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A-Day and Administration
Now that A-Day has passed and is becoming more familiar Julian Mainwood explains how Barnett Waddingham can help Trustees and HR managers perform a Post A-Day compliance check.
The new tax regime effective from 6 April 2006 introduced a lot of changes to administration processes and procedures. Many of these changes are well known but others are not so obvious and are often hidden within the regulations and the many pages of the Registered Pension Scheme Manual. Even now, several months on from A-Day, there are still areas of uncertainty and HM Revenue & Customs are regularly issuing updates and guidance.
The consequences of breaching the new regulations are potentially very serious. To mitigate this risk Barnett Waddingham's own administration department set up a committee with the brief to review all aspects of both the Finance Act and Pensions Act and how this impacts on administration processes. The knowledge and experience the committee has gained has meant we have also been able to help clients where the administration is carried out 'in-house' to provide reassurance that they have covered all the required areas and are fully compliant with the new regulations. Areas covered include:
- Benefit crystallisation events and the Lifetime Allowance checks for members,
- Transitional protection (including lump sum protection),
- Authorised payments (including how to avoid unauthorised payments),
- Calculating Pension Commencement Lump Sums,
- Disclosure requirements,
- Quarterly accounting for tax and annual Scheme Event reports,
- Different types of lump sum death benefits,
- Trivial commutation process,
- Review of forms, letters, statements and communications,
- Review of administration manuals, internal processes and checklists.
This is not an exhaustive list and the review can be tailored as required. Typically a full audit might involve the preparation of an A-Day checklist, an on site visit and a follow up report detailing what was tested along with any recommendations. Alternatively it may just be a simple review of letters and forms that is required.
If you are interested in this administration consultancy service please speak to your usual Barnett Waddingham contact.
Julian Mainwood, August 2006.