Pension scheme trustees: Disclosure of company and LLP owners

New obligation affecting pension scheme trustees

From 6 April 2016, most corporate pension trustees will be caught by a new company law requirement that they take reasonable steps to ascertain the key details of every “person having significant control” over them (their “PSCs”).

Trustee companies will be required to keep a register of their PSCs, which is to be open to public inspection. They must also provide these PSC details annually to Companies House, in the new confirmation statement (which replaces the annual return from 30 June).

These requirements are not confined to pension trustee companies. They apply to virtually all unlisted UK companies, and also to limited liability partnerships (“LLPs”) (which some schemes use as special purpose vehicles). There are criminal sanctions for non-compliance.

Most pension trustee companies are subsidiaries within a larger commercial group, in which case the group secretarial department may already be dealing with this as part of a wider exercise.

Meaning of “persons having significant control” (“PSC”)

A person can be a PSC in relation to a company by:

1.     holding (directly or indirectly) more than 25% of the shares;

2.     holding (directly or indirectly) more than 25% of the voting rights;

3.     holding (directly or indirectly) the right to appoint or remove directors holding a majority of the
         votes that can be cast at a meeting of the board of directors;

4.     having the right to exercise, or actually exercising, significant influence or control over the
        company; and

5.     having the right to exercise, or actually exercising, significant influence or control over the
        activities of a trust or firm which is not a legal entity and which meets any of the above
        conditions.

Applying items 1, 2 and 3 here should not normally present a problem. Items 4 and 5 are less straightforward, because they rely on the term “significant influence or control” which is not clearly defined (although there is this draft guidance). In the context of a pension trustee company, however, any person who is a PSC will normally be caught within one of the first three items – in which case that person need not be separately recorded under item 4 or 5.

What to do next

Companies and LLPs must take reasonable steps to establish who their PSCs are. They must therefore send notices to any person they have reasonable cause to believe should be recorded on the PSC register, and may also send notices to anyone else who they reasonably believe to hold the necessary information.

However, there is no requirement to send these notices if the company or LLP knows who the PSCs are and has the information it needs for the PSC register. This is likely to be the case for most pension trustee companies.

By all means speak with your usual Linklaters pensions contact if you would like to discuss this further. In the meantime, you can find our Corporate summary (which also includes information which will not generally affect pension scheme trustees) here.