What happens if I don’t comply? Employers are likely to ask you for help to choose and run a good quality pension scheme for automatic enrolment. Our lump sum investment 2017 elearning programme to help trustees understand their role.
Workplace pensions law has changed and every employer must comply. Summary: Trustees may need to know whether lump sum death benefits can be provided from their scheme or whether a separate scheme, which only provides these benefits, should be set up. Likewise, if you are an employer sponsoring a pension scheme you may want to be sure that the scheme is set up properly. What are lump sum death benefits?
If the regulator receives notification of a breach of the law, we are primarily concerned with any risks to members’ benefits which such a breach may pose. In determining whether a scheme is in breach of s255, we accept that there may be a legitimate range of legal opinion on particular facts. We do not consider that potential reporters have reasonable cause to believe that a breach of s255 has occurred where they have advice that a breach is possible but not likely. Where reporters do have reasonable cause to believe a breach has occurred, they should note that not every breach of s255 is likely to be of material significance to the regulator.
Reporters should assess the cause of the breach, its effect, the reactions to it and any wider implications it may have. For the purpose of this guidance, lump sum death benefits are benefits paid on the death of a scheme member in the form of a cash sum. As a consequence, if an employer did not previously have to designate a stakeholder scheme because of a group life only scheme that was in place, that employer will now have to meet the stakeholder designation requirement. If, however, the contributions were made to a separate life assurance scheme, authorisation and approval would not be required. If the members are deferred members of the scheme but remain employed by the employer, then contributions to the scheme for lump sum death benefits will not result in the scheme being required to apply for authorisation and approval to operate cross-border if these benefits are calculated by reference to the members’ salaries at the date of deferment. However, if there is any remaining link to current or final salaries for the calculation of lump sum death benefits, then the cross-border regulations may apply.