How to handle pension scheme share ownership

The trustees of pension schemes will often directly own a company’s shares as part of the overall investment portfolio they hold for the pension scheme.  Accordingly this ownership needs to be reflected in the company’s share register/register of members and any share certificate issued.

Types of pension schemes

There are a number of different types of pension scheme including:

  • defined benefit company pension schemes;
  • final salary company pension schemes;
  • money purchase or defined contribution company pension schemes;
  • personal pensions;
  • self-invested personal pensions (SIPPs);
  • stakeholder pensions.

The trustees of all of these have a duty to invest the pension contributions until they need to pay benefits. The trustees will often appoint third parties to manage and hold the investments, e.g. an investment manager, or will own insurance policies.  However a number will still buy direct investments, including shares, especially the trustees of SIPPs and Small Self-Administered Schemes (SSASs).

Where the shares are not held by the nominee of an investment manager or stockbroker appointed by the trustees the shares and other securities will need to be registered in the name of the trustees.

Should the shareholding be registered in the name of the pension scheme?

No. It is often a misconception that the shares should be registered in the name of the pension scheme.  Most pension schemes are set up under trust. As a trust is not a person it cannot be recorded as the holder of the shares. The shares, as for any other pension investment, are held by the trustees in their names on trust for the beneficiaries of the pension scheme.

To reflect the fact that they are held by the trustees for a pension scheme you can include the name of the pension scheme in the register and on any share certificates as an account designation or part of the address.  Four examples of what could appear in the share register are included at the end of this article reflecting different situations.

Where there is more than one trustee, i.e. it is not a sole corporate trustee, you should include each trustee as a joint shareholder for the pension scheme’s holding.  The trustees can choose not to have all the trustees recorded as the holder of the shares but where they are individuals at least two must be included.

You can, however, only enter one address for the trustees.  This could be the personal address of one of the trustees (see example 2 below) or the address of the scheme administrator if not the trustees (see example 3 below).

Share transfers involving a pension scheme

To reflect a transfer of all or part of a holding by the trustees you will, as for any other transfer, need to receive a fully completed stock/share transfer form J30 for fully paid shares, or form J10 for nil or partly paid shares. Form J30 will need to be signed by all the old trustees. Forms J10 will need to be sign both by all old trustees and all the trustees into whose names the shares are being transferred.

Change of pension scheme trustees

Where the trustees change then you will need to update the share register to reflect the new trustees and issue a new share certificate.  To do this you will need to receive an appropriately completed share transfer form as you would for any other transfer. In addition the appropriate certificate on the back page should be completed and signed by the old trustees to confirm that the transfer is exempt from stamp duty.  If the change is reflecting the death of a trustee then you will need to request a certified copy of the death certificate as well as any share transfer form.

Examples

The following are examples of how to record the ownership:

Example 1

Company scheme set up for its employees where the company is the sole corporate trustee and scheme administrator

Name of pension scheme   
Example 1 Retirement Benefits Scheme

Name of trustee
Example 1 Limited

Pension scheme administrator  
Example 1 Limited

Registered office of
corporate trustee:

Example 1 House
The Road
Exampleton
AB1 2CD
United Kingdom

 

 

Entries in the share register
Example 1 Limited
re Example 1 Retirement Benefits Scheme
Example 1 House
The Road
Exampleton
AB1 2CD
United Kingdom

Example 2

Company scheme with three individual trustees

Name of pension scheme  
XYZ Pension Scheme

Names of trustees    
Mrs A Xavier of X House,
The Street, Xyzton, XY1 2Z

Mr B Young of Y House,
The Yard, Xyzton XY1 4Z

Mrs C Zebedee of Z House,
Zigzag Path, Zyxton ZY1 1X

Pension scheme administrator  
The trustees of XYZ Pension Scheme

 

 

Entries in the share register
Mrs A Xavier
Mr B Young
Mrs C Zebedee
as trustees of XYZ Pension Scheme
Z House
Zigzag Path
Zyxton
ZY1 1X

Example 3

Company pension scheme with three individual trustees and one corporate trustee who have appointed a third party to act as scheme administrator

Name of pension scheme      
987 Staff Pension Scheme

Names of trustees
Mrs A Xavier of X House,
The Street, Xyzton, XY1 2Z

Mr B Young of Y House,
The Yard, Xyzton XY1 4Z

Mrs C Zebedee of Z House,
The Yard, Zyxton ZY 1 1X

123 Pension Trustees Limited,
Accountants Premises
Pensionton, AC1 1AC

Pension scheme administrator
123 Pension Administrators Limited,
123 Pension Street, Pensionton
SS45 6AS, United Kingdom

 

 

 

Entries in the share register  
Mrs A Xavier
Mr B Young
Mrs C Zebedee
123 Pension Trustees Limited
as trustees of 987 Staff Pension Scheme
c/o 123 Pension Administrators Limited
123 Pension Street
Pensionton
SS45 6AS
United Kingdom

 

Example 4

Self-Invested Personal Pension

Name of pension scheme  
The AR SIPP

Plan number  
800002

SIPP member    
Mr AJM Sipp

Name of trustee    
456 SIPP Trustees Limited,
123 Pension Street, Pensionton,
SI12 3PP, United Kingdom

Pension scheme administrator  
456 Pension Administrators Limited
123 Pension Street, Pensionton
SI12 3PP, United Kingdom

 

 

Entries in the share register
456 SIPP Trustees Limited
re 800002
123 Pension Street
Pensionton
SI12 3PP
United Kingdom

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