The People’s Pension Scheme (referred to as ‘The People’s Pension’ or just ‘the Scheme’) is a defined contribution occupational pension scheme. The Scheme has received authorisation from The Pensions Regulator to operate as a master trust pension scheme in line with the laws regulating such schemes.

People’s Partnership Limited is the provider of the Scheme. It’s part of the People’s Partnership Group, a group of companies run on a not-for-profit basis which provides financial products and benefits for working people.

Your employer is one of many who use the Scheme as their workplace pension scheme.

Background

The Scheme is set up under trust, so your pension pot and the Scheme’s assets are kept separate from those of both your employer and People’s Partnership. This keeps your money secure – see ‘What if things go wrong?’ below for more information.

The People’s Pension Trustee Limited (‘the Trustee’) is responsible for running the Scheme in line with its governing Trust Deed and Rules. The Trustee is also responsible for investing your pension pot, following any instructions you’ve given. It’s the Trustee’s duty to act in the best interests of Scheme members and other beneficiaries.

Meet The People’s Pension Trustee.

People’s Administration Services Limited (another company within the People’s Partnership Group) has responsibility to provide funds to the Scheme where costs aren’t otherwise met, in line with the requirements for master trust authorisation, in its role as scheme funder. It must maintain sufficient financial reserves, and The Pensions Regulator ensures that it meets these requirements.

The Trustee has also appointed People’s Administration Services Limited to carry out the day-to-day administration of the Scheme. The Trustee regularly monitors the administrator’s performance against service level agreements and other metrics.

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Regulation

Pensions law, which the Scheme must comply with, is extensive with a raft of member protection requirements.

The Scheme is registered with The Pensions Regulator, the UK regulator of workplace pension schemes. The Pensions Regulator oversees the running of pension schemes and can intervene in cases where scheme trustees, employers or advisers may have failed in their duties. The Pensions Regulator’s aims include improving confidence in pensions by protecting members’ savings and encouraging high standards in the way pension schemes are run.

The Trustee ensures that the Scheme complies with trust law and specific pensions legislation (supported by Codes of Practice and guidance issued by The Pensions Regulator).

In addition, the Scheme is an authorised master trust and must meet rigorous ongoing requirements designed to increase safeguards for pension scheme members. It is closely supervised by The Pensions Regulator. The requirements include having fit and proper people involved in running the Scheme, sufficient financial reserves, and robust systems.

The Scheme is also registered for tax purposes with HM Revenue & Customs – this gives you favourable tax treatment on your savings.

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What if things go wrong?

If your employer was to become insolvent, your pension savings would be safe as the Scheme’s assets are legally separate, so they won’t be available to your employer’s creditors.

If the scheme funder (People’s Administration Services Limited) was to become insolvent, your pension pot is protected. The Trustee can seek another scheme funder of sufficient strength in financial terms so that the Scheme can keep running as usual. Or the Trustee can decide that it’s better for your pension savings to be transferred to another authorised master trust (or pension arrangement of your choice) and the Scheme can be wound-up.

If the Scheme terminates and is to be wound-up, your pension pot is protected. Your pension savings would be transferred to another authorised master trust (or to another pension arrangement you choose). They can’t be used to meet the Scheme’s wind-up costs.

If the Scheme’s administrator (People’s Administration Services Limited) was to become insolvent, the Trustee would appoint a new administrator to operate the Scheme.

If the Trustee company was to become insolvent, new trustees would be appointed. This won’t affect the Scheme’s assets or your pension savings.

If the investment managers – Amundi, Invesco, Robeco, and State Street Investment Management Limited (SSIM) – or any other investment managers appointed were to become insolvent, new investment managers would be appointed. It’s possible that the Scheme investments held by the Trustee could, in extreme situations, be affected by the insolvency of an investment manager but considerable protection is in place.

The Trustee is the legal owner of most of the assets that the scheme invests in on behalf of the members. The Trustee has appointed Amundi, Robeco and Invesco to manage these investments. These assets are held in custody with Northern Trust.

The remaining Scheme investments are managed by SSIM and invested in highly regarded, mainstream pooled investment funds accessed via a long-term insurance contract with Managed Pension Funds Limited. This is a typical investment structure used by many pension funds in the UK, designed to provide protection to members’ pension savings.

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Financial Services Compensation Scheme

If Managed Pension Funds Limited was to become insolvent, it may be possible for any deficit of funds to be recovered from the Financial Services Compensation Scheme (FSCS), although we believe this position has yet to be tested. See www.fscs.org.uk for further information. It should be noted that an insolvency event of this kind that ultimately resulted in a detrimental impact on members’ pension pots would be an extreme event. The Trustee of the Scheme keeps all investment managers under careful review based on investment advice from a regulated advisory company authorised by the Financial Conduct Authority.

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Annuities at retirement

Some members who take retirement benefits from the Scheme do so by securing a permanent pension in payment, known as an annuity, with an insurance company. If the insurance company doesn’t meet its obligations due to insolvency, members may qualify for compensation in their own name from the FSCS. The maximum level of protection is currently stated by the FSCS as 100% of the retirement income being received from that product as a benefit falling due.