Atkin trustees, actuaries, consultants & administrators

Current issues - April 2019

GMP Equalisation – DWP guidance on conversion:  Whilst this outlines a 10 step methodology that schemes should follow to carry out conversion, there are many issues that remain uncertain (e.g. dealing with past transfers out, missing data and tax implications).  Although, the DWP notes that the Government is considering changes to the GMP conversion legislation to clarify certain issues, no date is given on when this can be expected.  Therefore, for now, it would appear that this still a case of watch this space.

GMP equalisation and pension scheme accounts:  The Pensions Research Accounts Group (PRAG) has issued guidance on the potential impact of GMP equalisation in pension scheme accounts.  They are only concerned with payments that should have been made to pensioners had GMP been equalised.  I suspect that, for many schemes, this will be hard to estimate without actual carrying out a GMP equalisation exercise and, therefore, the majority will elect instead to add a note to their accounts to that effect.

Fiduciary management:  Trustees will have to carry out a competitive tender for fiduciary management services on initial appointment, and every five years thereafter, under regulations that are expected to come into force near the end of the year.  We believe that fiduciary management can be an appropriate option for many smaller schemes and would hope that the additional costs carrying out regular tendering exercise do not put them off.  The key will be to ensure that these exercises can be carried out in a straight forward manner with, perhaps, a two stage process where the current arrangements are assessed against alternatives in broad terms before deciding whether a more thorough exercise is needed.  In some regards, it will be down to the industry to make sufficient information available in an accessible format to allow different managers to be easily compared against each other.

TPR guidance on DC wind-up:  TPR has issued new guidance on winding-up DC schemes.  If you are currently undergoing or contemplating a DC wind up, please give us a call as we would be happy to talk you through what this means.

Pension transfer advice – FCA to assess:  In an interim report, the FCA found that under 50% of transfer advice provided by IFAs was suitable.  Following on from this, the FCA now expects to carry out individual assessments of companies that are heavily involved in providing DB transfer advice.

PPF levy:  Just a reminder that the deadline for submitting certification of deficit reduction contributions (DRCs) for PPF levy calculation purposes is 30 April.

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We enjoy working with the team at Atkin Trustees. They are easy to get along with and their technical expertise, coupled with a pragmatic approach, allows us to advise our mutual clients in a manner beneficial to all. The team draws on this wealth of experience to ensure clients get a first class service, provided in an efficient manner. This added value is something other larger organisations would struggle to provide.

Gavin Paul, Pinsent Masons