Atkin trustees, actuaries, consultants & administrators

Current issues - June 2019

Statement of Investment Principles (SIP) – Last minute changes to regulations:  Schemes that must produce a SIP should be aware of some late additions, that must be included from 1st October 2020, and a new requirement that, from this date, trustees of DB schemes must make their SIP freely available on a website.  From 1st October 2021, trustees must also publish a statement in their accounts and on a freely available website, which summaries how they have performed on exercising voting rights.

Whilst we can understand the rationale for these changes and are very much for the idea that responsible asset owners should be taking a lead in determining corporate behavior, we hope that it will be possible to apply them in a proportionate way.  The SIP needs to remain a usable document with the level of detail reflecting the size of the scheme and their ability to influence their investment managers.  Careful thought also needs to apply to the mechanism by which SIPS are disclosed on publicly available websites, in some respects it might be easier were the TPR to provide their own platform which all schemes are required to use or, otherwise provide an alternative link.

Fiduciary Management (FM) – Competition and Markets Authority issues Order:  The CMA has made competitive tendering for FM mandates compulsory.  Where Schemes have not had a competitive tender, they will have to carry one out within 5 years of the original appointment.  The tendering process can be quite involved and therefore, it is important that Trustees agree the scope and make sure that the costs of such an exercise make sense for them.  Our hope is that this does not act as a barrier to fiduciary management for smaller schemes where there is potential for such arrangements to add the most value.

GMP Equalisation – when to act:  With HMRC delaying issuing their final GMP reconciliation data cuts until November and various working groups expected to issue reports on aspects of GMP equalisation, it still feels very much case of wait and see before carrying out any equalisation exercise.  However, in the meantime, Trustees need to consider how they should allow for the impact of equalisation in their actuarial valuations and scheme accounts.

LTA Breaches – A ray of hope for members?:  An individual with fixed LTA protection faced a huge tax bill when he failed to cancel a direct debit to a pension scheme by accident.  The member took the case to appeal and the Court found in the member’s favour, meaning he retained the higher LTA protection.

FCA to scrutinize transfer advice further: Following a survey that found that, in a significant number of cases, independent financial advisors had recommended that members transfer, the FCA is carrying further investigations; writing to firms identified as causing potential harm and directly assessing the most active firms.  Although FCA scrutiny is to be welcomed, the fear from a Trustee perspective has to be whether this leads to any of their transfer cases being reviewed and possibly benefits reinstated causing additional work and costs

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With our previous advisors we very rarely went to them for consultation advice, as we had little faith in them. We tended to use solicitors, and to that extent the cost to the Company has been significantly reduced, and we are very happy with Atkin & Co’s approach and guidance here. We are all more than happy with our move to Atkin & Co.

Paul, Administration and Actuarial client