Date posted: 01/02/2014
Audience: This Notice will be of particular interest to:
- HR Managers,
- Staff who have responsibility for the administration of the partnership pension arrangements, and
- Payroll Managers and staff who handle payments to the money purchase providers
Actions: To note the following:
- The position, processes and timescales have changed significantly since we issued EPN363 in September 2013
- The TUC Trustees will now be using a Prudential stakeholder scheme as the replacement vehicle to accept fund transfers and on-going contributions for current TUC/Prudential members who do not make an active choice to transfer elsewhere
- The new Prudential stakeholder scheme will be closed to new Civil Service entrants
- Further information to employers, and member communications, will be issued once the revised processes and timescales are agreed.
- EPN363 told employers that:
a. the Prudential was resigning as administrator and provider of the TUC stakeholder scheme (one of the partnership pension arrangements);
b. the TUC Trustees (TUCT) had decided to wind up the TUC stakeholder scheme;
c. TUC were appointing Legal & General (L&G) as a replacement provider to accept transfers of accrued funds from the TUC scheme; and
d. the Prudential/TUC partnership arrangement was closing to new Civil Service members from 1 October 2013
- EPN363 also set out what this meant for members and gave an indicative timescale for related processes and communications, whilst stating that it would be TUCT and Prudential who would be sending out the letters and option packs. This communications plan was delayed, and the position has now changed in respect of point 1c above. Points 1a, 1b and 1d remain unchanged.
- At the end of November 2013 Prudential advised TUCT that they were prepared to make a Prudential stakeholder arrangement available as a replacement vehicle for the TUC stakeholder scheme in respect of fund transfers and receipt of contributions for existing members. TUCT met to discuss this new proposal in December 2013, and in January 2014 Cabinet Office was advised that TUCT had decided to accept Prudential’s new offer instead of appointing L&G as replacement provider.
- As explained in EPN363, Cabinet Office selected the TUC stakeholder scheme (provided and administered by Prudential) as a result of its 2002 procurement exercise. Cabinet Office did not select the Prudential stakeholder scheme. This means that no new Civil Service entrants will be able to join the Prudential stakeholder arrangement and no Scottish Widows or Standard Life partnership members will be able to switch to it.
- However, the Prudential stakeholder arrangement will be able to:
- accept transfers of accrued funds in respect of deferred and active TUC stakeholder members who select Prudential or who do not make an active choice to transfer to another provider; and
- receive on-going Civil Service employer (and employee) contributions in respect of active members transferring into the Prudential stakeholder scheme.
- The Stakeholder regulations give members the right to transfer to any registered pension scheme of their choice. However, transferring Civil Service members will only be able to receive employer contributions if they join the Prudential stakeholder scheme, the Standard Life partnership arrangement or the Scottish Widows partnership arrangement.
- TUCT and Prudential are currently planning the process and timelines for the future winding up of the TUC scheme, fund transfers and associated communications exercise, liaising with Cabinet Office as appropriate.
- The originally proposed timelines have changed, and it could be some time before the TUCT and Prudential are ready to send out employer and member communications. However, members will be given all necessary information in plenty of time to enable them to make informed decisions and Cabinet Office will make sure that the options open to civil servants are included.
- Meanwhile, subject to point 6 above, current active partnership members of the TUC stakeholder scheme will continue to receive employer contributions (and make any employee contributions) and to be covered under the partnership ill health and death benefit provisions (if eligible), on the same basis as other partnership members, both before and after the fund transfers take place.
- Cabinet Office considers that the TUCT’s decision to use the Prudential stakeholder scheme as the default to accept fund transfers will mean the employer processes, fund transfers, member options and communications should be more straightforward than those envisaged in EPN363.
If you have a question about the distribution of EPNs or you need to receive them in a different format contact firstname.lastname@example.org.