New PPF guidance on Company Voluntary Agreements
BDB Pitmans
The Pension Protection Fund (PPF) has issued updated guidance on Company Voluntary Arrangements (CVAs), which sets out the considerations for employers and their advisors to demonstrate they have addressed when presenting the PPF with a CVA proposal.
In the last Pitmans Point we highlighted House of Fraser’s proposal to seek a CVA. The new guidance comes as the PPF maintains that it has seen a “marked increase” in the use of CVAs over recent months.
The guidance sets out the approach which the PPF will adopt when considering whether or not to vote in favour of a CVA. It covers questions which will be considered by the PPF such as whether the employer’s proposals have a reasonable prospect of being successful, whether all deficit reduction contributions are up to date and whether the CVA would pose a risk to these. The PPF will also consider whether the trustees should instruct a new valuation and agree a new schedule of contributions, as well as what the quantum of PPF drift is.
The PPF states that it will work closely with the trustees and the Pensions Regulator to minimise the risk to scheme members and it hopes that this guidance will enable employers to address the areas of concern for the PPF from the outset, making the whole process more streamlined.
