Some Hartley Pension clients may have to wait until February 2025 until they are able to transfer their pension to another provider.
In an update to clients, seen by FT Adviser, administrators UHY Hacker Young set out timing details for transfers out.
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.
The administrators have now issued the court application with a hearing date set for February 29 and March 1.
Therefore it is expected the transfer out process will start in March.
But UHY Hacker Young said the process to transfer out all clients will take 12 months and “therefore clients can expect the latest that they will be transferred out to a new operator is February 2025”.
It is understood more than 16,000 people are affected by the Hartley issues.
The cost models proposed by UHY 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 representatives it was decided only the fixed fee per client model and the hybrid charge based on asset type model would be considered.
After a further meeting the representatives decided the hybrid cost model is the best suited because “it eliminates cross-subsidisation” among clients, but a final decision has not been made.
If the hybrid model is selected, based on the current financial information, the fees are:
Asset type | Individual asset transfer amount per asset (£) |
Fixed element (trading costs, every client will pay this cost) | 3,157 |
Cash | 138 |
Property | 5,935 |
Loan | 2,666 |
Platform | 174 |
Non-platform | 5,741 |
Toxic | 207 |
If the fixed fee model is selected the fee would be £4,820.
UHY Hacker Young said: “Each client will be expected to pay their share of the exit and administration charge and will have the option to pay from their Sipp or directly to the administrators.
“Should there be insufficient funds within the Sipp, clients will not be pursued for the balance. However, they will not be allowed to draw down to diminish their Sipp value beyond the exit and administration charge.
“In the event that there is insufficient cash held in a Sipp, the administrators have the option to liquidate assets should the client not wish to pay personally.”
In November, Hartley Pensions assured clients it was not being placed into liquidation amid the administrators securing funding.
The joint administrators said they had secured funding to continue trading while the application to court was being made.
FS Legal, the firm acting for the representative respondents, is seeking funding from clients with regard to the legal costs involved in representing the respondents.
In a letter, FS Legal said: “Since 20 November 2023, we have sought to raise voluntary funding from Sipp account holders. To date, we are only part funded.”
They added: “The need to be able to communicate with the 16,741 is two-fold. Firstly, to be able to canvas the views of the 16,741 (and thereby satisfy ourselves that the majority are engaged) and secondly to seek the balance of the funding for the RR’s legal advice.”
