The UK Companies Act 2006 currently allows companies to appoint a corporate director as long as at least one of the directors is an individual. As most professional trusteeship providers operate as companies, the law effectively allows them to be appointed as a corporate director of the corporate trustee of a pension plan. However, the Small Business, Enterprise and Employment Act 2015 is set to change that (part of UK’s response to G20 commitments to increase corporate transparency – think Panama Papers and such like), so that only a natural person may be appointed as a director of a company unless the appointment falls within one of the exceptions provided for by regulations. The expectation was that professional pension trusteeship companies would benefit from an exemption. The new regime was expected to come into force in October 2016. As there was no sign of the exemptions emerging from Westminster and with the deadline looming, some professional trustee companies were becoming understandably nervous, in spite of the promise of a one year transitional period.
However, and without publicising the fact, the Companies House website now simply says: “You won’t be able to appoint corporate directors, although there are some limited exceptions. The detail of these exceptions are still under development. Any further information including a date for implementation will be provided on GOV.UK as soon as it’s available.”
So, corporate professional trusteeship providers breathe a sigh of relief – for now. But what they really want is to see a formal exemption written into legislation. Until then there will be nagging uncertainty as to whether their business model will still work when the new regime comes into effect.