The benefits from Group Life and Group Dependants' Pension policies must be paid through a discretionary Trust. It is the responsibility of the policyholder, using their own Trust to administer and maintain the Trust, to meet the requirements for being Registered with HMRC or Non-Registered, as appropriate.
There are a number of ways a discretionary Trust can be set up:
- Employer's Own Trust
- Unum Master Trust - LAMP(A)
- Registered Trust Deed
- Revised Basis/Updating for A-Day
- Non-Registered Trust Deed
- Isle of Man Trust Deed
- Amending Deeds
The benefits you are insuring may be those promised through your existing pension scheme or group life scheme, which is established under Trust and documented.
This scheme can continue and the existing Trust used. You continue maintaining the Trust documentation.
If you are now starting to insure Registered lump sum death benefits for PAYE taxed employees, their lump sum benefits can be held under the Unum Life Assurance Master Plan (A).
Policyholders do not have to set up their own Trust, simply agree to participate in LAMP(A), which has its own Scheme Administrator and Trustees. Notices of Participation must be completed before going on risk:
If you are switching Registered lump sum benefit insurance of an existing standalone group life scheme to Unum and want to use LAMP(A), then in addition to completing Notices of Participation you will need to terminate your existing trust:
If you already have a standalone Registered group life scheme insured with Unum, it is possible for the lump sum benefits to be switched and held under LAMP(A):
If you want to set up a standalone group life scheme, there are draft Trust wordings available to help you. The drafts allow for dependants' pensions as well as lump sum benefits. They also allow for the inclusion of Schedule D taxed individuals such as Equity Partners:
There are notes to explain about Registration and the roles of Trustees and the Scheme Administrator:
If you revise the basis of a Registered standalone group life scheme, the Trust may need variation to reflect the revision; there are draft wordings available to help you. Some Trusts may already rely on the policy provisions for the eligibility and benefits provided, meaning there is no need to revise the Trust to reflect a change in the insured basis.
If you have an existing standalone group life scheme which was approved before 6 April 2006, you may want to update the Trust for the A-Day provisions. There are draft wordings available to help you:
There are notes on the process of 'linking' to the HM's Revenue & Customs (HMRC) online record of a standalone group life scheme which was Approved before 6 April 2006:
Relevant life policies, which include Excepted policies, need to provide benefits under a Trust. There are draft Trust wordings available to help you:
If you want to set up a standalone group life scheme in the Isle of Man, there are draft Trust wordings available to help you.
Both Registered and Non-Registered Trusts need to be maintained in line with changes. There are draft wordings available to help you with popular changes: