Atkin trustees, actuaries, consultants & administrators

Managing Regulatory Change

In terms of scheme governance, there is a constantly changing landscape of legislation and regulation, from within the UK and from Europe, that Trustees must assimilate and apply to ensure good practice. Some of the more recent issues that Trustees will need to consider are:

  • The new flexibility that will apply to DC schemes may make these arrangements more popular. Members with transfer values of more than £30,000 will need to obtain financial advice before transferring to a DC scheme. This raises issues about communication to members, whether the ceding scheme has any responsibility to ensure that the need to obtain financial advice is satisfied, the current cash equivalent transfer value basis used by the scheme, investment and funding.

  • Is your principal employer a branch of an overseas scheme or is the principal employer based overseas. Following the example of the Olympic Airlines case, would your scheme qualify for the PPF if the overseas company entered insolvency?

  • Are you ready for the end of contracting-out? NICO will not be tracking individual GMPs in the future and there is a relatively narrow window for pension schemes to reconcile their GMP records with those of the National Insurance office. Failure to act shortly could mean that the scheme faces problems in the future (e.g. members who have been told by NICO that the scheme holds a GMP liability for them but for whom you have no records or the scheme’s GMP amounts being very different to those recorded by NICO). This would make any future plan to buy-out benefits more troublesome.

  • The Pension Regulator’s ‘Code of Practice 13’ on the Governance of occupational trust based Defined Contribution schemes extends to DB schemes if they have any DC element, which for many will usually be AVCs. Trustees should take a considered and proportionate approach to ensuring that members with AVCs are receiving value for money and are given clear and appropriate information about investments, charges and choices, both now and at retirement.
  • TPRs new code of practice on funding DB schemes focuses on Trustees having an integrated approach to covenant review, investment risk and funding whilst having consideration for the employer’s plans to sustain growth into the future.

On a personal note, I would like to thank you for your professional yet friendly approach. Always astute and never stuffy, however busy you undoubtedly get. Your innovative nature is an added bonus; Scheme Hub is excellent. I enjoy working with you and when you consider our interaction concerns pensions, that is saying something!

Lee, Administration and Actuarial client