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Pension scheme disclosure - a summary

Mark Howard gives a brief summary of the key points about disclosure requirements for pension scheme trustees.

Our experiences with our clients over the last 3 years since the Pensions Act 1995 came into force suggested that it might be useful to produce a summary of the key timescales relating to disclosure. Most of the timescales concern provision of information to members about their benefits. Other timescales cover matters such as the production of audited accounts and the payment of contributions each month.

Failure to comply with the regulatory deadlines can lead to fines by the Occupational Pensions Regulatory Authority (OPRA), as well as the additional costs of compliance.

If you have any queries regarding the points raised in the schedule, please do not hesitate to get in touch with your usual contact at Barnett Waddingham.

Timescales for Provision of Information relating to UK Occupational Pension Schemes

Member Benefits

Occurrence Pensions Act obligation and deadline Recommended practice for employer notifying administrator
Retirement at normal pension age Statement of options to member no later than 1 month after retirement date. (Best practice is 3 months beforehand.) Administrator usually requests information automatically in advance to enable options to be provided to member.
Early retirement Statement of options to member no later than 1 month after retirement. (2 months allowed for ill-health cases.) Notify administrator at least 3 months beforehand.
Payment of pension (normal retirement and early retirement). Best practice is to pay lump sum and begin to pay pension within 4 weeks of retirement. Send member's option decision form to administrator at least 1 month prior to retirement date.
Death Advise family of death benefits within 2 months (but best practice on payment shortens this - see below). Best practice is payment of lump sum within 10 working days. Best practice is to begin payment of spouse's pension within 20 working days. Advise administrator of fact and date of death immediately, and in any event within 5 working days. Advise salary info needed for calculation and payment of lump sum - within 5 working days. Advise salary info for calculation of spouse's pension (death in service cases) within 10 working days.
Leaving scheme Give member statement of his deferred benefits within 2 months. Advise date of leaving, within 10 working days.
New member Provide copy of booklet within 2 months of joining. Notify administrator within 1 month of member joining and provide booklet to member.
Transfers-in Tell member what his transfer-in buys within 2 months of request. Pass on transfer info received from former scheme, within 10 working days of receipt.
Transfers-out Quote transfer-out value within 3 months of request. Quote cash equivalent for divorce case within 3 months of request. Pay over transfer value within 6 months of request. Pass on request for TV, within 10 working days of receipt. Pass on copy of member's authority to complete transfer, within 10 working days of receipt.

Other requirements

Occurrence Pensions Act obligation and deadline Recommended practice for employer notifying administrator
Requests for information (e.g. copies of scheme documents, accounts etc or illustrative quotations for retirement etc). Provide information within 2 months of request. Pass on request for information within 10 working days of receipt.
Annual report and accounts To be audited within 7 months of scheme year end. Provide full annual update information requested by administrator within 1 month of year end.
Payment of employer contributions In accordance with Schedule of Contributions. Comply with timescales laid down in Schedule.
Payment of employee contributions (including AVCs) Pay over to trustee bank account or transfer to provider within 19 days following month of deduction. Pay contributions across within 10 days following month of deduction.
Scheme alterations (e.g. changes in benefits) Notify members within 3 months of change (best practice is to notify members before change). Notify administrator within 2 months prior to change to draft appropriate announcement.

Note that the above schedule of events is not exhaustive. There are many other regulatory timescales which apply to pension schemes.

Mark Howard, December 2000.