The DWP has made changes to the Disclosure Regulations for occupational pension schemes1. The changes take effect on 1 December 2010.

Background

The Disclosure Regulations require trustees to provide scheme members with certain information and documents (“relevant information”), either automatically or upon request.

The DWP’s changes will allow trustees to provide relevant information by electronic means (“e-disclosure”), where prescribed conditions are met.

Key points

Trustees will have the option of providing relevant information via email or a website. However, there are a number of wrinkles:

  • Trustees must be satisfied that their e-disclosure arrangements will allow members to access and store or print relevant information, and that the arrangements take account of the needs of disabled people.
  • A member will be able to “opt out” of e-disclosure, and insist on receiving relevant information by post. If trustees wish to use e-disclosure for pre- December 2010 members, they must first notify the members of their right to opt out and continue to receive information by post.
  • If trustees provide members with relevant information via a website, they must send the members notice by post or email. On the first occasion, the trustees must explain how members can access the relevant information. Thereafter, the trustees must tell members each time further relevant information is provided via the site.

There are also some minor changes to the rules about statutory money purchase illustrations (“SMPIs”) – the statements which trustees have to send each year to members with money purchase benefits. For example, in future it will be possible to provide some of the prescribed “health warnings” separately from the SMPIs themselves.

Comment

The changes will potentially enable trustees to use e-disclosure to provide:

  • information traditionally included in scheme booklets
  • benefits statements, including SMPIs
  • copy documents which members are entitled to see under the Disclosure Regulations – for example, trust deeds and rules, valuations and annual reports.

Trustees will however need to ensure that the prescribed conditions are met. It is helpful here that members are presumed to agree to e-disclosure. But the fact that members can “opt out” means that trustees may have to operate two-tier disclosure arrangements for years to come.

Trustees considering disclosing relevant information via a website will need to think carefully about issues including data protection and confidentiality. For example, where a scheme has special provisions that apply to particular categories of member, it may not be appropriate to give all members access to the full trust deed and rules.