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Shakespeare is famous for his ability to talk about ‘love’ and suffering. The above quote from Romeo and Juliet finds Romeo baring his sole about the pain of love to his companion Mercutio. With pensions, rather than 'love', there is another four letter word that consumes trustees, managers and administrators: D-A-T-A. Data may not be a tender thing but, if mismanaged, it too can be rough, rude, boisterous, and prick like a thorn.
TPR is emphasising the need for improving how data is kept, for all work-based schemes including FSA contract-based schemes.
Ash Shaw's October 08 newsletter featured the Pensions Regulator (TPR) consultation paper on data and record-keeping. TPR stated that the main problem areas were poor legacy data and limited appreciation of the importance of good record-keeping. This consultation paper stimulated 60 individuals to respond to TPR; one of the largest response rates ever experienced.
TPR published its findings in December 2008:
TPR is now giving useful guidance on what is good practice in pension record-keeping and administration and how to measure the presence of member data. It also gives advice on assessing the risks of incomplete or inaccurate data. This is available on TPR's website.
The consultation has resulted in TPR making clearer the difference between “common data” and “conditional data”. Common data is the data required to effectively administer a pension scheme and is applicable to all schemes (details such as name, address, date of birth, NI number, dates of start of pensionable service and expected retirement). Conditional data varies from scheme to scheme.
Would you value independent guidance and advice on how to carry out TPR's Guidance? If the time has come to do something about data management, feel free to contact Sally Tasker.
The following article was produced for us by David Hosford of Pitmans.
Why use contingent assets?
In these troubled times, it is more important than ever for trustees to explore all the options open to them to improve the security of their members’ benefits. One way of doing this, particularly where additional cash contributions are not possible, is to seek the agreement of the sponsoring employer that the trustees should have the benefit of some other assets should the employer default on its obligations to the scheme. The Pensions Regulator terms these “contingent assets” and encourages trustees to use these where appropriate.
Putting in place a contingent asset can be a win/win outcome for the trustees and employer – with the benefit of the contingent asset, the trustees may be able to agree a more aggressive investment strategy, and more realistic (as opposed to excessively prudent) funding basis, and the contingent asset can also serve to reduce the cost of the scheme by reducing the PPF risk based levy.
What does the PPF require?
To count for PPF purposes, the form the documentation must take, and the advice and processes the trustees must follow, are prescribed, and the contingent asset must be certified to the PPF by 31 March 2009. Contingent assets not documented or processed in accordance with PPF requirements can still serve a valuable role in improving security, but will not be taken into account by the PPF for levy purposes.
The PPF recognises:
- Parent (or other group company) guarantees of the employer’s obligations.
- Trustees receiving a charge over UK land.
- Trustees receiving a charge over a bank account.
- Trustees receiving a charge over stocks or shares.
- Bank guarantee/letter of credit in favour of the trustees.
Pitmans has assisted clients in putting the various types of contingent asset in place, including registration with the PPF. Given the 31 March deadline, and the procedures which need to be followed to put the contingent asset in place in a format acceptable to the PPF, clients considering a contingent asset should reach a decision on this and get the process underway immediately. This will be particularly important where, for examples, approval from a parent company is required, surveyors need to be instructed to value land, or a third party such as a bank or custodian of shares is involved.
Recertifying existing contingent assets
For trustees who have an existing contingent asset approved by the PPF, this can again count for 2009/2010 levy purposes provided it is re-certified to the PPF by 31 March 2009. The PPF has promised to produce a pre populated form on its website for use in these cases but will not be reminding trustees to recertify. Positive action is required. However if there has been any change to the situation or the value of the contingent asset, then further work would be required.
Checklist
The following checklist provides a number of questions regarding the levy and contingent assets which you may wish to ask yourselves, your lawyers and the scheme actuary:
- Has the 2008/2009 levy been correctly calculated?
- Do we want to appeal it (strict 28 day time limit)?
- Is all the information in the Scheme Return correct and up to date?
- What is the estimated 2009/10 levy?
- Do you want a contingent asset?
- What sort?
- Do you want to recertify or extend an existing contingent asset?
- Is a deficit reduction certificate appropriate?
- How can you maximise the employer’s D & B failure score at 31.3.09?
- Should you prepare a new PPF valuation before 31.3.09?
If you are considering using a contingent asset, Pitmans would be pleased to discuss the process with you and to assist the trustees or the employer (as appropriate) in the process. For more details please email David Hosford or call him on 0118 957 0262.
You ask – we listen. Many of you mentioned that you wanted to read our newsletter but found this hard as you were often out of the office. We are now publishing a plain text newsletter for Blackberry users. Please let Sally Tasker know if you have any difficulties or improvements points for how this works on your Blackberry.
We are currently recruiting for a part qualified certified accountant. Do you have experience of working in audit and a passion for good customer service?
Educated to degree level or equivalent you will need to have excellent interpersonal and people management skills and the ability to work well in a team. You will also need to be highly organised and resilient under pressure and you will need to demonstrate an open and positive approach in your work.
Our ideal candidate would also have some experience of pension scheme audit but this is not a requirement as guidance will be given.
In return Ash Shaw is offering a competitive salary package of c£35,000 and the opportunity to work with an award winning Firm of Pension Scheme Auditors and Accountants.
The role is home based and ideally the successful candidate should be within easy access of our main client base which is currently in and around the M25 (south) and be prepared to travel to London, Oxfordshire and Kent for team meetings.
If you are interested and would like to find out more about this opportunity please contact Gareth Burton on 020 7917 2987 for an informal discussion. We are asking candidates to apply by sending their CV to Sally Tasker and the closing date for the role is Friday, 6 March 2009.
Ash Shaw is committed to grow. Last month we announced the arrival of our new Human Resources manager, Kirsty Mitchell. Her details can now be found on our website.
We hope to expand our team through the year so if you know of a qualified or part-qualified accountant who is looking for new challenges at any stage in 2009, then please contact Sally Tasker.
To help us help you more swiftly, please send us a brief description of your situation (or a copy of last year’s signed accounts if you are looking for new auditors) to Sally Tasker and let us know when would be a convenient time to call you.
If someone else has sent you this web link, why not make sure you get your own copy in future? Sign up to Ash Shaw's free monthly email newsletters and receive the latest information, news, ideas and advice. Focused on small- and medium sized pension schemes, these mailings tell exactly what you need to know, without wasting your valuable time. Sign up now.
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