Pension Scheme and Gratuity Scheme Rules and Guidance, 2021

Summary

These Rules, made by the Guernsey Financial Services Commission under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2020, set the standards that licensed fiduciaries must meet when forming, managing, or administering pension schemes and gratuity schemes (together, Schemes), or advising on their formation, management, or administration. They replace and revoke the Pension Scheme and Gratuity Scheme Rules 2020 and took effect on 1 November 2021.

• Fair treatment and governance: Licensees must treat Scheme Members and beneficiaries fairly, ensure every Scheme has appropriate governance arrangements, clearly identify those responsible for governance, maintain internal controls, and monitor any person appointed to provide governance.
• Governing documentation: When acting as trustee, the licensee must ensure the Scheme is constituted by detailed Governing Documentation covering terms, obligations/powers, and benefits; administrators must retain copies needed for their functions.
• Notifications to the Commission: Licensees must notify the Commission of a Scheme's establishment or approval, transfer to/from another licensee or an unlicensed person, or termination, and of any material changes to information previously provided.
• Reporting: Licensees must submit an annual return and an annual statistical return to the Commission, and notify material changes to previously provided information as soon as reasonably practicable.
• Self assessment: Licensees should regularly assess compliance with the Rules and the effectiveness of their policies, procedures and controls, at least annually.
• Record keeping: Licensees must keep adequate records for each Scheme, including current and past Governing Documentation, meeting records, financial statements, actuarial valuations (for defined benefit schemes), statements of investment principles, contribution schedules, and member correspondence; records must be secure, readily available, and in English.
• Member access to documents: Scheme Members requesting documentation must be given specified documents within a reasonable time, subject to reasonable copying/delivery costs for hard copies.
• Service Providers: Licensees must keep records of Service Providers (administration, custody, financial advice, actuarial, audit), periodically review their suitability, competence and performance, and act if a provider is no longer competent; where a Service Provider is appointed by someone else, the licensee has related monitoring and notification duties.
• Information for new joiners: New Scheme Members (or, for occupational schemes, their employer) must receive a summary of key features and benefits, an explanation of rights and responsibilities, vesting rules, charge disclosures, opt out procedures, and complaints procedure details including CIFO contact information.
• Other substantive areas: Further Rules (not detailed here) address contributions, charges, provision of benefit information, transfers, statements of investment principles, and investment direction.

The Rules apply to all licensees in respect of all Schemes they form, manage, or administer, though the Commission may exclude or modify specific provisions for a licensee by written notice. Guidance notes accompanying the Rules are not binding but suggest ways to demonstrate compliance.

Key obligations

• Treat Scheme Members and beneficiaries fairly and pay due regard to their interests
• Ensure every Scheme has appropriate governance arrangements, clearly identified responsible persons, and internal controls
• Ensure the Scheme is constituted by detailed Governing Documentation (when acting as trustee) or retain necessary documentation (when acting as administrator)
• Notify the Commission within two months of a Scheme's establishment or approval, or completion of a transfer from an unlicensed person
• Notify the Commission within two months of completion of a transfer of a Scheme to another licensee
• Notify the Commission within two months of completion of a Scheme's termination or transfer to a person not licensed by the Commission
• Notify the Commission of material changes to previously provided information as soon as reasonably practicable
• Submit an annual return to the Commission within six months of the Scheme Year End
• Submit an annual statistical return as at 30 June, within two months of that date
• Perform a self-assessment of compliance and control effectiveness at least annually
• Keep adequate records for each Scheme, including Governing Documentation, meeting records, financial statements, and (for defined benefit schemes acting as trustee) actuarial valuations prepared at least every three years
• Maintain Scheme documentation securely, readily available, and in English
• Provide requested Scheme documents to Scheme Members within a reasonable time
• Maintain records of Service Providers, review their suitability, competence and performance periodically, and take action if a provider is no longer competent
• Provide new Scheme joiners (or their employer, for occupational schemes) with prescribed information on benefits, rights, charges, opt-out rights and complaints procedures including CIFO details

Applies to

licensees (holders of a fiduciary licence carrying on formation, management, or administration of pension or gratuity schemes), pension scheme trustees, pension scheme administrators, occupational pension schemes, Service Providers to Schemes

Deadlines

• within two months of establishment or approval of a Scheme, or completion of transfer from an unlicensed person: Notification of Scheme to the Commission
• within two months of completion of transfer of a Scheme to another licensee: Retiring licensee must notify the Commission
• within two months of completion of termination or transfer to a person not licensed by the Commission: Notification of Scheme termination/transfer to the Commission
• within six months of the Scheme Year End: Submission of annual return to the Commission
• within two months of 30 June: Submission of annual statistical return as at 30 June
• at least every three years: Actuarial valuations for defined benefit Schemes (when acting as trustee)
• 1 November 2021: Commencement of the Pension Scheme and Gratuity Scheme Rules 2021