The company will re-focus on increasing investment in and growing its long-standing employee benefits schemes providing sickness, accident, death and other benefits to a wide range of specialist construction industry companies.
Existing Welplan industry-wide employee benefits schemes are unaffected by this decision.
The decision to commence closure of Welplan Pensions comes as a result of the Pensions Regulator’s new Master Trust Authorisation regime, which came into full effect from April 1 this year.
The new regime has made pursuing authorisation cost-prohibitive for many small and medium-sized trusts and, following a strategic review, the Welplan Board concluded it was no longer viable to continue to support the scheme in the long-term.
The scheme will continue to operate exactly as it does now until such time as its Trustee Board has chosen and put in place arrangements with a suitable alternative default pension scheme for existing participating employers and members. Welplan anticipates that this process will take around five months and 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.
All employer/employee contributions into the scheme and members’ accumulated funds will continue to be held securely in trust as normal and Welplan will continue to provide financial and administrative support to the scheme during the closure process.
“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.”
Mr Kirton 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 while 24 have applied and are awaiting response from the Pensions Regulator. The remainder have either exited, triggered exit, are 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,” concluded Mr Kirton.