UK BESA’s welfare benefit and pensions subsidiary, Welplan Ltd, is to close its master trust pension scheme.
The decision to close Welplan Pensions is said to come as a result of the Pensions Regulator’s new Master Trust Authorisation regime, which came into effect on April 1. BESA says the new regime has made pursuing authorisation cost-prohibitive for many small and medium-sized trusts.
“Following a strategic review, the Welplan Board concluded it was no longer viable to continue to support the Scheme in the long term and, therefore, it was necessary to commence withdrawal from the market,” BESA says on its website.
The association adds that the scheme, which has operated successfully in the H&V and associated industry sectors since 1988, will continue to operate until arrangements with a suitable alternative scheme is put in place.
Welplan anticipates that this process will take about five months and says it will continue to support its 1,900 employer pensions’ clients and 55,000 individual members until they can be transferred to the new provider.
“Closure has been a very difficult decision,” said Welplan chief executive Bruce Kirton. “We’ve been around since 1960 and have operated a multi-employer pension scheme since 1988 and our incredible team here in Penrith have always been and will remain committed to offering the best possible service and value to our employers and their employees.
“However, over recent months it has become increasingly clear that the new master trust regulatory environment is one that favours much larger scale. There is now no meaningful place for small or even medium-sized, specialist businesses like ours.”
He added that there was “considerable consolidation” taking place in the master trust pensions market with a number of schemes already being swallowed up by larger providers and, of the 90 master trusts currently in operation, only one has received authorisation and 24 have applied and are awaiting response from the Pensions Regulator. The remainder have either exited, triggered exit, yet to declare or have been granted an extension.
“We are going back to our roots and will focus on growing our long-standing employee benefits business which has a proud 60 year heritage. We have a loyal and skilled team at Welplan and will be doing everything we can to minimise redundancies within the team.” said Mr Kirton.