The administrators of Hartley Pensions are looking at ways to manage toxic assets held in self-invested personal pensions so clients can transfer out.
Joint administrators UHY Hacker Young told FT Adviser it was currently exploring ways of taking toxic assets out of pension funds so that Hartley Sipps can be transferred to a new provider.
It said pension rules do not allow partial transfers out of the pensions if the pension is already in drawdown and this was why it was looking to remove the toxic assets first.
It emerged last week that Sipp holders could see the transfer out process kickstarted in April after months of waiting.
Peter Kubik, joint administrator of Hartley Pensions, said: “The pension funds held by Hartley have been divided into tranches with the tranches determined by the asset types held by those pensions. Those pensions with toxic assets are in tranches where transfers out will be much harder.
“Action relating to the pensions is being coordinated with regulatory bodies such as the HMRC and FSCS, which means that the timeframe is much slower than the pension fund holders would like. We’re obviously keen not to have any unnecessary delays in the process.”
Between 2018 and 2020 Hartley bought five troubled Sipp businesses in fairly quick succession.
This included a part of Lifetime's Sipp business in April 2018, Greyfriars Asset Management’s Sipp business in October 2018, Berkeley Burke’s Sipp arm in September 2019, GPC’s Sipp and Ssas business in January 2020, and Guinness Mahon's Sipp business in February 2020.
But these books included toxic assets which Hartley is battling with now to allow people to transfer.
Financial Risk Management principal Julian Pruggmayer said: “Most of the toxic investments in these schemes came about by the policyholders thinking they could save money and do the job themselves.
“Instead of paying a few hundred pounds to a qualified, experienced IFA they did it themselves and it's cost them thousands.”
Hartley bought these books to provide continuity of service to clients who faced uncertainty concerning their pensions when those providers entered administration and the firms were declared in default by the FSCS.
The FSCS told FT Adviser that for Berkeley Burke alone it has paid out more than £62mn in compensation, and for Guinness Mahon it was more than £41mn.
These figures are for the claims as a whole, not for particular investments, and the claims related to the firms’ poor due diligence.
The transfer out process
Last week, FT Adviser reported the transfer out process could finally be kickstarted in April.
In an update, UHY Hacker Young said these transfers would have to be done over the course of a few months due to the volume of Sipps.
For example, some Sipps will start their transfer process this month while others will have to wait until June.
The simplest transfers will go first while those with impaired assets will have to wait until last.
amy.austin@ft.com
