The Dormant Assets Act affects personal pension schemes although some benefits under qualifying schemes and automatic enrolment schemes are excluded.

New Regulations[1] are due to come into force on 1 August 2022 to introduce a transfer of dormant assets as a new type of authorised payment for tax purposes. This removes the tax charges which would otherwise apply if a payment were to be made to a reclaim fund, and so effectively means that transfers can go ahead.

The FCA has consulted on changes to its rules and guidance in connection with the new regime, and is due to finalise these shortly.

Actions

Personal pension scheme providers should start reviewing their Rules and terms and conditions to make adjustments for the Act.  Points to consider are: 

• Does the scheme fall within the scope of the Act?
• If so, how do the Rules currently treat unclaimed eligible pension benefits?
• Are any amendments needed for the Rules to allow a payment to be made to a reclaim fund?
• Do any existing processes need to be amended to enable compliance with the Act?

We can help with any of these points.  Do please get in touch with Alice Honeywill, Leonardo Robinson, Heather Musk or your existing Burges Salmon contact for more information.

This blog was written by Leonardo Robinson    

[1] Registered Pension Schemes (Authorised Member Payments) Regulations 2022 (SI 2022/723)