Following the announcement in the Budget last year that legislation would be brought in to restrict higher rate tax relief on pension contributions for high earners, members of the AMPS committee have been involved in attending Treasury consultation meetings and industry workshops on this topic.

A formal Consultation Document entitled 'Implementing the restriction of pensions tax relief' was issued by the Treasury in December 2009 with a response date of 3rd March 2010.

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MATTIOLI WOODS PLC APPOINTMENT AS AGENT TO FREEDOM SIPP

UPDATE AND NOTIFICATION OF WIND UP OF SCHEME

Scheme members will have hopefully received correspondence from PricewaterhouseCoopers (PwC) advising that Mattioli Woods plc have been appointed as agent to the Freedom SIPP. We have been working very closely with PwC to develop a solution to give much needed stability and security to the scheme’s members, by providing robust ongoing administration and information.

Next step

It is now the intention for the Freedom SIPP to be formally wound up in line with the rules contained within the scheme documentation. The wind up of the scheme allows for the orderly transfer of members of the Freedom SIPP to an alternative registered pension scheme arrangement.

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Normal Minimum Pension Age, the age from which individuals can normally first start to draw pension benefits, increases from age 50 to 55 with effect from 6th April 2010.

The impact of this change depends on how pensions legislation is interpreted.

The legislation is ambiguous to the extent that there are two key ways in which the legislation can be interpreted.

Interpretation A, which we believe is favoured by HMRC, creates significant problems for affected members and pensions administrators.

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This document has been produced by SIPP providers to set out examples of how operators offering SIPP products may choose to set out or describe certain elements of their SIPP offerings for customers and advisers.  The sections covered below are designed to set out some best practice considerations for providers writing customer literature for individual or group SIPPs.

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The FSA have published their business plan for 2009/10.

 

Against a backdrop of public and governmental scrutiny, recriminations and admissions that the FSA took their eye off the regulatory ball, in particular regulatory policies and supervision on capital adequacy, not surprisingly, the FSA will focus on prudential and conduct risks, in particular the role of senior management in firms. More than ever, Senior Management Systems & Controls will be scrutinised to ensure all senior management are conversant and engaged with risk management.

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I raised this problem at the request of a client (also an AMPS Member) at the last HMRC PSS Customer Forum at the end of November 2008. As is their wont, HMRC asked me to come back with more figures - I had already given them some - to illustrate the scale of the problem. As with other Govt Depts, it seems they will only treat a problem seriously once they become convinced a lot of people are affected.

Have any other AMPS Members experienced problems with transfers of pre-A Day property SIPPs? If you have, please can you estimate what percentage of your potential or actual clients have been affected?

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Has anyone got any experience with dealing with transfers in from QROPS to SIPPs?  We are hoping to transfer in a QROPS status pension from a registered pension scheme in Jersey. 

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The FSA has published its review of pension switching based on 30 firms and 500 transfers to personal pensions/SIPPs conducted since A-Day; this represented approximately 10% of transfer cases. Concerns were raised on the suitability of advice from advisers; comments were also made on Provider's actions.

Dealing first with advice issues, the FSA found unsuitable advice in 16% of the cases reviewed. Of course, one can conclude that 84% must have been acceptable, however the advice deficiencies included extra product charges not being justified or explained properly, loss of benefits from the ceding scheme, client attitude to risk not being matched to investments and the need for ongoing reviews not being covered - all basic stuff.

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A reminder to FSA authorised members that the FSA's TCF December deadline is fast approaching. The FSA set a December deadline for firms to demonstrate they are consistently treating customers fairly. For FSA authorised firms, this means:

• demonstrating that senior management have instilled a culture within the firm whereby they understand and can articulate what the fair treatment of customers means;
• ensuring this culture permeates all staff within the company and those staff know what their TCF responsibilities are;
• where errors are found they are put right and learned from;
• appropriately and accurately measuring performance against all customer fairness issues materially relevant to the firm's business and acting on the results;
• demonstrating that these measures are delivering fair outcomes; and
• have no serious failings, including areas of particular regulatory interest (of which we know SIPPs are).

The above points are extracted (and paraphrased in some cases) from various useful FSA documents that can be found on the website within the Treating Customers Fairly section. There is also some useful TCF information within the Small Firms section of the FSA website - this section has recently been redesigned and is a significant improvement on the previous layout.

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AMPS committee changes

At the AGM on the 8th October, three exiting committee members, Robert Graves (Rowanmoor Pensions), Mike Morrison (Winterthur Life) and David Philips (D A Philips & Co) were up for re-election to the committee having served one three year term. David Downie (Rowanmoor Pensions), the AMPS treasurer was however stepping down after a number of years involvement on the committee.

As well as the three committee members standing for re-election, three new candidates put themselves forward for election to the committee, namely Daniel Hawkins (Friends Provident), Ian Shaw (Montpelier Pensions Administration Services), and Michael Smith (Pointon York).

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