Pensions Simplification - Role of Scheme Administrator.

All group life assurance schemes must have appointed a person or persons to be responsible for carrying out the duties of the scheme administrator under the Finance Act 2004. This can be a corporate body such as the Principal Employer.

The information contained herein is based upon Unum's current interpretation of the underlying legislation that applies and which may change. Wedo not accept any responsibility for any loss which may arise from reliance on the information enclosed.

HM's Revenue & Customs (HMRC) provides guidance for scheme administrators in the Registered Pension Schemes Manual (RPSM) on their website:www.hmrc.gov.uk/manuals/rpsmmanual/

Unum does not act as a Scheme Administrator.

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Residence.

The person(s) appointed as scheme administrator under the scheme rules must be resident in:

The United Kingdom (UK),
Another EU member state, or
Another state in the European Economic Area (EEA) (that is Liechtenstein, Iceland or Norway).

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Multiple Scheme Administrators.

If more than one person is appointed scheme administrator, each is jointly and severally liable for any tax charges on the scheme administrator.

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Registration of Scheme.

Registration of a group life assurance scheme for tax purposes (under Chapter 2 of Part 4 of the Finance Act 2004) is done online and can only be carried out by the scheme administrator.

When Registering, the scheme administrator must make statutory declarations to HMRC:

The scheme meets the conditions to be Registered, and
The scheme documents do not provide for unauthorised payments, and
The information given on the application is correct and complete, to the best of the scheme administrator's knowledge and belief, and
The scheme administrator understands what his responsibilities as scheme administrator are, and intends to carry them out, and
The scheme administrator understands that giving false information may lead to de-registration of the scheme and possibly prosecution.

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Taxes and Lifetime Allowance Charge.

The scheme administrator has responsibility for all tax charges, interest and penalties for the Registered scheme in addition to being the person who isresponsible for Registering a new scheme.

The scheme administrator is not responsible for payment of a Lifetime Allowance Charge when a lump sum death benefit is paid following a member'sdeath. Any Lifetime Allowance Charge falls solely on the recipient(s) of the lump sum payment(s). The scheme administrator pays any lump sum deathbenefit in full, without any regard to any Lifetime Allowance Charge that may potentially be due. The personal representatives of the member areresponsible for ascertaining whether a chargeable amount arose following the payment of a relevant lump sum death benefit. (RPSM 11105510)

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Practitioners.

An authorised practitioner is a person the scheme administrator has authorised HMRC to deal with on the scheme administrator's behalf in relation to aRegistered scheme.

An authorised practitioner can file Event Reports, Pension Scheme Return and Accounting for Tax forms on behalf of the scheme administrator but thescheme administrator must approve the content and authorise the submission of the return/report.

The scheme administrator can authorise HMRC to deal with different practitioners for different functions, for example Pension Scheme Return, Accounting for Tax Return, Event Report.

There can also be unauthorised practitioners acting on behalf of the scheme administrator, but whom they have not given HMRC authority to deal with.

Unum does not act as a practitioner.

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The Pensions Regulator.

A group life assurance scheme is not required to register or make reports of any events to the Pensions Regulator.

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Reporting responsibilities.

The scheme administrator is responsible for filing the Event Reports, Pension Scheme Return and Accounting for Tax forms, as shown below. A practitioner can file these on behalf of the scheme administrator but the scheme administrator must approve the content and authorise the submission of the return/report.

File an Event Report (and amend a filed one)
File a Pension Scheme Return (and amend a filed one)
File an Accounting for Tax Return (and amend a filed one)
Amend scheme details
Elect to contract out (not relevant to group life schemes)
Register to operate Relief at Source (and amend details) - necessary if self-employed / equity partners are members of the scheme
Amend scheme administrator's designatory details.

See RPSM Chapter 12 of the scheme administrators section, 'Information Requirements and Administration: Contents' - RPSM12300000.

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Event Reports.

For a group life assurance scheme the scheme administrator will need to provide an event report to HMRC in respect of the reportable events setout in The Registered Pension Schemes (Provision of Information) Regulations 2006 (SI2006/567) as amended by SI2006/1961.

There are 21 reportable events, as shown below, with comment on the ones which could apply to a group life assurance scheme.

The event report must be made after the end of the tax year to which it relates and no later than the next 31 January. Except where the scheme is winding up, then all information must be submitted within the 3 months following completion of the winding up (unless a shorter period is specifically required for an item).

Unauthorised payments.
The scheme makes an unauthorised member payment(a) or an unauthorised employer payment(b).
- (a) Defined in section 160(2) and includes payments treated as unauthorised payments.
- (b) Defined in section 160(4) and includes anything treated as an unauthorised payment.
Payments exceeding 50% of standard Lifetime Allowance.
The scheme makes a lump sum death benefit payment to a person in respect of the death of a member, and that payment, either alone or when aggregated with other such payments from that scheme, amounts to more than 50% of the standard Lifetime Allowance applicable at the time of the member's death.
Early provision of benefits.
Serious ill-health lump sum.
Suspension of ill-health pension.
Benefit crystalisation events and Enhanced Lifetime Allowance or Enhanced Protection
A benefit crystallisation event occurs in relation to a member in respect of the scheme and -
- (a) the amount crystallised by the event -
  - (i) exceeds the standard Lifetime Allowance, or
  - (ii) together with amounts crystallised by other events in relation to that member, exceeds the standard Lifetime Allowance, for the year in which the event occurs; and
- (b) the member relies on entitlement to either an enhanced Lifetime Allowance or Enhanced Protection in order to reduce or eliminate liability to the Lifetime Allowance Charge.
Pension commencement lump sum.
Pension commencement lump sum: Primary and Enhanced Protection provisions of Schedule 36.
- a. Stand-alone lump sum.
Transfers to qualifying recognised overseas pension schemes.
Investment-regulated pension scheme.
Changes in scheme rules
The scheme changes its rules to -
- (a) entitle any person to require the making of unauthorised payments; or
- (b) permit investment other than in policies of insurance
Changes in rules of pre-commencement scheme treated as more than one scheme.
Change in legal structure of scheme.
Change in number of members
The number of scheme members falls in a different band at the end of a tax year from that in which it fell at the end of the previous tax year.
The bands are -
- (a) 0 members;
- (b) 1 to 10 members;
- (c) 11 to 50 members;
- (d) 51 to 10,000 members; and
- (e) more than 10,000 members.
Alternatively secured pension.
Transfer lump sum death benefit.
Lump sum payment after the death of a member aged 75 or over.
Scheme chargeable payment.
Country or territory of establishment
The scheme changes the country or territory in which it is established.
Occupational pension scheme.
The scheme becomes, or ceases to be, an occupational pension scheme.

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Provision of Information.

In addition to event reports, other information reporting is required by The Registered Pension Schemes (Provision of Information) Regulations 2006(SI2006/567) as amended by SI2006/1961.

Those which could apply to a group life assurance scheme are shown below.

Scheme Winding Up.

The scheme administrator must notify the Commissioners for HMRC that the scheme has wound up and the effective date. This must be submitted within the 3 months following completion of the winding up, including any event reports and any other required information (unless a shorter period is specifically required for an item).

Scheme Administration.

The scheme administrator must notify the commissioners for HMRC of the termination of their appointment and the effective date. This must be submitted within the 30 days of the termination.

Information to Personal Representatives.

The scheme administrator must provide to the deceased member's personal representatives the percentage of the standard lifetime allowance expended by, and the amount and the date of payment of, a relevant lump sum death benefit by the scheme in relation to the member. This must be provided within the 3 months following the final such payment.

Retention of Records.

Scheme administrators, trustees, administration services, participating employers (and their directors) must preserve scheme documents for 6 years after the tax year to which they relate. Scheme documents relate to monies received or owing, the assets, payments made and the administration of the scheme.

A person no longer needs to preserve documents if all the documents are transferred to their successor.

For more information, call your Sales Consultant on 01306 887766.

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Unum Limited is authorised and regulated by the Financial Services Authority. Registered in England 983768.

We monitor telephone conversations and e-mail communications from time to time for the purposes of training and in the interests of continually improving the quality of service we provide.

Registered Office:

Milton Court, Dorking,
Surrey, RH4 3LZ
TEL: 01306 887 766
FAX: 01306 881 394
TXT TEL: 01306 887 784

UP1147 06/2007

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