Action needed on Executive Pension Plans/One Member Arrangements

To meet with the new IORP II requirements, these arrangements must be wound up and their assets transferred to either the Zurich Master Trust (ZMT) or another suitable arrangement within a very tight timeframe.

The key deadline for you to be aware of is 5 May, this is the date that we require signed Participation Agreements to be returned to us – more details below.

There are two types of EPPs/OMAs for you to consider:

i. where Zurich Trustee Services Limited (ZTSL) is trustee (ZTSL EPPs) – this accounts for over 95% of impacted cases;

ii. where the Employer is Trustee (non-ZTSL EPPs) – this is a much smaller but still an important cohort of customers

(i) Executive Pension Plan – where ZTSL is trustee (ZTSL EPPs)

ZTSL, as trustee, made a formal commitment (with effect from 31 December 2022) to wind up and transfer these plans to our Master Trust or other arrangement. In March, ZTSL wrote to impacted employers confirming this intention, and that it must be completed by the end of June in order to comply with the new IORP regulations.

Next phase - a signed Participation Agreement must be returned

This week we are again writing to impacted employers and our letter will include a Zurich Master Trust Participation Agreement.

In order to join the Zurich Master Trust, this Participation Agreement must be completed and signed by the employer, and returned to Zurich by 5 May 2023 to avoid disruption to your customer’s pension planning.

If an employer signed Participation Agreement is not returned to Zurich by 5 May 2023 then it may not be possible to make further contributions to the EPP and it is likely that the EPP would be wound up and transferred to a Personal Retirement Bond (PRB).

To help speed up the transition process, we have created a dedicated mailbox and all completed Participation Agreements should be emailed (not posted) to onemembertransition@zurich.com. We will accept scanned or photo images of the signed agreement.

(ii) Executive Pension Plan - where the Employer is Trustee (non-ZTSL EPPs)

While this is a much smaller cohort of customers, you should note that there is a slightly different requirement for these.

As the Employer is trustee, there is a greater responsibility on the member and employer to take action.  In relation to these EPPs, Zurich wrote to impacted employers in December 2022 asking the Employer, as Trustee, to confirm their intention to wind up schemes before 30 June 2023.

The deadline for all non-ZTSL EPPs to be wound up and the assets transferred is six months from the date the employer made its formal commitment. This date will be 30 June 2023 if the commitment was made on 30 December or 31 December 2022.

How will non-ZTSL EPPs be wound up? 

The wind up of these schemes must be initiated by direction of the member to the employer as trustee. In this situation, Zurich will shortly be issuing a notification document to the member for signing to commence the wind up process. Thereafter further documentation, including a Participation Agreement (pre-populated for convenience) will need to be signed and returned by the Employer.

Impact on charges and commission

There will be no impact on charges on cases transferred to the Zurich Master Trust. Any surrender penalties will not be applied on the transfer but will continue – in line with the current contracts – on the value of any assets transferred. Surrender Penalties will not apply to any new contributions within the Zurich Master Trust.

There will be no impact on commissions for cases which transfer to the Zurich Master Trust.

If you have any questions about the action required on Executive Pension Plans / One Member Arrangements, please don’t hesitate to contact your Zurich Broker Consultant.