Implications of new money laundering regime for pension scheme trustees

• United Kingdom

• Pensions

07-07-2017

The Government has issued new money laundering regulations in order to implement the most recent EU money laundering directive into UK law by the deadline of 26 June 2017. Pension scheme trustees need to be aware of the regulations as they contain new obligations which apply to trusts in general (and may apply to pension schemes).

Money laundering is not a new issue. The UK already had money laundering regulations which imposed requirements on trustees conducting a business to register with HMRC. However, HMRC had issued guidance which said that it regarded occupational pension schemes as low risk trusts and registration was not therefore required, even in the case of professional trustees.

The new regulations contain additional requirements which could have implications for pension scheme trustees. Amongst other things, they require certain trustees to keep records in relation to the “beneficial owners” of their trust and, in certain circumstances, register with and provide information to HMRC.

The application of the regulations in relation to occupational pension schemes and how far pension scheme trustees will need to comply with these new obligations is far from clear. Significant industry discussions are ongoing with HMRC who have indicated that they intend to take a “pragmatic approach” and will provide further guidance in due course on how these new requirements will apply in practice.

We are monitoring the position and participating in these discussions through our connections with the Association of Pension Lawyers, the PLSA and other industry bodies. Once we have greater clarity on what is required, we will update you.