Hartley Pensions has reassured clients it is not being placed into liquidation amid the administrators securing funding.
In an update to clients, seen by FT Adviser, administrators UHY Hacker Young said some had been warning of the possibility of Hartley being placed into liquidation.
But the joint administrators said they had secured funding to continue trading while the application to court is made.
They stated: “Liquidation was only a possibility as the representative respondent’s believed liquidation may have resulted in a return to clients from FSCS compensation, however the FSCS have advised that compensation on the proposed exit and administration charge is not currently available.”
A spokesperson for FS Legal Solicitors, who were acting on behalf of representative respondents also said liquidation would be a last case situation.
They said: “All parties are working hard to avoid a liquidation scenario. An agreement needs to occur between the various interested parties.
“FS Legal Solicitors LLP are to act for the six representative respondents in the application made by Hartley’s joint administrators.
“The funding of the court work for the representative respondents is being invited from the 16,741 Sipp members. If this does not work, we have instructions to apply to court for a costs order.”
The administrators also tried to clear up some confusion regarding the proposed representative respondents and the administrator’s court application to consider the exit and administration charge.
They said: “The joint administrators have approached clients to become RR’s and six clients have agreed to take on this role.
“An application to court is required to formally appoint the RR’s and they therefore require legal representation.
“FS Legal have confirmed that they are willing to act on the RR’s behalf but for both the RR’s formal appointment and the application to consider the charge.”
UHY Hacker Young is applying to court to ratify an ‘exit and administration’ charge that the administrators would make against the assets clients hold within their Sipps.
This will replace the current annual management fees Sipp clients are being charged and will enable them to eventually transfer out.
It was expected that the court application would be issued this month.
The cost models proposed by UHY, previously included:
- Fixed fee per client model – This model is a fixed fee for all clients regardless of the type(s) of asset held or value of their Sipps.
- Hybrid charge based on asset type model – This model is a different charge for each type of asset held within a client's Sipp.
- Percentage based model on the total value of the assets under administration model – This model will charge a percentage on the value of the assets in a client's Sipp; and
- Capped percentage charge – This model will charge a percentage on the value of the assets within a client's Sipp subject to a cap to be determined.
But after meeting with the representatives it was decided that only the fixed fee per client model and the hybrid charge based on asset type model will now be considered.
As it stands, clients of Hartley Pensions are able to draw down money from their pensions in the usual manner. They can also trade investments and request their pension commencement lump sum.
The only restrictions in place are that no further contributions can be made to client Sipps, and that the administrators are unable to facilitate transfers out at this time.
Transfers will only be allowed once the exit and administration charge is ratified by the courts, in order to “ensure all clients are treated fairly”.
