Part 6 - Special Situations Flashcards
(56 cards)
Which Act abolished LTA
Finance Act 2024
When was LTA abolished from?
6 April 2024
What change is now measured in place of LTA
🤍 Certain Tax free lump sums against a fixed monetary capped amount called the Lump Sum Allowance (LSA). The capped amount is set at £268,275
🩶 Certain lump sum death benefits, tax free lump sums under the LSA and serious ill-health lump sums that are paid tax free against a fixed allowance called the Lump Sum and Death Benefit Allowance. The capped amount in £1,073m
What Regulations set out the New Transfer Regulations and who published these?
The Department for Work and Pensions
The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021
What flexible options have individuals age 55 and above had since April 6 2015, in respect of DC Funds?
🤍 Leaving the fund untouched
🩶 Taking a guaranteed income (annuity)
🤍 Opting for an adjustable income (flexi-access)
🩶 Taking cash in chunks (partial withdrawals)
🤍 Withdrawing the entire pension pot in one go
🩶 Combining multiple options
What legislation set out requirements for trustees to actively signpost members towards the government backed guidance
The Occupational and Personal Pension Schemes (Disclosure of Information) Regulations
What must firms regulated by the Financial Conduct Authority (FCA) include in their guidance
🩶 Include a clear and prominent statement about the availability of guidance in their communications
🤍 Encourage individuals to seek either free guidance or professional financial advice before making pension decisions
🩶 Provide appropriate risk warnings to individuals choosing to access their DC pension savings on an execution only basis
Reasons a pension scheme may decide to wind up
🤍 No longer wishes to make required level of contribution (too costly)
🤍 Membership of the scheme is too small to justify the costs
🤍 Company is no longer able to (e.g Insolvency)
🤍 The continuing cost of providing DB pensions
What did The Occupational and PersonalPension Schemes (Conditions for Transfers) Regulations 2021 set out?
The conditions that must be satisfied before a statutory pension transfer can take place
What are the two conditions in relation to transfer of which either be saitisfied
🤍 First Condition is met if the receiving scheme is of a type listed in the transfer regulations
🩶 the Second Condition applies to transfer into all other schemes and for this to be met the Trustees must consider additional scam risk indicators by carrying out certain checks.
What must the receiving scheme be in order to satisfy the first condition
🤍 a public service pension scheme
🩶 an authorised Master trust listed by the Pensions Regulator (tPR)
🤍 An authorised Collective Defined Contribution (CDC) scheme included on the list to be published by tPR
What checks are included in the Second Condition
🤍 whether there is an employment link if the transfer is ti either an occupational pension scheme or a QROPS
🩶 whether there is a residency link if the transfer is to a QROPS
🤍 for the presence of amber of red flags
List the Red flags
🔺 the member has failed to provide the required information
🔺 the member has not provided evidence of receiving MoneyHelper guidance
🔺 there is evidence that someone has carried out a regulated activity without the required regulatory status
🔺 the member requested a transfer following unsolicited advise
🔺 the member has been pressured to make the transfer
List the Amber flags
🔸 the member has not demonstrated an employment link or residency link
🔸 the evidence may not be genuine or may not have been provided directly by the member
🔸 the member cannot demonstrate an employment link or residency link
🔸 high risk or unregulated investments are included in the scheme
🔸 the scheme charges are unclear or high
🔸 the schemes investment structure is unclear or unorthodox.
🔸 overseas investments are included in the scheme
🔸 a sharp unusual rise in transfers involving the same scheme or adviser
What must schemes do if one or more amber flag is present?
Direct to MoneyHelper to obtain guidance before the transfer proceeds
What happens if one or more red flags are present
The scheme must refuse the transfer and notify the member of their decision within seven working days
What are the two types of Climate risk
🤍 Event driven (acute)
🤍 Longer term shifts (chronic)
What must the Statement of Investment Principles set out from 1 October 2019?
How Trustees take account of financially material considerations (which include environmental, social and governance) over the longer term
What does TCFD stand for?
Task force for Climate risk Financial Disclosures
What is the TCFD framework designed for?
🤍 to help investors understand the climate related risks in their portfolio
What does the TCFD set out?
the Trustees:
🤍 strategy regarding climate related risks
🤍 their governance
🤍 their approach to risk management and
🤍 include targets and metrics which will provide a measure of the schemes carbon footprint
What Cyber risks apply to pension schemes?
🤍 hacking attacks against the scheme or a third party administrator
🤍 loss of a laptop containing member data
🤍 virus or malware introduced into the computer system
🤍 scheme administrators falling victim to a phishing email
What guidance has tPR published for trustees on Cyber Security?
🤍 A cyber risk assessment cycle, to assess risks, identify mitigations and then monitor and report
🤍 Governance requirements
🤍 Possible controls
🤍 How to respond to an incident
🤍 Recognition that cyber risk is a dynamic and evolving risk
What are the National Cyber Security’s 10 steps to cyber security to help organisations protect themselves in cyber space?
(REAL AVID IS)
1) Risk Management
2) Engagement and training
3) Asset Management
4) Architecture and configuration
5) Vulnerability protection
6) Identity and access management
7) Data security
8) Logging and monitoring
9) Incident management
10) Supply chain security
