Chapter 4

Question 1

What is the TPR’s purpose?

Answer 1

Regulate trust based/work based schemes
Support employers with auto enrolment

Question 2

What Responsibilities does TPR have?

Answer 2

Recover unpaid contributions
Protect, improve, and reduce the risk of PPF
Balance the needs of employers growing vs the needs of DB scheme

Question 3

What are FOS compensation limits for complaint referred in 2022

Answer 3

£375k plus interest and other compensation
£355k in 2020/21, £350k in 2019

Question 4

Who is an eligible complainant for FOS

Answer 4

Five - trustee with less than £5m
Fifty - small business with less than 50 employees
.5 - charity with £6.5m turnover or balance sheet of £5m
Buy to let guarantor
Microenterprise with less than 10 employees

Not Occ or PPP (Ombudsman)

Question 5

What is the role of the Ombudsman

Answer 5

Deal with complaints relating to how pension scheme are run (not misselling)

Question 6

Who does the PPF apply to?

Answer 6

DB & Hybrid Members (only DB part).
Not wound up before 06/04/2005

Question 7

Can the PPF pay benefits?

Answer 7

Yes, Benefits can be paid

No new members can join and no further benefits can accrue.
No Transfer Values

Question 8

What are the levels of PPF compensation?

Answer 8

100% at NRD, receiving survivors income, ill health (case by case)
90% Retired/Deferred but not at NRD
50% Spouse
25% per child up to 50% PLUS Spouses
50% per child up to 100% NO Spouses

Question 9

What are the revaluation levels of PPF for Deferred and receiving income members?

Answer 9

Deferred (too young)
Pre 2009 - CPI Max 5% (Fer 9, fine, five)
Post 2009 - CPI Max 2.5%

Receiving Income
After 1997 then CPI Max 2.5%

Question 10

What are the age/salary bands applicable to auto-enrolment?

Answer 10

Eligible - Age 22 & Over £10k Earnings
Non-Eligible (right to opt in) - Age 16 - 21 & SPA (66) - 74, Over £6,240 Earnings
Entitled (to ask) - Over SPA (66), Less than £6,240

4 weekly pay is £6240 - £480, £10k - £768

Employee can still take TFC at retire

Question 11

How long can an employer postpone auto-enrolment for?

Answer 11

1 day to 3 months.
No Cap on Auto Enrol Charges

Question 12

What is the minimum contribution for auto-enrol?

Answer 12

Employer 3%, Min Total 8%. No minimum for employee as employer could pay in full.

Question 13

When can a member opt out?

Answer 13

They must have become an active member (joining window is 8 weeks) AND received enrollment information

Question 14

Which scheme has an obligation to accept business even if it is unprofitable?

Answer 14

NEST

Question 15

How does Offsetting work?

Answer 15

Assets/income of same value are transferred to the ex-spouse

Question 16

How is a lump sum earmarking order taxed?

Answer 16

Member is deemed to receive all taxed on members income

Question 17

When can a Periodic Payment earmarking order stop?

Answer 17

Member dies, Ex-spouse remarries/cohabits (although lump sum would continue).
Member remarries then continues as normal

Question 18

Which benefits can & cannot be applied in a pension-sharing order?

Answer 18

CAN - Protected payments, SERPS, S2P, Occ (inc AVC), Ind, statutory
CANNOT - New State, Basic State, State Graduated, Widows

Question 19

What does an unfunded DB have to offer in pension share?

Answer 19

Has to offer membership, does not have to offer transfer value.

Question 20

What contributions must be paid for a member on parental leave in a DC paid scheme

Answer 20

Employer conts based on pre-leave conts, employee based on actual earnings.

Question 21

How long can a creditor claim income?

Answer 21

Max length is 3 years from when income order takes effect