Regarding ABCs, the PPF had previously suggested it would only accept the inclusion of these arrangements if the structures were backed by UK property.The inclusion of ABC models by trustees and sponsors in levy calculations is commonplace to demonstrate added security and, in turn, a reduced levy.However, after formal consultation from May this year, the PPF has said it will now accept bids from trustees on ABCs backed by any kind of asset.David Taylor, the PPF’s head of strategy, told IPE the fund’s previous stance was due to the ease of including UK property into risk calculations – as well as because the majority of ABCs used the asset. “This was never about ABCs themselves but about the way they show up in accounts for valuation purposes,” he said.He said the fund was not looking to impose any restriction on what the asset would be but did argue that trustees should be able to seek independent valuation – and for a level they deem appropriate.“We will ask schemes to certify to us a valuation that properly reflects what would happen if the employer became insolvent,” he said.“To give this teeth, we will require that the independent valuation recognises a legal duty of care to the PPF, meaning it can legally be relied upon.”The scheme will also require legal opinion on the structure of the ABC, and the “step-in rights” trustees have in the event of insolvency.“We know ABCs are complicated and trustees take strong legal advice when setting them up,” he said.“We hope much of the required information is out there, but we just need to ensure this information comes to us.”The PPF also settled another contentious issue regarding the use of independent and external credit ratings for sponsors, over a PPF-specific insolvency risk score calculated by Experian.It said it would not recognise these scores, and all sponsors must submit data to Experian for an insolvency risk score to be calculated.Taylor said the idea was discussed with the industry-working group, and he understood the attraction of using credit ratings as they look deeper into the performance of companies more than the PPF could.“There are a number of limitations, a practical one being the entity with a credit rating might not be the actual sponsoring employer – you would have to find a way to connect the two,” he said. “There are also complications on how to translate a credit rating into an insolvency measure – you are mixing two concepts.”However, the Confederation of British Industry, an industry group for UK employers, said some businesses would pay more based on changes to insolvency scores, and that overseas-headquartered companies would be concerned if credit score overrides were not used.However, it did accept that changes to the levy calculation were positive overall and welcomed the reduced levy intake.Joanne Segars, chief executive at the National Association of Pension Funds, also welcomed the reduced levy, as well as the new calculation. “While we recognise that applying transitional relief is not a simple task, we would have liked to see the PPF providing some transitional support for the minority of schemes that will face significant increases to the levy,” she said.The lifeboat fund said it would consider providing support for schemes when it published its initial proposals in May this year, which the NAPF fully supported.The PPF’s consultation of mortgage age and ABCs – as well as other secondary matters – will run until mid-November, with final structures expected before 2015. The UK Pension Protection Fund (PPF) has published amended plans over the introduction of its new levy calculation, while launching a final consultation on changes to asset-backed contributions (ABC) and mortgage age calculations.The lifeboat fund also said its levy intake for the next 2015-16 valuation year would fall by 10% to £635m (€809m) – a reflection of falling risk at the employer and scheme levels.It will now run a “second-order” consultation determining the proposed changes in levy and insolvency score calculation.This includes changes to ABCs and the mortgage age variable – the latter a contentious issue in previous consultation over the inclusion of mortgage holdings by sponsors in risk calculations.