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?
- 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.