Questions and answers
I am in a contribution group that is forecast to be in credit at 31 March 2008. How can I work out what credit my firm may be allocated?
At the moment, we cannot tell individual firms what credit they might receive. What we can say is that it will be in proportion to your 2007/08 tariff base in the relevant contribution group. Firms must have been a member of a relevant contribution group from 1 April 2007 to be eligible for a credit. Details of the transition rules are available from the FSA (PS07/19, FSCS Funding review).
More information will be provided by the FSA when it revises its online fees calculator and details for individual firms will be provided on the FSA's fees and levy invoices which are expected to be sent out in the Summer. In the meantime the FSA has given some examples on its website for different types of firms.
How do I know what proportion of the funding requirement in the new Sub-class(es) my firm will pay?
At the moment, we cannot tell individual firms how much they will need to pay. What we can say is that it will be in proportion to your 2008/09 tariff base in the relevant Sub-class. If you have a credit from a previous contribution group, this will help to offset your share of the funding requirement. Some firms may receive a refund.
More information will be provided on the FSA's fees and levy invoice which is expected to be sent out in the Summer. In the meantime the FSA has given some examples on its website for different types of firms.
Why is FSCS forecasting that some contribution groups will have funds in credit at 31 March 2008?
Our levies cover a financial year (1 April - 31 March), plus the first quarter of the next financial year. However, this year we are fixing the contribution group funds at 31 March 2008. Therefore some of the credit is due to the presence of funds we estimated were needed for the first quarter of 2008/09, which was included in our 2007/08 levy.
Forecast fund balances also reflect current claims trends. Some claims volumes, such as mortgage endowments and pensions review, have been lower than expected during 2007/08 which means that we have paid less compensation than we expected at the start of the 2007/08 financial year. This means that some contribution group fund balances at 31 March 2008 are likely to be higher than anticipated when we raised our 2007/08 levy.
