UK - The Pension Protection Fund levy paid by companies could vary according to the geographical location of the sponsor, both within and outside the UK, Global Pensions has learned.
PricewaterhouseCoopers partner Martin Miles said: "The general demographic criteria used by D&B to score a company are also based on the geographical region where the company is located.
"Based on this, two identical companies located in a different geographical region - also within the UK - might be rated differently by D&B and therefore pay a different PPF levy."
Miles said this can happen either way. "An economically depressed area might receive government subsidies and, as a result, be rated higher than another one," he added.
Allen & Overy senior professional support lawyer Giannis Waymouth said: "There is a logic to location being a factor in assessing employer credit ratings, but it will inevitably be a blunt instrument.
"What if the business serves an entirely different area of the country? It would be easy for individual ratings to be unfair because they don't analyse the business in sufficient detail."
Sackers partner Claire Carey said the PPF was trying to look into the next years' levies to come out with an alternative approach which could smooth some of the differences in assessment.
According to the PPF's website, D&B and the lifeboat fund are discussing a possible alternative approach which could reduce these differences - by using the consistent underlying statistical score to align the local based failure scores to the equivalent failure scores.
Each local score would then be mapped to the equivalent UK score, whose probability could then be used.
D&B did not return messages and calls for comment.
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