A lot has happened since 26 June 2017. We’ve had Wimbledon, summer holidays, a total solar eclipse, Leeds and Reading Festivals, the summer transfer window closed (football, not pensions), the start of the autumn term at school, the World Black Pudding Throwing Championships, Proms in the Park and we are now nearly into half term. By contrast, little seems to have happened in terms of pension plans gearing up for the latest money laundering regulations which came into force on that date.

There is a lot to think about. Not least, that failure to comply carries criminal sanctions and could result in trustees being sentenced to 2 years in prison (worst case scenario).

Read on for our ten step compliance plan for trustees of UK occupational pension plans.

STEP 1 - Identify the “beneficial owners” of the pension plan – “beneficial owner” captures:

  • all trustees
  • the original sponsoring employer
  • the current plan employers
  • all identifiable pension plan beneficiaries (such as active members, deferred members, persons in receipt of pension and pension credit members)
  • any categories of undetermined beneficiaries
  • all other individuals who could be said to exercise “control” over the plan. This could capture, for example, the directors of a corporate trustee or a plan actuary whose consent is required to any form of plan amendment.

STEP 2 - Review plan rules to identify any other individuals who might exercise “control”.

STEP 3 - Collate information required to be kept in respect of “beneficial owners” who are individuals. This includes:

  • full name
  • national insurance number or unique taxpayer reference
  • if the individual does not have a national insurance number or unique taxpayer reference, the individual’s usual residential address. If the address is outside of the UK, passport number or identification card number or equivalent form of identification
  • date of birth, and
  • nature of role in relation to the pension plan. 

STEP 4 - Collate information required to be kept in respect of “beneficial owners” who are corporate bodies, this includes:

  • corporate/firm name;
  • unique taxpayer reference;
  • registered principal office;
  • legal form of the legal entity and the law by which it is governed;
  • if applicable, the name of the register of companies in which the legal entity is entered including details of the EEA State or third country in which it is registered;
  • registration number; and
  • nature of the entity’s role in relation to the plan. 

STEP 5 - Create a written record of the description of the class of persons who are undetermined beneficiaries or potential beneficiaries. 

STEP 6 - Create a written record of a contact address for all trustees and pension plan advisers. 

STEP 7 - Identify whether the pension plan constitutes a “taxable relevant trust”. This will depend upon whether the pension plan is liable to pay any of the following taxes: income tax, capital gains tax, inheritance tax, stamp duty reserve tax, stamp duty land tax, land and buildings transaction tax (in Scotland). 

STEP 8 - If the plan is a “taxable relevant trust”, and the trustees became liable to either income tax or capital gains tax for the first time in the tax year 2016/17, the trustees must register on HMRC’s new Trusts Registration Service by 5 December 2017. 

STEP 9 - If the plan is a “taxable relevant trust” but either (1) the trustees were not liable for income tax or capital gains tax in the last tax year or (2) they have already paid such taxes in previous tax years, they must register on HMRC’s new Trusts Registration Service by 31 January 2018.

STEP 10 - Add money laundering compliance to the pension plan’s risk register.