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The Actuary The magazine of the Institute & Faculty of Actuaries

Pension scheme trustees warned of chair statement rules

UK pension scheme trustees must produce a chair’s statement that is compliant with the law or face mandatory fines, the Pensions Regulator (TPR) has warned today.

Breaking the rules will lead to fines ©Shutterstock
Breaking the rules will lead to fines ©Shutterstock

This comes after TPR fined two pension scheme trustees £2,000 for failing to include required information in their annual statements, both of which were later upheld in court.

The judge in one case said schemes must prepare statements with a “considerable amount of clearly specified and detailed information”, and not just an annual governance statement.

“We are pleased that the judges agreed that a mandatory penalty applies to chair's statements which are not compliant,” TPR executive director, Nicola Parish, said.

“Annual chair’s statements are an essential way to show pension savers that their scheme is being properly governed and will deliver the retirement benefits they are promised.”

In the case brought by EC2, trustee of Autoenrolment.co.uk, judge David Hunter QC ruled that the chair’s statement for 2015/16 was “deficient in five respects” and the £2,000 fine was upheld.

And the case brought by trustees of the Moore Stephens Master Trust was upheld by the judge in one of three areas that were deemed by TPR to be non-compliant.

The chair's statement was for the scheme’s 2016/17 year, and the fine was reduced from £2,000 to £500.

The judge ruled that, as the scheme was a master trust with a professional trustee, and ran schemes for multiple employers, “some penalty” for the failure was “therefore appropriate”.

“As these cases clearly demonstrate, we are prepared to defend our penalties in court,” Parish continued. “It is the law for trustees to produce chair's statements and make sure they contain all the necessary information.

“We continue to expect high standards of trustees and will take action when chair's statements are not compliant with the law.”

Detailed TPR guidance about producing a chair’s statement can be found here.

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