Updated GMP declarations
Following the recent High Court Judgment – Lloyds Banking Group Pensions Trustees Ltd v Lloyds Bank Plc, which ruled that Defined Benefit (DB) occupational pension schemes must equalise GMP benefits accrued on or after 17 May 1990 – we have made some slight amendments to the two GMP declarations: for DB transfers, and for buy-out plans.
The main purpose of the revised wording is to ensure the customer is aware of this important court case that would almost certainly impact on their GMP entitlement, and therefore the potential suitability of proceeding with the transfer.
The updated GMP declarations for DB transfers and buy-out plans have now been uploaded to the portal to replace the previous ones.
There will be a crossover period until the end of January 2019, in which the old declarations can still be accepted on newly submitted cases, but from February onwards we will only accept the new versions.
However, we can still accept the old GMP declarations on cases that were already in pipeline before the end of January.
Verifying schemes for Defined Benefit pension transfers
We have recently agreed a new process with our Anti Money Laundering & Sanctions Unit for verifying DB pension schemes…
1 Obtain PSTR (HMRC registration number – always required)
2 Check the FCA website (if the scheme is showing as registered, proceed; if it isn’t, go to 3)
3 Check Companies House (if the scheme is showing as registered, proceed; if not, go to 4)
4 Check EIOPA (if the scheme is showing as registered, proceed; if not, go to 5)
5 Request the HMRC portal print (if received, proceed; if not, go to 6)
6 Reject the request
Waiting to receive an HMRC screen print from the scheme can significantly delay the matching of the monies, but this new process ensures we will now only request it as a last resort.
Restrict activities flag for a Benefit Crystallisation Event
A restrict activities flag is set by submitting a BCE, or any of the ‘Edit Crystallised Pension Benefits’ wizards options apart from ‘Edit income payment strategy’. This flag is only visible to internal users.
The flag is then cleared when the submitted wizard is either completed or rejected. As this requires authorisation, the flag may be set for several days.
The purpose of the flag is to prevent…
1 Cash processing (including matching cash and completing regular withdrawals)
2 Order processing
3 Cash, transfer, and order based fees from completing
The reason for highlighting the flag is that, if a deal is keyed after a BCE has been submitted, but before it’s been authorised, it may appear to be stuck. This is not the case, and the deal will progress after the BCE has been authorised providing there is sufficient cash or assets to proceed.