HMRC’s annual deadline of 31 January for many things tax-related has been a useful reminder that registered pension schemes are required to move over from HMRC’s Pension Schemes Online platform to HMRC’s new Managing Pension Schemes (MPS) service. HMRC refers to this process as migration.
Some Background
HMRC launched the MPS service in 2018. HMRC newsletters since then have made clear that all registered pension schemes would be required to migrate onto the MPS service in due course. Some pension schemes have still not migrated over. For the most part, this has been because there has been no urgency, and no immediate need to migrate. If a scheme did not have an event report to submit, it seemed reasonable to query the need to deal with migration when there are so many other pressing issues for pension trustees to be tackling.
However, given that those schemes that remain on the old Pension Schemes Online platform will eventually be de-registered, and potentially suffer a consequent 55% tax charge, it is not a matter of if a scheme migrates, but when. And it can take some time to carry out the migration process. If you have not already done so, now would be the time to get started, if only so that you have some idea of the scale of what is required and can plan accordingly.
For some schemes, the migration process is proving a challenge. If you are thinking that your scheme administrators will be dealing with this on your behalf, please think again. Only those persons registered as the “Scheme Administrator” (SA) on HMRC’s Pension Schemes Online platform can initiate the migration process. The SA for these purposes is not your third-party administrator, which HMRC calls a “scheme practitioner”. The SA is usually one or more of the pension scheme trustees.
Are You Ready to Migrate?
There are three key steps that you will need to take (with several sub-steps) to migrate onto the MPS service. Hopefully this blog will prove helpful but if you find that you end up going down a different route to the steps set out here, that might be ok too! The steps below should at least give you an overview of what is required.
Step One – Access your Pension Schemes Online Account
This will involve several sub-steps.
Step 1.1 – Identify the SA for your pension scheme
For schemes registered before 6 April 2006, the SA was usually the pension provider or, in the case of an occupational pension scheme, one or more trustees. For schemes registered on and after 6 April 2006, the SA is whoever has been appointed the SA in the pension scheme’s trust deed and rules. Again, however, this is usually one or more of the trustees.
Another point to note is that from 6 April this year, the person who is registered as the SA must be UK resident. If anyone is registered as an SA who is not UK resident, they must cease to act before 6 April. If they are the sole SA, they must first associate a different person who is UK resident (usually another trustee) as SA before ceasing to act.
If there is a corporate trustee, the corporate trustee itself can be registered as the SA.
If you know who is the SA, but they can’t remember their scheme administrator ID, they will need to contact HMRC to recover their ID. This will be sent in the post to the address that the SA registered when they first became the SA. That in itself can prove a challenge for two reasons: (a) remembering which address was used and (b) still having physical access to that address.
If the SA does have their ID number, but has not logged on to the Pension Schemes Online platform in the last three years, their Government Gateway details (needed to access the service) will have been deleted, meaning access will be denied. HMRC will still hold their pension scheme administrator ID and registration details, but they will need to be recovered. The ‘how to recover your enrolment details’ section of the Manage a registered pension scheme guide provides more information.
Step 1.2 – Appoint a new SA if you cannot identify the existing SA
What if you don’t know who the SA is? This isn’t as silly as it sounds. Someone (usually a trustee) will have been registered as being the SA when the pension scheme was first established and registered with HMRC. After registration though, it is unlikely that the SA would have ever needed to log back into the system because the actual third-party administrator (called a “scheme practitioner” on HMRC’s online platforms) would have dealt with any submissions that needed to be made on the Pension Schemes Online service. The SA may have been designated as much as 30 or 40 years ago and may have moved away or even have sadly passed away. Even if a person only became the SA in the last ten years, there is a good chance they would not be able to remember their Government Gateway ID and password, and/or their scheme administrator ID (in which case, see above).
If the original SA is no longer available, or known, one of the existing trustees, who is UK resident, should register as a scheme administrator (assuming another person is not designated as the SA under the trust deed and rules – this should be checked). At this stage, the trustee will be registering as an SA on the Pension Schemes Online platform. Registration on the MPS service is a separate stage.
The trustee being appointed to the SA role will need to complete a declaration that they understand they are responsible for carrying out the functions and responsibilities of the SA, are a fit and proper person, intend to carry out these functions and responsibilities of the SA at all times and understand that they may be liable to a penalty or prosecution if they make a false statement.
Step 1.3 – Become registered as the SA for your pension scheme
Ordinarily, the original SA would associate a new SA for a pension scheme using the Pension Schemes Online service. However, where the original SA is not known, or contactable, that is clearly not possible. The new SA (once they have been formally registered as an SA with an ID number) should contact HMRC to explain that the original SA is unknown/uncontactable/deceased and ask if HMRC will associate them as an SA for the pension scheme directly onto the Pension Schemes Online service. If HMRC agrees to do this, the trustee will need to provide the original definitive deed establishing the pension scheme, their deed of appointment as a trustee, the pension scheme’s PSTR number and their new scheme administrator ID.
Step 1.4 – Access the Pension Schemes Online service
The existing SA (if there is one), or the new SA once registered as the SA for the pension scheme, must physically access their Pension Schemes Online account using their government gateway ID and password that is associated with their scheme administrator ID.
Click on “Pension Scheme for Administrators Product” and then “view all pension schemes”. Your pension scheme name should appear in the list.
Step Two – Register as an SA on the MPS Service
Next, register as an SA on the MPS service:
- Log into the government gateway account associated with the scheme administrator ID used on the Pension Schemes Online service.
- Select ‘get online access to a tax, duty or scheme’.
- Select ‘Other taxes or schemes’.
- Select ‘Manage and register pension schemes’.
- Select ‘register as an administrator or recover your administrator details’
The registration process will involve providing name, residential address, date of birth, national insurance number, unique tax reference number, email and phone number. The SA will be required to declare that they understand they are responsible for carrying out the functions and responsibilities of the SA, are a fit and proper person, intend to carry out these functions and responsibilities of the SA at all times and understand that they may be liable to a penalty or prosecution if they make a false statement.
Step Three – Initiate Migration!
Once registered on the MPS service, the SA should log into the service and start the migration process. This is done by clicking “Add pension schemes registered on the Pension Schemes Online service”. The name of your pension scheme should appear here. Click on this and start the migration process.
The migration process involves inputting lots of data. It covers questions about the scheme such as type of benefits, whether the scheme is open or closed, whether there are any insurance contracts or annuities, the number of active, deferred and pensioner members, and whether the scheme is investment regulated (more on that below).
The next block of questions relates to the sponsoring employer and any participating employers (name, registered office, company number, VAT number, PAYE number, unique tax reference number). You only need to include current employers here and not historic ones. This block also requires the personal data of all directors of each employer (name, date of birth, residential address, national insurance number, unique tax reference number, email, phone number).
The final block of questions relates to the personal data of all trustees (again, name, date of birth, residential address, national insurance number, unique tax reference number, email, phone number). It is no small feat collecting all of this data if you have a few directors and trustees to liaise with.
One question to watch out for during the migration process is whether the pension scheme is investment regulated. The MPS service does not provide a definition of “investment regulated”, but this is a term generally used by HMRC and also in the Finance Act 2004 for a scheme where there are consequences if it invests in “taxable property” (primarily residential property) and tangible moveable property (like artwork). The term usually captures SIPPs, where a member is directing the investment and it is there to prevent the member from, say, using their pension fund to buy their own house, or tangible property which can’t be easily realised to pay pension. Further information is provided in the pensions tax manual. For some reason, many pension schemes that migrate onto the MPS service are classified by HMRC as investment regulated when they are not. It is not possible to change this in the MPS service, so you would need to contact HMRC to make that change.
Once all data is inputted into the MPS service, there will be another declaration to complete. This includes confirmation that the SA is a fit and proper person with a working knowledge of pensions and the SA duties and liabilities.
And then you are done! You should be able to click back to your home page on the MPS service, click into “view your pension schemes” and see your pension scheme listed there.
And Finally
Once you have migrated your pension scheme onto the MPS service, it would be sensible to associate your third-party scheme administrator as a “practitioner”. You can do this by clicking on “view your pension schemes”, then the pension scheme name and then “authorise a scheme practitioner”. You just need the name that your third-party administrator uses on the platform, along with their scheme practitioner ID.
We would like to say that you won’t then need to log into the system for another 20 years but unfortunately that is not the case. You will have taken on specific responsibilities and obligations by registering as the SA. It is therefore a good idea to log into the MPS service on a regular basis so that (a) you don’t lose access and (b) you can keep an eye on anything that needs picking up and dealing with, for example that first notice to file a scheme return for 2024/25 (which is likely to be requested once a new scheme migrates onto the MPS service).
The whole process from start to finish can take some time, especially if you need help from HMRC who might send out some items (such as scheme administrator ID) in the post, as an extra security measure. However, the process is not impossible.
So, are you ready to migrate?
