian Customer Services t: experianppf@mailgb.custhelp.com, who can help investigate and correct your data. To help them answer your query please provide details of the discrepancies within the data. Appeals of Mean Scores, Levy Bands and Levy Rates can be made directly to Experian following their publication on the Experian/PPF portal. All appeals must be made in writing and sent either by to experianppf@mailgb.custhelp.com, including "PPF appeal" in the subject line, or, following Experian's written consent, by registered post. Pension Protection Fund 4 August 2016

5 Applications for statutory levy reviews (post invoice) should be made by reference to the requirements set out at the following link: px. Pension Protection Fund 5 August 2016