A Highly Regulated Environment

Pensions Law

The law requires that most occupational pension schemes in the UK need to be set up as trusts. A trust ensures that the pension scheme’s assets are kept separate from those of the employer. This is important for the security of members’ benefits.

A trustee is a person or company, acting separately from the employer, who holds assets in the trust for the beneficiaries of the scheme. Trustees are responsible for ensuring that the pension scheme is run properly and that members’ benefits are secure. A professional trustee is not really any different in terms of their duties and responsibilities than any other trustee.

Trustees must act within the framework of the law. There are several types of law affecting occupational pension schemes, in particular:

• the general law of trusts; and
• specific legislation (supported by the codes of practice issued by the Pensions Regulator).

The Pensions Regulator

The Pensions Regulator is a non-departmental public body created under the Pensions Act 2004 with specific objectives:

• to protect the benefits of members of work-based pension schemes
• to promote good administration of work-based pension schemes
• to reduce the risk of situations arising that may lead to claims for compensation from the Pension Protection Fund.

A work-based pension scheme is any scheme that an employer makes available to employees. This includes all occupational schemes, and any stakeholder and personal pension schemes where employees have direct payment arrangements. Professional Trustees are primarily involved in relation to trust based occupational pension schemes but Dalriada Trustees also provide governance services in relation to contract based schemes.

In order to gather data the Pensions Regulator collects data through the scheme return and receives reports of significant breaches of the law from ‘whistleblowers’, and reports of notifiable events from trustees and employers. The Regulator can also demand documents (or other information) from trustees and employers, among others.

Regulatory action can include the appointment of an independent trustee, an improvement notice requiring specific action to be taken within a certain time, recovery of unpaid contributions from the employer or the prohibition of trustees. The Regulator also has anti-avoidance powers including Contribution Notices (where there has been a deliberate attempt to avoid a statutory debt) and Financial Support Directions (where a sponsoring employer is either a service company or is insufficiently resourced).

A clearance procedure is available for anyone who wishes to confirm that they will not be subject to either a contribution notice or a financial support direction following a proposed transaction.

Complaints

Pension scheme members may not always agree with actions taken by the Trustees and we would encourage any members of schemes where Dalriada acts as a trustee who are not satisfied with any decision we have taken or any other aspect of their scheme to make informal contact with us as trustees. You can email any of our staff via their Profile or use our Contact form.

Trustees of most schemes must have an internal dispute resolution procedure in place to consider any complaints. The person making the complaint can contact the Pensions Advisory Service at any time about their complaint. If the person is not happy with the decision, or if the dispute resolution procedure is not operated properly, they may take the matter to the Pensions Ombudsman.