TIDMLGT
RNS Number : 5636N
Lighthouse Group PLC
21 January 2019
21 January 2019
Lighthouse Group plc
("Lighthouse" or the "Group")
Conclusion of strategic review of auto-enrolment business
Lighthouse Group plc (AIM: LGT), the national financial advisory
group, is pleased to announce that it has completed its strategic
review of the Corporate Pensions Trust ("CPT"), the unbundled
Master Trust incorporating the Lighthouse Pensions Trust, the
Group's proprietary solution for small and medium sized businesses
looking to meet their obligations to provide auto-enrolment
compliant workplace pension schemes.
In September 2018 the Group announced a strategic review of the
business following the introduction by the Pensions Regulator
("TPR") of a new authorisation regime for Master Trusts which comes
into operation on 1 April 2019. The new regime will significantly
increase the annual running costs, both in the year of initial
application for authorisation and in all subsequent years, as well
as the capital required to be held to meet any future wind-up
costs.
The Group has now concluded that review and determined it would
not be in the best interests of shareholders to continue to provide
financial support to the CPT to enable it to apply for Master Trust
authorisation. This decision has been communicated to the CPT
Trustees.
During its strategic review the Group considered alternative
scheme providers to which the participating employers and members
of the CPT might be able to transfer and discussions were held with
a number of interested parties. Those discussions resulted in the
Group identifying the Auto-Enrolment Master Trust ("AEMT") operated
by Smart Pension Limited ("Smart"), which is part-owned by Legal
& General, as the most appropriate candidate to assume
responsibility for receiving the assets and members within the
CPT.
Heads of Agreement between the Group and Smart have now been
signed with the proposed transfer having been approved by the
Trustees of the CPT, subject to the AEMT obtaining Master Trust
authorisation from TPR (Smart is expected to submit its application
to TPR imminently). Further details about Smart are given in the
section "About Smart Pension Limited" set out below this
announcement.
Accordingly the scheme administrator for the CPT has today
written to all employers advising them of the position and of the
proposal for all participating employers and members and the scheme
assets to be transferred to the AEMT once that scheme has been
authorised. TPR has indicated that it expects its reviews of
applications for authorisation by Master Trusts to take three
months before approvals are granted. With final TPR approval
anticipated during April 2019, it is anticipated that new employer
and member contributions will be paid to the AEMT from May 2019.
The scheme assets will likewise be transferred from the CPT to the
AEMT by the end of June 2019. The Group expects the wind-up process
to take a minimum of six months from the date of the scheme assets
being transferred.
The Group has agreed to continue to fund the operating costs of
CPT Trustees during the process, together with the costs of
winding-up the CPT once all transfers have been effected. It is
intended that the existing contractual arrangements between the
Group and participating employers within the CPT for the provision
of regular payroll assessment and opt-in/opt-out reviews will be
renewed but with the AEMT as the scheme provider post transfer.
The impact of the proposed transfer is expected to be broadly
cost neutral in 2019 and should provide a small net income stream
after associated costs from 2020 onwards.
Malcolm Streatfield, Chief Executive Officer of Lighthouse,
commented: "Given the investment made by the Group to date in
establishing and maintaining the Lighthouse Pensions Trust, the
significant increase in operating costs that will arise from the
Pensions Regulator's new authorisation regime, and the highly
competitive market for the provision of auto-enrolment compliant
workplace pension schemes, the maintenance by the Group of the
Lighthouse Pensions Trust, within the Corporate Pensions Trust,
could no longer be justified.
"The Board is pleased to have secured, in principle, a deal to
transfer participating employers and members and the scheme assets
accumulated within the Corporate Pensions Trust to the
Auto-Enrolment Master Trust run by Smart Pension Limited. The
transfers, once the AEMT has been approved by the Pensions
Regulator, will provide a well-backed and market-leading home for
those employers and members who have previously chosen to use the
Corporate Pensions Trust to meet their auto-enrolment obligations,
whilst enabling the Group to concentrate on its primary business of
providing appropriate financial advice, particularly through its
affinity connections, and giving a recurring revenue to the Group
for years to come."
Andrew Evans, Chief Executive Officer of Smart Pension Limited,
commented "We are delighted to enter into this partnership
following an in-depth review by the Lighthouse Group, on behalf of
the CPT Trustees. We are impressed with Lighthouse Group's approach
to excellence in client service and care, which will continue going
forward. This is great news all round, particularly for the
employers and members of the CPT who will have access to our
world-class technology."
For further information, please contact:
Lighthouse Group plc
Malcolm Streatfield - Chief Executive Tel: +44 (0) 20 7065 5640
Peter Smith - Group Finance Director
investorenquiries@lighthousegroup.plc.uk www.lighthousegroup.plc.uk
finnCap Limited
(Nominated Adviser and Broker to the Tel: + 44 (0) 20 7220
Company) 0500
Corporate
Julian Blunt /Emily Watts/Hannah Boros
ECM
Alice Lane
Media enquiries:
IFC Advisory Limited
Graham Herring/Heather Armstrong/ Tel: +44 (0) 20 3934 6630
Florence Chandler
heather.armstrong@investor-focus.co.uk www.investor-focus.co.uk
About Lighthouse Group plc
Lighthouse has been listed on AIM since 2000 as an integrated
financial services company for investors, coupled with significant
scale in terms of distribution through financial advisers and
wealth managers and its fully diversified business model.
As one of the UK's largest autonomous financial advice and
wealth management groups, Lighthouse provides a comprehensive range
of services to businesses and individuals and is retained by most
of the major trades unions and other affinity groups to advise
their combined memberships of over 6 million members.
The Group aims to increase its relationships with, and the
benefits it derives from, its affinity group and professional
partners.
In addition to a wide range of financial advice, the Group has
developed innovative products to meet the specific needs of its
retail and corporate customers.
Lighthouse operates from its headquarters in London as well as
having principal operating offices in Stockport and Woodingdean,
near Brighton.
For more information please visit:
http://www.lighthousegroup.plc.uk/
About Smart Pension Limited
Smart was formed in 2014 and has established itself as one of
the largest Master Trusts in the UK auto-enrolment market,
excluding those owned by insurance companies or funded by
Government. Smart's AEMT has c.95,000 participating employers and
c.650,000 members and currently has c.GBP200 million assets under
management. It offers a superior member experience utilising
proprietary technology developed by Smart and is competitively
priced. The pricing structure to be offered to CPT participating
employers and members is likely to be considerably lower than that
currently charged by the CPT.
Legal & General owns 17 per cent. of Smart and supplies the
main default funds used by the AEMT, all of which have
out-performed their respective benchmarks over a one and five year
period.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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