Budget 2014 Actions for defined contribution trustees

Our key actions timeline will help shape your key decisions, meeting agendas and action points for 2014 and 2015.

To consider now

For immediate attention from Trustees and pension managers and immediate implementation if required.

Make decisions on 27 March 2014 relaxations

• Decide whether your scheme will apply the new relaxations in effect from 27 March 2014 on trivial commutation, small pots and drawdown.
• If you want to apply any of the new limits immediately you will need to check your rules.
• Your rules may already allow you to apply the new relaxations. If not, a rule amendment will be needed if you want to apply the new relaxations.
• Consider interim flexibilities for members who retire before 6 April 2015.

Implement amendments for 27 March 2014 relaxations

• If your rules need to be amended in order to allow for the 27 March 2014 relaxations, execute a deed of amendment.
• Inform the scheme's employers and administrators of any changes to current processes.

Communicate with members

• Decide whether you want to issue a general communication to all members on the Budget 2014 changes.
• Consider targeted communications for members retiring before 6 April 2015.
• Ask your lawyers to review all communications.

To consider later in 2014

For consideration by Trustees at the next Trustee meeting with implementation by end of 2014 or the beginning of 2015.

Understand the impact of the 6 April 2015 changes

• Consider the flexibilities that will be introduced with effect from 6 April 2015 and whether or not your scheme will provide these flexibilities to members.
• Consider whether you will rely on the permissive statutory override or amend your scheme rules.
• Review the scheme's rules to determine whether any changes are needed to reflect your decisions or are required as a result of legislative changes.
• Speak to the scheme's employers, administrators and other professional advisors

Make decisions on the 6 April 2015 flexibilities

• Consider your review of the scheme's rules and decide whether rule amendments are required and/or desirable.
• Schemes will provide access to flexible pensions for their members if they provide 'flexi- access drawdown' or 'uncrystallised funds pension lump sums'.
• If you decide to rely on the permissive statutory override to provide flexibility, decide how you will use this power and document your decision.

Ask whether your scheme's rules are 'fit for purpose'

• Instruct the scheme's lawyers to draft a deed of amendment to implement any decisions taken on the 6 April 2015 flexibilities and to ensure your scheme's rules are 'fit for purpose' after 6 April 2015.
• Payments such as trivial commutation lump sums and winding up lump sum death benefits will become redundant. Consider asking your lawyers to tidy up the rules as part of any deed of amendment.

To consider at the beginning of 2015

For action by 5 April 2015 and ongoing actions to ensure compliance with the new regime.

Communicating the 6 April 2015 flexibilities

• Consider general communication to members covering the scheme's approach to post-6 April 2015 flexibilities.
• Provide members with information on their right to transfer to another DC scheme.
• Amend existing retirement communications to incorporate statutory requirement to signpost the availability of guidance under the 'guidance guarantee'.

Ensuring compliance with the 6 April 2015 regime

• Understand any disclosure obligations that will arise from the new £10,000 DC annual allowance applicable for any member accessing flexi-access drawdown.
• Take legal advice on the post-6 April 2015 position for members who are in existing flexible or capped drawdown arrangements.
• Put in place administrative processes to ensure that the scheme complies with any disclosure obligations.

Review the default fund and investment strategy

• Review the scheme's default fund and investment strategy. Seek legal and investment advice on any changes.