We have received an increasing number of questions regarding the Chair’s statement for trust based Occupational Pension Scheme. Below are brief answers to some of those initial questions. It is not designed as an exhaustive briefing document and for further detailed information and specific advice please contact us on 01883 332260.

Who has to comply? Trustees of Trust Based money purchase (defined contribution) Occupational Pension Schemes

A Chair of Trustees must be appointed

When? Existing schemes within 3 months of 6 April 2016. New schemes within 3 months of the date the new scheme is established.

Who can be appointed as chair? The following:

  • An individual who is a trustee of the scheme.
  • A professional trustee body which is a trustee of the scheme.
  • An individual who is a director of a non-professional corporate trustee company.
  • A director of a professional trustee body.

How? Register on The Pensions Regulator’s online website

Key duties?  Signing Chair’s statement

A Chair’s statement must be produced

When? Within 7 months of the end of each scheme year.

For those schemes whose year end was before 5 April 2015 the scheme year will run from 6 April 2015 until scheme year end, then as above.

For schemes whose year end starts from 6 July 2015 the deadline for submitting the statement has already passed.

What are the key items the statement must contain?

Default arrangements

  • Statement of default investment strategy
  • Description of any review of the default arrangements and any changes undertaken as a result
  • Where no review was undertaken, the date of the last review

Charges and transaction costs

  • The charges and transaction costs applicable to the default investment
  • The range of charges and transaction costs applicable to any other investment fund options
  • Confirm the extent to which the charges and transaction costs represent good value for the members.

Core financial transactions

A description of how the requirement to process core financial transactions (e.g. contributions, transfers in and out, payments to members) promptly and accurately has been complied with.

Trustee knowledge and understanding

  • Confirm how the requirements for knowledge and understanding have been met
  • Confirm how the trustee’s combined knowledge and understanding together with the advice available to them enables them to meet their duties


This article is not meant to be exhaustive and is based on our current understanding of legislation which can change without notice.  It is not a recommendation for changing any existing arrangements and professional advice should always be sought prior to making any changes to your arrangements.


It’s surprising that given the number of changes that have been made to UK pensions in the last 18 months, there are still so many people still do not know what Pension Wise is, who it’s for, or what it does.

Pension Wise is the Government’s free, impartial retirement guidance service that’s open to everyone aged over 50, who is seeking information about how they can turn their pension savings into a retirement income.

It was introduced following the retirement option changes announced in the 2014 budget and specifically it can:

  • Provide guidance on defined contribution pensions only
  • Help you understand what can be done with your pension pot, how to shop around and potential taxes and fees
  • Highlight pension scams and how to avoid them
  • Explain the importance of ensuring your money lasts as long as you do

You can arrange a meeting with Pension Wise either over the phone via The Pensions Advisory Service known as ‘TPAS’ or face to face via the Citizens Advice Bureau.  They will discuss your pension(s) based on the information you provide and highlight the options available, before providing a summary of these.

This is a useful service for individuals approaching retirement age but it is important to note that Pension Wise cannot give financial advice, will not recommend any products and will not tell you what to do with your money.

If you are an employee of a company whose Workplace Pension we manage and are approaching retirement we will provide you with clear straight forward retirement advice considering all the options available to you.

To access this advice please contact our
Corporate Pension Team on 01883 332260

Many firms offer an employer contribution,  some require an employee to make a contribution of their own volition, but most do wish to pass on the monetary value of this pension contribution if an employee refuses to join the pension scheme.

However, changes to pension legislation, and in particular the imminent reduction in tax efficient allowances, means that many employers are reconsidering their options. The two allowances that will reduce from 6th April 2016 are:

  • the annual allowance, and higher earners may only be able to pay in as little as £10,000 per annum
  • and the lifetime allowance which is the most tax efficient fund that can be built up inside a pension, and this falls from £1.25m to £1m

Clearly the benefit of a pension contribution is that it allows an employer to help employees fund for a retirement income – it is effectively deferred pay. We understand that in the event that an employee is likely to incur lifetime allowance charges or annual allowance charges (often both) then an employer may think it is fair to pass on the saving that is made.

To avoid abuse of this concession the employer would normally require evidence of the reason why the employee is affected; in the case of the annual allowance the evidence is straightforward, but would require an employee to provide evidence (e.g. a tax return, or SA302)

In the case of the lifetime allowance, we would suggest that a provision of a fixed protection certificate would give evidence that the lifetime allowance either has been exceeded or at least protection against this event has been applied for.

However, in respect of Fixed Protection 2016 it seems likely that no certificate will be issued and relevant individuals will only have a reference number. Whilst the exact implementation of this rule is not yet known, employers would be expected to verify an individual who has fixed protection by using this reference number on an HMRC website. To make matters worse the forms for Fixed Protection 2016 are not expected to be available until July at the earliest and as there is no timeframe for an individual to apply for FP 2016, employees may not have the evidence but must be opted out of any schemes or they break Fixed Protection!

We are able to offer advice in this area and if you would like to protect employees who have lifetime or annual allowance issues, you may wish to consider passing on some of the saving of contributions.

We have communications that will assist with this using some of the rationale above. Please do not hesitate to get in contact.

The following does NOT apply to Salary Sacrifice / Exchange or SMART pension contributions

Basic rate tax relief is automatically added to any personal pension contributions you make from your net pay at the point the contributions are invested into your pension account. If you are a higher/additional rate taxpayer, you are entitled to claim additional tax relief to reflect this.

How to Claim: The first step to complete this is to obtain a statement of the GROSS PERSONAL contributions that you have paid into your pension account during the tax year from your pension provider. Most pension providers allow you to obtain such a statement online once you have registered to use their online services.

Once you have your statement YOU need to make a claim to HMRC for your higher rate tax relief which you can so in one of two ways:

1.Complete Box 1 of the ‘Tax Reliefs’ section of your Self Assessment (SA100) form

Enter the total amount of your gross personal contributions on which you wish to claim your higher rate tax relief. Do not include any employer contributions in this figure. During completion of the tax return you can choose whether to receive any tax rebate immediately or via an adjustment to your future tax code.

2. Contact HMRC directly and request your higher rate tax relief

Write to HMRC (Pay As You Earn, HM Revenue and Customs, BX9 1AS) and request your higher rate tax relief either immediately or via an adjustment to your future tax code. We can provide you with a template letter on request to accompany your statement of contributions.

Alternatively, you can call HMRC on 0300 200 3300 and confirm your name, address, National Insurance Number, gross personal contributions during the year and the tax year to which the claim relates.

CARE: Subsequent to your claim, HMRC is likely to automatically change your tax code for future tax years on the assumption, rightly or wrongly, that the same contributions are to be paid in the future. Whilst this provides you with your higher rate tax relief immediately, saving you the need to claim this in the future, it does mean that if this assumption turns out to be wrong to any degree you could end of paying too little tax and owing HMRC money.

As such you must remember to advise HMRC immediately your contributions change,, particularly if these reduce, stop or change to a salary sacrifice/exchange/SMART Pension basis, so that they can re-adjust your future tax code.

Previous Tax Years: It may be possible to claim higher rate relief on pension contributions made in previous tax years if you have not previously done so. The deadline is four tax years after the end of the tax year in which you are making the claim.

As per 2 above in this case you should contact HMRC and provide them with the details of your gross personal contributions paid and the tax years to which these relate. HMRC will then review this and confirm whether or not a rebate is due and if so the amount. Normally HMRC settles any previous tax year claims by cheque.

All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs’ practice. Levels and bases of tax relief are subject to change. This information is not provided as personal advice and should not be treated as such.