The Pension Protection Fund (PPF) pays compensation to members of eligible occupational pension schemes on employer insolvency. To fund this, schemes pay a pension protection levy, the risk-based element of which reflects the level of scheme underfunding and the probability of PPF entry during the next year. One factor in the calculation of employer insolvency is the “failure score” produced by Dun & Bradstreet (D&B).

D&B attributes a failure score on 31 March each year, representing each employer’s probability of insolvency, ceasing to trade and being unable to pay all its creditors within the next 12 months. If the company’s failure score appears incorrect, an appeal may be made for a recalculation within 28 calendar days of the issue of the levy invoice. However, the failure score can be requested at any time, and an appeal may be lodged before the invoice is received. Should the appeal be rejected, there is a maximum of 28 days to escalate the appeal to the next level. In exceptional circumstances, D&B may allow an extension of this time limit.

D&B has a five stage appeal process dealing with failure score complaints, the first being a customer services review and data validation.

Further stages are:

The appeals process can be lengthy and costly, with each stage requiring a written submission. The appeal grounds are relatively narrow and the structure is rigid. D&B seems reluctant to consider arguments concerning the process itself.

Case law confirms that the obligation to provide financial information to D&B extends only to filing data with the relevant registry. Accounts filed by the applicable deadline are assumed to be “available”. To check that D&B has accurate company data, trustees and employers should obtain the failure score of each scheme company as early as possible in the year before that score will have an impact on the levy calculation. Mistakes may then be rectified before they result in a higher pension protection levy. Separate advice should also be sought on possible actions to improve failure scores.