Winding-up Pension ???

workingboy

My pension is being wound-up ??

I had pension provided and paid for by my employer who has since wound-up in approx 1985.

The pension company has told me that the pension has to be wound-up and that I should become a trustee to carry this out. If I didnot do this, they would appoint a trustee to do this with a charge.

Having done this and the deed of the pension passed to me as the sole survivor of the scheme. Advised by the pension company, I have started the registering to become a scheme administrator and informing the HMRC of the scheme being wound-up.

Unless someone can help me or advise before contacting this pension company.

1) Why would they wind-up this pension now, after the company ceased trading in approx. 1985

2) What happened to the monies paid in by the company (which I donot know the value), also the interest the monies incurred over the years.

Any help or advice would be appreciated.

Thanks

[Deleted User]

What sort of pension scheme is it? eg it could be:
- company sponsored defined benefit scheme
- company sponsored defined contribution (DC) scheme
- DC scheme written under contract with an insurance company
- small self administered scheme (SSAS)
- possibly something else

If you're not sure, try and refer back to the notices that were issued when you joined and in 1985.

workingboy

If of any help

Its was known as from Pearl - "The Top Hat Plus Pension Scheme", briefly from the scheme its 'an endowment assurance policy'.

I joined in the 70's

thanks

[Deleted User]

Not sure what you've got. Generally a 'top hat' scheme is used as a top up to a more general scheme eg execs may be members of a staff scheme and a top hat scheme to increase their benefits.

However, an endowment assurance policy is different again as it's written under differenet rules (eg taxation is very different) and usually pays a lump sum on death or on reaching a set age (you're probably aware that they were often used as a mortgage repayment vehicle).

An endowment assurance shouldn't need a trustee (as they're not written under trust as far as I know), but pensions is my area not endowments.

Think this is too unusual for me to be of any help, but I'd suggest seeking some advice before you progress things any further. Maybe try an IFA with some pensions knowledge.

workingboy

thanks

The term 'Top Hat etc' is the name of the pension provided by Pearl Assurance, all the sub-sections of the policy refers to 'pension/s'.

Debt_Free_Chick

This sounds like an old style "executive pension plan". Typically used where there were only a small number of employees - or, where a company wanted to provide pensions for a small number of employees, different to those provided for all the others - or to provide an extra pension. Ignore the term "executive" as you didn't need to be an executive or a director to qualify. It was just a marketing term used by insurers.

The key point is, EPPs were not personal pensions - they were an occupational pension scheme for one member only and the company was usually the trustee.

With the company no longer in existence, there has to be a trustee of some description, hence Pearl's suggested that the member become the trustee purely to sort this matter out. The term "administrator" has a specific meaning in HMRC speak and by default the trustee is the administrator.

In response to your specific questions ....

1) Could be oversight. Could be that Pearl didn't actually know that the company had ceased to exist. It really doesn't matter, the point is that certain changes have to made now that Pearl know the company no longer exists.

2) there should be absolutely no change in the value of the policy. The value should be no worse than that which would apply, if the company still existed. It sounds as though the policy was paid-up, probably in 1985 when the company ceased to exist. So the basic sum assured would be reduced, but bonuses would continue to be added. The only way you can confirm this is to ask Pearl.

The most important thing is .... what's happening to wind-up the scheme? Simply appointing you as a trustee doesn't achieve that. Ideally, the policy needs to be changed so that there are no longer any trustees - the policy needs to be converted, essentially and that's what the winding up process should be achieving. Once that happens, as the old trustee, you would need to tell HMRC about the winding up and that should be the end of it.

It's a pity that Pearl have left dealing with HMRC to you. I can understand it, up to a point - as the Trustee is the administrator - but they could have given you some help with this.

Can you explain from the stuff you've had so far, whether the trustee has now been removed from the policy? Anything in the paperwork that suggests/confirms this?

On the one hand this is simple and should result in the policy, with no loss in value, being transferred to your name. On the other hand, there's some procedural stuff to go through which is not easy for the uninitiated.

workingboy

Thanks

I've been authorised by "The pensions regulator" as a Trustee and by "Pearl" as a scheme administrator. I have started the registering process with the HMRC with a ID No. and awaiting further instructions in approx. 5 days.

As advised by Pearl, I should inform the HMRC about the winding up, but cannot find any link for this, only a PDF form pre-Aday 2006. Would this be within the next stage when my registering is completed with HMRC.

thanks again.