On this page
- Triggering event duties
- Scheme engagement
- How to submit information to us
- If you don't comply
Triggering event duties
If you are involved with a master trust you have duties to report certain 'triggering events' to us. These events may indicate that the scheme cannot continue to operate. You also cannot increase charges to members during a triggering event.
These duties take retrospective effect from 20 October 2016. Therefore you should be prepared to comply if they apply to your scheme.
There are four duties that relate to triggering events.
1. Report a triggering event to us
If a master trust experiences a triggering event the trustees, scheme funder or scheme strategist need to report this to us within seven days of the event occurring. If you experience more than one event, you need to report each event separately. If you are unsure whether a triggering event has occurred, you should seek professional advice.
To meet your duties you will need to identify who the scheme funder and scheme strategist are for your master trust. A scheme funder is liable to provide funds to the scheme and/or is entitled to receive the profits of the scheme. The scheme strategist is responsible for business decisions relating to the commercial activities of the scheme.
The table below sets out the triggering events that you now need to report and who is responsible for doing so.
|Triggering event||Date event occurs||Who must report|
|A scheme funder has an insolvency event||The date of the insolvency event||Scheme funder|
|A scheme funder becomes unlikely to continue as a going concern||The earlier of the date the scheme funder tells us or the date the trustees or scheme strategist become aware of the event||Scheme funder|
|A scheme funder decides to end the relationship with the scheme||The date of the decision||Scheme funder|
|A scheme funder ends the relationship or arrangement with the scheme||The earlier of the date the scheme funder tells us or the date the trustees or scheme strategist become aware of the event||Scheme funder|
|A scheme funder, scheme strategist or the trustees decide that the scheme should be wound up (where the person making the decision has the power to do so under the scheme rules)||The date of the decision||Decision-maker|
|An event occurs which is required or permitted by the scheme rules to result in the scheme winding up||The date on which the event occurs||Trustees / scheme funder / scheme strategist|
|The trustees decide that the scheme is at risk of failure and cannot continue in its current state||The date of the decision||Trustees|
If trustees, a scheme funder or a scheme strategist become aware of a triggering event that has not been reported by the responsible party, they have a duty to tell us.
2. Charge restrictions during a triggering event
During the triggering event period you must not:
- increase charges on or in respect of members
- impose new charges on or in respect of members
- impose charges on or in respect of members as a consequence of leaving or deciding to leave the scheme
The triggering event period starts from the date that the triggering event occurs until either:
- we are satisfied that the event has been resolved
- the members’ benefits have been moved to a different arrangement and the scheme has wound up
When a triggering event occurs, trustees must calculate the level of administration charges that applied to scheme members on 20 October 2016. You must do this for each arrangement or fund. The scheme must not exceed this level of charges during the triggering event period.
Trustees must prepare a statement of these administration charges. You must submit it to us within seven days of the triggering event.
3. Charge restrictions on schemes receiving transfers
Your master trust may receive transfers from a scheme that has experienced a triggering event. If this happens on or after 20 October 2016 you cannot increase or impose new charges on or in respect of members to cover:
- costs incurred by the transferring scheme
- costs that relate to transferring those members’ rights
Trustees of receiving schemes also need to prepare and submit two statements to us:
- a statement of the annual level of administration charges that applied in relation to members of the scheme on 20 October 2016, for each arrangement or fund within the scheme
- a statement that explains:
- how they are complying with the restriction on charges
- whether they are liable for the costs above and, if so, how they will meet those costs
For transfers that took place before 27 April 2017, this statement must be submitted to us by 4 May 2017. For transfers that are completed on or after 27 April 2017, the statement must be submitted to us within seven days of the transfer.
4. Resolving a triggering event
Once the trustees are of the opinion that a triggering event has been resolved, they need to tell us within 14 days. We will assess the facts and issue a notice to the trustees to confirm whether we are satisfied that the event has been resolved.
We expect trustees to consider the appropriate time to notify both participating and prospective employers and members that the scheme has experienced a triggering event. It is important to provide clear and effective communications to alleviate any concerns, therefore, plans for resolving the triggering event or moving members to an alternative arrangement should include a strategy for communicating with the various parties affected.
We expect trustees to write to members and employers to advise key dates and milestones in the project plan, particularly where there are actions or decisions required from them.
If a decision is made to exit the market and wind up the scheme, we also expect you to consider the appropriate time to close the scheme to new employers.
We will engage with all schemes that experience a triggering event. We will discuss how you plan to resolve the event or transfer members to a different master trust and wind up the scheme.
We expect you to engage with us in an open and co-operative way. We are aware that the particular circumstances of a scheme will present different types of risks. We will take this into account when deciding how we will engage with schemes.
If you fail to respond to information requests without reasonable explanation, we may use our formal information gathering powers or carry out an inspection to get the information we need to meet our duties.
How to submit information to us
If you need to send information to us about a triggering event, you should complete the triggering events form (PDF, 91kb, 4 pages).
If you need to notify us of a triggering event which has been resolved, you should complete the resolved triggering events form (PDF, 86kb, 4 pages).
If you need to send us a statement of the annual level of administration charges, or if you are a receiving scheme and need to send us the two statements relating to charges, you should email these to email@example.com.
If you don't comply
Failing to comply with your duties may result in a penalty of up to £5,000 for an individual and £50,000 in any other case.
When we consider whether to impose a penalty and the level, we will apply our risk-based approach and take into account the relevant facts of the case. For further information about the factors we generally consider when deciding whether to take enforcement action, see our compliance and enforcement policy for occupational pension schemes providing money purchase benefits (PDF, 116kb, 20 pages).