Contingent Asset Certificates
The deadline for the submission of contingent asset certificates is 31 March 2008.
The Board supports the development of risk management products of various kinds and will recognise the following types of contingent assets in the levy calculation for 2008/09:
- Guarantees given by parent/group companies and undertakings (Type A)
- Security over cash, real estate and securities (Type B)
- Letters of credit and bank guarantees (Type C)
Although the three types of contingent asset remain the same for the levy year 2008/09 as for the levy year 2007/08, there have been some changes to the specific certificates. Details of how the Board will treat contingent assets for the purposes of the pension protection levy for 2008/09 are set out in the Board’s determination under section 175(5) of the Pensions Act 2004 which was published on 18 February 2008.
Certain acceptability criteria are in place for each form of contingent asset, in order to protect the Pension Protection Fund and levy payers against enforceability and valuation risks. In particular, a standard certificate must be completed in relation to each contingent asset arrangement for it to be recognised for levy purposes. Each certificate also has accompanying notes which should be read before completion.
Updated guidance, images of certificates and standard form agreements in relation to contingent assets for use in the levy year 2008/09 have been published below and can be accessed via the following links:
Certificates
TYPE A
Certificate in relation to Type A group company guarantee for the levy year 2008/09
TYPE B
Certificate in relation to Type B(i) security over bank account for the levy year 2008/09
Certificate in relation to Type B(ii)EW security over land in England and Wales for the levy year 2008/09
Certificate in relation to Type B(ii)S standard security over land in Scotland for the levy year 2008/09
Certificate in relation to Type B(ii)NI security over land in Northern Ireland for the levy year 2008/09
Certificate in relation to Type B(iii) security over a portfolio of securities for the levy year 2008/09
TYPE C
Certificate in relation to Type C(i) letter of credit or bank guarantee (evergreen) for the levy year 2008/09
Certificate in relation to Type C(ii) letter of credit or bank guarantee (reducing balance) for the levy year 2008/09
IMPORTANT NOTE ON STANDARD DOCUMENTS: It is the user’s responsibility to obtain legal advice before using the Pension Protection Fund’s standard documentation – you should not rely on the guidance note or on other documentation published by the Pension Protection Fund. The Board accepts no responsibility to trustees/managers or any other person for the efficacy of the standard documentation or for any legal effects that such documentation may have if used in any circumstances.
|
