Archive for the ‘Trustees’ Category

Trust in trusts

Trusts are sometimes used to distribute assets when someone dies rather than making specific provisions in a will. This allows the trustees to decide how and who to pass money to and can result in less tax being paid.

The Sunday Telegraph recently reported the case of a family dispute where the trust was set up by a father to benefit his wife and children. His son, a beneficiary and also a trustee, ended up in dispute with his 79-year-old mother and blocked distribution of money due to her.

A costly legal case resulted before she won her share of the money. Lawyers suggested such trusts should have at least one ‘professional’ independent trustee to avoid this type of problem.

Trusts can be useful devices to distribute assets but good legal advice is important when setting them up.

Steve Clark

A higher pension–but at what price?

Former BT employees are the latest to get an offer from their former employer of a higher BT Logo Flickr psdpension.

Similar offers have previously been made by Boots and ITV. Of course there’s a catch. The company is offering a higher fixed pension that will never increase in future, whereas its normal pension rises in line with inflation.

For those in good health, the danger of taking the fixed pension is that they live into their nineties and that the rate of inflation rises – in that case the spending power of their income will shrink. On the other hand, for those in poor health who aren’t likely to live long, a higher income now could represent a very good deal.

If you get such an offer, ask our advice, as there are often wrinkles (for example in relation to spouse’s pension rights) that could be very important.

Steve Clark

Unlocking local authority pension funds could build 20,000 homes

According to specialist Hearthstone Investments investing the capital held in Local Government Pension Schemes (LGPS) could help build 20,000 homes.

Last November, Islington Council invested £20m (2.5%) of its pension fund into the TM Hearthstone UK Residential Property Fund to deliver new housing. If this all 89 pension funds did the same it would mean investment for new housing of around £4bn.

Christopher Down, chief executive of Hearthstone, said: ‘The recent landmark investment by Islington Council in the Hearthstone Fund provides a case study for how investment by LGPS can play a role in alleviating this crisis without requiring new sources of capital at a time of austerity.’

Richard Greening, Islington Council’s executive member for finance and performance, urged other pension schemes to join the fund to boost the delivery of new housing.

He said: ‘Our decision to invest in residential property was based on careful analysis of the options. It reflects our view that investment in this sector will produce good long-term returns for local taxpayers and the members of our pension fund.

‘We selected the TM Hearthstone fund because it is the only FCA regulated fund in the sector and is run by a team with considerable investment management experience. The fund offers a tax-efficient means for our pension fund to invest in the UK’s largest asset class without taking on the risks associated with investing in housing directly or in smaller schemes.’

The combined market value of all 89 LGPS in England and Wales at the end of March 2012 was £157bn.


Steve Clark

NOW: Pensions –that’s Quality!

New breed pension provider NOW: Pensions has become the first master trust to attain the new PQM READY standard.

The benchmark will help show employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.

PQM READY was set up by PQM (Pension Quality Mark), the mark that recognises good quality defined contribution pensions, to help employers spot a good multi-employer pension scheme or master trust.

To get PQM READY schemes need to show, among other things, proof that independent trustees are in a majority or have a casting vote, and that member communications are clear, regular and engaging.

This announcement also means that employers that use NOW: Pensions will be able to make a fast-tracked application for PQM. They will only have to demonstrate PQM’s contributions standards to get the certification.

You can read more about the Pension Quality Mark by clicking here.


It’s good to see NOW: Pensions embrace the PQM. We placed our first scheme with NOW: recently and have been impressed with their ethos and communications.

There is much pressure from the regulators for these types of pension schemes to be fairer, more transparent and charge members less in running costs. We’re sure other providers will follow.

Steve Clark

Call for single pension regulator

The Work & Pensions Committee have called on the government to reassess the case for establishing one body with sole responsibility for regulating workplace pensions.

The Report calls on the Government to reassess the case for establishing one body with sole responsibility for regulating workplace pensions.

Noting concerns over current gaps in regulation and the potential for further gaps to arise as a result of now having three regulators with a role to play, the Report argues that a single regulator is necessary to ensure that all members of workplace pension schemes are adequately and consistently protected.


The Work & Pensions Committee is simply echoing what those in the pensions industry have been saying for some time. The distinction between the regulation of company pension schemes and contract based plans has been a source of concern for many.

If the Coalition Government is serious about reducing red tape here is  great opportunity!

Steve Clark