their benefits. Once the data is accurate, the PPF will then carry out a valuation of the scheme's assets and liabilities. If this valuation finds that the scheme can afford to purchase annuities for its members at or above the level of compensation the PPF would provide, then the scheme will exit the assessment period and wind up independently. If the scheme cannot afford to purchase such benefits for its members, the assets of the scheme will transfer into the PPF and the Board will take over responsibility for paying compensation to members. Compensation The PPF pays two levels of compensation which are set out in legislation:[6] • If members are over the normal pension age of the scheme, or are in receipt of a spouses, dependants or ill health pension they will receive 100 per cent of the pension in payment when the company entered insolvency. • If a member is an early retiree or under the normal pension age of the scheme, they will receive 90 per cent of what they were. In most cases, members’ compensation for pensionable service from 6 April 1997 will rise in line with inflation each year, subject to a maximum of 2.5 per cent a year. Member compensation will remain stable and not change if there are no inflationary increases or if there is a fall in inflation too. Compensation for pensionable service before 6 April 1997, including any applicable Guaranteed Minimum Pension (GMP) benefits, won’t increase in line with inflation. Following a court ruling in July 2021, the statutory limit on the amount of compensation paid by the PPF, known as the compensation cap, no longer applies. Levies One of the PPF’s four sources of funding is a levy charged to all eligible defined benefit schemes. There are two parts to how the levy is calculated: • The scheme based levy – based on how large the scheme is and is payable by all schemes • The risk-based levy – take account of the scheme’s sponsoring employer’s insolvency risk, the scheme’s underfunding risk and its investment risk. Similar to an insurance premium the amount each scheme pays is based on the risk it could present. To calculate this risk, the PPF will assess the risk of a scheme’s ability to meet its pension obligations, the scheme’s investment strategy, and the risk of a sponsoring employer(s) going insolvent. The PPF’s insolvency risk