DC schemes asked to confirm compliance with charge controls
Friday 5 June 2015
Trustees and managers of occupational defined contribution (DC) pension schemes will be asked to confirm whether or not they comply with new charge controls in their scheme return to The Pensions Regulator.
As a result of new legislative requirements introduced on 6 April, other new questions added to the scheme return will include confirming the name of a scheme’s chair of trustees or managers.
A guide to what’s new in this year’s scheme return and how to complete it in full have been published by us and can be viewed in DC scheme return.
DC scheme returns will be issued to schemes in the coming months and we are urging trustees, and those completing returns on behalf of trustees, to ensure they fully understand the new requirements that are relevant to them.
Andrew Warwick-Thompson, executive director for DC and public service pension schemes, said:
“The regulations which became law in April place new requirements on trustees and are designed to drive up standards of governance and administration across DC workplace schemes. A key part of our remit is to educate and enable trustees and managers to ensure they understand how to satisfy these new regulations and, in doing so, provide assurance to scheme members that their pensions savings are being looked after properly.
“In light of these legislative changes, we have updated the scheme return so that trustees will be required to confirm that they are meeting the new requirements, notably the charge controls and the need to appoint a chair of trustees.
“I urge trustees and managers to read our new guide and ensure that they accurately complete the new sections of the return that are relevant to them.”
- The regulator is asking all DC schemes (including those with 2 to 11 members) to confirm whether any of the employers that use the scheme have passed their automatic enrolment staging date and if so whether they have:
- automatically enrolled any staff into the scheme to meet their automatic enrolment duties since 6 April 2015, or
- used the scheme to meet their automatic enrolment duties for staff that were existing members of the scheme
- Scheme trustees or managers have a legal obligation to complete the scheme return accurately and on time. Non-compliance or non-completion may cause the regulator to investigate further and could result in a fine. It might also lead to concerns over whether a scheme has complied with other legal obligations, for example the charge controls, which again could lead to us taking further action.
- The regulator sends out requests to complete scheme returns no more frequently than once a year and no less frequently than once every three years. The benefit structure of a scheme determines when we request a scheme return, as outlined below:
- DB and hybrid schemes: scheme returns requested annually, return notifications sent between the months of November to January each year
- DC schemes with 12 or more members: scheme returns requested annually, return notifications sent between the months of May to December each year
- DC schemes with less than 12 members: scheme returns requested once every three years, return notifications sent between the months of May to December each year
- The Pensions Regulator is the regulator of work-based pension schemes in the UK. We have objectives to: protect members’ benefits; reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the employer’s plans for sustainable growth (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
Matt Adams 01273 662086
Out of hours 01273 648496