0370 1500 100

New more onerous money laundering duties for trustees are now in place – so be prepared

Until recently, occupational pension schemes have escaped fairly lightly from the complexities of money laundering compliance. Going forward from 26 June 2017, trustees have to keep accurate and up-to-date records of all the scheme’s beneficial owners. For members, this means their names, NI numbers/tax reference, date of birth and role in relation to the scheme. It includes all types of members – including potential dependants, etc. However, a scheme’s beneficial owner can also include its sponsoring employer or employers, and so specific information has to be provided in relation to them as well. In certain circumstances, the trustees themselves can also be the beneficial owners in relation to a scheme’s assets. They must also disclose the full names of any advisers paid to give legal, financial or tax advice to the trustees (Scheme Advisers). This is to be put on HMRC’s online register before 31 January 2018. The register itself would benefit from some fine tuning. The trustees also need a formal contact address.

Trustees should decide to whom to delegate responsibility for compiling this information. In doing so they would need to bear in mind data protection compliance and reducing the risk of a cyber-attack.

While this is all information which trustees can be expected to have readily available in relation to their scheme, there is probably a trustee information gap for these purposes for deferred members and potential dependants.

Trustees also have to disclose a shortened version of the scheme’s beneficial owners when they enter into a transaction or business relationship for the scheme to any Scheme Adviser and provide updated information within 14 days if key information changes.

Professional trustee companies have slightly different duties

They have to update their register of owners, or who controls the company, within 14 days of being notified of a change. The change then needs to be filed at Companies House within 14 days. They must continue to ensure they have carried out a risk assessment to work out and assess the risks of money laundering/terrorist financing. They then need to put in place and maintain policies, controls and procedures to mitigate and effectively manage these risks of money laundering/terrorist financing.

They need to ensure their employees receive the appropriate training on this and then carry out and keep records of what can be simplified customer due diligence.

Professional trustees are theoretically meant to register with HMRC, but HMRC Guidance states they do not have to register if they are trustees of occupational pension schemes, as these are low risk trusts.

When entering into a business relationship with Scheme Advisers, the Scheme Adviser will carry out customer due diligence on the professional trustee. A UK-based corporate trustee must provide the following information on request:

  • information to show its name, registered number, registered office and principal place of business, its board of directors, the senior persons responsible for its operations, the law to which it is subject, its legal owners and its beneficial owners
  • its articles of association or other governing documents

The professional trustees must then update this information within 14 days from the date on which they became aware of the change.

Published:21 July 2017


Pensions Law Update - July 2017

Key Contact

Penny Cogher