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SUP 16 Annex 43B Guidance notes for completion of the Retirement income flow data return (‘REP015’) and the Retirement income stock and withdrawals flow data return (‘REP016’)

Annex 43BG

1This annex consists only of guidance notes for form REP015 and form REP016.

Introduction

1. These notes aim to assist firms in completing and submitting the Retirement income flow data return (‘REP015’) and the Retirement income stock and withdrawals flow data return (‘REP016’).

Defined terms

2. Handbook Glossary terms are italicised in these notes.

Key abbreviations

3. The following table summarises the key abbreviations used in these notes::

AUA

assets under administration

DB

defined benefit

DC

defined contribution

EBC

employee benefit consultant

HMRC

HM Revenue & Customs

LTA

lifetime allowance

PCLS

pension commencement lump sum

PIPs

pension investment plans

REP015

Retirement income flow data return

REP016

Retirement income stock and withdrawals flow data return

SIPP

self-invested personal pension

TIPs

trustee investment plans

UFPLS

uncrystallised funds pension lump sum

Data requested

4. We are asking for data on all UK defined contribution (DC) pension plans held in a personal pension scheme or stakeholder pension scheme, or in a defined contribution occupational pension scheme (including small self-administered schemes (SSASs) and Executive Pension Plans (EPPs)), where the firm is the scheme’s pension provider and/or the retirement income provider. We are also asking for data on pension annuities.

5. This includes DC and money purchase plans that provide a guaranteed income benefit – whether this is in the form of a deferred annuity or guaranteed annuity rate. Plans with guaranteed income benefits that are covered by this return include (but are not limited to):

  1. (a) plans that are a result of an individual or bulk transfer from a defined benefit (DB) scheme; and

  2. (b) plans with guaranteed benefits as a result of contracting out (i.e. plans with guaranteed minimum pension or equivalent pension benefits). Examples of such contracts include ‘section 32 buyout plans’, retirement annuity contracts (often known as a ‘section 226 pension’ or ‘section 620 pension’), executive pension plans and bulk purchase annuities.

6. DB pensions and pension assets that are managed on behalf of third parties (such as trustee investment plans (TIPs) that are managed on behalf of DB or DC schemes, and pension investment plans (PIPs) that are managed on behalf of SIPPs) should not be included.

Group level data

7. Where firms are part of a group, requests should be completed at group level, giving information for all FCA regulated firms who have provided pension annuities within the relevant reporting period and/or pension scheme operators. This will involve aggregating various sources of management information in to a single group-level figure; however, we believe this is the best method to provide a basis for trend analysis across the market.

Identifying the ‘retirement income provider’

8. Data on retirement income plans should be submitted by the retirement income product provider. In the case of drawdown plans opened by existing plan holders, the originating pension provider is the retirement income provider, and therefore should submit the data. This includes the scenario where the transition to drawdown happened within the same pension scheme. In the case of annuities, it is only the annuity provider who should submit data on plans being used to purchase annuities.

9. Where white labelling or other third party arrangements exist between a firm such as a pension provider (or other third party) that does not itself provide retirement products and another firm, it is the firm providing retirement income products on its behalf that is considered to be the retirement income provider, and who should therefore report data in respect of all plan holder actions including entering drawdown, taking an uncrystallised funds pension lump sum (UFPLS) and purchasing an annuity.

10. Where outsourcing arrangements exist between a retirement income provider and a third party administrator, the retirement income provider should report the requested data.

11. Where a third party arrangement (see examples below) exists between a retirement income provider and a pension provider, the retirement income provider should report all of the plan holder actions, i.e. entrants to drawdown and annuity purchases.

Example 1 – single tie arrangements

12. A mutual society (pension provider) has pension plan holders but does not provide annuities itself. Instead, it has a single firm arrangement with a life company which provides annuities. Under this arrangement, plan holders of the pension provider who want to purchase an annuity are referred to the life company. In this scenario, the life company providing annuities is considered to be the retirement income provider, and should report this data.

Example 2 – panel arrangements

13. A trust-based pension scheme uses an employee benefit consultant (EBC) to advise on their scheme retirement options. The trust-based scheme does not provide drawdown or annuities to its members, and the EBC offers a panel of life companies or other annuity providers which provide drawdown and annuities. The relevant life company or annuity provider should report the data as the retirement income provider.

Example 3 – white labelling

14. A pension provider offers annuities to its plan holders which it does not provide itself: the annuities are in fact provided by a third party life company through a white labelling arrangement. Plan holders wishing to purchase an annuity are referred to the life company, as part of a single-firm third party arrangement. In this scenario, the third party life company is considered to be the retirement income provider, and should report the data in respect of these annuities.

Example 4 – white labelling

15. A SIPP operator white labels their SIPP plan, which includes drawdown facilities, to a third party. The SIPP operator, rather than the third party, is the retirement income provider, and so should report all sales under such white labelling as ‘single-provider third party arrangement’.

Format of responses

16. All figures in REP015 and REP016 should be entered in single units; these returns do not ask for any data to be reported in units of thousands or millions. Figures required in pounds sterling should be reported to two decimal places.

17. REP015 and REP016 both have one optional question at the end where the firm can enter a text-based response. Firms should use this question to provide any additional information that might help explain any of the answers provided in the return.

18. While for ease of explanation this guidance sometimes refers to plan holders, firms should respond on the basis of each individual policy or plan. We do not want firms to submit data at a plan holder level where a plan holder holds more than one plan. However, where a number of arrangements have been set up for one individual within a scheme, these arrangements should be reported as one plan. Plans should be reported regardless of whether they are held by the original plan holder or by a beneficiary.

NOTES FOR COMPLETION OF THE RETIREMENT INCOME FLOW DATA RETURN (‘REP015’) AND THE RETIREMENT INCOME STOCK AND WITHDRAWALS FLOW DATA RETURN (‘REP016’)

Section A Notes for completion of REP015

The following notes do not cover all questions in REP015, but only those questions where we considered guidance would assist firms in completing the return.

Part 1 – activity during the reporting period (questions 4 to 11)

Firms should answer all questions in this part.

Q4: How many plans were transferred away to another provider by plan holders aged 55 and over who had not yet accessed their benefits?

Include all plans that were transferred away to another provider during the reporting period (i.e. exits) by plan holders aged 55 and over, who had not yet accessed any benefits (i.e. not taken any UFPLS payments or crystallised any of their plan). Include plans where the Open Market Option is being exercised (i.e. a PCLS is being paid and an annuity is being purchased from another provider). Deaths of plan holders meeting these criteria should be excluded.

We understand that where a plan has in the past been transferred in from a previous provider, the current provider may not always be aware if a UFPLS had been taken prior to that transfer. Such plans should be reported here unless the current provider is aware that the plan was previously accessed.

Q5: How many plans were transferred away to another provider by plan holders aged 55 and over who had already accessed their benefits (by crystallising some or all of their assets or taking an uncrystallised funds pension lump sum (UFPLS))?

Include all plans that were transferred to other providers during the reporting period by plan holders aged 55 and over who had already accessed their benefits by crystallising some or all of the assets (entering drawdown), by using some assets to purchase an annuity, or by taking one or more UFPLS from their plan at any time (i.e. whether or not such access took place during the reporting period or prior to it). Deaths of plan holders meeting these criteria should be excluded.

We understand that where a plan has in the past been transferred in from a previous provider, the current provider may not always be aware if a UFPLS had been taken prior to that transfer. Plans should not be reported here unless the current provider has been made aware that the plan was previously accessed.

Q6: How many defined benefit (DB) to defined contribution (DC) transfers have you completed?

Report the number of DB to DC transfers in that have taken place during the reporting period. This should be DB to DC transfers only, and pension transfers with other safeguarded benefits should not be included. Section 32 buyout policies should also be excluded.

The data required here is different to the data required under the Product Sales Data Return on pension transfers.

Q7: What was the total value withdrawn via Pension Commencement Lump Sum (PCLS) for all plans? (£)

Report the total value of all PCLS (tax free cash) taken by plan holders who have, during the reporting period, taken a PCLS. Report all plans that have taken any PCLS, including those that have also taken an income via drawdown, purchased an annuity, or transferred away. Only include the value of the PCLS, and not any of the taxable income withdrawn.

This should be reported in pounds sterling and single units.

Q8: What was the total number of plans that were fully encashed via small pot lump sums, UFPLS or drawdown?

Report the number of plans that have had all funds withdrawn during the reporting period (i.e. where plans close with nil value), regardless of when the plan was first set up or when the plan holder first accessed their plan.

Include all plans that have been fully withdrawn (extinguished) by a small pot lump sum, UFPLS or drawdown, and plans that were fully withdrawn in one payment or in multiple payments during the period.

Note: we do not expect any plans with an amount remaining at the end of the reporting period to be captured here, unless it is a de minimis amount (e.g. £1) that has been left in order to avoid paying an account closure fee.

Q9: What was the total amount withdrawn this period from the fully encashed plans reported in question 8? (£)

Report the total amount withdrawn during this reporting period from those fully encashed plans reported in question 8; by either small pot lump sums, UFPLS or drawdown. Include all withdrawals made from these plans in the reporting period. This figure should be reported in pounds sterling and single units.

Part 2 – Breakdown of activity by plan holders accessing their pension plans during the reporting period

Value of assets under administration in plans accessed during the reporting period (questions 10 to 13)

Questions 10 to 13 should be completed by all firms.

Please note that the reporting requirements vary between questions:

• For questions 10 and 11, firms should include data relating to all plan holders who enter drawdown or purchase an annuity for the first time, regardless of whether the plan has previously been accessed in other ways.

• For questions 12 and 13, firms should only include data relating to plan holders who have not accessed their plans prior to this reporting period.

The figures should be reported in pounds sterling and single units.

Q10: What was the total value for assets under administration (AUA) of plans that entered drawdown? Value should be after any PCLS but before any income withdrawn (£).

Drawdown assets should only be reported by the provider of the drawdown plan.

Report the total value of assets in plans of all plan holders who enter drawdown for the first time in the reporting period and who do not withdraw all their assets. Include instances where the transition to drawdown happened within the same pension scheme. Include both the value of the crystallised assets and any remaining uncrystallised assets in the plans. The value should be after any PCLS but before any income withdrawn.

It should INCLUDE plans held by plan holders who:

• enter drawdown for the first time, crystallise 100% of their plan, and withdraw part (but not all) of their crystallised assets; or

• enter drawdown for the first time and crystallise only a part of their pension plan, leaving at least some crystallised and/or uncrystallised funds invested; or

• enter drawdown for the first time, crystallise 100% of their plan, taking their PCLS but taking no income; and/or

• enter drawdown for the first time, but have previously accessed their plan by using part of it to take a UFPLS or purchase an annuity.

It should EXCLUDE plan holders who:

• at the start of the relevant reporting period already have part uncrystallised and part crystallised plans which are in drawdown, but crystallise a new portion of their assets in the relevant reporting period, as they are not new entrants to drawdown;

• at the start of the relevant reporting period are already in drawdown and, although not drawing an income, partially crystallise additional assets and therefore may get a new ‘slice’ of tax free cash, as they are not new entrants to drawdown; and/or

• access their plan for the first time and take all of their benefits during the period. (These plan holders should be reported in question 15.)

If the answer to this question is £0, then questions 14 – 29 can be left blank.

Q11: For annuity providers only, what was the total value of AUA for plans that were used to purchase annuities? Value should be after any PCLS but before annuity purchase (£).

This question should be completed by the annuity provider only.

Report the total value of the assets in plans where the plan holder purchased an annuity during the reporting period. The value should be after any PCLS but before annuity purchase.

Firms should not include the value of any plans used to purchase products that are reported to HM Revenue & Customs (HMRC) under drawdown rules (e.g. products that are marketed as annuities but which are actually crystallised assets in drawdown). The value of plans used to purchase these products should be reported in question 10.

Do not include values where a plan holder starts receiving annuity payments in place of a DB pension that was already in payment (e.g. DB pensions transferred to an annuity as a result of a scheme buyout).

However, firms should include values where DB scheme benefits that were not in payment were transferred to your firm and a plan holder then chose to take up an annuity (e.g. a section 32 plan holder who bought a lifetime annuity).

If the answer to this question is £0, then questions 30 – 53 can be left blank.

Q12: What was the total value of AUA for plans that were accessed for the first time by taking a partial UFPLS? Value should be before any partial UFPLS withdrawals (£).

Report the total value of assets in plans held by plan holders who accessed their plan for the first time by taking a partial UFPLS payment during the reporting period.

The total value should include the value of all uncrystallised assets before the first UFPLS withdrawal.

Do not include plans that have already been accessed by the plan holder prior to the start of the reporting period (e.g. by partially crystallising the plan or by taking an earlier UFPLS payment).

We understand that where a plan has in the past been transferred in from a previous provider, the current provider may not be aware if a UFPLS had been taken prior to that transfer. Only exclude such plans if you have been made aware that the plan was previously accessed.

If the answer to this question is £0, then questions 54 – 60 can be left blank.

Q13: What was the total value withdrawn from plans that were accessed for the first time and fully encashed via small pot lump sums, UFPLS or drawdown? Value should be gross, i.e. include both tax free and taxable portions (£).

Report the gross amount of all the withdrawals made during this reporting period by plan holders who accessed their plan for the first time and fully encashed it by the end of the period.

It should include both tax free and taxable portions. It should include plan holders who fully withdraw their plan in one payment, or in multiple payments, as long as all payments were made in the same reporting period.

Do not include plans that have already been accessed by the plan holder prior to the start of the reporting period (e.g. by partially crystallising the plan or by taking an earlier UFPLS payment).

We understand that where a plan has in the past been transferred in from a previous provider, the current provider may not be aware if a UFPLS had been taken prior to that transfer. Only exclude such plans if you have been made aware that the plan was previously accessed.

[Note: we do not expect any plans with an amount remaining at the end of the period to be captured here, unless it is a minimal amount (e.g. £1) that has been left in order to avoid paying an account closure fee.]

If the answer to this question is £0, then questions 61 – 68 can be left blank.

The remainder of Part 2 of REP015 is separated into four sections: on entering drawdown, purchasing annuities, taking UFPLS, and taking full encashments. Only those firms that responded in questions 10 to 13 confirming these activities took place during the reporting period should complete the subsequent relevant questions.

Plan holders that entered drawdown during the reporting period but did not fully exhaust their plan (questions 14-29)

This captures all new entrants to drawdown in the reporting period who did not withdraw all their assets. If firms report any value of drawdown sales greater than zero under question 10 they should complete questions 14 to 29; other firms may leave these questions blank.

When completing the return, firms should report plans in the appropriate column for the pot size band that reflects the amount of AUA in the plan after any PCLS but before any income withdrawal.

Q14: What was the total number of plans that entered drawdown during the reporting period by crystallised pot size?

The notes to question 10 provide more information about which plans should be included for this question.

Plans should be reported under the pot size band that reflects the amount of AUA in the plan after any PCLS but before any income withdrawal (i.e. the pot size when the plan holder entered drawdown).

Q15 – Q19: Number of plans by plan holder age band and crystallised pot size

Questions 15 to 19 ask for the figures reported in question 14 to be broken down into age bands.

Firms may report plans according to either the age of the plan holder at the end of the reporting period, or the age of the plan holder at the point the plan entered drawdown.

Q20 – Q23: Number of plans by distribution channel and crystallised pot size

Distribution should be reported under the following categories:

• ‘Existing plan holders’, i.e. existing accumulation pension/internal vesting plan holders.

• ‘New plan holders via single firm third party arrangement’, i.e. plan holders whose accumulation pension is with a third party pension provider for whom the reporting firm is a sole provider for a retirement income product.

• ‘New plan holders via multi-firm third party arrangements’, i.e. panel arrangements where the reporting firm receives business from a third party pension provider as a result of a restricted retirement income product panel.

• ‘New plan holders’, i.e. transfers in not from third party arrangements and which do not relate to any third party arrangement. Benefits may be purchased by an Open Market Option or transfer (including immediate vesting).

Distribution figures should be reported by the retirement income product provider. In the case of arrangements for drawdown to existing plan holders this means the originating pension provider should report the sales as the ‘retirement income provider’. This includes a situation where the transition to drawdown happened within the same pension scheme.

Where third party arrangements exist between a retirement income provider and a pension provider, the retirement income provider should report all of the plan holder actions, i.e. entrants to drawdown and annuity purchases.

All new plan holders received through panels and bureaux should be reported as through multi-firm third party arrangements. This includes panels that are part of intermediary firms.

Where third party arrangements exist between a retirement income provider and a pension provider, the retirement income provider should report all of the plan holder actions, i.e. entrants to drawdown and annuity purchases.

The examples in the Introduction to these guidance notes help clarify which firms should be reporting third party sales.

Q24: Number of plans by use of advice and crystallised pot size: number that were advised

Of the plans reported as entering drawdown in question 14, report how many of the plan holders were advised at the point of entering drawdown.

COBS 19.7.19 requires firms to record whether the retail client has received regulated advice and risk warnings when they contact the firm about accessing their pension. Report the number of plan holders who informed your firm they received advice at this point.

Q25: Number of plans by use of advice and crystallised pot size: number that were not advised but took up pensions guidance (e.g. Pension Wise)

Of the plans reported as entering drawdown in question 14, report how many of the plan holders who were not advised at the point of entering drawdown stated that they used Pension Wise.

COBS 19.7.8R and COBS 19.7.19R require firms to ask whether the retail client has received pensions guidance when they contact the firm about accessing their pension, and for firms to keep a record of the response. Firms should report plan holders who informed the firm they received guidance (but not advice) at this point.

Q26 – Q28: Number of plans by packaged product options and crystallised pot size

Of the plans reported as entering drawdown in question 14, report how many have the relevant packaged product attributes stated in questions 26 to 28.

Fixed term annuities, variable annuities and ‘retirement account’ products (e.g. where guarantees on investments or funds structured through TIPs pay income back into the drawdown account) should be reported in these questions.

Question 26 ‘Capital guarantee for part or all of assets’ captures all fixed term annuity products. These products may pay out an income that is set at the outset, but this income will not rise over the term.

Fixed term annuities should not be reported under question 27 ‘Income guarantee for all or part of assets”. Question 27 is intended to capture unit-linked income guarantees in drawdown that have the potential to increase over the term, e.g. variable annuities and some of the new retirement account TIPs.

Q29: What was the total number of plans where only a PCLS was taken by crystallised pot size?

Of the plans reported as entering drawdown in question 14, report the number of ‘zero income’ plans where funds were crystallised and PCLS taken, but no taxable drawdown income has been taken.

Pension annuities purchased during the reporting period (questions 30 to 53)

Please do not report new products marketed as annuities but which are actually crystallised assets in drawdown and therefore reported to HMRC under drawdown rules.

Please do not include cases where a plan holder starts receiving annuity payments in place of a DB pension that was already in payment (e.g. DB pension benefits transferred to an annuity as a result of a scheme buyout).

However, please do include cases where DB pension benefits that were not in payment were transferred to your firm and a plan holder then chose to take up an annuity (e.g. a section 32 plan holder who bought a lifetime annuity).

When completing the return, firms should report annuity sales under the pot size band that reflects the amount of AUA in the plan after any PCLS but before annuity purchase.

Q30: What was the total number of pension annuities purchased during the reporting period by pot size?

The guidance to question 11 provides more information about which plan holders should be included for this question.

Annuity purchases should be reported under the pot size band that reflects the amount of AUA in the plan after any PCLS but before annuity purchase.

Q31 – Q35: Number of pension annuities by plan holder age band and pot size

Questions 31 to 35 ask for all the annuity purchases reported in question 30 to be broken down into age bands of the plan holder.

Firms may report plans according to either the age of the plan holder at the end of the reporting period, or the age of the plan holder at the point the annuity was purchased.

Q36 – Q39: Number of pension annuities purchased by distribution channel and pot size

Questions 36 to 39 ask for all the annuity purchases reported in question 30 to be broken down into the distribution channel, (such as via a single firm third party arrangement or multi-firm third party arrangements) used to sell the product.

The guidance to questions 20 to 23 provides more information about how this data should be reported.

Q40: Number of pension annuities by use of advice and pot size: number that were advised

Of the annuity purchases reported in question 30, report how many plan holders were advised at the point of purchasing the annuity.

COBS 19.7.19 requires firms to record whether the retail client has received regulated advice and risk warnings when they contact the firm about accessing their pension. Firms should report plan holders who informed your firm they received advice at this point.

Q41: Number of pension annuities by use of advice and pot size: number that were not advised but took up pensions guidance (e.g. Pension Wise)

Of the annuity purchases reported in question 30, report how many of the plan holders who did not receive advice stated that they used Pension Wise.

COBS 19.7.8R and COBS 19.7.19R require firms to ask whether the retail client has received pensions guidance when they contact the firm about accessing their pension, and for firms to keep a record of the response. Firms should report plan holders who informed the firm they received guidance (but not advice) at this point.

Q42 – Q53: Number of pension annuities by product types/options and pot size

Questions 42 to 53 ask for data on the product features of the annuity purchases reported in question 30.

The annuity features and options in these questions are not mutually exclusive and one annuity sale could therefore be reported under more than one of these questions (e.g. a single-life escalating annuity would be reported under both questions 49 and 52).

In this return, we mean ‘enhanced annuities’ (question 42) to be only those underwritten on impaired life or lifestyle factors, e.g. smoking. This should not include annuities solely underwritten on other factors, e.g. occupation or postcode details.

We mean ‘flexible annuities’ (question 53) to be those that change shape (e.g. ‘U’, ‘J’ or ‘L’ shaped annuities) and which have only become available since 6 April 2015. These flexible annuities may include features such as:

• provision to take a lump sum in future;

• a taxed lump sum at outset;

• reduced income after a specified period, or at a particular age, such as at State Pension Age, or provision for this; and/or

• increased income after a specified period, or at a particular age or event, such as on identification of a care need, or provision for this.

Only report investment-linked annuities as flexible annuities (in question 53) if they follow a structure that only became allowable since the April 2015 changes.

Plan holders who accessed their plan for the first time by taking a partial UFPLS payment (questions 54 to 60)

Plans which are accessed for the first time by taking a first UFPLS payment in the reporting period should be reported, but only where they have assets remaining at the end of the period, i.e. they have taken partial UFPLS with the first payment during the reporting period.

Do not include plans that have already been accessed by the plan holder prior to the start of the reporting period (e.g. by partially crystallising the plan or by taking an earlier UFPLS payment).

These questions capture the numbers of those plan holders that have taken an UFPLS withdrawal and not the numbers with access to UFPLS.

Plans should be reported under the pot size band that reflects the amount of uncrystallised AUA in that plan prior to the first UFPLS withdrawal.

Q54: What was the total number of plans where plan holders accessed their plan for the first time by taking partial UFPLS payments during the reporting period by uncrystallised pot size?

The guidance to question 12 provides more information about which plans should be reported for this question.

Plans should be reported under the pot size band that reflects the amount of uncrystallised AUA in the plan prior to the first UFPLS withdrawal.

Q55 – Q58: Number of plans by plan holder age band and uncrystallised pot size

Questions 55 to 58 ask for the plans reported in question 54 to be broken down by the age band of the plan holder.

Firms may report plans according to either the age of the plan holder at the end of the reporting period, or the age of the plan holder at the point the UFPLS was paid from the plan.

Q59: Number of plans by use of advice and uncrystallised pot size: number that were advised

Of the plans reported in question 54, report how many plan holders were advised at the point of accessing their benefits.

COBS 19.7.19 requires firms to record whether the retail client has received regulated advice and risk warnings when they contact the firm about accessing their pension. Firms should report plan holders who informed the firm they received advice at this point.

Q60: Number of plans by use of advice and uncrystallised pot size: number that were not advised but took up pensions guidance (e.g. Pension Wise)

Of the plans reported in question 54, report how many of the plan holders who did not receive advice stated that they used Pension Wise.

COBS 19.7.8R and COBS 19.7.19R require firms to ask whether the retail client has received pensions guidance when they contact the firm about accessing their pension, and for firms to keep a record of the response. Firms should report plan holders who informed the firm they received guidance (but not advice) at this point.

Full encashments made by plan holders who accessed their plans for the first time (questions 61 to 68)

Firms should report plans where the plan holder withdrew all their funds in the reporting period, but had not previously accessed their plan. This includes plan holders who fully withdrew their funds in one or more payments (as long as all payments were made in the same reporting period).

Do not include plans that have already been accessed by the plan holder prior to the start of the reporting period (e.g. by partially crystallising the funds or by taking an earlier UFPLS payment).

Do not report any plans with an amount remaining at the end of the reporting period here, unless it is a minimal amount (e.g. £1) that has been left in order to avoid paying an account closure fee.

Plans should be reported under the pot size band that reflects the amount of uncrystallised AUA in the plan prior to the first withdrawal in the reporting period.

Q61: What was the total number of full encashments by plan holders who accessed their plan for first time (via small pot lump sums, UFPLS or drawdown) by pot size?

The notes to question 13 provide more information about which plan holders should be included for this question.

Plans should be reported under the pot size band that reflects the amount of uncrystallised AUA in the plan prior to the first withdrawal in the reporting period.

Q62 – Q66: Number of full encashments by plan holder age band and uncrystallised pot size

Questions 62 to 66 ask for the full encashments reported in question 61 to be broken down into age bands.

Firms may report plans according to either the age of the plan holder at the end of the reporting period, or the age of the plan holder at the point the plan was fully encashed.

Q67: Number of full encashments by use of advice and pot size: number that were advised

Of the full encashments reported in question 61, report how many were made by plan holders who were advised at the point of accessing their benefits.

COBS 19.7.19 requires firms to record whether the retail client has received regulated advice and risk warnings when they contact the firm about accessing their pension and receive the risk warnings. Firms should report plan holders who informed the firm they received advice at this point.

Q68: Number of full encashments by use of advice and pot size: number that were not advised but took up pensions guidance (e.g. Pension Wise)

Of the full encashments reported in question 61, report how many of the plan holders who did not receive advice stated that they used Pension Wise.

COBS 19.7.8R and COBS 19.7.19R require firms to ask whether the retail client has received pensions guidance when they contact the firm about accessing their pension, and for firms to keep a record of the response. Firms should report plan holders who informed the firm they received guidance (but not advice) at this point.

Section B Notes for completion of REP016

The following notes do not cover all questions in REP016, only those questions where we considered guidance would assist firms in completing the return.

Part 1 – Retirement income stock data (questions 4 to 16)

This section captures the group’s pension and retirement income books in aggregate as at the end of the period being reported. Where questions ask for plans or assets to be reported by the age of the plan holder, it is the age at the end of the reporting period that is relevant.

Questions 4 to 12 are split so that firms provide separate figures depending on whether the figure reported relates to a trust-based scheme or a contract-based scheme:

Firms should report all personal and stakeholder pensions as contract-based schemes, including SIPPs written under trust.

• Only DC occupational money purchase schemes should be reported as trust-based schemes. For unitised with-profits business, firms should report the policy fund value.

For traditional or conventional with-profits business, firms should report the asset share or other appropriate available value.

Providers should report asset values for all single arrangement SIPPs where individual investments are not allocated between uncrystallised or crystallised investments. All such assets should be split across the uncrystallised and crystallised questions (4 to12) using either unitised holdings split between plan members or percentage lifetime allowance (LTA) calculations that exist for the single arrangement SIPP.

Uncrystallised stock data (questions 4 to 8)

This section captures plans with uncrystallised assets only. Firms should not include crystallised plans in schemes with retirement ages below 55.

Do not include plans that are partially crystallised in this section (they are captured in the next section). Plans that are in phased drawdown should not be included in this section.

Q4: How many defined contribution (DC) pension plans do you have in accumulation where the plan holder is aged 55 or over and has not accessed their pension?

This captures plans where the plan holder is aged 55 and over and has never accessed their benefits (i.e. taken no PCLS, UFPLS or drawdown income) and which remain completely uncrystallised.

Q5: How many DC pension plans do you have with only uncrystallised assets where the plan holder is aged 55 or over and has at any time taken a lump sum payment via uncrystallised funds pension lump sum (UFPLS)?

Report the number of plans where the plan holder is aged 55 or over and has only uncrystallised assets (but has at any time accessed their pensions via UFPLS and so has assets remaining).

Firms should not include plans where the plan holder takes an UFPLS payment from uncrystallised funds, but part of the plan is already crystallised and in drawdown.

Q6: How many DC pension plans do you have in accumulation where the plan holder is aged under 55 years old?

Report the number of plans where the plan holder is aged under 55 years old and has never accessed their plan and so has only uncrystallised assets.

Q7: How many DC pension plans do you have which are still solely in accumulation (uncrystallised) and have a guaranteed income benefit such as a guaranteed annuity rate (GAR), deferred annuity option, or guaranteed minimum pension (GMP)?

Report any DC and money purchase plans that include guaranteed income benefit (whether this is in the form of a deferred annuity or guaranteed annuity rate). This would include, but is not limited to, plans that are created as a result of an individual or bulk transfer from a defined benefit occupational pension scheme and contracts with guaranteed benefits as a result of contracting out (i.e. plans with guaranteed minimum pension or equivalent pension benefits). Examples of such contracts include section 32 buyout plans, retirement annuity contracts (often known as a ‘section 226 pension’ or ‘section 620 pension’), executive pension plans and bulk purchase annuities.

[Note: see ‘Identifying the retirement income provider’ at paragraphs 8–11 of these notes.]

Do not report any plans which have been accessed in any way (e.g. where PCLS or UFPLS have been taken).

Q8: What is your total value of uncrystallised assets under administration (AUA) in DC pension plans? (£)

Report all uncrystallised pension assets here, regardless of the age of the plan holders or whether they also have crystallised assets. Include the uncrystallised assets of any partially crystallised plans.

For unitised with-profits business, firms should report the policy fund value. For traditional or conventional with-profits business, firms should report the asset share or other appropriate available value.

Where SIPP providers are unable to provide a valuation for the date required (31 March) they should use the most recent valuation.

The figure should be reported in pounds sterling and single units.

Partially crystallised stock data (question 9)

All plans where the plan holder has both uncrystallised and crystallised funds should be reported in this question. This includes all plans in ‘phased’ or ‘drip feed’ drawdown. Plan holders who have part of their funds crystallised in drawdown and are also taking UFPLS from uncrystallised funds should be included.

Crystallised stock data (questions 10 to 12)

This section is intended to capture the firm’s crystallised book of pension business, i.e. assets in drawdown. All products marketed as annuities but written within drawdown tax rules (e.g. fixed term and variable annuities) should be included here even if funds are domiciled outside the UK.

Q10: How many drawdown (capped and flexi) plans do you have where 100% of the funds are crystallised?

Report all plans where all the assets are crystallised.

Q11: How many drawdown plans do you have where a PCLS has been paid but no income has ever been taken?

Report all plans where a PCLS has been taken but no income has been paid. Include plans which are 100% crystallised and those which are partially crystallised.

Q12: What is the total value of crystallised assets under administration (AUA) in DC pension plans? (£)

Report all crystallised (in drawdown) pension assets here, regardless of the age of the plan holders or whether they also have uncrystallised assets. Include the crystallised assets of any partially crystallised plans.

For unitised with-profits business, firms should report the policy fund value. For traditional or conventional with-profits business, firms should report the asset share or other appropriate available value.

Where SIPP providers are unable to provide a valuation for the relevant date (31 March), they should use the most recent valuation.

The figure should be reported in pounds sterling and single units.

Report all plans where all the assets are crystallised.

Q13: In total how many annuities do you currently have in payment?

Report how many annuities were in payment at the end of the reporting period. Firms should report all annuities in payment regardless of whether the annuitant has an individual contract (i.e. bulk annuities in payment should be reported for each individual recipient not as one single contract in payment).

Annuities in payment to dependents, spouses and civil partners of the original annuitant should be included.

Q14: What was the total income paid on all your annuities in payment during the reporting period? (£)

Report the total amount of all annuity payments made during the period.

The figure should be reported in pounds sterling and single units.

Q15: What is the total number of plans where the plan holder made regular withdrawals by drawdown or UFPLS?

Report the total number of plans where the plan holder gave instructions for regular withdrawals at any point previously (by drawdown or by UFPLS) and where the plan remains invested at the end of the reporting period.

Include plans with regular withdrawals of any frequency (e.g. annual, quarterly, monthly or other frequency) so long as at least one withdrawal was made during the reporting period.

Include plans where the plan holder has chosen to take additional ad hoc payments in addition to their regular income or has chosen to vary the level of their regular payments during the period.

Include all plans with regular withdrawals regardless of whether the plan holder accessed their plan prior to this reporting period or not.

Plans with both capped and flexi-access drawdown should be captured.

Plans where the plan holder remained invested but did not take an income in the period can be excluded.

If this figure is lower than 750, questions 17 – 31 can be left blank.

Q16: What is the total number of plans where the plan holder made ad hoc partial withdrawals by drawdown or UFPLS?

Report the total number of plans where the plan holder has received ad hoc payments (by drawdown or by UFPLS) and where the plan remains invested at the end of the reporting period. Do not include any plans where the plan holder has given instructions for regular withdrawals as these should be reported separately at question 15. Plans with both capped and flexi-access drawdown should be captured. Plans where the plan holder remained invested but did not take an income in the period can be excluded. If this is figure is 0, questions 32 and 33 can be left blank

Part 2 - Withdrawals flow data (questions 17 to 34)

This section captures more information about the plans reported in questions 15 and 16 where plan holders made one or more withdrawals in the relevant period and remain invested at the period end, and includes plan holders regardless of when they began accessing their plan. The guidance for questions 15 and 16 provides more information on which plans should be included.

Plans where the plan holder remained invested but did not take an income in the period can be excluded.

Plans where the plan holder gave instructions for regular withdrawals should be reported under questions 17 to 31.

Note that firms should only complete questions 17 to 31 where 750 or more plans with regular withdrawals are reported in question 15. If this is not the case, these questions can be left blank.

Include plans with regular withdrawals of any frequency (e.g. annual, quarterly, monthly or other frequency) providing that at least one withdrawal was made during the reporting period. Plans where the plan holder has given no instructions for regular withdrawals and instead has made withdrawals by one or more ad hoc requests should be reported under questions 32 and 33.

Where plan holders have set up a regular payment and also taken one or more ad hoc withdrawals during the reporting period, firms should include their plans in the answers on regular withdrawals (questions 17 to 31) and not ad hoc withdrawals (questions 32 and 33).

In questions 17–24 plans should be reported in the age band column that reflects the age of the plan holder at the end of the reporting period.

In questions 25–33 plans should be reported in the pot size band column that reflects the pot size at the start of the reporting period, or when the plan entered drawdown (if later).

Note that questions 32 and 33 should only be completed where one or more plans with ad hoc partial withdrawals are reported in question 16. If this is not the case, these questions can be left blank.

To answer questions 17 to 31, firms should calculate annual withdrawal rates for all the plans with regular withdrawals set up and which were reported in question 15.

Firms should not calculate withdrawal rates for each withdrawal; it is a rate of withdrawal for each plan holder over the year that should be calculated.

Firms are should use one of two methods set out below for calculating annual withdrawal rates.

Method 1 – Electronic valuations (where possible)

Where firms can extract an up to date valuation electronically, firms should use the following method:

• Step 1: the member’s plan value (in pounds sterling) at the beginning of the period being reported is extracted (including both crystallised and uncrystallised funds);

• Step 2: any contributions and transfers in to the plan over the period are added to the value at step 1;

• Step 3: any transfers out of the plan and/or PCLS over the period are deducted from the value at step 2; and

• Step 4: all income payment withdrawals over the period (regular and ad hoc drawdown and UFPLS) should then be totalled and divided by the value after step 3 to calculate the annual withdrawal rate.

Method 2 – Latest annual valuations (where method 1 is not possible)

Where electronic valuations at specific dates cannot be extracted, firms should use the following alternative method:

• Step 1: extract the member’s plan value (in pounds sterling) at the last annual valuation date prior to the start of the period being reported;

• Step 2: any contributions and transfers in over the 12-month period starting with the annual valuation identified in step 1 and ending with the following annual valuation (which will have taken place during this reporting period) are added to the value at step 1;

• Step 3: any transfers out of the plan and/or PCLS over the 12-month period between valuations are deducted from the value at step 2; and

• Step 4: all income payment withdrawals over the period between valuations (regular and ad hoc drawdown and UFPLS) should then be totalled and divided by the plan value after step 3 to calculate the annual withdrawal rate.

Both methods ignore investment growth as it will be carried over to the starting valuation of the next year’s calculation and be reflected in the withdrawal rate reported then.

Where a plan holder enters a drawdown arrangement for the first time within the year being reported and starts regular withdrawals, firms should use the starting value when the plan entered drawdown.

Plans where plan holders make both regular and ad hoc withdrawals should be reported as one plan only and both the regular and ad hoc withdrawals should be included together in the rate of withdrawal calculation.

Example 1 – using method 1

A SIPP plan has an opening valuation of £200,000 at the start of the reporting period (i.e. 1 April). The plan holder has regular withdrawals set up and withdraws £100,000 from the SIPP during the reporting period. A firm able to extract the value of the plan at the beginning of the period (method 1) should calculate this as a 50% annual withdrawal rate, i.e. £100,000/£200,000.

Example 2 – using method 2

A SIPP provider does not have electronic valuation information available and instead undertakes manual annual valuations (method 2) on 1 October each year. Under method 2 the SIPP provider calculates the withdrawal rate for the 12 months between the last two annual valuations (i.e. October to September). To do this it should total all the withdrawals made in the 12 months between valuations and divides this against the starting valuation for the period.

The SIPP’s value at the start of the period was £250,000, and the plan holder made regular and ad hoc withdrawals totalling £100,000 during the following 12 months. The firm should therefore calculate the withdrawal rate for this reporting period as 40%, i.e. £100,000/£250,000.

Example 3 – making contributions during the year

A plan holder starts the reporting period (year 1) with a £50,000 pot of crystallised assets and during the period makes use of their money purchase annual allowance and pays in £10,000 as uncrystallised assets. They have regular withdrawals set up and during the reporting period withdraw £12,000.

To calculate the withdrawal rate the provider divides the withdrawals of £12,000 by the total of the starting pot plus contributions (£50,000 + £10,000 = £60,000), which results in a rate of 20%.

At the start of the next reporting period (year 2) the starting valuation should include both the crystallised assets and the new uncrystallised assets resulting from the £10,000 contribution last period, even if the uncrystallised assets are in a separate arrangement and remain untouched throughout year 2.

Example 4 – entering drawdown within the reporting period

A plan holder transfers into the pension scheme in January, entering drawdown with a starting value (after PCLS) of £100,000. They set up regular withdrawals and receive £5,000 in February and £5,000 in March. The withdrawal rate should be 10%, i.e. £10,000/£100,000.