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Who Really Pulls Your Strings? How New PSC Requirements Affect Trustees

For those UK pension trustee boards out there who are incorporated (i.e. as a trustee company), from 6 April 2016 there will be a new requirement to keep a register of your “persons with significant control” (PSC).  In addition, from 30 June 2016 this information will need to be delivered to Companies House where it will be made publicly available.  

As trustee directors you should make sure that whoever handles your statutory books and filings is aware of the new requirements and puts procedures in place to ensure they are complied with. It is worth noting that failure to maintain a PSC register will be a criminal offence.

Some of the key points from a pensions perspective are:

  • If you have a trustee company limited by shares, your PSC is likely to be your immediate parent company (typically a participating employer of the pension plan or another company in the group), although certain other individuals/entities could also be caught. If you have a trustee company limited by guarantee, it may be more tricky to identify your PSC as there is no “shareholding” as such. In either case, an analysis should be undertaken of the company’s constitution to understand who has control of the company in practice (in particular, who has the power to appoint and remove the majority of trustee directors).

  • If you are a trustee company whose PSC is an employer of the pension plan or another group company, you may view the new requirements as simply a matter of compliance. Indeed, there may be compelling reasons to maintain the status quo (such as the ability of the trustee to recover VAT paid to third party suppliers where the trustee company sits within the employer’s group). However, some trustee directors may be uncomfortable stating publicly that they are “controlled” by the employer’s group as this seems at odds with the fiduciary nature of a pension trustee.  In these cases, it may be possible to move to alternative structures such as a company limited by guarantee where the trustee directors are the members. However, this would need to be structured carefully to avoid the employer still being regarded as a PSC. For example, factors such as who has the ability to appoint and remove trustee directors, as well as the ratio of member-nominated to employer-nominated trustee directors, will likely have an impact.

  • Trustees considering potential moral hazard proceedings via the Pensions Regulator may find it easier to identify potential targets for regulatory action as companies within the employer’s group will have to identify their own PSC.

© Copyright 2017 Squire Patton Boggs (US) LLP

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About this Author

Geoffrey K. Barnes, Squire Patton Boggs, Hazardous Waste matters Lawyer, Cost recovery Attorney
Senior Partner

Geoffrey’s practice involves corporate counseling and litigation before state and federal courts and agencies. Over his long career, Geoffrey has handled matters covering the full spectrum of environmental law, including: issues arising under federal and state air, water, and solid and hazardous waste laws; enforcement claims; private party claims for cost recovery or diminution in property value; insurance claims for recovery of environmental cleanup costs; environmental criminal proceedings; employee exposure claims; evaluation and allocation of environmental risks in...

216 479 8646
Philip Sutton, Estate Attorney, Squire Patton Boggs
Partner

Philip has over 20 years’ experience advising corporate sponsors, trustees and others on a wide range of issues relating to UK pension plans. He regularly helps clients to establish, change or close their pension plans as well as assisting on a wide range of compliance and day-to-day advisory issues.

+ 44 121 222 3541
Sarah Gosling, Pensions Practice Group, Squire Patton Boggs law firm
Associate

Sarah is an associate in the Pensions Practice Group who has been specialising in pensions law since 2009. She advises trustees, corporates and other professionals on a wide range of pensions issues, with a particular focus on trust-based occupational schemes.

+44 121 222 3154