SUP 16 Annex 58 Guidance notes for the Pensions Dashboard Service Firms – Half-Yearly Prudential Return

1Introduction

This data provides the FCA with information on the solvency of firms engaged in regulated pensions dashboard activity, referred to as pensions dashboard service firms in this guidance note. The data items are intended to reflect the underlying adequate financial resources requirements contained in PDCOB 13. The data enables us to monitor firms against the requirements set out there, and also against the individual requirements placed on firms. We have included references to the underlying rules to assist in the completion of the return.

The data assists the FCA in the ongoing supervision of firms engaged in regulated pensions dashboard activity. The data items apply to all pensions dashboard service firms subject to PDCOB. In the text below, we have identified where elements do not apply to all firms.

This guidance note does not constitute individual or general FCA guidance. The purpose of this guidance note is to help firms complete the prudential return (FIN075). This summary is not a substitute for reading the actual text of the FCA Handbook. It is important to note that this guidance may be subject to periodic review.

Currency

All figures should be reported in Sterling (unless otherwise stated). Figures should be reported in single currency units (unless otherwise stated).

Defined terms

The descriptions indicated in these notes are designed simply to repeat, summarise or amplify the relevant statutory or other definitions and terminology, including, where appropriate, the pensions dashboard service firm’s accounting framework, without departing from their full meaning or effect. The defined terms are not meant to replace, redefine, or reinterpret relevant accounting standards or corresponding accounting terms.

Data elements or items

These are referred to by row first, then column.

Basis of completion

PART ONE: FINANCIAL STATEMENT INFORMATION

SECTION A: BALANCE SHEET

FIXED ASSETS

1B – Intangible assets

Pensions dashboard service firms should enter the amount of intangible assets that they hold. Intangible assets are identifiable non-monetary assets that are without physical substance. For example, goodwill, copyrights, patents and intellectual property.

2B – Tangible assets

Pensions dashboard service firms should enter the amount of tangible assets that they hold. Tangible assets are assets that have physical substance and for which a measurable value can be attached. Examples include property, real estate, plant and equipment beneficially owned by the firm.

3B – Investments

Pensions dashboard service firms should enter the amount of assets held for long-term investment purposes. This represents the firm’s long-term investments, including shares, bonds, real estate, exchange-traded funds, money market funds, cash or cash equivalents that are held for long-term investment purposes.

4B – Total fixed assets

This amount should be the sum of items 1B (intangible assets), 2B (tangible assets) and 3B (investments).

CURRENT Assets

5A – Stocks (or inventories)

Pensions dashboard service firms should enter the monetary equivalent amount of their inventory held. These are assets held for sale in the ordinary course of business (finished goods), assets in the production process for sale in the ordinary course of business (work in progress), and materials or supplies that are consumed during production (raw materials).

6A – Debtors

Pensions dashboard service firms should enter the amount of debtors. This includes loans and securities, and both trade and non-trade debtors. It also includes the total amount falling due within one year from directors, fellow group undertakings or undertakings in which the firm has a participating interest where included as debtors.

7A – Investments held as current assets

Pensions dashboard service firms should enter the amount of assets held for short-term investment purposes. These are short-term investments that a firm holds for resale or pending their sale with a maturity date of less than one year and are generally easily converted to cash. These can include short-terms investments in, for example, equities, debt securities and exchange-traded funds. It also includes the value of shares in group undertakings where such investments are held as current assets.

8A – Cash at bank and in hand

Pensions dashboard service firms should enter the amount of cash held by a business in the form of notes and coins (eg, petty cash) or which are held at a bank in the form of on demand deposits.

9A – Other assets

Pensions dashboard service firms should enter the amount of other current assets held by the firm where they are not reported in items 5A (stocks (or inventories)), 6A (debtors), 7A (investments held as current assets) or 8A (cash at bank and in hand).

10A – Total current assets

This amount should be the sum of items 5A (stocks (or inventories)), 6A (debtors), 7A (investments held as current assets), 8A (cash at bank and in hand) and 9A (other assets).

CURRENT LIABILITIES

11A – Bank loans and overdrafts

Pensions dashboard service firms should enter the amount of any borrowings sourced from banks or building societies.

12A – Other liabilities falling due within one year

Pensions dashboard service firms should enter the amount of any borrowings that are not sourced from banks or building societies. These are short-term financial obligations that are not reported in item 11A (bank loans and overdrafts) to be settled within one year or within a normal operating cycle.

13A – Total current liabilities

This amount should be the sum of items 11A (bank loans and overdrafts) and 12A (other liabilities falling due within one year).

14B – Net current assets

This should equal item 10A (total current assets) minus item 13A (total current liabilities).

15B – Total assets less current liabilities

This should equal the sum of item 4B (total fixed assets) and item 10A (total current assets), less item 13A (total current liabilities).

16B – Other liabilities falling due after more than one year

Pensions dashboard service firms should enter the amount of any long-term borrowings, including loans (eg, mortgage, bank loans or debt securities issued) that are due to be repaid after more than one year and debt securities with maturities greater than one year.

17B – Provisions for liabilities and charges

Pensions dashboard service firms should enter the amount of any provisions for liabilities and charges. These represent liabilities of uncertain timing or amount. They come about because of a present obligation (legal or constructive) that has arisen as a result of a past event(s) (ie, an event that creates a legal or constructive obligation and where there is no realistic alternative but to settle the obligation). The payment is probable in that it is more likely than not to occur, and the amount can be estimated reliably.

18B – Net assets

Net assets represent the residual interest that owners (or shareholders) have in the firm once the assets of the firm are used to settle all outstanding liabilities. This should equal item 15B (total assets less current liabilities) minus item 16B (other liabilities falling due after more than one year) and minus item 17B (provisions for liabilities and charges). Please note that this figure must be the same figure as item 25A (total capital and reserves); otherwise, the balance sheet (or statement of financial position) will not balance.

19B – Guarantees provided by firm

Pensions dashboard service firms should enter the total value of guarantees provided by the firm to cover the indebtedness of other persons or entities.

CAPITAL AND RESERVES

Capital account (incorporated businesses excluding Limited Liability Partnerships)

20A – Ordinary share capital

Pensions dashboard service firms should enter the face value of shares that have been issued and for which cash has been received.

21A – Preference share capital

Pensions dashboard service firms should enter the face value of shares that have been issued and for which cash has been received, and which have preferential rights over the holders of ordinary shares.

22A – Share premium account

Pensions dashboard service firms should enter the difference between the cash received in exchange for ordinary share capital and the face value of the shares issued.

23A – Profit and loss account (retained earnings)

A pensions dashboard service firm should enter its retained earnings. This represents the accumulation of all profits previously retained by the firm (after the deduction of tax and dividends) since the birth of the firm. It would also include the profit retained by the firm in the financial year that is brought across from the firm’s profit and loss account statement (ie, it would include item 41B (retained profit)).

24A – Other reserves

Pensions dashboard service firms should enter the amount of any other reserves that they hold and that are not reported in item 23A (profit and loss account (retained earnings)). This may include reserves created by appropriations of share premiums and similar realised appropriations, gifts of capital (such as those from a parent undertaking), and revaluation reserves (eg, reserves arising from the revaluation of land and buildings).

25A – Total capital and reserves

Pensions dashboard service firms should enter the sum of item 20A (ordinary share capital), item 21A (preference share capital), item 22A (share premium account), item 23 (profit and loss account (retained earnings)), and item 24A (other reserves). Please note that this figure must be the same figure as item 18B (net assets); otherwise, the balance sheet (or statement of financial position) will not balance.

Capital account (unincorporated businesses and limited liability partnerships)

26A – Sole trader / Partners' capital account / Members' capital

For a pensions dashboard service firm that is a sole trader, the firm should enter the net balance on the firm’s capital account and current account. For a pensions dashboard service firm that is a partnership, the firm should enter the capital of the partnership (ie, capital made up from the partners).

27A – Other reserves

Pensions dashboard service firms should enter the amount of any other reserves that they hold.

28A – Total capital and reserves

Pensions dashboard service firms should enter the sum of item 26A (Sole trader / Partners’ capital account / Members’ capital) and item 27A (other reserves).

Please note that this figure must be the same figure as item 18B (net assets); otherwise, the balance sheet (or statement of financial position) will not balance.

29A – Memo (1)

Pensions dashboard service firms should enter the total amount of debtors falling due within one year from directors, fellow group undertakings or undertakings in which the firm has a participating interest where included as debtors.

30A – Memo (2)

Pensions dashboard service firms should enter the total value of shares in group undertakings where such investments are held as current assets.

SECTION B: PROFIT AND LOSS ACCOUNT

REVENUE

31B – Revenue from all regulated pensions dashboard activities

Pensions dashboard service firms should enter the total income accrued during the reporting period from regulated pensions dashboard activities.

32B – Revenue from all FCA regulated activities

Pensions dashboard service firms should enter the total income accrued during the reporting period from all FCA regulated activities. This includes the income accrued during the reporting period from regulated pensions dashboard activities.

33B – Revenue from all non-FCA regulated activities

Pensions dashboard service firms should enter the total income accrued during the reporting period from all non-FCA regulated activities.

34B – Total revenue

Pensions dashboard service firms should enter the sum of item 32B (revenue from all FCA regulated activities) and item 33B (revenue from all non-FCA regulated activities).

EXPENDITURE

35B – Total expenditure

Pensions dashboard service firms should enter the total expenditure incurred during the reporting period both in relation to its regulated and non-regulated activities. It should exclude taxation payable on the firm’s profits during the reporting period.

36B – Profit/(Loss) on ordinary activities before taxation

This figure is produced by deducting the total expenditure from ordinary activities (both regulated and non-regulated) incurred during the reporting period from the total revenue (both regulated and non-regulated) accrued during the reporting period. If the firm has not undertaken any extraordinary activities, this should be equal to item 34B (total revenue) minus item 35B (total expenditure).

37B – Profit/(Loss) on extraordinary activities before taxation

Pensions dashboard service firms should enter any profits/losses on extraordinary activities before taxation during the reporting period. This should consider the proportion of total revenue obtained because of extraordinary activities, less the total expenditure incurred as a result of these extraordinary activities. An extraordinary event is a one-off (or non-recurring) event that has either generated a material profit or loss. Examples of an extraordinary activity may be the sale of a building or the purchase of new premises.

38B – Taxation

A pensions dashboard service firm should estimate the tax that will be payable on its profits and insert that figure in this field.

39B – Profit/(Loss) for the period before dividends and appropriations

This figure should be calculated by subtracting item 35B (total expenditure) and item 38B (taxation) from item 34B (total revenue).

40B – Dividends and other appropriations

Pensions dashboard service firms should enter any dividends and other appropriations, which include dividends paid to shareholders, staff bonuses and wages paid to self (sole trader) etc.

41B – Retained profit

Pensions dashboard service firms should calculate this by subtracting item 40B (dividends and other appropriations) from item 39B (profit/(loss) for the period before dividends and appropriations).

Annual report and accounts

42B – Date of most recent annual report and accounts

A pensions dashboard service firm should enter the date (in the format of dd/mm/yyyy) on which its most recent annual report and accounts were prepared.

43B – Please provide an attachment or the link to the publication of your most recent annual report and accounts

A pensions dashboard service firm should provide either an attachment or the link to its most recent annual report and accounts.

PART TWO: SUPPLEMENTARY INFORMATION

SECTION C: AUDITED ACCOUNTS

44B – If your firm is incorporated, does your firm qualify for the Companies House small firms’ exemption from having its accounts audited?

Answer ‘Yes’ or ‘No’. A pensions dashboard service firm should indicate in the affirmative (‘Yes’) if the firm is incorporated and has prepared its accounts under this exemption because the firm has qualified to apply the Companies House small firms’ exemption from having its accounts audited. Otherwise, the firm should indicate ‘No’ if this is not the case.

45B – If the firm is required to submit audited accounts, please report the date on which your accounts were last audited.

If a pensions dashboard service firm is required to submit audited accounts, the firm should enter the date (in the format of dd/mm/yyyy) on which the firm’s accounts were last audited.

PART THREE: REGULATORY CAPITAL

SECTION D: CORE CAPITAL RESOURCES REQUIREMENT

46B – Base requirement

With reference to PDCOB 13.5.1R, for a firm with a Part 4A permission to carry on regulated pensions dashboard activities, the base requirement is equal to £40,000.

47B – Core capital resources requirement

The core capital resources requirement should be calculated in accordance with PDCOB 13.5.1R. A pensions dashboard service firm should enter its core capital resources requirement.

SECTION E: CAPITAL RESOURCES

Incorporated businesses excluding Limited Liability Partnerships

48A – Share capital

In accordance with PDCOB 13.7.3R, a pensions dashboard service firm should enter its ordinary share capital and preference share capital (excluding preference shares redeemable by shareholders within 2 years) at the end of reporting period.

49A – Reserves

In accordance with PDCOB 13.7.3R, a pensions dashboard service firm should enter its accumulated total of all retained profit, and other reserves created by appropriations of share premiums and similar realised appropriations at the end of reporting period. Reserves would also include gifts of capital, for example, from a parent undertaking. Refer to PDCOB 13.7.3R, to take into account the necessary adjustments that a firm must make to its reserves, where appropriate.

50A – Interim net profits

In accordance with PDCOB 13.7.3R, a pensions dashboard service firm should enter its total interim profits net of tax, anticipated dividends or proprietor’s drawings and other appropriations.

51A – Revaluation reserves

In accordance with PDCOB 13.7.3R, a pensions dashboard service firm should enter its revaluation reserves such as reserves arising from the revaluation of land and buildings, including any net unrealised gains for the fair valuation of equities held in the available-for-sale financial assets category.

52A – Eligible subordinated loans

In accordance with PDCOB 13.7.3R and PDCOB 13.7.8R, a pensions dashboard service firm should enter its eligible subordinated loans. A subordinated loan/debt cannot be included as part of the firm’s capital resources to meet the firm’s core capital resources requirement unless it meets the conditions set out in PDCOB 13.7.8R.

53A – Less investments in own shares

In accordance with PDCOB 13.7.3R and PDCOB 13.7.5R, a pensions dashboard service firm should enter any of its 'investments' in the balance sheet which are invested in the firm’s own shares in this field for deduction.

54A – Less intangible assets

In accordance with PDCOB 13.7.3R and PDCOB 13.7.5R, a pensions dashboard service firm should enter its intangible assets for deduction.

55A – Less interim net losses

In accordance with PDCOB 13.7.3R and PDCOB 13.7.5R, a pensions dashboard service firm should enter its interim losses, where they have not already been incorporated into the firm’s reserves, for deduction.

56A – Total capital resources

In accordance with PDCOB 13.7, a pensions dashboard service firm should calculate its total capital resources as at the firm’s end date of the reporting period by using the following formula: item 48A (share capital) + item 49A (reserves) + item 50A (interim net profits) + item 51A (revaluation reserves) + item 52A (eligible subordinated loans) - item 53A (investments in own shares) - item 54A (intangible assets) - item 55A (interim net losses).

Unincorporated businesses and limited liability partnerships

57A – Capital of a sole trader or partnership

In accordance with PDCOB 13.7.3R, a pensions dashboard service firm should enter its total net balance on its capital accounts and current account at the end of reporting period.

58A – Eligible subordinated loans

59A – Personal assets not needed to meet non-business liabilities

In accordance with PDCOB 13.7.3R and PDCOB 13.7.6R, pensions dashboard service firms that are either sole traders or partnerships may use personal assets as eligible capital unless: i) these assets are being used to meet liabilities relating to other non-FCA activities (including personal and other business activities); or ii) the firm holds client money or other client assets in relation to regulated activities other than regulated pensions dashboard activity. Refer to PDCOB 13.7.6R.

60A – Less intangible assets

In accordance with PDCOB 13.7.3R and PDCOB 13.7.5R, a pensions dashboard service firm should enter its intangible assets for deduction.

61A – Less interim net losses

62A – Less excess of drawings over profits for a sole trader or partnership

In accordance with PDCOB 13.7.3R and PDCOB 13.7.5R, a pensions dashboard service firm should enter any excess capital removed from the firm over and above any profit made by the firm for deduction.

63A – Total capital resources

In accordance with PDCOB 13.7, a pensions dashboard service firm should calculate its total capital resources as at the firm’s end date of the reporting period by using the following formula: item 57A (capital of a sole trader or partnership) + item 58A (eligible subordinated loans) + item 59A (personal assets not needed to meet non-business liabilities) - item 60A (intangible assets) - item 61A (interim net losses) - item 62A (excess of drawings over profits for a sole trader or partnership).

SECTION F: CAPITAL ADEQUACY POSITION

64A – Capital resources surplus/(deficit)

In accordance with PDCOB 13.3.1R, pensions dashboard service firms must at all times maintain capital resources equal to or in excess of their core capital resources requirement. Pensions dashboard service firms that are incorporated businesses, excluding limited liability partnerships, should calculate this by subtracting item 47B (core capital resources requirement) from item 56A (total capital resources). Pensions dashboard service firms that are unincorporated businesses and limited liability partnerships should calculate this by subtracting item 47B (core capital resources requirement) from item 63A (total capital resources).

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SUP 16 Annex 58 Guidance notes for the Pensions Dashboard Service Firms – Half-Yearly Prudential Return