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Pensions Security

How secure are my savings?

Welplan Pensions (the Scheme) is a defined contribution occupational pension scheme, established under a trust by the Funder, Welplan Ltd., which is part of the BESA Group.

The Scheme is governed by an Independent Trustee Board, and is administered by Welplan Ltd.

Pension Investments are held separately by Legal & General Investment Management Ltd (LGIM) and HSBC (for the Islamic Index Fund only).

This Scheme is used by many employers, including your own, as their workplace pension scheme.

The Scheme has to comply with an extensive and rigorous set of legislation and codes of practice, set by the Government and enforced by The Pensions Regulator.

The Pensions Regulator oversees pension schemes and will intervene in cases where scheme trustees, or employers, have failed in their duties.

For tax purposes, the Scheme is registered with HM Revenue & Customs.

How does a trust arrangement help protect my pension pot?

The Independent Trustee Board own and control scheme assets. The Board is made up of two volunteer independent Trustees, two volunteer funder appointed Trustees, and a paid independent Chair. Visit our Trustee page to find out more about the individuals governing the scheme.

The Trustees ensure that your personal account and the assets of the Scheme are held legally separate from both Welplan Ltd and your employer.

It is the Trustee’s duty to follow the terms of the trust, act in the best interests of scheme members and other beneficiaries, and comply with Pension Regulations.

What if things go wrong with my employer?

In the event of your employer becoming insolvent, any investments or contributions in transit would be protected, because the Scheme’s assets are held under trust and are therefore separate from those of your employer.

Pension contributions are not available to creditors of your insolvent employer.

If your employer owes money to the Pension Scheme, the administrator will claim these from the insolvency practitioner, and may recover these in due course. There is a slight risk to members, the Trustees place great importance on ensuring employers pay on time, and if the administrator is aware of an issue, you may be informed directly.

What if things go wrong with the scheme administrator?

If Welplan Ltd were to become insolvent, Scheme assets are protected because they are held under trust, and creditors of Welplan Ltd are not able to draw on investments.

The Trustees would appoint a new administrator to take over from Welplan Ltd. Any contributions in transit – where the employer has paid Welplan Ltd., but these have not yet been invested – are held in Bank Accounts which the Trustees control.

What if things go wrong with the Investment Manager?

There are protections in place for investments held by LGIM, the Investment Manager for the default options and 13 of the 14 freestyle investment funds, with HSBC providing the HSBC Islamic Fund. Full details of these are described here:

LGIM:

Pension schemes invest in pooled funds by the purchase of a long-term insurance policy from Legal & General Assurance (Pensions Management) Ltd (“PMC”) to which units are allocated in a range of pooled investment funds (“PF Sections”). Investment management of PMC's assets is delegated to Legal & General Investment Management Limited (LGIM).

PMC legally and beneficially owns the assets in the PF Sections (unit linked) - the policyholder has contractual rights against PMC. PMC is authorised by the Prudential Regulatory Authority (PRA) and regulated by the FCA and PRA. LGIM is authorised and regulated by the FCA.

The assets managed on behalf of the Trustees are legally and financially ring-fenced from the rest of the L&G Group via PMC, meaning Legal and General has no claim over any of the assets held by PMC. Given this separation and regulatory protection, PMC insolvency is extremely unlikely. However, if it were to occur, PMC pooled fund policyholders have a floating charge over the underlying assets themselves which gives priority over the pooled assets for the value of their units. Furthermore, PMC policyholders may also be able to claim up to 100% of any shortfall in recoveries after the operation of the floating charge from the Financial Services Compensation Scheme (FSCS).

HSBC:

HSBC is also regulated by the Prudential Regulated Authority and the Financial Conduct Authority in the UK. The investment in the HSBC Islamic Global Equity Fund has been certified by the Financial Conduct Authority as a recognised collective investment scheme in the UK. As it is not a fund which is domiciled in the UK, it is not protected by the Financial Services Compensation Scheme. In a bankruptcy situation, the Fund assets are not mixed with those of HSBC’s own assets and would be treated as separate. The Fund would continue post-bankruptcy and an alternative custodian/administrator would be sought which should not ultimately jeopardise the assets of the Fund.

What if the scheme were to be closed?

The Scheme could be closed and forced into ‘wind up’ by the Trustees, the Scheme Funder, or by government intervention.

There is a risk that Scheme assets (your pension savings) would be required to meet the costs of administering the wind up of the Scheme. Therefore, the Trustees ensure there are funds set aside to meet the running costs of the scheme for a period of two years.

This approach is in line with TPR guidance and requirements under recent legislation.

What if I have already taken my benefits as a pension (annuity)?

An annuity pays a pension income, usually for life, and some members may have purchased one with an insurance company to gain access to their retirement benefits.

If the provider of such an annuity entered insolvency, the member may qualify for compensation from the FSCS.

How can I be reassured that the scheme is well governed?

The Independent Trustee Board is keen to demonstrate that the scheme is well governed.

Scheme accreditations are sought from independent assessors where appropriate, and currently include:

Pension Quality Mark Ready

Master Trust Assurance Audit

Defaqto 5 star rating

Visit our accreditations page to find out more.