Legacy pension schemes are not suitable to meet the new auto-enrolment duties
“When employers set up their auto-enrolment pension schemes, many left behind legacy pension schemes that were not suitable to meet the new auto-enrolment duties. Many of these legacy schemes were trust-based arrangements, which still need to comply with other statutory duties, and both the government and The Pensions Regulator (TPR) are now looking to focus on ensuring these duties are met.
TPR has already been issuing fines to Trustees of some legacy schemes for not meeting their statutory duties, such as failing to produce a Chair’s Statement or providing a non-compliant Chair’s statement. TPR is required by law to issue a fine for failing to provide a Chair’s Statement, and fines can range from £500 to £2,000.
Businesses should address any legacy pension schemes they operate, and liaise with both the Trustees and their professional advisers to ensure all statutory duties are being met, and to avoid any unnecessary fines!
Barnett Waddingham’s Head of Workplace Wealth, Mark Futcher, says: ” With the increasing costs to pension scheme Trustees for meeting statutory duties on Chair’s Statement and value for money analysis, it is clear that many smaller schemes should consider whether it is financially viable to maintain the status quo.”