Safe Hands Trust Fund
Being a newer player in the funeral plans market, Safe Hands are keen to reassure potential clients. In the UK, there are strong controls over the funds of properly established funeral plan companies. Here is what they have to say on the subject of their Trust Fund. “The Safe Hands Trust Fund was set up in conjunction with Wrigleys LLP (a law firm specialising in trust funds), great care has been taken to ensure the fund in which our customers’ monies are invested, complies with all current legislation as set out in the Regulated Activities Order (Financial Services and Markets Act 2000).
SUMMARY OF THE ACTUARIAL REPORT ON THE SAFE HANDS PLANS TRUST
The triennial report was prepared by Mazars LLP, a top ten UK audit and accounting firm and one of Europe’s largest audit and accounting firms, dated 21 October 2016, following their appointment to do so by the Trustees, Pitman’s Independent Trustees Limited. The report complies with the Technical Actuarial Standards on Funeral Plans, Modelling, Data and Reporting, as issued by the Financial Reporting Council, and the Actuarial Profession Standards APS Z1 and APS X2 issued by the Institute and Faculty of Actuaries.
The report recorded that the Trust primarily invested in funds managed by UBS, in a range of asset classes including equities, index-linked and fixed interest bonds and cash, and the Trust owns a subsidiary company which invests in commercial and residential property.
The valuation of the Trust assuming all plan holders died on 31 August 2016 showed value, after deferred tax liability, of £12.7m with a surplus of funds of £1.17m. The valuation results of a Central Scenario based on a set of likely future events valued the surplus at up to £3.00m.
The actuarial methodology based the calculation on the future liabilities of the costs of the funerals based on the number of funerals expected each year, and the expenses incurred in administering the Trust. The report made appropriate assumptions as to future inflation rates and investment returns for each class of investment, and made proper account of taxes likely to arise, and took account of mortality rates.
For the purposes of the valuation Mazars were given full access to all information as to plans and plan holders, and they target sample tested the data.
Article 60 of the RAO stipulates, ‘sums paid by the customer under the contract will be held on trust for the purpose of providing the funeral and that the following requirements will be met with respect to the trust‘:
- The trust must be established by a written instrument
- More than half the trustees must be unconnected with the provider.
None of Safe Hands’ directors or staff are in any way connected with the board of trustees, making it 100% independent. The Trust Fund is with Pitmans Trustees Ltd.
- The trustees must appoint an independent fund manager who is an authorised person who has permission to carry out an activity of the kind specified in article 37 of the RAO, and who is a person who is unconnected with the provider, to manage the assets of the trust.
The Safe Hands Trust Fund is managed by UBS – a multinational investment management firm, voted ‘Global Best Investment Bank’ at the Global Finance World’s Best Investment Banks Awards 2016.
- Annual accounts must be prepared and audited by a person who is eligible for appointment as a company auditor under Section 25 of the Companies Act 1989 with respect to the assets and liabilities of the trust.
Mazars, one of the UK’s largest accounting and auditing firms, have been appointed to audit the Safe Hands Trust Fund. They have already carried out the first audit (to April 2015) and will be undertaking the following year (to April 2016) imminently.
- The assets and liabilities of the trust must, at least once every three years, be determined, calculated and verified by an actuary who is a Fellow of the Institute of Actuaries or the Faculty of Actuaries.
Mazars have also been appointed as actuaries to the Safe Hands Trust. Although the initial actuarial report is not due until January 2017, it is expected to be compete and ready for publication by no later than November 2016.”