The Pension Protection Fund (PPF) has announced its plan to be self-sufficient, in broad terms, by 2030.
The PPF believed 2030 would be the point at which future claims would be low relative to its capability to pay compensation to members. It anticipated the significance of the pension protection levy would have "substantially diminished by that time".
As part of PPF’s three-year strategic plan 2015-2018, in order to meet its long-term objective, PPF said it would move to a new insolvency risk provider Experian with a new levy model for assessing insolvency risk.
David Shaw, head of strategy and policy at PPF, said: "From next year, based on a new Experian model, it will look at universal defined benefit schemes of employers." Shaw explained the previous model looked at insolvency experience of the whole of UK businesses, while the new levy model was "tailored to our universal employers".
Shaw believed the new levy model would be more predictive and transparent. He added: "For the first time, our levy payers will understand how exactly levy is calculated. They will be able to see the information in our new online portal. Levy payers and employers will be able to see the information used and try to discuss that with Experian and with us."
The PPF also said they would move their member services such as payroll and member queries in-house in order to gain more control and flexibility and save costs. Shaw said: "That would give us a much greater amount of control and flexibility over the services we offer. We make sure we really are offering exceptional services, and overtime that gives us the opportunity to bring costs down."
The PPF also announced it would consider bringing some of its asset management in-house if it was cost efficient to do so.
David Taylor, director of strategy and legal affairs said: "We'll bring assets in-house if it's going to save us money and if having greater control will benefit us.
Taylor did not specify which asset classes would be migrated in-house, but said: "There are some asset classes that we are going to be in for the long term and it makes sense to start bringing them in. There are other asset classes that we may not be in for the long term, in which case building up infrastructure only to then migrate out of those classes doesn't make a great deal of sense."
Taylor explained some assets should be managed externally, adding: "There are some asset classes that are just inheritably complicated or require particular skills. It makes sense to continue using outside specialists. There are others where we can actually do better."
PPF is a fund to protect savers with defined benefit pension schemes if their employers become insolvent. It is funded through investments and a levy from eligible schemes.
Last year the PPF estimated the pension protection levy would fall by almost 10% to £635m.