The Pension Protection Fund has delayed publication of its new model for calculating sponsor insolvency risk scores, which play a major role in determining the levy defined benefit schemes pay in to the PPF
These scores are currently provided by Dun & Bradstreet but the fund is switching to Experian to calculate the scores for the 2015/16 levy.
The PPF said last week that it had intended to make an announcement about the new model by the end of 2013, but development work had 'taken longer than originally anticipated'. This means that levy payers will not be able to see their new scores in early 2014 as was originally intended.
'We are making steady progress with Experian but want to make sure that any new model we consult on is robust and fit-for-purpose,' the PPF said.
It added that it would continue working with Experian and the industry steering group to ensure the model meets its test of being 'suitably predictive, transparent for levy payers and a better fit for the PPF universe'.
Despite the fund not providing a time when it would publish the new model for consultation, it said it was 'committed to giving levy payers as much time as practically possible to understand any new methodology before it is used in levy calculations'.
Nick Griggs, a partner at actuaries Barnett Waddingham, said it was important that the replacement for the Dun & Bradstreet scores were a better fit for the requirements of the PPF levy calculation.
'So whilst these delays are not ideal it is more important that the new rating system is fit for purpose,' he said.
'The PPF appear to be aware of levy payers concerns and it is encouraging that they have indicated that extra flexibility will be offered during the transition period to allow holes in Experian's data to be rectified and presumably score corrections to be backdated if necessary.'
Joanne Shepard, senior consultant at Towers Watson, told The Actuary the delay was 'slightly frustrating'.
But she added: 'We agree that the PPF shouldn't publish prematurely and it should make sure that the model is fit for purpose before it does publish, because otherwise that is not helpful either and a waste of people's time.'
Asked when the PPF would publish the new model, Shepard said: 'Our understanding is that the fund is looking to publish in May.'
The PPF, established in 2005, exists to provide compensation to members of defined benefit pension schemes that have become insolvent.