Atkin trustees, actuaries, consultants & administrators

Current Issues - May 2019

TPR planning to contact more schemes:  TPR intends to contact hundreds of schemes throughout 2019 to monitor matters such as dividend payments to shareholders, length of recovery plans and efficient record-keeping.  TPR will take action where standards are not met.  For schemes operating with a tight budget, the challenges are likely to include how they can respond to TPR questions both efficiently and comprehensively.  In such circumstances, there might be some sense in appointing a specialist third party to manage the process. 

TPR enforcement action:  TPR continues to take a tough stance where schemes have not been treated fairly, using its powers to appoint Trustees, issuing penalty notices for failure to prepare a Chair’s Statement; issuing information gathering notices and 5 instances where criminal powers were employed to prevent fraud.  In such an environment, Trustees need to be clear as to their roles and responsibilities, ensuring that they understand what their advisors are doing on their behalf and that any decisions are fully reasoned out and documented.

DWP concern over transfer delays:  DWP has requested ‘urgent talks’ with Mercer, Aon and Willis Towers Watson to understand what is delaying transfer times.  If this is a concern for DWP and the Pensions Minister, it will be sensible for Trustees to understand what is happening in their own schemes and that their SLA reporting is picking up what appears to be a significant issue. 

Pension freedoms:  Flexible withdrawal continues to be an attractive option although the average withdrawals per person have fallen.  Although, most DB schemes do not offer flexible withdrawal, given the continued popularity of this option, Trustees may want to consider whether this is presented as an option to members at retirement.

PPF Guidance – planning for employer insolvency:  The PPF has issued a guide designed to help trustees with risk management and contingency planning to protect the Scheme in the event of the insolvency of the sponsor and deliver an orderly entry into PPF assessment which minimises potential disruption on members.  This builds very much into the IRM framework and the TPR focus on contingency planning.

HMRC delays issuing final cuts of GMP information:  HMRC have confirmed that they now expect to start issuing their final data cuts of the GMP information from November 2019.  For many schemes this data cut is likely to draw to a close their GMP reconciliation exercises and act as a starting point for carrying out any GMP equalisation exercises, therefore any delay is unhelpful, particularly in an environment where auditors are keen to include allowances for GMP equalisation both in the company and pension scheme accounts.

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