The Society of Pension Consultants have launched two aids to help scheme administrators meet their new responsibilities as A-Day approaches.
Under the new pension tax regime, which starts on 6 April, scheme administrators will have three basic responsibilities which include when benefits are paid to members, which centre around the Lifetime Allowance limit, including the assessment and payment of recovery charges to Her Majesty’s Revenue and Customs (HMRC), if the limit is exceeded.
To carry out their job, administrators have to obtain details of a member’s existing entitlements to protection or enhanced allowances, in order to produce a member statement, which sets out details on the lifetime allowance limit, how much they have taken in benefits, and any charge they may have to pay for exceeding the limit.
Although many scheme sponsors have yet to make the necessary A-Day changes to their schemes, the SPC say administrators will already find they are having to issue benefit quotations now for post A-Day events, either because of current disclosure regulations or through member requests.
In addition, administrators also require declarations from members regarding the correctness of the information they provide in relation to other pension schemes, as otherwise administrators become jointly liable for any lifetime allowance recovery charge levied on the member.
To help gather all this additional information, the SPC have produced two template member declaration documents that can be downloaded and filled in with the relevant information.
Protection and Lifetime Allowance Enhancement Statement, the title of the first form, sets out the main issues surrounding the lifetime allowance, including the two different types of protection available, along with fund valuations to allow the member to make a decision.
The second document available from the SPC, is the Details of Benefits from Other Registered Schemes or Overseas Transfer Form, which is designed to help administrators find out about a member’s other pensions and whether they are taking or are about to take benefits from these schemes.
SPC say the forms are free to use, either in their current form, or administrators can adapt them to suit the needs of their members.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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