A
bill
to
Make provision about pension schemes; and for connected purposes.
B e it enacted by the King’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Scheme regulations relating to a scheme for local government workers which
has pension funds may make provision about, or in connection with, asset
pool companies and participation in asset pool companies by the scheme
managers.
The provision which may be made under subsection (1) includes provision—
imposing requirements or prohibitions on scheme managers;
enabling the responsible authority, in prescribed circumstances, to
give a direction to a scheme manager requiring the manager—
to participate in an asset pool company specified in the
direction, or
to cease to participate in an asset pool company so specified;
enabling the responsible authority, in prescribed circumstances, to
give a direction to an asset pool company specified in the direction,
or to all or any of its participating scheme managers, requiring the
company or scheme managers concerned—
to take any steps specified in the direction with a view to
enabling or securing compliance by a scheme manager with a
direction requiring it to participate in, or to cease to participate
in, the company (see paragraph
(b)
), and
to take any other steps necessary to enable or secure compliance
with such a direction;
imposing requirements or prohibitions on asset pool companies;
enabling or requiring the responsible authority to issue guidance to
asset pool companies;
enabling the responsible authority, in prescribed circumstances, to
give a direction to an asset pool company—
requiring it to comply with guidance issued as mentioned in
paragraph (e)
(where the responsible authority is satisfied that
it is failing, or has failed, to do so without good reason),
as to the manner in which it is to carry out any specified
investment management activities.
In subsection (2) (f) (i) and (ii) —
“
specified” means specified in the direction;
“
investment management activities” means activities involved in or
connected with the management of funds and other assets.
If provision is made under subsection
(2)
(b)
or
(c)
, the scheme regulations
must require the responsible authority to consult the following persons before
a direction is given in respect of the participation of a scheme manager in an
asset pool company, namely—
the scheme manager;
the asset pool company;
the scheme managers participating in the asset pool company;
any other person the responsible authority considers it appropriate to
consult.
If provision is made under subsection
(2)
(f)
for the giving of directions to an
asset pool company, the scheme regulations must require the responsible
authority to consult the following persons before a direction is given, namely—
the asset pool company;
the scheme managers participating in the asset pool company;
the Financial Conduct Authority;
any other person the responsible authority considers it appropriate to
consult.
Scheme regulations making provision mentioned in
subsection (2)
(a)
may
(among other things)—
require a scheme manager to participate in an asset pool company
with a view to that company managing the funds and other assets of
the scheme for which the scheme manager is responsible;
prohibit a scheme manager from participating in more than one asset
pool company at the same time (subject to any transitional
arrangements permitted by the regulations where a scheme manager
participating in one company decides to participate instead in another
company);
require the scheme managers for the time being participating in an
asset pool company to take steps to secure the grant of FCA
authorisation to the company for carrying out prescribed activities.
Scheme regulations making provision mentioned in
subsection (2)
(d)
may
(among other things) require an asset pool company to take steps to secure
the grant of FCA authorisation to the company for carrying out prescribed
activities.
“
activities” means activities which—
are activities of a kind that an asset pool company could carry
out, and
require FCA authorisation;
“
FCA authorisation” means authorisation by the Financial Conduct
Authority under the Financial Services and Markets Act 2000.
For the purposes of this Chapter—
“asset pool company” means a company limited by shares and
registered in the United Kingdom which is established for purposes
consisting of or including—
managing funds or other assets for which its participating
scheme managers are responsible, and
making and managing investments on behalf of those scheme
managers (whether directly or through one or more collective
investment vehicles),
and whose shares are all held by scheme managers only or by another company limited by shares and registered in the United Kingdom whose shares are all held by scheme managers only, and
a scheme manager participates in an asset pool company by—
being a shareholder of the company,
being a shareholder in another company which is the only
shareholder of the company, or
contracting with the company for it to manage the funds and
other assets for which the scheme manager is responsible.
The provision made by virtue of
subsection (1)
must include provision for
securing that (among other things)—
each scheme manager formulates, publishes and keeps under review
an investment strategy,
the funds or other assets for which a scheme manager is
responsible (other than money needed for making payments under
the scheme from the pension fund maintained by that scheme manager)
are—
held on behalf of the scheme manager by an asset pool
company in which the scheme manager participates (subject
to any transitional arrangements permitted by the regulations
in relation to the transfer of funds or assets to the company),
and
properly managed by that company with a view to
implementing the scheme manager’s investment strategy, and
in the case of a scheme for local government workers for England and
Wales, each scheme manager (other than the Environment Agency)
co-operates with an appropriate strategic authority to identify and
develop appropriate investment opportunities.
The provision made by virtue of
subsection (1)
may include, in particular,
provision about—
sources of advice that a scheme manager must, or may, use in
formulating its investment strategy, and
matters that must, or may, be covered by an investment strategy.
The matters referred to in subsection (3) (b) include—
the scheme manager’s approach to responsible investment,
the scheme manager’s approach to local investments, and
strategic asset allocation or target ranges for growth and income.
In this section—
“
investment strategy” means a statement of a scheme manager’s
objectives, priorities and preferences in relation to the investment of
the funds and other assets for which it is responsible;
“
local investments”, in relation to a scheme manager, means investments
in, or for the benefit of persons living or working in—
the scheme manager’s area, or
the areas of the other scheme managers participating in the
same asset pool company as the scheme manager;
“
strategic authorities” means—
the Greater London Authority,
a combined authority in England established under section 103
of the Local Democracy, Economic Development and
Construction Act 2009,
a combined county authority in England established under
section 9(1) of the Levelling-up and Regeneration Act 2023,
any other local authority in England of a description prescribed
for the purposes of this paragraph in scheme regulations, and
a corporate joint committee in Wales established by regulations
under Part 5 of the Local Government and Elections (Wales)
Act 2021 (asc 1).
Scheme regulations under this section may make provision conferring on the
scheme manager (in relation to carrying out its functions as a scheme
manager)—
any specified power or powers of a local authority under Part 6 of
the Local Government Act 1972, or
any power or powers corresponding to one or more of the powers of
a local authority under that Part.
The power to make provision by virtue of subsection
(2)
is not exercisable if,
or to the extent that, the scheme manager already has the powers of a local
authority under Part 6 of the Local Government Act 1972 (otherwise than by
virtue of scheme regulations under this section).
Scheme regulations under this section may make provision conferring on the
scheme manager (as part of its functions as a scheme manager) power to
provide any administrative, professional or technical service for any other
person who is a scheme manager for a public service pension scheme.
In subsection (4) —
“public service pension scheme” means a scheme for the payment of
pensions and other benefits to or in respect of persons of a description
set out in section 1(2) of PSPA 2013, and
“scheme manager” (in the third place it appears) means any person
who is, for the purposes of PSPA 2013, a scheme manager for any
such scheme.
The power to make provision by virtue of subsection
(4)
is not exercisable if,
or to the extent that, the scheme manager already has the power to provide
services referred to in that subsection (otherwise than by virtue of scheme
regulations under this section).
Scheme regulations under this section may amend or modify any Act passed
before or in the same Session as this Act.
In this section “specified” means specified in scheme regulations under this
section.
After paragraph 2 of Schedule 2 to the Procurement Act 2023 (general vertical A contract between a local government pension scheme manager to manage the funds and other assets for which the scheme to make and manage investments on behalf of the scheme if the contract so provides, to carry out other investment
if each of the conditions set out in sub-paragraph
(2)
is met.
The conditions are— that more than 80% of the activities of the company are that no person exercises a decisive influence on the activities the participating scheme managers in the company, that the company does not carry out any activities that are the participating scheme managers in the company, where the only shareholder in the company is another The contracts covered by this paragraph include a contract where For the purposes of sub-paragraph
(2)
(b)
, a person does not exercise being a director, officer or manager of the company, acting where the only shareholder in the company is another In this paragraph—
“
“
arrangements exemption from public procurement rules) insert—
“2A
(1)
and an asset pool company providing for the company—
(a)
manager is responsible,
(b)
manager, and
(c)
management activities for or on behalf of the scheme
manager,
(2)
(a)
investment management activities carried out for or on behalf
of local government pension scheme managers;
(b)
of the company (either directly or indirectly) other than—
(i)
acting in their capacity as local government pension
scheme managers, and
(c)
contrary to the interests of—
(i)
in their capacity as local government pension scheme
managers, or
(ii)
company, that other company.
(3)
the local government pension scheme manager concerned is already
a participating scheme manager in the company (as well as one
where the scheme manager concerned will become a participating
scheme manager in the company as a result of entering into it).
(4)
(5)
a decisive influence on the activities of the asset pool company only
by reason of—
(a)
in that capacity, or
(b)
company, being a director, officer or manager of that other
company.
(6)
investment management activities” means activities involved
in or connected with the management of funds or other
assets for which a scheme manager is responsible (including
making and managing investments on behalf of the scheme
manager);
local government pension scheme manager” means a person
who is, by virtue of section 4(5) of the Public Service
Pensions Act 2013, a scheme manager for a pension scheme
for local government workers in England and Wales;
Scheme regulations relating to a scheme for local government workers which
has pension funds may make provision for or in connection with—
the carrying out of periodic or ad hoc governance reviews of individual
scheme managers,
the issuing by the responsible authority of guidance to persons carrying
out governance reviews about the carrying out of such reviews, and
functions of the responsible authority in response to a report of such
a review.
For this purpose, in relation to any scheme manager—
a governance review is a review of the governance of the scheme so
far as administered by the scheme manager, and the performance and
effectiveness of the scheme manager, over a period (“the period of
review”);
a periodic governance review is a governance review that is required
by a provision of scheme regulations to take place—
within a prescribed period after the commencement of that
provision, or
within a prescribed period after the completion of a previous
governance review,
in respect of a period of review prescribed by or determined under the regulations;
an ad hoc governance review is a governance review that is required
by scheme regulations to take place—
where a direction to carry out a governance review has been
given to the scheme manager by the responsible authority (if
a power to give such a direction has been conferred by the
regulations), in respect of a period of review specified in the
direction, or
in prescribed circumstances (other than the passage of time
since the most recent completed governance review), in respect
of a period of review prescribed by or determined under the
regulations.
The period of review for the first governance review of a scheme manager
may include time before the commencement of the regulations providing
for governance reviews to take place.
Scheme regulations which make provision for the carrying out of governance
reviews must make provision—
requiring governance reviews to be carried out independently of the
scheme manager being reviewed and the responsible authority, but
under arrangements made by and at the expense of that scheme
manager;
requiring the person carrying out a governance review, as soon as
practicable after completing the review, to—
prepare a report on the review, and
send a copy of the report to the responsible authority and the
scheme manager being reviewed; and
requiring the scheme manager to publish the report.
In Schedule 3 to PSPA 2013 (scope of scheme regulations: supplementary
matters), in paragraph 11 (pension funds) at the end insert—
“In the case of a scheme for local government workers this also
includes merger (including compulsory merger) of two or more
separate pension funds.”
PSPA 2013 is amended as follows.
In section 3 (scheme regulations)—
in subsection (1), after “2022” insert “and Chapter 1 of Part 1 of the
Pension Schemes Act 2026”, and
“(d)
consequential, supplementary, incidental or transitional
provision in relation to any provision of Chapter 1 of Part 1 of the Pension Schemes Act 2026.”
“(5)
Subsection (1) may be satisfied, in relation to provision contained in
scheme regulations—(a)
made under any provision of Chapter 1 of Part 1 of the Pension
Schemes Act 2026, or(b)
made under section 3(2) (d) above,
In this Chapter—
“
local government worker” has the same meaning as in PSPA 2013 (see
paragraph 3 of Schedule 1 to that Act);
“
management” and related expressions, in relation to the funds and
assets of a scheme for local government workers, include (among other
things)—
buying, selling or holding assets;
setting asset allocation;
establishing and managing pooled investment vehicles;
selecting investments;
acting as a responsible investor (including by acting as a
shareholder in an investee company);
deciding whether to develop or use internal investment
management capability or external investment managers;
managing cash flow;
“
PSPA 2013” means the Public Service Pensions Act 2013;
“
prescribed” means prescribed by scheme regulations;
“
the responsible authority” means (in relation to a scheme for local
government workers in England and Wales or Scotland)—
the Secretary of State, in or as regards England and Wales, or
the Scottish Ministers, in or as regards Scotland;
“
scheme” means a scheme (within the meaning of PSPA 2013) established
under section 1 of that Act;
“
scheme manager”, in relation to a scheme for local government workers,
means a person who is a scheme manager by virtue of section 4(5) of
PSPA 2013 (being a person responsible for the local administration of
pensions and other benefits payable under the scheme who maintains
a pension fund for the purposes of providing pensions and other
benefits under its part of the scheme);
“
scheme regulations” means regulations made under section 1 of PSPA
2013.
A reference in this Chapter to the funds and other assets for which a scheme
manager is responsible is to the funds and other assets which are (or should
be) held as part of its pension fund for the purpose of providing pensions
and other benefits under its part of a scheme for local government workers.
Nothing in this Chapter is to be taken as affecting the generality of the powers
conferred by section 1 or 3(1) of, or any provision of Schedule 3 to, PSPA
2013.
“36B Power to modify scheme in relation to payment of surplus to employer
(1)
(2)
Where no power is conferred on any person to make payments to the
employer out of funds held for the purposes of the scheme, the resolution may confer a power to do so on the trustees, subject to any restrictions specified in the resolution.(3)
Where a power is exercisable by the trustees (whether or not by virtue
of subsection (2) ) to make payments to the employer out of funds held for the purposes of the scheme, the resolution may remove or relax any restriction imposed by the scheme on the exercise of the power.(4)
This section does not apply to a scheme that is being wound up.
(5)
(6)
(7)
Regulations may provide that this section does not apply, or applies
with prescribed modifications, in prescribed circumstances or to schemes of a prescribed description.(8)
See also section 37 (which limits the circumstances in which a power
to make payments of surplus may be exercised).”
In the Pensions Act 2004, omit section 251 (old resolution procedure in relation
to payments of surplus).
Subsection (2)
does not affect the validity of a resolution passed under the
section it repeals.
Section 37
of the
Pensions Act 1995
(restrictions on power to pay surplus to
employer) is amended in accordance with
subsections (2)
to
(5)
.
“(2A)
The power referred to in subsection (1)(a) may be exercised only so
far as permitted by, and only in accordance with, regulations.(2B)
Regulations must be made under subsection (2A) —
(a)
prohibiting the making of a payment unless an actuary of a
prescribed description (“the relevant actuary”) is satisfied that prescribed conditions are met in relation to the value of the scheme’s assets and the amount of its liabilities,(b)
making provision about the basis (or bases) on which the value
of the scheme’s assets and the amount of its liabilities are to be determined for that purpose,(c)
requiring the relevant actuary to give a certificate before a
payment is made, and(d)
requiring members of the scheme to be notified in relation to
a payment before it is made.(2C)
The provision that may be made by regulations under subsection (2A) includes provision—
(a)
about other conditions that must be met in order for the making
of a payment to be permitted;(b)
about the giving of certificates by the relevant actuary,
including about the form and content of a certificate;(c)
prohibiting the making of a payment without the employer’s
consent;(d)
in relation to a superfund scheme (within the meaning of Part
3 of the Pension Schemes Act 2026)—(i)
prohibiting the making of a payment in all
circumstances;(ii)
prohibiting the making of a payment without the
Authority’s consent.(2D)
The power referred to in subsection (1)(a) may not be exercised if
there is a freezing order in force in relation to the scheme under section 23 of the Pensions Act 2004.”
Omit subsections (3) and (4).
In subsection (6)(a), for “the requirements of this section” substitute “subsection (2A) ”.
In subsection (8)—
omit “in prescribed circumstances”;
after “modifications,” insert “in prescribed circumstances or”.
“(8)
Regulations may provide that this section does not apply, or applies
with prescribed modifications, in prescribed circumstances or to schemes of a prescribed description.”
In section 175 of the Pensions Act 1995 (parliamentary control of orders and
regulations)—
in subsection (1), for “(2), (2A) and (3)” substitute “(2) to (3)”;
in subsection (2A), after “section” insert “37(2A),”;
“(2B)
Any provision that may be made by regulations or an order
under this Act subject to the procedure described in subsection (1) may instead be made by regulations subject to the procedure described in subsection (2).”
The Secretary of State may make regulations (“value for money regulations”)
for the purpose of evaluating, and promoting best practice with regard to,
the provision of value for money by—
prescribed descriptions of relevant pension schemes (“regulated VFM
schemes”), and
prescribed descriptions of arrangements under relevant pension
schemes (“regulated VFM arrangements”).
Value for money regulations may in particular require responsible trustees
or managers to—
make, and publish (in whole or part) reports of, assessments (“VFM
assessments”) of the performance of—
regulated VFM schemes, or
regulated VFM arrangements,
with regard to the provision of value for money in respect of prescribed periods (“VFM periods”);
notify the Pensions Regulator of any publication they make under paragraph (a) ;
publish or share with prescribed persons in respect of—
regulated VFM schemes or (as the case may be) regulated VFM
arrangements, and
VFM periods,
prescribed categories of information (“metric data”) for the purpose of enabling VFM assessments to be made (with respect to the scheme or arrangement in question and other regulated VFM schemes or regulated VFM arrangements).
A duty to publish information under
subsection (2)
(c)
may be a duty to
publish the information for a specified period.
Where value for money regulations require responsible trustees or managers
to make a VFM assessment with respect to a scheme or arrangement, the
regulations may require those trustees or managers to—
assign to the scheme or arrangement, and set out in the VFM
assessment, a rating for that period (a “VFM rating”), and
notify the Pensions Regulator of the rating.
Value for money regulations may specify—
the method for calculating anything that is to be calculated under the
regulations;
the time at or by which anything required to be done under the
regulations must be done.
In complying with value for money regulations a person must have regard
to any guidance issued from time to time by the Secretary of State.
The Secretary of State must consult with such persons as the Secretary of
State considers appropriate before—
making value for money regulations;
issuing guidance under subsection (6) .
In this Chapter “responsible trustees or managers” means any of the
following—
trustees or managers of a regulated VFM scheme;
trustees or managers of a relevant pension scheme any arrangements
under which are regulated VFM arrangements.
Subject to
subsection (11)
, value for money regulations are subject to the
affirmative procedure.
Any exercise, after the first, of the power to prescribe categories of information
by virtue of
subsection (2)
(c)
is subject to the negative procedure.
Subject to
subsection (13)
, in this Chapter “relevant pension scheme” means
an occupational pension scheme that provides money purchase benefits.
Value for money regulations may provide that where an occupational pension
scheme provides money purchase benefits in conjunction with other benefits,
references in this Chapter (other than this subsection) to the occupational
pension scheme are to an occupational pension scheme only to the extent that
it provides money purchase benefits.
the quality of services provided to members of the scheme or (as the
case may be) arrangement;
classes of assets invested in;
investment performance;
costs incurred by the scheme or (as the case may be) arrangement;
charges on members or employers in relation to the scheme or (as the
case may be) arrangement.
Value for money regulations made by virtue of section 11 (2) (c) may—
specify time limits within which metric data in respect of a VFM period
must be published or shared;
make provision about the form in which and the means by which
metric data is to be published or shared;
require the published or shared information to deal separately with
different cohorts of members of the scheme or (as the case may be)
arrangement;
require a person appointed under the regulations to make available,
for the publication or sharing of metric data, an electronic database
(operated by that person);
require responsible trustees or managers, on publishing or sharing
any information under regulations made by virtue of
section 11
(2)
(c)
, to notify the Pensions Regulator—
of the publication of the information and where it is published,
or
(as the case requires) of the sharing of the information.
Value for money regulations made by virtue of
section 11
(2)
(c)
may require
the Pensions Regulator to—
determine the form in which metric data must be published or shared,
and
publish, or share with the Secretary of State and responsible trustees
or managers, details of the form so specified.
Value for money regulations made by virtue of section 11 (2) (a) may—
require responsible trustees or managers to compare (in respect of a
VFM period) a scheme’s or arrangement’s metric data with—
the metric data of a prescribed number (or prescribed minimum
number) of other schemes or arrangements (“comparator”
schemes or arrangements) selected by the trustees or managers,
or
one or more relevant benchmarks;
make other provision about the method for comparing and evaluating
the performance of schemes or arrangements, for example provision
about—
factors that may or must be considered;
criteria to be used in comparing performance;
the use and evaluation of evidence;
make provision about how the results of comparisons are to be taken
into account in making determinations under
section 15
(1)
(determinations for the purposes of assigning ratings);
make provision about the eligibility of—
relevant pension schemes for selection as comparator schemes;
arrangements under relevant pension schemes for selection as
comparator arrangements;
specify factors that responsible trustees or managers must take into
account when selecting comparator schemes or comparator
arrangements.
Without prejudice to the breadth of
subsection (1)
(b)
(i)
, factors prescribed in
accordance with that provision may for example include—
factors relating to differences in the composition of the membership
of different schemes or arrangements;
special features or characteristics of schemes or arrangements that are
taken into account in their investment strategies.
In this section “relevant benchmark” means—
a benchmark specified in value for money regulations;
if value for money regulations so provide, a benchmark approved and
published by the Pensions Regulator.
Value for money regulations may—
require responsible trustees or managers to—
issue VFM member satisfaction survey forms to relevant
members from time to time as directed by the relevant
authority;
make reports (“survey data reports”) of information returned
in such forms;
provide that survey data reports (or survey data reports that meet
prescribed conditions) relating to a VFM period are to be regarded as
metric data for the purposes of this Chapter;
require the relevant authority to carry out consultation before issuing
forms under
paragraph (a)
;
if regulations are made under
paragraph (c)
, make provision about
who must be consulted.
In this section—
“
relevant authority” means whichever of the Secretary of State or the
Pensions Regulator is designated in the regulations as the relevant
authority;
“
relevant member” means—
in relation to a responsible trustee or manager within
section
11
(8)
(a)
, a member of the relevant pension scheme concerned;
in relation to a responsible trustee or manager within
section
11
(8)
(b)
, a member of an arrangement by virtue of which the
trustee or manager is a responsible trustee or manager;
“
VFM member satisfaction survey form” means a request, in a form
approved by the relevant authority, for inviting from relevant members
information regarding their level of satisfaction with the service
provided by the scheme or arrangement (as the case requires).
Responsible trustees or managers who are required by virtue of section 11 (4) (a) to assign a VFM rating to a scheme or arrangement in respect of a VFM period (the “relevant period”) must assign to the scheme or (as the case requires) arrangement—
a “fully delivering” rating if the responsible trustees or managers
determine that the scheme or arrangement is delivering value for
money;
a “not delivering” rating if—
the responsible trustees or managers determine that the scheme
or arrangement is not delivering value for money, and
Condition A, B or C of subsection (2) is met;
in any other case, an intermediate rating.
For the purposes of subsection (1) (b) (ii) —
Condition A is met if the responsible trustees or managers determine
that there is no realistic prospect of the scheme or (as the case may
be) arrangement delivering value for money within a reasonable period;
Condition B is met if the responsible trustees or managers have
assigned an intermediate rating to the scheme or arrangement in each
of a prescribed number of VFM periods immediately preceding the
relevant period;
Condition C is met if the Pensions Regulator notifies the responsible
trustees or managers that the Regulator—
considers that the responsible trustees or managers have failed
to comply with an improvement plan or an action plan relating
to the scheme or arrangement (and the VFM period), and
does not consider the failures to be so minor that they should
be ignored.
Value for money regulations must specify the number of grades of
intermediate rating.
If value for money regulations provide that there are to be two or more
intermediate ratings, the regulations—
may name each of those ratings;
must specify the conditions for assigning each of those ratings.
Where, apart from this subsection, a scheme or arrangement would be assigned
a “not delivering” rating in respect of a VFM period by virtue of Condition
B of
subsection (2)
being met, the Pensions Regulator may, if it considers that
prescribed conditions are met, by notice to the scheme or arrangement
authorise the responsible trustees or managers to assign to the scheme or
arrangement (instead of a “not delivering” rating) any intermediate rating
the Pensions Regulator considers appropriate.
In this Chapter “action plan”, in relation to a regulated VFM scheme or
regulated VFM arrangement, means a plan under
section 16
(2)
(c)
or
17
(1)
(a)
which—
sets out the responsible trustees’ or managers’ assessment as to
whether or not transferring the benefits of the members (under the
scheme or arrangement) to another scheme or arrangement could
reasonably be expected to result in the generality of those members
receiving improved long-term value for money, and
proposes measures (or options for measures) for improving the position
(with regard to value for money) of members or subsets of members
of the scheme or arrangement.
An action plan may not include a proposal to transfer the benefits (under the
scheme or arrangement) of some or all of the members of that scheme or
arrangement unless the responsible trustees or managers determine that the
proposed transfer could reasonably be expected to result in the generality of
those members receiving improved long-term value for money.
Value for money regulations may make further provision about what may
or must be included in an action plan.
Value for money regulations may make provision about the consequences of
the assigning under
section 15
(1)
of an intermediate rating to a regulated
VFM scheme or regulated VFM arrangement in respect of a VFM period.
Without prejudice to the breadth of
subsection (1)
, value for money regulations
may require responsible trustees or managers of a scheme or arrangement to
which any grade of intermediate rating has been assigned to—
prepare a plan (an “improvement plan”) specifying actions that the
responsible trustees or managers propose to take with a view to
improving the scheme’s or (as the case may be) arrangement’s
performance with regard to the provision of value for money;
provide a copy of the plan to the Pensions Regulator;
prepare an action plan and provide a copy of it to the Pensions
Regulator;
give notice in a prescribed format to any person who is a participating
employer in relation to the scheme or arrangement of—
the VFM rating that has effect in relation to the scheme or
arrangement);
any actions specified by virtue of
paragraph (a)
in an
improvement plan;
any actions the trustees or managers consider it is appropriate
for the employer to take having regard to the rating assigned
to the scheme or arrangement;
ensure that no person becomes an employer in relation to the scheme
or arrangement for as long as the scheme or (as the case may be)
arrangement continues to have an intermediate rating;
take any other steps that may be prescribed.
Value for money regulations may—
make further provision about what may or must be included in an
improvement plan;
confer additional functions on the Pensions Regulator in connection
with schemes that are assigned an intermediate rating.
In this section—
“
employer”, in relation to a regulated VFM scheme or regulated VFM
arrangement, means a person who employs persons who are members
of the scheme or (as the case requires) arrangement;
“
participating employer” in relation to a regulated VFM scheme or
regulated VFM arrangement, means an employer who is for the time
being making contributions to the scheme or (as the case requires)
arrangement.
A regulated VFM scheme or regulated VFM arrangement to which a “not
delivering” rating has been assigned (an “affected” scheme or
arrangement) must—
prepare an action plan and provide a copy of it to the Pensions
Regulator;
give notice in a prescribed format to any person who is a participating
employer in relation to the scheme or arrangement of—
the VFM rating that has effect in relation to the scheme or
arrangement);
any actions the trustees or managers consider it appropriate
for the employer to take having regard to the “not delivering”
rating;
ensure that with effect from the publication of the VFM assessment
in which the rating is set out no person is to become an employer in
relation to the scheme or (as the case may be) arrangement;
take any other steps that may be prescribed.
Where a transfer solution (see
subsection (3)
) applies to an affected scheme
or arrangement, the Pensions Regulator may—
require the accrued rights and benefits of all (or a subset of) the
members of the scheme or arrangement to be transferred to a pension
scheme (or arrangement under a pension scheme) that—
is selected by the responsible trustees or managers, and
meets prescribed conditions;
specify conditions that must be met by a scheme or arrangement
selected under
paragraph (a)
.
For the purposes of
subsection (2)
, a transfer solution applies to an affected
scheme or arrangement if—
the Pensions Regulator considers that—
based on the assessment carried out by the responsible trustees
or managers under section
15
(6)
(a)
in the action plan of the
scheme or arrangement, transferring the benefits of all (or a
subset of) the members of the scheme or arrangement to
another pension scheme (or arrangement under a pension
scheme) could reasonably be expected to result in the generality
of the members of the scheme or arrangement receiving
improved long-term value for money, and
any other measures proposed under
section 15
(6)
(b)
in the
action plan of the scheme or arrangement are unlikely to result
in its achieving an intermediate (or “fully delivering”) rating
or substantially improving its performance with regard to the
provision of value for money, and
any prescribed conditions are met.
Value for money regulations may make provision—
about the process for transferring accrued rights and benefits under
subsection (2)
(which may for example include provision for restricting
or prohibiting administrative costs and as to time limits);
conferring on the Pensions Regulator power to direct the trustees or
managers of the affected scheme to do things permitted or required
by the regulations;
conferring a discretion on the Pensions Regulator;
about the winding up of a relevant scheme in circumstances where
the accrued rights and benefits the members are, or are to be,
transferred out of the scheme.
In this section —
“
employer” has the same meaning as in
section 16
;
“
participating employer” has the same meaning as in
section 16
.
Value for money regulations may make provision for ensuring compliance
with value for money provisions.
Regulations under subsection (1) may in particular—
provide for the Pensions Regulator to issue a notice (a “compliance
notice”) to a person with a view to ensuring the person's compliance
with a value for money provision;
provide for the Pensions Regulator to issue a notice (a “third party
compliance notice”) to a person with a view to ensuring another
person's compliance with a value for money provision;
provide for the Pensions Regulator to issue a notice (a “penalty notice”)
imposing a penalty on a person where the Pensions Regulator is of
the opinion that the person—
has failed to comply with a compliance notice or third party
compliance notice, or
has contravened a value for money provision;
provide for the making of a reference to the First-tier Tribunal or
Upper Tribunal in respect of the issue of a penalty notice or the amount
of a penalty;
confer other functions on the Pensions Regulator.
The regulations may make provision for determining the amount, or the
maximum amount, of a penalty in respect of a failure or contravention.
The amount of a penalty imposed under the regulations in respect of a failure
or contravention must not exceed—
£10,000, in the case of an individual, and
£100,000, in any other case.
Value for money regulations may provide that where the Pensions Regulator
has, in compliance with a requirement of regulations under
subsection (3)
(c)
(ii)
, imposed a penalty on a person the Regulator is to be authorised to withdraw
the penalty if—
the Regulator considers it appropriate to do so having regard to the
circumstances in which the contravention took place, and
any prescribed conditions are met.
Value for money regulations may provide—
that if the Regulator determines that a rating assigned by responsible
trustees or managers for the purposes of
section 11
(4)
(a)
is not correct,
the Regulator may by a notice (a “directions notice”) substitute for
that rating the rating the Regulator considers should have been
assigned;
that, where the Pensions Regulator substitutes a rating by virtue of
paragraph
(a)
, that rating is to be deemed for all purposes to be the
rating assigned to the scheme under
section 15
(1)
.
A directions notice under
subsection (7)
must set out the reasons for the
Pensions Regulator’s determination.
Regulations may provide for the making of a reference to the First-tier Tribunal
or Upper Tribunal in respect of a determination of the Pensions Regulator
under
subsection (7)
(a)
.
The Pensions Act 1995 is amended as follows.
In section 7 (appointment of trustees)—
“(aa)
where subsection (3A) or (3B) applies, to secure that
the trustees as a whole have the skills and knowledge necessary for ensuring that the scheme, or an arrangement under it, improves its performance as regards the provision of value for money;”
“(3A)
This subsection applies where—
(a)
the trust scheme is a regulated VFM scheme (as defined
in section 11 (1) (a) of the Pension Schemes Act 2026), and(b)
the most recent rating assigned to the scheme under section 15 (1) of that Act was an intermediate or “not
delivering” rating.(3B)
This subsection applies where—
(a)
an arrangement under the trust scheme is a regulated
VFM arrangement, and(b)
the most recent rating assigned to the arrangement
under section 15 (1) of that Act was an intermediate or “not delivering” rating.”
“(7)
In this section “regulated VFM arrangement” and “regulated
VFM scheme” are to be interpreted in accordance with section
21 of the Pension Schemes Act 2026.”
In section 11 (powers to wind up schemes), in subsection (1)—
omit the “or” after paragraph (b), and
“(d)
the scheme is a regulated VFM scheme and—
(i)
the rating most recently assigned to the scheme
under section 15 (1) of the Pension Schemes Act 2026 is “not delivering”, and(ii)
the Authority are satisfied that the scheme is
not capable of providing value for money, or(e)
the following conditions are met in relation to a
regulated VFM arrangement (“A”) under the scheme—(i)
that the rating most recently assigned to A under section 15 (1) of the Pension Schemes Act 2026
is “not delivering”, and(ii)
the Authority are satisfied that A is not capable
of providing value for money.”;
“(8)
In subsection (1)—
(a)
“regulated VFM arrangement” and “regulated VFM
scheme” have the same meaning as in Chapter 2 of Part
2 of the Pension Schemes Act 2026 (see section 21 of that Act);(b)
the reference to the provision of value for money is to
be interpreted in accordance with that Chapter.”
This section applies if the Financial Conduct Authority makes rules, in relation
to persons regulated by it, that correspond to value for money regulations.
The Secretary of State may by regulations make provision for the purpose of
enabling or facilitating the use of the database mentioned in section
12
(2)
(d)
for the publication or sharing of information—
that relates to persons to whom the rules made by the Financial
Conduct Authority apply, and
that corresponds to metric data,
Regulations under subsection (2) are subject to the negative procedure.
This Chapter applies to a pension scheme managed by or on behalf of the
Crown as it applies to other pension schemes.
Accordingly, references in this Chapter to a person in their capacity as a
trustee or manager of a pension scheme include the Crown, or a person acting
on behalf of the Crown, in that capacity.
This Chapter applies to persons employed by or under the Crown as it applies
to persons employed by a private person.
In this Chapter—
“
action plan” has the meaning given by
section 15
(6)
;
“
intermediate rating” means an “intermediate” VFM rating (
section
15
(1)
(c)
);
“
fully delivering rating” means a fully delivering VFM rating (see
section
15
(1)
(a)
);
“
improvement plan” is to be interpreted in accordance with
section
16
(2)
(a)
;
“
metric data” is to be interpreted in accordance with
section 11
(2)
(c)
;
“
money purchase benefits” has the same meaning as in the Pension
Schemes Act 1993 (see section 181 of that Act);
“
not delivering rating” means a “not delivering” VFM rating (see
section
15
(1)
(b)
);
“
occupational pension scheme” has the same meaning as in the
Pension
Schemes Act 1993
(see section 1(1) of that Act);
“
prescribed” means prescribed by value for money regulations;
“
regulated VFM arrangement” is to be interpreted in accordance with
section 11
(1)
(b)
;
“
regulated VFM scheme” is to be interpreted in accordance with
section
11
(1)
(a)
;
“
relevant pension scheme” is to be interpreted in accordance with
section
11
(12)
and
(13)
;
“
responsible trustees or managers” is to be interpreted in accordance
with
section 11
(8)
;
“
trustee or manager” means—
in relation to a scheme established under a trust, the trustees;
in relation to any other scheme, the managers,
(including in the words that define “responsible trustees or managers” in section 11 (8) );
“
value for money regulations” has the meaning given by
section 11
(1)
;
“
VFM assessment” has the meaning given by
section 11
(2)
(a)
;
“
VFM period” is to be interpreted in accordance with
section 11
(2)
(a)
;
“
VFM rating” is to be interpreted in accordance with
section 11
(4)
(a)
.
The Secretary of State may make regulations (“small pots regulations”) for
the purpose of securing that small dormant pension pots held by
auto-enrolment schemes are—
held by consolidator schemes, and
in the case of consolidator schemes that have more than one
arrangement, held subject to consolidator arrangements.
A pension pot is “small” if its value, determined as at such time and in such
manner as is prescribed, is £1,000 or less (but is not nil).
A pension pot is “dormant” if—
no contributions were paid into the pension pot by, or on behalf or
in respect of, the individual for whom the pot is held during such
period of at least 12 months as is prescribed, and
the individual has, subject to any prescribed exceptions, taken no step
to confirm or alter the way in which the pension pot is invested.
The period that may be prescribed under
subsection (3)
(a)
in relation to a
pension pot in existence at the time the regulations come into force may begin
at any time after the coming into force of this section.
Small pots regulations—
are subject to the affirmative procedure if they—
are the first such regulations,
prescribe a person under
section 23
(1)
(determination of
destinations for small pots),
include provision under
section 24
(1)
or
26
(1)
(requirements
to send transfer notices or transfer pension pots), or
amend or repeal provision contained in an Act;
otherwise, are subject to the negative procedure.
Small pots regulations must require a prescribed person to make, in relation
to each small dormant pension pot held by an auto-enrolment scheme—
a proposal in relation to the pot (“the default proposal”), and
one or more other proposals in relation to the pot (“the alternative
proposals”).
For the purposes of this Chapter a “proposal”, in relation to a small dormant
pension pot, means a proposal that—
the pot should be held by a specified consolidator scheme, and
if there is more than one arrangement under that scheme, the pot
should be held subject to a specified arrangement under the scheme.
In this subsection “specified” means specified in the proposal.
Subsection (1) does not apply in relation to a small dormant pension pot if—
the auto-enrolment scheme that holds the pot is itself a consolidator
scheme,
any of the sums or assets comprising the pot, or any sums or assets
from which any of the sums or assets comprising the pot derive, were
at any time comprised in a small dormant pension pot in respect of
which a transfer notice was sent under small pots regulations, and
no response to that notice was received under section 24 (3) (d) (ii) .
A person specified under
subsection (1)
may be a body corporate established
by or under the regulations.
Small pots regulations may, in compliance with subsection (1) —
prescribe one person to make all of the proposals required to be made
under
that subsection
, or
prescribe two or more persons in relation to different descriptions of
those proposals.
Small pots regulations must require a proposal made by virtue of subsection
(1) to be notified to the trustees or managers of the auto-enrolment scheme
that holds the pension pot to which the proposal relates (unless those trustees
or managers are themselves the destination proposer).
A person prescribed under
subsection (1)
is referred to in
this Chapter
as a
“destination proposer”.
Small pots regulations must require the trustees or managers of an
auto-enrolment scheme to prepare a notice (“a transfer notice”) in respect of
each small dormant pension pot held by the scheme that is not exempt and
send it to the individual for whom the pot is held.
Small pots regulations must require a transfer notice in respect of a pension
pot to comply with the following provisions of this section.
The notice must—
set out the default proposal in relation to the pot;
set out the alternative proposal or proposals in relation to the pot;
state that, if the individual does not respond to the notice, the pot
will—
if the default proposal specifies that the pot be transferred to
a consolidator scheme, be transferred to that scheme, and
if there is more than one arrangement under the consolidator
scheme specified in the default proposal, be held subject to the
arrangement so specified;
invite the individual to consider whether they are content with the
default proposal and, if not, to respond to the notice stating either—
that they want to adopt one of the alternative proposals and
if so which, or
that they do not want any action to be taken in relation to the
pension pot.
Where membership of a consolidator scheme or a consolidator arrangement
specified in a proposal set out in a transfer notice entails being a party to a
contract with the trustees or managers of the scheme, the notice must set out,
or otherwise communicate, the terms of such a contract.
The notice must include such details as may be prescribed relating to—
the pension pot,
the auto-enrolment scheme, and
the consolidator scheme or schemes, and any consolidator
arrangements, specified in a proposal set out in the notice.
A small dormant pension pot is “exempt” if—
prescribed conditions are met in relation to the pot, and
the trustees or managers of the scheme that holds it determine that it
is in the best interests of the individual for whom the pot is held that
it should not be transferred in accordance with small pots regulations.
A determination in relation to an individual under
subsection (1)
(b)
may be
made by reference to a class of individuals of which the individual in question
is a member.
Small pots regulations may include further provision about how
determinations under
subsection (1)
(b)
are to be made.
Small pots regulations must require the trustees or managers of an
auto-enrolment scheme, in relation to each small dormant pot held by the
scheme in respect of which they have sent a transfer notice, to implement the
proposals set out in the notice in accordance with this section.
Subsection
(1)
does not apply to a pension pot if the trustees or managers
have received a response under
section 24
(3)
(d)
(ii)
in relation to it.
Small pots regulations must secure that if—
the trustees or managers do not receive a response to the notice, and
the default proposal involves the transfer of the pot to a consolidator
scheme,
the trustees or managers are required to transfer the pot to that scheme.
Small pots regulations must secure that if—
the trustees or managers receive a response to the notice, and
the alternative option identified by the individual under
section
24
(3)
(d)
(i)
involves the transfer of the pot to a consolidator scheme,
the trustees or managers are required to transfer the pot to that scheme.
Small pots regulations must secure that if—
the trustees or managers do not receive a response to the notice, and
the default proposal involves the pot being held by a consolidator
scheme subject to an arrangement specified in the proposal,
the pot is required to be held subject to that arrangement.
Small pots regulations must secure that if—
the trustees or managers receive a response to the notice, and
the alternative proposal identified by the individual under
section
24
(3)
(d)
(i)
involves the pot being held by an arrangement specified in
the proposal,
the pot is required to be held subject to that arrangement.
The trustees or managers may transfer a pension pot by virtue of
subsection
(3)
or
(4)
, or change the arrangement subject to which a pension pot is held
by virtue of
subsection (5)
or
(6)
, notwithstanding that it breaches a term of
the scheme (such as a requirement for consent); and any such breach is to be
disregarded for all purposes.
Subsections
(2)
and
(3)
apply where a pension pot held for an individual is
transferred by virtue of
section 26
(3)
or
(4)
to a different pension scheme (“the
receiving scheme”).
The individual becomes a member of the receiving scheme in relation to the
pot, and acquires the rights, and becomes subject to the obligations, of
membership.
Where membership of the receiving scheme in relation to the pot entails being
a party to a contract with its trustees or managers, a contract is treated as
entered into between the individual and the trustees or managers—
at the time at which the pension pot is transferred to the receiving
scheme, and
on the terms communicated to the individual by virtue of section 24 (4) .
Subsections (5) and (6) apply where a pension pot is by virtue of section 26 (5) or (6) held subject to a different arrangement under the same pension scheme, or an arrangement under a different pension scheme.
The individual becomes a member of the arrangement in relation to the pot,
and acquires the rights, and becomes subject to the obligations, of membership.
Where membership of the arrangement in relation to the pot entails being a
party to a contract with its trustees or managers of the pension scheme in
question, a contract is treated as entered into between the individual and the
trustees or managers—
at the time at which the pension pot is first held subject to the
arrangement, and
on the terms communicated to the individual by virtue of section 24 (4) .
Small pots regulations must prohibit the trustees or managers of an
auto-enrolment scheme from transferring a pension pot by virtue of
section
26
(3)
or
(4)
, or changing the arrangement subject to which it is held by virtue
of
section 26
(5)
or
(6)
, before the end of the required notice period.
In
subsection (1)
“the required notice period”, in relation to a pension pot,
means the period of 30 days, or such longer period as may be prescribed,
beginning with the day on which the transfer notice in respect of the pot is
sent.
Small pots regulations must (subject to
subsection (5)
) require the trustees or
managers of an auto-enrolment scheme to effect any transfer of a pension pot
by virtue of
section 26
(3)
or
(4)
, and any change in the arrangement subject
to which it is held by virtue of
section 26
(5)
or
(6)
, before the end of the
required transfer period.
In subsection
(3)
“the required transfer period”, in relation to a pension pot,
means the period of one year beginning with—
the date on which the provision of the regulations under which the
requirement is imposed comes into force, or
if later, the date on which the pension pot first becomes small and
dormant.
Small pots regulations may include provision extending the required transfer
period until the end of a prescribed period beginning with the date on which
the trustees or managers are notified of the proposals made by virtue of
section 23
(1)
in respect of the pot.
Small pots regulations must permit the trustees or managers of an eligible
Master Trust scheme to apply to the Pensions Regulator for authorisation
of—
the scheme, or
such arrangements under the scheme as are specified in the application.
Small pots regulations must require the Pensions Regulator to grant an
application for authorisation where—
the application is made in accordance with regulations made by virtue
of
subsection (1)
, and
prescribed conditions are met.
Small pots regulations may permit or require the Pensions Regulator, where
prescribed conditions are, or cease to be, met in relation to a consolidator
scheme or arrangement—
to require the trustees or managers to take prescribed steps;
to prohibit a destination proposer, in prescribed cases or in all cases,
from specifying the scheme or arrangement in proposals under
section
23
(1)
;
to withdraw authorisation.
The conditions that may be prescribed under
subsection (2)
(b)
or
(3)
include
conditions relating to—
the terms of the scheme,
the value of sums and assets held by the scheme for the purpose of
providing money purchase benefits,
the fees charged by the scheme, or
a VFM rating assigned to the scheme or any arrangement under the
scheme;
and include conditions that involve the exercise of a discretion by the Pensions Regulator.
Small pots regulations may permit or require the Pensions Regulator, where
it withdraws authorisation, to require the trustees or managers of the scheme
in question to take prescribed steps in relation to relevant pension pots.
The steps that may be required to be taken by virtue of
subsection (5)
include
steps to limit the fees that may be charged.
For the purposes of subsection (5) a pension pot is “relevant” if—
any of the sums or assets comprising the pot, or any sums or assets
from which any of the sums or assets comprising the pot derive, were
at any time comprised in a small dormant pension pot in respect of
which a transfer notice was sent under small pots regulations, and
no response to that notice was received under section 24 (3) (d) (ii) .
For the purposes of this Chapter a Master Trust scheme is “eligible” if it is
authorised under section 5 of the Pension Schemes Act 2017 (authorisation
of Master Trust schemes).
In this Chapter “consolidator scheme” means—
an eligible Master Trust scheme—
that is for the time being authorised by virtue of
section
29
(1)
(a)
, or
any arrangement under which is for the time being authorised
by virtue of
section 29
(1)
(b)
, or
an FCA-regulated pension scheme that is for the time being included
on a list published by the FCA under
section 137FBC
(2)
(b)
of the
Financial Services and Markets Act 2000.
In this Chapter “consolidator arrangement” means—
an arrangement under an eligible Master Trust scheme where—
the scheme is for the time being authorised by virtue of
section
29
(1)
(a)
, or
the arrangement is for the time being authorised by virtue of section 29 (1) (b) , or
an arrangement under an FCA-regulated pension scheme that is for
the time being included on a list published by the FCA under
section
137FBC
(2)
(b)
of the Financial Services and Markets Act 2000.
Small pots regulations may, in particular—
authorise the Pensions Regulator to charge a prescribed fee in respect
of an application for authorisation under the regulations;
confer a right of appeal to the First-tier Tribunal or the Upper Tribunal;
require the trustees or managers of a relevant pension scheme to take
prescribed steps to improve the accuracy and completeness of
information held by them;
require a relevant person, other than the FCA, to provide prescribed
information, in such form and at such time as may be prescribed, to—
a relevant person, or
an individual for whom a relevant pension scheme holds a
pension pot;
require the trustees or managers of a relevant pension scheme to keep,
and retain for a prescribed period, prescribed records;
limit the fees that may be charged by a relevant pension scheme in
connection with the transfer of a pension pot under the regulations;
require a destination proposer, the trustees or managers of a relevant
pension scheme, or the Secretary of State, to pay compensation to an
individual who has suffered a loss as a result of a breach of the
regulations;
provide for the delegation of a function conferred by the regulations.
In
subsection (1)
(c)
to
(f)
, a reference to information includes personal data,
and a reference to records includes records of personal data.
The processing of personal data in accordance with the regulations does not
breach—
any obligation of confidence owed by the person processing the
personal data, or
any other restriction on the processing of personal data (however
imposed).
In this section—
“
personal data” has the same meaning as in the Data Protection Act 2018
(see section 3 of that Act);
“
processing” has the same meaning as in the Data Protection Act 2018
(see section 3 of that Act);
“
relevant pension scheme” means—
an auto-enrolment scheme, or
a consolidator scheme;
“
relevant person” means—
the Pensions Regulator,
the FCA,
a destination proposer, or
the trustees or managers of a relevant pension scheme.
The power to make small pots regulations is capable of being exercised so
as to amend or repeal provision contained in an Act.
In particular, small pots regulations may—
amend section 146 of the Pension Schemes Act 1993 (functions of the
Pensions Ombudsman) so as to confer on the Pensions Ombudsman
the function of investigating and determining complaints or disputes
relating to a destination proposer;
amend section 175 of that Act (levies towards certain expenditure) so
as to include expenditure of—
a destination proposer, or
the Secretary of State by virtue of section 31(1)(h)
(compensation).
Small pots regulations may make provision with a view to ensuring the
compliance of any person who is not FCA-regulated with any provision of
the regulations.
The regulations may in particular—
provide for the Pensions Regulator to issue a notice (a “compliance
notice”) to a person with a view to ensuring the person's compliance
with a provision of the regulations;
provide for the Pensions Regulator to issue a notice (a “third party
compliance notice”) to a person with a view to ensuring another
person's compliance with a provision of the regulations;
provide for the Pensions Regulator to issue a notice (a “penalty notice”)
imposing a penalty on a person where the person—
has failed to comply with a compliance notice or third party
compliance notice, or
has contravened a provision of the regulations;
provide for the making of a reference to the First-tier Tribunal or
Upper Tribunal in respect of the issue of a penalty notice or the amount
of a penalty.
The regulations may make provision for determining the amount, or the
maximum amount, of a penalty in respect of a failure or contravention.
But the amount of a penalty imposed under the regulations in respect of a
failure or contravention must not exceed—
£10,000, in the case of an individual, and
£100,000, in any other case.
Any penalty payable under the regulations is recoverable by the Regulator.
In England and Wales, any such penalty is, if the county court so orders,
recoverable under section 85 of the County Courts Act 1984 or otherwise as
if it were payable under an order of that court.
In Scotland, a penalty notice is enforceable as if it were an extract registered
decree arbitral bearing a warrant for execution issued by the sheriff court of
any sheriffdom.
The Regulator must pay into the Consolidated Fund any penalty recovered
under this section.
A reference in this section to a provision of small pots regulations includes
a reference to a requirement or restriction imposed by the Pensions Regulator
under the regulations.
The Treasury may make regulations to enable the FCA to take action (in
addition to any action it may otherwise take under the Financial Services and
Markets Act 2000) for monitoring and enforcing compliance of an
FCA-regulated person with any provision of small pots regulations.
The regulations may apply, or make provision corresponding to—
provision contained in small pots regulations by virtue of section 32 , or
any provision of the Financial Services and Markets Act 2000,
with or without modification.
Regulations under this section are subject to the affirmative procedure.
For the purposes of this Chapter a person is “FCA-regulated” if they are an
authorised person (within the meaning of the Financial Services and Markets
Act 2000) in relation to the operation of a pension scheme.
The Secretary of State may by regulations amend
section 22
(2)
(definition of
“small” in relation to a pension pot) so as to substitute a larger or smaller
amount for the amount for the time being specified there.
Before making regulations under this section the Secretary of State must—
consult such persons as the Secretary of State considers appropriate,
and
publish details of the proposed amendment, and the Secretary of
State’s reasons for making the proposal, and consider any
representations made.
Regulations under this section are subject to the affirmative procedure.
This Chapter applies to a pension scheme managed by or on behalf of the
Crown as it applies to other pension schemes.
Accordingly, references in this Chapter to a person in their capacity as a
trustee or manager of a pension scheme include the Crown, or a person acting
on behalf of the Crown, in that capacity.
This Chapter applies to persons employed by or under the Crown as it applies
to persons employed by a private person.
In this Chapter—
“
the alternative proposals”, in relation to a small dormant pension pot,
has the meaning given by
section 23
(1)
;
“
auto-enrolment scheme” has the meaning given by
subsection (5)
;
“
consolidator arrangement” has the meaning given by
section 30
(2)
;
“
consolidator scheme” has the meaning given by
section 30
(1)
;
“
the default proposal”, in relation to a small dormant pension pot, has
the meaning given by
section 23
(1)
;
“
destination proposer” has the meaning given by section 23
(7)
;
“
dormant”, in relation to a pension pot, has the meaning given by
section
22
(3)
;
“
eligible”, in relation to a Master Trust scheme, has the meaning given
by
section 29
(8)
;
“
exempt”, in relation to a pension pot, has the meaning given by
section
25
;
“
the FCA” means the Financial Conduct Authority;
“
FCA-regulated”, in relation to a pension scheme, has the meaning given
by
subsection (2)
;
“
FCA-regulated”, in relation to a person, has the meaning given by
section 33
(4)
;
“
functions” includes powers and duties;
“
Master Trust scheme” has the same meaning as in the
Pension Schemes
Act 2017
(see section 1(1) of that Act);
“
money purchase benefits” has the same meaning as in the
Pension
Schemes Act 1993
(see section 181(1) of that Act);
“
pension pot” has the meaning given by
section 37
;
“
pension scheme” has the meaning given by section 1(5) of the
Pension
Schemes Act 1993
;
“
prescribed” means specified in, or determined in accordance with, small
pots regulations;
“
proposal”, in relation to a small dormant pension pot, has the meaning
given by
section 23
(2)
;
“
provider”, in relation to an FCA-regulated pension scheme, means the
person mentioned in
subsection (2)
(b)
;
“
small”, in relation to a pension pot, has the meaning given by
section
22
(2)
;
“
small pots regulations” has the meaning given by
section 22
(1)
;
“
terms”, in relation to a pension scheme, has the meaning given by
subsection (3)
;
“
transfer”, in relation to a pension pot, includes a transfer of an amount
representing its value;
“
transfer notice” has the meaning given by
section 24
(1)
;
“
trustees or managers”, in relation to a pension scheme, means (subject
to
subsection (4)
)—
in the case of a scheme established under a trust, the trustees
of the scheme, and
in any other case, the persons responsible for the management
of the scheme;
“
VFM rating” has the same meaning as in
Chapter 1
.
A pension scheme is “FCA-regulated” if the operation of the scheme—
is carried on in such a way as to be a regulated activity for the
purposes of the Financial Services and Markets Act 2000, and
is carried on in the United Kingdom by a person who is in relation
to that activity an authorised person under section 19 of that Act.
A reference in this Part to the terms of a pension scheme is to the terms of
any instrument or agreement—
in which the scheme is comprised, or
to which the provider of the scheme and any member are parties in
connection with the scheme.
A reference in this Chapter to the trustees or managers of a pension scheme
is, where the scheme is FCA-regulated, a reference to the provider of the
scheme.
In subsection (5) “active member” has the same meaning as in Part 1 of the Pensions Act 2008 (see section 99 of that Act).
In this Chapter, “pension pot” means sums or assets held for the purpose of
providing money purchase benefits to or in respect of a member of a pension
scheme; and—
a reference to the pension scheme that holds a pension pot is to that
pension scheme;
a reference to the individual for whom a pension pot is held is to that
member.
Where—
an individual is a member of an auto-enrolment scheme in relation to
more than one employment, and
the sums or assets held by the scheme for the purpose of providing
money purchase benefits to or in respect of the member in relation to
those employments are accounted for separately by the scheme,
the sums or assets held in relation to each employment are regarded for the purposes of this Chapter as separate pension pots.
In subsection (2) “employment” has the same meaning as in Part 1 of the Pensions Act 2008 (see section 99 of that Act).
The Financial Services and Markets Act 2000 is amended as follows.
“137FBC FCA general rules: regulation of consolidator pension schemes
(1)
The FCA may make general rules under which the provider of an
FCA-regulated pension scheme is required to notify the FCA where it intends that the scheme should be a consolidator scheme, or an arrangement under the scheme should be a consolidator arrangement, for the purposes of Chapter 2 of Part 2 of the Pension Schemes Act 2026.(2)
If the FCA makes rules under subsection (1) it must—
(a)
make general rules regulating pension schemes that have given
(and not withdrawn) a notice of the kind mentioned in subsection (1) , and(b)
publish and maintain a list of FCA-regulated pension schemes,
and arrangements under such schemes, in accordance with subsections (3) and (4).(3)
The list must, subject to subsection (4), include each FCA-regulated
pension scheme, and each arrangement under an FCA-regulated scheme, in relation to which the FCA has received a notice by virtue of subsection (1) .(4)
The list must not include a scheme or arrangement if—
(a)
the notice in relation to it has been withdrawn by the provider
of the scheme, or(b)
the FCA has determined that it is unlikely that rules made
under subsection (1) or (2) (a) will be complied with in relation to the scheme or arrangement within such period as the FCA considers reasonable.(5)
In determining what provision to include in rules under subsection
(2) (a) , the FCA must have regard to any provision contained in small
pots regulations by virtue of section 29 of the Pension Schemes Act 2026 (authorisation of consolidator schemes etc by the Pensions Regulator).(6)
In this section—
“
FCA-regulated”, in relation to a pension scheme, has the meaning
given by subsection (7) ;“
pension scheme” has the meaning given by section 1(5) of the Pension Schemes Act 1993 ;“
provider”, in relation to an FCA-regulated pension scheme,
means the person referred to in subsection (7) (b) .(7)
A pension scheme is “FCA-regulated” if the operation of the scheme—
(a)
is a regulated activity, and
(b)
is carried on in the United Kingdom by an authorised person.”
In section 204A (meaning of “relevant requirement” and “appropriate
regulator”)—
In the Pensions Act 2014, omit the following provisions (which contain powers
that have not been brought into force to make provision for the automatic
transfer of pension benefits etc)—
section 33;
Schedule 17, except paragraph 15(1) (which contains interpretative
provisions that apply for the purposes of Schedule 18 to that Act).
In Schedule 18 to that Act (power to restrict charges or impose requirements The definitions in paragraph 15(1) of Schedule 17 apply for the
in relation to schemes), in paragraph 4 (interpretation), for sub-paragraph (1)
substitute—
“(1)
purposes of this Schedule.”
In consequence of
subsection (1)
(b)
, in section 256 of the Pensions Act 2004
(no indemnification for fines or civil penalties), in subsection (1)(b), for “that
Act” substitute “the Pensions Act 2014”.
The Pensions Act 2008 is amended as follows.
Section 20 (quality requirement: UK money purchase schemes) is amended
as follows.
In
subsection (1)
, after “purchase scheme” insert “that is not a relevant Master
Trust and”.
“(1A)
A money purchase scheme that is a relevant Master Trust satisfies the
quality requirement in relation to a jobholder if the conditions in subsection (1)(a) to (c) and Condition 1 and Condition 2 of this subsection are met.Condition 1
This Condition is that the relevant Master Trust—
(a)
is approved under section 28A in respect of a main scale default
arrangement,(b)
is exempted by regulations from the requirement for approval,
(c)
has previously been approved under section 28E (transition
pathway relief) and is to be treated in accordance with regulations as if it had approval under section 28A ,(d)
qualifies under section 28E for transition pathway relief, or
(e)
qualifies under section 28F for new entrant pathway relief.
Condition 2
This Condition is that the relevant Master Trust—
(a)
is approved under section 28C in respect of the asset allocation
requirement, or(b)
is exempted by regulations from the requirement for approval.
(1B)
Regulations under Condition 1(b) or 2(b) of subsection (1A) may
exempt any description of relevant Master Trust, for example those that are—(a)
designed to meet the needs of persons with a protected
characteristic within the meaning of the Equality Act 2010, or(b)
hybrid schemes.
(1C)
Regulations may—
(a)
permit the Regulatory Authority to determine that a relevant
Master Trust is to be treated for a period (“the protected period”) as meeting Condition 1 or Condition 2 of subsection
(1A) for a period specified by the Regulatory Authority;(b)
specify circumstances in which a relevant Master Trust, which
is treated as mentioned in paragraph (a) and meets prescribed conditions, is to be subject during a prescribed period (ending with the end of the protected period) to any requirements specified in the regulations; and provision under this paragraph may include provision corresponding to any provision that may be made under section 28A (10) ;(c)
make provision about the Regulatory Authority requiring the
trustees or managers of a relevant Master Trust to give the Regulatory Authority a plan showing how they propose to meet or continue to meet the scale requirement under section 28A or the conditions for approval under section 28C .”
“(4)
In this section—
“
main scale default arrangement” is to be interpreted in
accordance with section section 28A (13) ;“
Master Trust scheme” has the same meaning as in the Pension
Schemes Act 2017 (see section 1(1) of that Act);“
relevant Master Trust” means a money purchase scheme that
has its main administration in the United Kingdom and is an authorised Master Trust scheme.”
In section 25 (quality requirement: non-UK occupational pension schemes)
for “18(b) or (c)” substitute “18(c)”.
Section 26 (quality requirement: UK personal pension schemes) is amended
as follows.
“(7A)
The fifth condition is that if the scheme is a group personal pension
scheme of a prescribed description it must, unless subsection (7C) applies, hold an approval under section 28B in respect of a main scale default arrangement.(7B)
The sixth condition is that if the scheme is a group personal pension
scheme of a prescribed description it must hold an approval under section 28C in respect of the asset allocation requirement.(7C)
This subsection applies if the group personal pension scheme—
(a)
(b)
qualifies under section 28E for transition pathway relief, or
(c)
qualifies under section 28F for new entrant pathway relief.
(7D)
(7E)
Regulations may—
(a)
permit the Regulatory Authority to determine that a group
personal pension scheme is to be treated as meeting the fifth or sixth condition for a period (the “protected period”) specified by the Regulatory Authority;(b)
specify circumstances in which a group personal pension
scheme which is treated as mentioned in paragraph (a) and meets prescribed conditions is to be subject during a prescribed period (which ends with the end of the protected period) to any requirements specified in the regulations; and provision under this paragraph may include provision corresponding to any provision that may be made under section 28A (10) ;
In section 28 (certification that quality requirement or alternative requirement
is satisfied) in subsection (3A) omit paragraphs (a) and (c).
In section 28 (certification that quality requirement or alternative requirement
is satisfied) in subsection (4) (definition of “relevant quality requirement”)—
in paragraph (a), at the end insert “, except so far as that quality
requirement relates to Condition 1 or 2 in
subsection (1A)
”;
in paragraph (b), at the end insert “, except so far as that quality
requirement relates to the fifth and sixth conditions”;
in paragraph (c), at the end insert “, except so far as those requirements
relate to Condition 1 or 2 in section 20
(1A)
”.
“28A MSDA approval: relevant Master Trusts
(1)
For the purposes of Condition 1 of section 20 (1A) , the Regulatory
Authority (“the Authority”) may approve a relevant Master Trust (“the RMT”) in respect of a main scale default arrangement if the Authority determines that—(a)
the RMT meets the scale requirement by reference to the main
scale default arrangement, and(b)
any other prescribed conditions are met.
(2)
The RMT meets the scale requirement by reference to a main scale
default arrangement if the sum of the values mentioned in paragraphs (a) to (c) of subsection (4) is equal to or greater than the minimum amount.(3)
In this section “the minimum amount” means £25 billion.
(4)
Subject to subsection (7) , those values are—
(a)
the total value of assets of the RMT which—
(i)
represent accrued rights of members of that scheme,
(ii)
are held subject to the main scale default arrangement,
and(iii)
are managed under a common investment strategy;
(b)
if one or more relevant Master Trusts are connected with the
RMT, the total value of assets of those schemes that—(i)
represent accrued rights of members of those schemes,
(ii)
are held subject to the main scale default arrangement,
and(iii)
are managed under the investment strategy mentioned
in paragraph (a) (iii) ;(c)
if one or more group personal pension schemes are connected
with the RMT, the total value of assets of those schemes that—(i)
represent accrued rights of members of those schemes,
(ii)
are held subject to the main scale default arrangement,
and(iii)
are managed under the investment strategy mentioned
in paragraph (a) (iii) .(5)
A reference in subsection (4) to a relevant Master Trust or a group
personal pension scheme being “connected” with the RMT is to a relevant Master Trust or a group personal pension scheme having a prescribed connection with the RMT.(6)
Regulations under subsection (5) may, for example, provide—
(a)
that a relevant Master Trust is connected with the RMT only
if it has the same scheme funder or scheme strategist as the RMT, or(b)
that a group personal pension scheme is connected with the
RMT only if its provider is also the scheme funder or scheme strategist of the RMT.(7)
Regulations may make provision about amounts that are to be excluded
or adjusted in calculating the total value under subsection (4) (a) to (c) .(8)
Regulations may make provision about—
(a)
how the satisfaction of criteria relevant to the meeting of the
scale requirement is to be evidenced;(b)
what it means for assets of a pension scheme to be managed
under a “common investment strategy” (including in particular provision defining that expression by reference to whether or how far the assets relating to each member of the scheme are allocated in the same proportion to the same investments).(9)
(10)
Regulations may make provision—
(a)
as to a time limit within which the Authority must decide an
application for approval;(b)
as to procedures in connection with approvals or where an
approval has been given;(c)
about the withdrawal of approvals including conditions for,
and procedures in connection with, withdrawals;(d)
for the Authority’s decision on the application, or on a decision
to withdraw approval, to be referred to the Upper Tribunal;(e)
for the Authority to maintain and publish a list of relevant
Master Trusts that are approved under this section.(11)
Regulations under subsection (10) (c) may in particular make
provision—(a)
about steps, including communications with a relevant Master
Trust, that the Authority must take before deciding to withdraw an approval;(b)
setting a minimum period that must elapse between a
notification that approval is to be withdrawn and the withdrawal of the approval;(c)
where the Authority has given notice to the trustees or
managers of a relevant Master Trust that the approval (under this section) of that scheme is likely to be withdrawn and any other prescribed conditions are met, requiring the trustees or managers to—(i)
act in relation to the scheme as if its approval has been
withdrawn, and(ii)
take steps for ensuring that persons (such as employers)
who may be affected in the event of the relevant Master Trust’s losing that approval are promptly informed if such a loss should occur;(d)
permitting the Authority to impose, on a person who fails to
comply with a requirement under paragraph (c), a penalty determined in accordance with the regulations that does not exceed £100,000;(e)
providing for the making of a reference to the First-tier Tribunal
or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty.(12)
Before making regulations under this section the Secretary of State
must consult such persons as the Secretary of State considers appropriate.(13)
In this section “main scale default arrangement” means an
arrangement—(a)
that is used for the purposes of one or more pension schemes,
and(b)
subject to which assets of any one of those schemes must under
the rules of the scheme be held, or may under those rules be held, if the member of the scheme to whom the assets relate does not make a choice as to the arrangement subject to which the assets are to be held.28B MSDA approval: group personal pension scheme
(1)
The Regulatory Authority (“the Authority”) may, for the purposes of
the Condition in section 26 (7A) , approve a group personal pension scheme (“the GPP”) in respect of a main scale default arrangement if the Authority determines that—(a)
the GPP meets the scale requirement by reference to the main
scale default arrangement, and(b)
any other prescribed conditions are met.
(2)
The GPP meets the scale requirement by reference to a main scale
default arrangement if the sum of the values mentioned in paragraphs (a) to (c) of subsection (4) is equal to or greater than the minimum amount.(3)
In this section “the minimum amount” means £25 billion.
(4)
(a)
the total value of assets of the GPP which—
(i)
represent accrued rights of members of the GPP,
(ii)
are held subject to the main scale default arrangement,
and(iii)
are managed under a common investment strategy;
(b)
if one or more group personal pension schemes are connected
with the GPP, the total value of assets of those schemes that—(i)
represent accrued rights of members of those schemes,
(ii)
are held subject to the main scale default arrangement,
and(iii)
are managed under the investment strategy mentioned
in paragraph (a) (iii) ;(c)
if one or more relevant Master Trusts are connected with the
GPP, the total value of assets of those schemes that—(i)
represent accrued rights of members of that scheme,
(ii)
are held subject to the main scale default arrangement,
and(iii)
are managed under the investment strategy mentioned
in paragraph (a) (iii) .(5)
(6)
Regulations may make provision about—
(a)
how the satisfaction of criteria relevant to the meeting of the
scale requirement is to be evidenced;(b)
what it means for assets of a pension scheme to be managed
under a “common investment strategy” (including in particular provision defining that expression by reference to whether or how far the assets relating to each member of the scheme are allocated in the same proportion to the same investments).(7)
(8)
A reference in subsection (4) to a group personal pension scheme or
a relevant Master Trust being “connected” with the GPP is to a group personal pension scheme or a relevant Master Trust having a prescribed connection with the GPP.(9)
Regulations under subsection (8) may, for example, provide—
(a)
that a group personal pension scheme is connected with the
GPP only if it has the same provider as the GPP, or(b)
that a relevant Master Trust is connected with the GPP only if
its scheme funder or scheme strategist is also the provider of the GPP.(10)
Regulations may make provision—
(a)
as to a time limit within which the Authority must decide an
application for approval;(b)
as to procedures in connection with approvals or where an
approval has been given;(c)
about the withdrawal of an approval, including conditions for
and procedures in connection with withdrawals;(d)
for the Authority’s decision on the application, or on a decision
to withdraw approval, to be referred to the Upper Tribunal;(e)
for the Authority to maintain and publish a list of group
personal pension schemes that are approved under this section.(11)
Regulations under subsection (10) (c) may in particular make
provision—(a)
about steps, including communications with a group personal
pension scheme, that the Authority must take before deciding to withdraw an approval;(b)
setting a minimum period that must elapse between notification
that approval is to be withdrawn and the withdrawal of the approval;(c)
where the Authority has given notice to the provider of the
GPP that its approval is likely to be withdrawn and any other prescribed conditions are met, requiring the provider to—(i)
act in relation to the scheme as if its approval has been
withdrawn, and(ii)
take steps for ensuring that persons (such as employers)
who may be affected in the event of the GPP losing that approval are promptly informed if such a loss should occur;(d)
permitting the Authority to impose, on a person who fails to
comply with a requirement under paragraph (c) , a penalty determined in accordance with the regulations that does not exceed £100,000;(e)
providing for the making of a reference to the First-tier Tribunal
or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty.(12)
Before making regulations under this section the Secretary of State
must consult such persons as the Secretary of State considers appropriate.(13)
In this section “main scale default arrangement” means an
arrangement—(a)
that is used for the purposes of one or more pension schemes,
and(b)
subject to which assets of any one of those schemes must under
the rules of the scheme be held, or may under those rules be held, if the member of the scheme to whom the assets relate does not make a choice as to the arrangement subject to which the assets are to be held.28C Approvals in respect of asset allocation
(1)
The Regulatory Authority (“the Authority”) may approve a relevant
Master Trust or a group personal pension scheme in respect of the asset allocation requirement only if the Authority determines that at least the prescribed percentage (by value) of the assets held in default funds of the scheme are qualifying assets.(2)
Regulations under subsection (1) may prescribe a percentage by
reference to—(a)
all of the assets of the scheme that are held in default funds,
or(b)
a prescribed description of the assets of the scheme that are so
held.(3)
Regulations under subsection (1) made after 31 December 2035 may
not increase the prescribed percentage.(4)
In this section “qualifying asset” means an asset of a prescribed
description.(5)
A description of asset prescribed under subsection (4) may for example
be—(a)
private equity,
(b)
private debt,
(c)
venture capital, or
(d)
interests in land,
but (unless within any of the above paragraphs) may not be securities listed on a recognised investment exchange within the meaning of the Income Tax Acts (see section 1005 of the Income Tax Act 2007) excluding those registered by the Financial Conduct Authority as an SME growth market in accordance with the Market Conduct sourcebook.
(6)
A description prescribed under subsection (4) may for example relate
to—(a)
whether an asset is located in the United Kingdom or
elsewhere;(b)
the presence or absence of other prescribed factors linking an
asset to economic activity in the United Kingdom.(7)
For the purposes of this section assets of a relevant Master Trust or
group personal pension scheme are held in “default funds” if—(a)
the jobholders by or in respect of whom contributions have
been made to the scheme have not (or predominantly have not) expressed a choice as to where the contributions are allocated, and(b)
the arrangements under which the assets are held meet any
other conditions that may be prescribed.(8)
Regulations may assign different descriptions of asset to different
fractions of the percentage prescribed under subsection (1) .(9)
Regulations may make provision—
(a)
about how the meeting of the asset allocation requirement is
to be evidenced;(b)
requiring the trustees or managers of relevant Master Trusts
or the providers of group personal pension schemes to have regard to any guidance issued by the Secretary of State about the effect of any regulations under this section.(10)
Regulations may make provision—
(a)
as to a time limit within which the Authority must decide an
application for approval;(b)
as to procedures in connection with approvals or where an
approval has been given;(c)
about the period for which an approval has effect;
(d)
about the withdrawal of an approval, including conditions for
and procedures in connection with withdrawals;(e)
about the provision to the Authority of information required
for the purposes of deciding applications (including any additional information the Authority may require in a particular case);(f)
requiring the Authority to report to the Secretary of State any
information the Secretary of State may require relating to the allocation of assets by relevant Master Trusts or group personal pension schemes;(g)
for the Authority’s decision on the application to be referred
to the Upper Tribunal;(h)
for the Authority to maintain and publish—
(i)
a list of relevant Master Trusts that are approved under
this section, and(ii)
a list of group personal pension schemes that are
approved under this section,(or a single list of the pension schemes mentioned in sub-paragraphs (i) and (ii)).
(11)
(a)
about steps, including communications with a relevant Master
Trust or group personal pension scheme, that the Authority must take before deciding to withdraw an approval;(b)
setting a minimum period that must elapse between notification
that approval is to be withdrawn and the withdrawal of the approval;(c)
where the Authority has given notice to the trustees or
managers of a relevant Master Trust or the provider of a group personal pension that its approval is likely to be withdrawn and any other prescribed conditions are met, requiring the trustees or managers or provider to—(i)
act in relation to the scheme as if its approval has been
withdrawn, and(ii)
take steps for ensuring that persons (such as employers)
who may be affected in the event of the scheme losing that approval are promptly informed if such a loss should occur;(d)
permitting the Authority to impose, on a person who fails to
comply with a requirement under paragraph (c) , a penalty determined in accordance with the regulations that does not exceed £100,000.(12)
Before making the first set of regulations under subsection (1) the
Secretary of State must prepare and publish a report regarding—(a)
how the financial interests of members of relevant Master Trusts
and group personal pension schemes are or would be affected by the proposed regulations;(b)
what effects the proposed measures could be expected to have
on economic growth in the United Kingdom;(c)
any other matters the Secretary of State considers appropriate.
(13)
Before making regulations under this section, the Secretary of State
must consult the Treasury.(14)
The Secretary of State must consult such persons as the Secretary of
State considers appropriate before publishing a report under subsection
(12) .(15)
Provision under this section overrides any provision of the trust deed
or rules of the scheme in question, so far as they are in conflict (and for that purpose, a provision of the trust deed or rules of the scheme is “in conflict” with provision under this section so far as the former does not allow for the assets of the scheme to be managed in such a way as to meet the conditions for approval under this section).28D Information
(1)
Regulations may make provision about information that the trustees
or managers of a relevant Master Trust or the provider of a group personal pension scheme must give to the Regulatory Authority about the allocation of assets of the relevant Master Trust or group personal pension scheme.(2)
The regulations may make provision about—
(a)
the types of information that must be given;
(b)
when it must be given;
(c)
the form and manner in which it must be given.
28E Transition pathway relief
(1)
The Regulatory Authority (“the Authority”) may approve a relevant
Master Trust as qualifying for transition pathway relief if the Authority determines that—(a)
the condition in subsection (2) is met, and
(b)
any other prescribed conditions are met.
(2)
The condition mentioned in subsection (1) (a) is that the Authority
determines that the relevant Master Trust—(a)
would qualify for approval under section 28A (MSDA approval)
if the amount specified in section 28A (3) were £10 billion, and(3)
The Authority may approve a group personal pension scheme as
qualifying for transition pathway relief if the Authority determines that—(a)
the condition in subsection (4) is met, and
(b)
any other prescribed conditions are met.
(4)
The condition mentioned in subsection (3) (a) is that the Authority
determines that the group personal pension scheme—(a)
would qualify for approval under section 28B (MSDA approval:
group personal pension schemes) if the amount specified in section 28B (3) were £10 billion, and(b)
has a credible plan in place for meeting the scale requirement
within the meaning of section 28B (2) .(5)
Regulations may require trustees or managers of schemes that are
authorised under this section to take prescribed steps, for example—(a)
to produce plans for increasing the scale of their schemes’
holdings or to take other actions that may facilitate progress towards approval under section 28A or 28B , or(b)
in connection with governance and investment capability.
(6)
Regulations must make provision about the criteria for making any
determinations under subsection (1) or (3) .(7)
Regulations may make provision—
(a)
as to a time limit within which the Authority must decide an
application;(b)
as to procedures in connection with approvals or where an
approval has been given;(c)
for the Authority’s decision on the application to be referred
to the Upper Tribunal;(d)
for the Authority to maintain and publish a list of schemes
that are approved under this section.(8)
Before making regulations under this section the Secretary of State
must consult such persons as the Secretary of State considers appropriate.(9)
In this section “relevant Master Trust” has the same meaning as in
section 20.28F New entrant pathway relief
(1)
A relevant Master Trust or group personal pension scheme qualifies
for new entrant pathway relief for the purposes of Condition 1 (e) of section 20(1A) or section 26 (7C) (c) if the relevant Master Trust or group personal pension scheme is approved by the Regulatory Authority (“the Authority”) under this section.(2)
The Authority may approve a relevant Master Trust or a group
personal pension scheme under this section only if the Authority determines that—(a)
the scheme in question does not yet have any members,
(b)
(c)
the scheme in question has an innovative product design, and
(d)
any other prescribed conditions are met.
(3)
Regulations may make provision—
(a)
as to a time limit within which the Authority must decide an
application;(b)
as to procedures in connection with approvals or where an
approval has been given;(c)
for the Authority’s decision on the application to be referred
to the Upper Tribunal;(d)
for the Authority to maintain a list of relevant Master Trusts
or group personal pension schemes that are approved under this section.(4)
Regulations may make provision about the meaning of “strong
potential to grow” and “innovative product design” (including how it can be demonstrated that a scheme has strong potential to grow or an innovative product design).(5)
Before making regulations under this section the Secretary of State
must consult such persons as the Secretary of State considers appropriate.28G Suspension of asset allocation requirement: savers’ interest test
(1)
Regulations must make provision for authorising the Regulatory
Authority (“the Authority”), on an application by a relevant Master Trust or group personal pension scheme, to determine that the scheme in question is to be treated, for a period specified by the Authority, as if that scheme were exempted from the requirement for approval under section 28C .(2)
The Secretary of State must make regulations under subsection (1) so
that they have effect whenever regulations under section 28C(1) or (2) have effect.(3)
Regulations under subsection (1) —
(a)
must provide that the Authority may not determine that the
applicant is to be treated as mentioned in subsection (1) unless the Authority is of the view that meeting the asset allocation requirement would cause material financial detriment to members of the scheme;(b)
may make provision about the basis on which the Authority
may or must form such a view, including about the evidence which the Authority may or must take into account;(c)
may make provision as to the process for making a
determination, including as to—(i)
the level of detail of enquiry required in different cases;
(ii)
a time limit within which the Authority must decide
an application;(iii)
procedures in connection with applications;
(d)
must provide for the Authority’s determination on an
application to be referred to the Upper Tribunal.(4)
Regulations under subsection (1) may make provision about what is,
or is not, to be regarded as material financial detriment for the purposes of this section.28H Risk notices
(1)
The Regulatory Authority (“the Authority”) may give a risk notice to
the trustees or managers of a relevant Master Trust if the Authority considers that—(a)
there is an issue of concern in relation to the relevant Master
Trust, and(b)
the relevant Master Trust will, or is likely to, cease to meet the
conditions for approval under section 28A or 28C if the issue is not resolved.(2)
A “risk notice” is a notice that requires the trustees or managers of a
relevant Master Trust to submit to the Authority a plan (a “resolution plan”) setting out proposals for resolving the issue of concern.(3)
A risk notice must—
(a)
identify the issue of concern;
(b)
specify the date by which the resolution plan is to be submitted.
(4)
If the Authority is not satisfied that the proposals in a resolution plan
are likely to be adequate to resolve the issue of concern, the Authority may give a further notice to the trustees or managers requiring them to submit a revised plan by a date specified in the notice.(5)
The trustees or managers must implement the proposals in a resolution
plan if the Authority—(a)
is satisfied that the proposals are likely to be adequate to
resolve the issue of concern, and(b)
notifies the trustees or managers accordingly.
(6)
The Authority may direct the trustees or managers to comply with
the requirement imposed by subsection (5) .(7)
Where the trustees or managers are required by subsection (5) to
implement the proposals in a resolution plan, they must—(a)
submit to the Authority, before the end of a period specified
in regulations, a report setting out what progress they are making in implementing the proposals (a “progress report”);(b)
submit further progress reports to the Authority at intervals
specified by the Authority.(8)
Resolution plans and progress reports must be provided in the manner
and form specified by the Authority.(9)
A reference to a resolution plan in subsections (4) to (8) includes a
reference to a resolution plan as revised under subsection (4) .(10)
Regulations may—
(a)
specify information that a risk notice must contain;
(b)
provide that the date referred to in subsection (3) (b) or (4) must
fall before the end of a period specified in the regulations.(11)
Section 10 of the Pensions Act 1995 (civil penalties) applies to a trustee
or manager of a relevant Master Trust who fails to comply with—(a)
a notice under subsection (1) or (4) ,
(b)
a direction under subsection (6) , or
(c)
a requirement imposed by subsection (7) .
28I Penalties
(1)
Regulations may make provision about the imposition by the
Regulatory Authority of a penalty on the trustees or managers of a relevant Master Trust or the provider of a group personal pension scheme where the scheme—(a)
fails to meet the condition in section 20 (1A) by virtue of not
being approved under section 28A or 28C , and(b)
accepts contributions from an employer in relation to a
jobholder on the basis that it is an automatic enrolment scheme in relation to that jobholder.(2)
Regulations may make provision about the imposition by the
Regulatory Authority of a penalty on the provider of a group personal pension scheme where the scheme—(b)
accepts contributions from an employer in relation to a
jobholder on the basis that it is an automatic enrolment scheme in relation to that jobholder.(3)
The regulations must provide—
(a)
that a penalty must not exceed £100,000 in relation to each
employer from which contributions are accepted as mentioned in subsection (1) (b) or (2) (b) , and(b)
that there is a right of appeal against the imposition of the
penalty.28J Enforcement by the Financial Conduct Authority
(1)
The Treasury may make regulations to enable the Financial Conduct
Authority to take action (in addition to any action it may otherwise take under the Financial Services and Markets Act 2000) for monitoring and enforcing compliance of any FCA-regulated person with any provision of or under this Chapter.(2)
The regulations may apply, or make provision corresponding to—
(a)
provision made by or under this Part in relation to the
Regulatory Authority, or(b)
any provision of the Financial Services and Markets Act 2000,
with or without modification.
(3)
In this section, “FCA-regulated person” means an authorised person
(within the meaning of the Financial Services and Markets Act 2000).”
“30A Review of exercise of powers under section 28C
(1)
The Secretary of State must—
(a)
review the effects of any regulations under section 28C (approvals in respect of asset allocation), and
(b)
prepare, publish and lay before Parliament, a report of the
review.(2)
A review under subsection (1) must be conducted before the end of
the period of 5 years beginning with the day on which the regulations in question come into force.(3)
In carrying out the review the Secretary of State must take the
following into account—(a)
whether and how the financial interests of members of Master
Trust schemes and savers in group personal pension schemes have been affected by the regulations;(b)
the effects (if any) of the measures on economic growth in the
United Kingdom;(c)
any other matters the Secretary of State considers appropriate.”
In section 99 (interpretation of Part)—
the existing words become subsection (1);
in that subsection, at the appropriate places insert—
““group personal pension scheme” means a personal pension scheme which is available, or intended to be available, to employees of the same employer or of employers within a group, but does not include—
a stakeholder pension scheme (as defined in section 1
of the Welfare Reform and Pensions Act 1999), or
any pension scheme that requires all its members to
make a choice as to how their contributions are
invested;”;
““Regulatory Authority” has the meaning given by regulations under subsection (2);”;
““relevant Master Trust” has the meaning given by section 20(4);”;
“(2)
The Secretary of State may by regulations define “Regulatory
Authority” for the purposes of this Part.”
In section 143 (orders and regulations), in subsection (5)(a)—
The following provisions of the Pensions Act 2008 (which relate to transition
pathway relief) are repealed at the end of the period of 5 years beginning
with the day on which the provisions mentioned in paragraphs (a) and (b)
come into force—
section 28E ;
the word “ 28E ” in section 143(5)(a).
Regulations under subsection (17) are subject to the negative procedure.
The Financial Services and Markets Act 2000 is amended as follows.
In section 1A (the Financial Conduct Authority), in subsection (6), after the Pensions Act 2008,”.
paragraph (a) insert—
“(aa)
Section 204A (meaning of “relevant requirement” and “appropriate regulator”
is amended as follows.
Part 1 (Master Trusts) of the Pension Schemes Act 2017 is amended as follows.
In section 5 (decision on application), in subsection (3)—
omit the “and” before paragraph (e);
“(f)
that it has sufficient investment capability (see section
12A), and(g)
(in the case of an applicant that has its main
administration in the United Kingdom) that the scheme meets Condition 1 of section 20(1A) (scale requirement) of the Pensions Act 2008.”
“12A Investment capability
(1)
This section applies for the purposes of enabling the Pensions Regulator
to decide whether it is satisfied that a Master Trust scheme (that has its main administration in the United Kingdom) has sufficient investment capability (see section 5(3)(f)).(2)
In order to be satisfied that the Master Trust scheme has sufficient
investment capability the Pensions Regulator must be satisfied—(a)
that appropriate systems are in place for managing the
investment strategy and monitoring outcomes,(b)
that the scheme has appropriate systems for delivering effective
governance, and(c)
that there are appropriate strategies for recruiting and retaining
expert staff.(3)
In deciding whether it is satisfied about the matters mentioned in subsection (1) , the Pensions Regulator must take account of any factors
specified in subsection (2) .(4)
The Secretary of State may by regulations—
(a)
make provision about the meaning of terms used in subsection (2) ;
(b)
specify further factors that the Pensions Regulator must take
into account in deciding whether it is satisfied about the matters mentioned in subsection (1) .(5)
The first regulations that are made under this section are subject to
affirmative resolution procedure.(6)
Any other regulations under this section are subject to negative
resolution procedure.12B Scale requirement
(1)
The Secretary of State may by regulations make provision about how
the Pensions Regulator is to decide whether it is satisfied that a Master Trust scheme that has its main administration in the United Kingdom meets Condition 1 in section 20 (1A) (scale requirement) of the Pensions Act 2008.(2)
The regulations may, among other things, specify matters which the
Pensions Regulator must take into account in making its assessment.(3)
The first regulations under this section are subject to affirmative
resolution procedure.(4)
Any subsequent regulations under this section are subject to negative
resolution procedure.”
The appropriate authority may make regulations for the purpose of restricting
the ability of the provider of a pension scheme to begin operating a non-scale
default arrangement.
The regulations may, in particular, make provision—
prohibiting the provider of a pension scheme from beginning to operate
a non-scale default arrangement unless the arrangement is approved
by the appropriate regulator;
about the criteria which the appropriate regulator must apply in
deciding whether to approve a non-scale default arrangement;
about the conditions which the appropriate regulator may or must
attach to approval;
about the ongoing requirements to which the provider of a pension
scheme is to be subject in relation to a non-scale default arrangement
approved under the regulations;
where assets of a pension scheme are held subject to a non-scale default
arrangement that is being operated in breach of the regulations,
requiring the provider of the pension scheme in question to ensure
that the assets are held subject to a different arrangement of a
description specified in the regulations;
conferring functions on the appropriate regulator, including functions
involving the exercise of a discretion;
for ensuring compliance with the regulations, including provision for
the imposition of civil penalties not exceeding £100,000;
for the making of a reference to the First-tier Tribunal or Upper
Tribunal in respect of anything done under the regulations.
Regulations under this section are subject to the affirmative procedure.
The Secretary of State and the Treasury (“the reviewers”), acting jointly, must
carry out a review of the non-scale default arrangements operated by providers
of pension schemes.
The review must consider the following (as well as any other matters that
the reviewers consider relevant)—
the number of non-scale default arrangements being operated by
providers;
the extent to which non-scale default arrangements operated by
providers have been consolidated, or are likely to be consolidated,
into approved main scale default arrangements;
where non-scale default arrangements have not been so consolidated,
the reasons why;
the circumstances in which it may be appropriate for non-scale default
arrangements not to be so consolidated.
The reviewers must publish a report on the review as soon as reasonably
practicable after the review is completed.
The Pensions Regulator and the FCA must provide such information and
assistance as the reviewers may require for the purposes of the review.
Neither section 348 of the Financial Services and Markets Act 2000 nor section
82 of the Pensions Act 2004 prohibits the disclosure by the reviewers, the
Pensions Regulator or the FCA of any information where the disclosure is
made for the purpose of enabling or facilitating any person’s compliance with
this section.
The appropriate authority may make regulations about the consolidation of
non-scale default arrangements into approved main scale default arrangements.
The regulations may, in particular, make provision—
requiring the provider of a pension scheme, subject to any exemptions
specified in the regulations, to consolidate a non-scale default
arrangement operated by it into an approved main scale default
arrangement operated by it;
requiring the provider of a pension scheme to prepare, and provide
the appropriate regulator with, an action plan about how and when
a non-scale default arrangement operated by it is to be so consolidated;
conferring functions on the appropriate regulator, including functions
involving the exercise of a discretion;
for ensuring compliance with the regulations, including provision for
the imposition of civil penalties not exceeding £100,000;
for the making of a reference to the First-tier Tribunal or Upper
Tribunal in respect of a decision made under the regulations.
Regulations under this section—
may not be made until the review under section
43
has been completed
and the report on it published, and
must take account of the review’s conclusions.
Regulations under this section are subject to the affirmative procedure.
The Financial Services and Markets Act 2000 is amended as follows.
In section 1A (the Financial Conduct Authority), in subsection (6), before Chapter 4 of
Part 2
of the Pension Schemes Act 2026 (default
paragraph (ca) insert—
“(cze)
arrangements);”.
In section 204A (meaning of “relevant requirement” and “appropriate
regulator”)—
“(ad)
by or under Chapter 4 of Part 2 of the Pension Schemes
Act 2026 (default arrangements),”;
“(ad)
by or under Chapter 4 of Part 2 of the Pension Schemes
Act 2026 (default arrangements);”.
This Chapter applies to a pension scheme managed by or on behalf of the
Crown as it applies to other pension schemes.
Accordingly, references in this Chapter to a person in their capacity as a
trustee or manager of a pension scheme include the Crown, or a person acting
on behalf of the Crown, in that capacity.
This Chapter applies to persons employed by or under the Crown as it applies
to persons employed by a private person.
In this Chapter—
“
the appropriate authority”, in relation to the making of regulations,
means—
where the only pension schemes to which the regulations apply
are FCA-regulated pension schemes, the Treasury;
where the only pension schemes to which the regulations apply
are not FCA-regulated pension schemes, the Secretary of State;
in any other case, the Treasury and the Secretary of State acting
jointly;
“
the appropriate regulator”, in relation to a pension scheme, means—
in relation to an FCA-regulated pension scheme, the FCA;
in relation to any other pension scheme, the Pensions Regulator;
“
consolidating” a non-scale default arrangement into an approved main
scale default arrangement means ensuring that any assets held subject
to the non-scale default arrangement are instead held subject to the
approved main scale default arrangement;
“
the FCA” means the Financial Conduct Authority;
“
FCA-regulated”, in relation to a pension scheme, has the meaning given
in
subsection (2)
;
“
money purchase benefits” has the same meaning as in the Pension
Schemes Act 1993 (see section 181 of that Act);
“
non-scale default arrangement”, in relation to a pension scheme, means
an arrangement—
which is not an approved main scale default arrangement, and
subject to which assets of the scheme must under the rules of
the scheme be held, or may under those rules be held, if the
member of the scheme to whom the assets relate does not make
a choice as to the arrangement subject to which the assets are
to be held;
“
operate”, in relation to a default arrangement, has the meaning given
in
subsection (3)
;
“
pension scheme” has the meaning given by section 1(5) of the Pension
Schemes Act 1993;
“
the provider” of a pension scheme means—
in relation to an FCA-regulated pension scheme, the person
mentioned in
subsection (2)
(b)
;
in any other case, the trustees or managers;
“
the trustees or managers”, in relation to a pension scheme, means—
in the case of a scheme established under a trust, the trustees
of the scheme, and
in any other case, the persons responsible for the management
of the scheme.
A pension scheme is “FCA-regulated” if the operation of the scheme—
is carried on in such a way as to be a regulated activity for the
purposes of the Financial Services and Markets Act 2000, and
is carried on in the United Kingdom by a person who is in relation
to that activity an authorised person under section 19 of that Act.
The provider of a pension scheme “operates” a non-scale default arrangement
or main scale default arrangement if any assets held for the purposes of the
scheme are held subject to the non-scale default arrangement or main scale
default arrangement.
The Financial Services and Markets Act 2000 is amended as follows.
“Part 7A Unilateral changes to pension schemes
117A Pension schemes to which this Part applies
(1)
This Part applies to a pension scheme—
(a)
that is FCA-regulated, and
(b)
in relation to which any of the following conditions is met.
(2)
The conditions are—
(a)
that the scheme is an auto-enrolment scheme;
(b)
that the scheme is a workplace personal pension scheme that
is not an auto-enrolment scheme;(c)
that the scheme is a pension scheme of a prescribed description.
(3)
For the purposes of subsection (2) (a) and (b) a pension scheme is an
“auto-enrolment scheme” if any individual is or at any time was an active member of the scheme in consequence of arrangements under section 3 (2) , 5 (2) or 7 (3) of the Pensions Act 2008 or section 3(2), 5(2) or 7(3) of the Pensions (No. 2) Act (Northern Ireland) 2008 (c. 13 (N.I.)) (arrangements for jobholder to become active member of automatic enrolment scheme).(4)
In subsection (3) “active member” means an active member within the
meaning of Part 1 of the Pensions Act 2008 (see section 99 of that Act) or Part 1 of the Pensions (No. 2) Act (Northern Ireland) 2008 (c. 13 (N.I.)) (see section 78 of that Act).(5)
For the purposes of subsection (2) (b) a pension scheme is a “workplace
personal pension scheme” if—(a)
the scheme is a personal pension scheme,
(b)
direct payment arrangements exist, or have at any time existed,
in relation to the scheme, and(c)
contributions have been paid under the arrangements in respect
of, or on behalf of, two or more employees.(6)
In subsection (5) “direct payment arrangements” means direct payment
arrangements within the meaning of section 111A of the Pension Schemes Act 1993 or section 107A of the Pension Schemes (Northern Ireland) Act 1993.117B Unilateral changes
(1)
The provider of a pension scheme to which this Part applies may—
(a)
amend the terms of the scheme as regards a description of
pension pot held by the scheme,(b)
change the investments comprised in a description of pension
pot held by the scheme,(c)
transfer a description of pension pot held by the scheme to a
different pension scheme operated by the same provider, or(d)
transfer a description of pension pot held by the scheme to a
pension scheme operated by a different provider.(2)
A change or transfer within subsection (1) (b) to (d) may be effected
notwithstanding that it breaches a term of the pension scheme (such as a requirement for consent); and any such breach is to be disregarded for all purposes.(3)
Subsection (1) is subject to—
(a)
subsection (5) , sections 117D to 117F and any regulations under section 117H (1) (c) , and
(b)
any other provision of legislation (including any rule) which
restricts or otherwise affects the provider’s power to do anything within subsection (1) .(4)
In subsection (1) (c) and (d) , a reference to a pension scheme to which
a description of pension pot may be transferred includes a pension scheme to which this Part does not apply.(5)
A transfer to a pension scheme operated by a different provider may
not be effected under subsection (1) (d) without the consent of that provider.(6)
A reference in this Part to the terms of a pension scheme is to the
terms of any instrument or agreement—(a)
in which the scheme is comprised, or
(b)
to which the provider of the scheme and any member are
parties in connection with the scheme.(7)
In this Part, “unilateral change” means an amendment, change or
transfer within any of paragraphs (a) to (d) of subsection (1) .117C Effect of transfer of pension pot on membership of scheme etc
(1)
This section applies where a pension pot is transferred under section
117B (1) (c) or (d) to a different pension scheme (“the receiving scheme”).(2)
The individual—
(a)
becomes a member of the receiving scheme in relation to the
pot, and(b)
in a case in which there is more than one arrangement under
the receiving scheme, becomes, in relation to the pot, a member of the arrangement specified in the unilateral change notice under section 117F (3) (b) ;and acquires the rights, and becomes subject to the obligations, of membership.
(3)
Where being a member of the receiving scheme in relation to the pot,
or of the arrangement under the receiving scheme under which the pot is to be held, entails being a party to a contract with the provider of the receiving scheme, a contract is treated as entered into between the individual and the provider—(a)
at the time at which the pension pot is transferred to the
receiving scheme, and(b)
on the terms communicated to the individual in the unilateral
change notice under section 117F (3) (c) .117D Best interests test
(1)
The provider of a pension scheme to which this Part applies may effect
a unilateral change under section 117B (1) only if—(a)
the provider concludes, before doing so, that the best interests
test is met in relation to the unilateral change, and(b)
it is reasonable for the provider to have reached that conclusion
at that time.(2)
“The best interests test”, in relation to a unilateral change, is that it is
reasonably likely that effecting it will achieve—(a)
a better outcome for the directly affected members of the
scheme (taken as a whole), and(b)
no worse an outcome for the other members of the scheme
(taken as a whole),than the relevant alternative action or, where there is more than one alternative action, each of them.
(3)
For the purposes of this Part, the members of a pension scheme who
are “directly affected” by a unilateral change are the members for whom the scheme holds pension pots of the description in question.(4)
The following are “relevant alternative actions” for the purposes of subsection (2) in relation to a unilateral change—
(a)
not effecting the unilateral change, and
(b)
where the unilateral change is an internal change, each other
internal change that could be made in accordance with this Part in relation to pension pots of the description in question.(5)
In subsection (4) “internal change” means a unilateral change that
results in a description of pension pot held by the scheme being held—(a)
subject to a different arrangement under the same scheme, or
(b)
subject to a particular arrangement under a different pension
scheme operated by the same provider (including where there is only one arrangement under that scheme).(6)
The FCA must make general rules specifying considerations or
information that must be taken into account in determining whether the best interests test is met.117E Certification by independent person
(1)
The provider of a pension scheme to which this Part applies may effect
a unilateral change under section 117B (1) only if, before effecting it—(a)
the provider has appointed a person to review the proposed
unilateral change, and(b)
the person appointed has given the provider a certificate under
this section in relation to the proposed unilateral change.(2)
The person appointed must—
(a)
be independent of the provider, and
(b)
have such expertise as is specified in general rules made by
the FCA.(3)
The certificate must certify that, in the opinion of the independent
person—(a)
the pension scheme is a pension scheme to which this Part
applies,(b)
the proposed unilateral change is within section 117B (1) (a) to (d) ,
(c)
section 117B (1) is not disapplied in relation to the proposed
unilateral change by regulations under section 117H (1) (a) ,(d)
any conditions prescribed under section 117H (1) (c) are met,
(e)
the best interests test is met in relation to the proposed
unilateral change, and(f)
the provider has complied with such other requirements as
may be specified in general rules made by the FCA.(4)
The FCA must make general rules about appointments and certification
under this section, including provision—(a)
for determining for the purposes of this section whether a
person is independent of the provider of a pension scheme;(b)
specifying terms on which an appointment under this section
must be made;(c)
about the form of a certificate and when it must be given.
(5)
In this Part “the independent person”, in relation to a proposed
unilateral change, means the person appointed under subsection (1) (a) to review it.117F Unilateral change notice
(1)
The provider of a pension scheme to which this Part applies may effect
a unilateral change under section 117B (1) only after—(a)
the provider has sent a unilateral change notice to each of the
required recipients, and(b)
the required notice period has expired.
(2)
“A unilateral change notice” means a notice that includes such
information relating to the unilateral change as is specified in general rules made by the FCA.(3)
General rules made pursuant to subsection (2) must, in the case of a
unilateral change under section 117B (1) (c) or (d) , require the unilateral change notice to—(a)
specify the pension scheme (“the receiving scheme”) to which
it is proposed the pensions pots in question are to be transferred,(b)
specify, in a case in which there is more than one arrangement
under the receiving scheme, the arrangement subject to which it is proposed the pots be held after the transfer, and(c)
where membership of the receiving scheme, or of an
arrangement specified under paragraph (b), entails being a party to a contract with the provider of the receiving scheme, set out, or otherwise communicate, the terms of such a contract.(4)
“The required recipients” means—
(a)
the members of the scheme directly affected by the change,
and(b)
such other persons as may be specified in general rules made
by the FCA.(5)
A unilateral change notice must be in such form, and be sent by such
means, as is specified in general rules made by the FCA.(6)
In subsection (1) “the required notice period” means such period as
is specified in general rules made by the FCA.117G Further duties to make FCA general rules
(1)
The FCA must make general rules—
(a)
about the fees that may or may not be charged by providers
of a pension schemes in relation to unilateral changes effected under section 117B (1) ;(b)
imposing requirements on the provider of a pension scheme
who proposes to effect, or effects, a unilateral change under section 117B (1) to provide information to the independent person;(c)
imposing requirements on the provider of a pension scheme
who proposes to effect, or effects, a unilateral change under section 117B (1) , as to the records they must keep and retain for the purposes of this Part.(2)
The rules made by virtue of subsection (1) must apply in relation to
pension schemes established before, as well as those established after, those rules (or this section) came into force.117H Treasury regulations
(1)
The Treasury may by regulations—
(a)
provide that section 117B (1) does not apply in relation to
unilateral changes of a description specified in the regulations;(b)
amend section 117D (best interests test);
(c)
prescribe further conditions (in addition to those in sections
117D to 117F ) that must be met in relation to a unilateral
change for it to be permitted under section 117B (1) ;(d)
require the FCA to make general rules in compliance with section 117E (4) (b) that require the inclusion, in the terms of an
appointment under that section, of a term providing that members of the pension scheme may in their own right enforce the terms of appointment under section 1 of the Contracts (Rights of Third Parties) Act 1999;(e)
disapply any legislation, or require the FCA to disapply any
general rule, so far as it restricts or otherwise affects the power in section 117B (1) ;(f)
make provision consequential on this Part.
(2)
(3)
Regulations under subsection (2) must in particular require the FCA
to include in such general rules provision designed to ensure that the independent person does not have a conflict of interest.(4)
The power to make regulations under subsection (1) is capable of
being exercised so as to amend or repeal any provision of primary legislation.117I Interpretation of Part
(1)
In this Part—
“
the best interests test” has the meaning given by section 117D (2) ;“
directly affected”, in relation to a unilateral change, has the
meaning given by section 117D (3) ;“
FCA-regulated”, in relation to a pension scheme, has the meaning
given by subsection (2) ;“
the independent person”, in relation to a proposed unilateral
change, has the meaning given by section 117E (5) ;“
money purchase benefits” means money purchase benefits within
the meaning of the Pension Schemes Act 1993 (see section 181(1) of that Act) or the Pension Schemes (Northern Ireland) Act 1993 (see section 176(1) of that Act);“
pension pot” has the meaning given by subsection (3) ;“
pension scheme” has the meaning given by section 1(5) of the Pension Schemes Act 1993 ;“
personal pension scheme” means a personal pension scheme
within the meaning of the Pension Schemes Act 1993 (see section 1(1) of that Act) or the Pension Schemes (Northern Ireland) Act 1993 (see section 1(1) of that Act);“
provider”—(a)
in relation to an FCA-regulated pension scheme, means
the person referred to in subsection (2) (b) ;(b)
in relation to any other pension scheme, means the
trustees or managers of the scheme;“
terms” , in relation to a pension scheme, has the meaning given
by section 117B (6) ;“
transfer”, in relation to a pension pot, includes a transfer of an
amount representing its value;“
trustees or managers”, in relation to a pension scheme, means—(a)
in the case of a scheme established under a trust, the
trustees of the scheme, and(b)
in any other case, the persons responsible for the
management of the scheme;“
unilateral change” has the meaning given by section 117B (7) ;“
unilateral change notice” has the meaning given by section
117F (2) .(2)
A pension scheme is “FCA-regulated” if the operation of the scheme—
(a)
is a regulated activity, and
(b)
is carried on in the United Kingdom by an authorised person.
(3)
“Pension pot” means sums or assets held for the purpose of providing
money purchase benefits to or in respect of a member of a pension scheme; and—(a)
a reference to the pension scheme that holds a pension pot is
to that pension scheme;(b)
a reference to the individual for whom a pension pot is held
is to that member.”
In section 105 (insurance business transfer schemes), in subsection (3), at the
“Case 6
Where the scheme is effected under
Part 7A
(unilateral changes to
pension schemes).”
end insert—
In section 168 (appointment of persons to carry out investigations in particular a person has effected, or has purported to effect, a unilateral
cases), in subsection (4), after paragraph (i) insert—
“(iza)
change under
subsection (1)
of
section 117B
(unilateral changes
by providers of pension schemes), but any of the provisions
mentioned in
subsection (3)
of that section may have been
contravened in relation to it;”.
In section 429 (Parliamentary control of statutory instruments), in subsection provision made under
section 117H
which amends or repeals
(2B), after paragraph (ab) insert—
“(ac)
any provision of primary legislation;”.
Subject to section 50 (1) , the trustees or managers of a relevant scheme must—
design, and make available to each eligible member of the scheme,
one or more default pension benefit solutions;
at least in such circumstances or at such times or intervals as may be
prescribed, review the design (and if appropriate the number) of the
default pension benefit solutions.
In this Chapter “pension benefit solution”, in relation to a pension scheme,
means a contractual or other arrangement for making pension payments in
respect of members’ accrued rights.
In this Chapter “default pension benefit solution”, in relation to a relevant
scheme, means a pension benefit solution which—
is designed for delivering money purchase benefits under the scheme
to—
the eligible members of the scheme generally, or
a subset of those eligible members,
is designed to provide a regular income for the eligible members
concerned in their retirement (whether or not together with other
benefits),
is for the time being designated by the trustees or managers of the
scheme as the pension benefit solution under which—
the eligible members of the scheme generally, or
a subset of those eligible members,
will receive pension payments unless they choose to receive pension payments under a different pension benefit solution, and
meets any other conditions that may be prescribed.
The trustees or managers of a relevant scheme must, in determining what
default pension benefit solutions the scheme should make available (generally
or to subsets of eligible members), take account of—
the needs and interests of—
the scheme’s membership as a whole, and
any subset of the scheme’s membership that the trustees or
managers consider appropriate;
the circumstances of different eligible members of the scheme (for
example the normal pension ages of such members or the value or
expected value of their money purchase benefits under the scheme);
the possibility that a member may already have received some of their
benefits (for example as a lump sum) before deciding to make use a
default pension benefit solution;
such other factors as may be prescribed.
Regulations may make provision about how trustees or managers of a scheme
are to assess the needs and interests of the scheme’s membership for the
purposes of
subsection (4)
(a)
.
Regulations may—
specify descriptions of eligible members in relation to which subsection
(3) is to have effect with the omission of paragraph (b) of that
subsection;
In this Chapter—
“
eligible member”, in relation to a relevant scheme, means any member
who is accruing or entitled to benefits falling within paragraph (a) of
the definition of “money purchase benefits” in section 181(1) of the
Pension Schemes Act 1993 and is not of a description excepted by
regulations;
“
relevant scheme” means an occupational pension scheme which—
provides benefits falling within paragraph (a) of the definition
of “money purchase benefits” in section 181(1) of the Pension
Schemes Act 1993,
is a registered pension scheme, and
is not of a description excepted by regulations.
Regulations under this section—
are subject to the negative procedure if they are made under
subsection
(1)
(b)
or
(6)
(a)
otherwise, are subject to the affirmative procedure.
The trustees or managers of a relevant scheme (“the principal scheme”) are
not required to comply with
section 49
(1)
in relation to eligible members of
the scheme (whether comprising the members of the scheme generally or a
subset of those members) in relation to whom the first or second condition
is met; and such members are referred to in this Chapter as “transferable
members”.
The first condition is that the trustees or managers of the principal scheme
have determined that it is not reasonably practicable for them to design and
make available to the members concerned default pension benefit solutions.
The second condition is that the trustees or managers of the principal scheme
have determined that a qualifying pension benefit solution of a qualifying
scheme (other than the principal scheme) will provide a better outcome for
the members concerned than any default pension benefit solution that the
trustees or managers of the principal scheme could design and make available
to them.
Where the principal scheme has transferable members, the trustees or
managers must take the steps set out in
subsection (5)
in respect of them.
The steps mentioned in subsection (4) are to—
identify a qualifying scheme (the “receiving scheme”) that is able to
and agrees to—
receive a transfer in respect of the accrued rights of the
transferable member (a “relevant transfer”), and
make a qualifying pension benefit solution available to the
transferable member;
at such times or in such circumstances as may be prescribed, enter
into arrangements (“transfer arrangements”) with the receiving scheme
with a view to effecting a relevant transfer to that scheme;
take any other prescribed steps.
In carrying out the step in subsection
(5)
(a)
, the trustees or managers of the
principal scheme must have regard to the matters mentioned in
section 49
(4)
(and for that purpose references in those paragraphs to “the scheme” are to
the principal scheme).
Section 49
(5)
applies for the purposes of
subsection (6)
as it applies for the
purposes of
section 49
(4)
.
The trustees or managers of the principal scheme must, at least in such
circumstances or at such times or intervals as may be prescribed, review the
suitability of any qualifying pension benefit solution in respect of which they
have identified a qualifying scheme as mentioned in subsection
(5)
(a)
.
In this Chapter, “qualifying pension benefit solution”, in relation to a qualifying
scheme, means a pension benefit solution designed and maintained by the
trustees or managers of the scheme that—
is designed for delivering money purchase benefits under that scheme
to—
the members of the scheme generally, or
a subset of those members,
is designed to provide a regular income for the members concerned
in their retirement (whether or not together with other benefits), and
meets any other conditions that may be prescribed.
Nothing in this Chapter authorises any transfer in respect of a person’s accrued
rights under a relevant scheme without that person’s consent.
In this section “qualifying scheme” means—
an occupational pension scheme, or
a personal pension scheme,
that is a registered scheme and meets any prescribed conditions.
If a transferable member accepts in writing a proposal of the principal scheme
for the transferable member’s accrued rights to be transferred to the receiving
scheme—
the trustees or managers of the principal scheme must communicate
that proposal to the receiving scheme, and
the proposal is to be treated as requiring the receiving scheme to enrol
the transferable member as a member of the receiving scheme and
use the cash equivalent to provide rights for the member under that
scheme.
Regulations may require a pension scheme of a prescribed description to
agree to receive a transfer in respect of the accrued rights of a transferable
member where—
the principal scheme has been unable, having used reasonable
endeavours, to identify a qualifying scheme that is able and willing
to do so, and
any other prescribed conditions are met.
A requirement under subsection
(14)
may only be imposed on a pension
scheme that is one or both of the following—
a Master Trust scheme within the meaning of the Pension Schemes
Act 2017;
a consolidator scheme within the meaning of Chapter 2 of Part 2
(consolidation of small dormant pension pots).
Regulations may prohibit or limit the charging of fees in respect of transfers
made under transfer arrangements.
Regulations may provide for the manner in which cash equivalents are to be
calculated and verified.
Where only one pension benefit solution is available to the members of a
relevant scheme, the trustees or managers must ensure that each eligible
member of the scheme is given at a prescribed time a communication which—
describes the pension benefit solution, and
sets out the trustees’ or managers’ opinion as to what might be the
circumstances (in terms of age, pension savings etc) of a person for
whom the pension benefit solution is suitable.
Where more than one pension benefit solution is available to the eligible
members of a relevant scheme, the trustees or managers must ensure that, at
a prescribed time, each eligible member of the scheme is given a
communication which—
describes the default pension benefit solution or qualifying pension
benefit solution that the trustees or managers consider to be the most
appropriate to the member (“the specified solution”), and
sets out the trustees’ or managers’ opinion as to what might be the
circumstances (in terms of age, pension savings etc) of a person for
whom the specified solution is suitable.
Regulations may make provision about how a pension benefit solution is to
be presented to a member when the member applies to receive benefits.
The trustees or managers of a relevant scheme must ensure that each eligible
member of the scheme is given at prescribed times or intervals—
information about basic features of the member’s pension, including
that it has—
an accumulation phase, and
a decumulation phase;
general information about the availability to the member of a default
pension benefit solution or qualifying pension benefit solution and an
explanation that such a solution is designed to provide a regular
income during retirement.
Regulations may require the trustees or managers of a relevant scheme to
communicate to each eligible member at prescribed times or intervals—
information about the pension benefit solutions available to the eligible
members;
general information about other options that may be available to the
member for receiving benefits in respect of their contributions;
information describing a particular pension benefit solution that the
trustees or managers consider to be suitable for the eligible member
in question;
where information within
paragraph (c)
is included in a
communication, the trustees’ or managers’ opinion as to what might
be the circumstances (in terms of age, pension savings etc) of a person
for whom the pension benefit solution is suitable;
any general information prescribed for the purpose of assisting eligible
members in deciding how to receive their pension benefits.
The trustees or managers of a relevant scheme may request from eligible
members of the scheme any information the trustees or managers consider
reasonably necessary for the purpose of—
designing or reviewing, or in the case of transferable members
identifying, pension benefit solutions;
determining what pension benefit solution may be appropriate for the
member, including what rate of decumulation may be appropriate;
which may for example include information about the member’s financial circumstances or plans for retirement.
Regulations may require the trustees or managers of relevant schemes to
request from eligible members any information the trustees or managers
consider appropriate for the purposes specified in
subsection (7)
.
In exercising their functions under subsection
(7)
trustees and managers must
comply with any requirements that may be prescribed.
Regulations may make provision about the format of any communications
authorised or required to be made under
this section
.
Before making regulations under
this section
the Secretary of State must
consult any persons the Secretary of State thinks appropriate.
Regulations under this section are subject to the negative procedure.
Regulations may require trustees or managers of a relevant scheme to provide
or make available to eligible members, at prescribed times or intervals,
information expressed in clear and plain language which would or may assist
in—
the selection of a pension benefit solution, or
decisions that may need to be made with respect to a pension benefit
solution.
Regulations may require that information provided or made available to a
member by virtue of
subsection (1)
must, as far as possible, be based on
information about the member’s circumstances.
Regulations may require trustees or managers of a relevant scheme to—
monitor the rate of decumulation under pension benefit solutions used
by members, and
inform the member concerned if the trustees or managers consider
that the rate of decumulation should be reviewed.
Regulations under this section are subject to the affirmative procedure.
The trustees or managers of a relevant scheme must determine, and from
time to time review and if necessary revise, a strategy (a “pension benefits
strategy”) for ensuring that the trustees or managers—
identify and carry out the steps they need to take for the purpose of
understanding the requirements of eligible members of the scheme
with regard to pension benefit solutions;
design, or in the case of transferable members identify, pension benefit
solutions that take account of those needs;
communicate effectively with eligible members of the scheme with
regard to pension benefit solutions and comply with any regulations
under section
52
.
The trustees or managers must publish the strategy and ensure that a copy
of it is provided on request to—
the Pensions Regulator;
any member of the scheme.
Regulations may—
specify any objectives, principles or matters the trustees or managers
must take into account in determining or revising a strategy;
make provision about the level of detail required in a pensions benefit
strategy;
authorise the Secretary of State to—
determine the format in which a benefits strategy is to be set
out, or
delegate that function to the Pensions Regulator;
make provision as to the period within which a pension benefits
strategy must be determined;
specify the intervals at which the strategy must be reviewed;
require the trustees or managers of relevant schemes to—
to take account, in determining or revising a strategy, any
guidance issued by the Pensions Regulator;
provide in the strategy evidence of how they have taken
account of any matters prescribed by virtue of
subsection (3)
(a)
.
Regulations may require the trustees or managers of a relevant scheme to
publish, alongside a pension benefits strategy (or revised pension benefits
strategy), prescribed information or evidence as to whether and how they
have complied with the requirements imposed by virtue of this Chapter.
Regulations under this section—
are subject to the affirmative procedure if they are under
subsection
(3)
(a)
;
otherwise are subject to the negative procedure.
Regulations may make provision with a view to ensuring the compliance of
any person with any provision of or under this Chapter.
The regulations may in particular—
provide for the Pensions Regulator to issue a notice (a “compliance
notice”) to a person with a view to ensuring the person's compliance
with a provision of or under this Chapter;
provide for the Pensions Regulator to issue a notice (a “third party
compliance notice”) to a person with a view to ensuring another
person's compliance with a provision of or under this Chapter;
provide for the Pensions Regulator to issue a notice (a “penalty notice”)
imposing a penalty on a person where the person—
has failed to comply with a compliance notice or third party
compliance notice, or
has contravened a provision of or under this Chapter;
provide for the making of a reference to the First-tier Tribunal or
Upper Tribunal in respect of the issue of a penalty notice or the amount
of a penalty;
confer other functions on the Regulator.
The regulations may make provision for determining the amount, or the
maximum amount, of a penalty in respect of a failure or contravention.
But the amount of a penalty imposed under the regulations in respect of a
failure or contravention must not exceed—
£10,000, in the case of an individual, and
£100,000, in any other case.
Any penalty payable under the regulations is recoverable by the Regulator.
In England and Wales, any such penalty is, if the county court so orders,
recoverable under section 85 of the County Courts Act 1984 or otherwise as
if it were payable under an order of that court.
In Scotland, a penalty notice is enforceable as if it were an extract registered
decree arbitral bearing a warrant for execution issued by the sheriff court of
any sheriffdom.
The Regulator must pay into the Consolidated Fund any penalty recovered
under this section.
Section 7 of the Pensions Act 1995 (appointment of trustees) is amended as
follows.
In subsection (3), at the end of paragraph (c) omit “or” at the end of paragraph to secure compliance with the duties of trustees under
Chapter
(c) and after that paragraph insert—
“(ca)
6
of Part 2 of the Pension Schemes Act 2026, or”.
Regulations under this section are subject to the affirmative procedure.
This Chapter applies to a pension scheme managed by or on behalf of the
Crown as it applies to other pension schemes.
Accordingly, references in this Chapter to a person in their capacity as a
trustee or manager of a pension scheme include the Crown, or a person acting
on behalf of the Crown, in that capacity.
This Chapter applies to persons employed by or under the Crown as it applies
to persons employed by a private person.
In this Chapter—
“
default pension benefit solution” has the meaning given by
section 49
(3)
;
“
eligible member” has the meaning given by
section 49
(7)
;
“
money purchase benefits” has the same meaning as in the Pension
Schemes Act 1993 (see section 181 of that Act);
“
occupational pension scheme” has the same meaning as in the Pension
Schemes Act 1993 (see section 1(1) of that Act);
“
pension benefit solution” has the meaning given by
section 49
(2)
;
“
pension scheme” has the meaning given by section 1(5) of the Pension
Schemes Act 1993;
“
personal pension scheme” has the same meaning as in the Pension
Schemes Act 1993 (see section 1(1) of that Act);
“
prescribed” means prescribed by regulations;
“
principal scheme” is to be interpreted in accordance with
section 50
(1)
;
“
qualifying pension benefit solution” has the meaning given by
section
50
(9)
;
“
registered pension scheme” has the meaning given in Part 4 of the
Finance Act 2004;
“
regulations” means regulations made by the Secretary of State under
this Chapter;
“
relevant scheme” has the meaning given by
section 49
(7)
;
“
transferable member” is to be interpreted in accordance with
section
50
(1)
;
“
trustees or managers”, in relation to a pension scheme, means—
where the scheme is established under a trust, the trustees of
the scheme;
in any other case, the managers of the scheme.
In the Financial Services and Markets Act 2000, before section 137FC insert— The FCA must make general rules for the purpose of ensuring that In determining what provision to include in the rules, the FCA— must aim to ensure, so far as possible, that the outcomes In this section—
“ is designed for delivering money purchase benefits is designed to provide a regular income for the members meets any other prescribed conditions;
“ is a regulated activity, and is carried on in the United Kingdom by an authorised
“
“
“
“ an auto-enrolment scheme, a workplace personal pension scheme that is not an a pension scheme of a prescribed description,
“137FBD
FCA general rules: guided retirement
(1)
default or qualifying pension benefit solutions are made available to
members of relevant pension schemes.
(2)
(a)
(b)
achieved by the rules in relation to relevant pension schemes
correspond to those achieved by that Chapter, and any
regulations made under it, in relation to pension schemes to
which that Chapter applies.
(3)
default or qualifying pension benefit solution” means a pension
benefit solution which—
(a)
under a pension scheme to some or all of the members
of the scheme,
(b)
concerned in their retirement (whether or not together
with other benefits), and
(c)
FCA-regulated pension scheme” means a pension scheme whose
operation—
(a)
(b)
person;
money purchase benefits” has the same meaning as in the
Pension Schemes Act 1993 (see section 181 of that Act);
pension benefit solution”, in relation to a pension scheme, means
a contractual or other arrangement for making pension
payments in respect of members’ accrued rights;
pension scheme” has the meaning given in section 1(5) of the
Pension Schemes Act 1993;
relevant pension scheme” means an FCA-regulated pension
scheme that is—
(a)
(b)
auto-enrolment scheme, or
(c)
This Part—
contains a regulatory framework for superfunds, and
prohibits superfund transfers except where made in accordance with
that framework.
This Chapter
defines key concepts such as “superfund scheme”, “superfund”,
“superfund transfer” and “capital buffer”.
Chapter 2
allows for authorisation of superfunds by the Regulator, which is
an initial step that must be taken before a scheme is eligible to receive
superfund transfers.
Chapter 3
requires the Regulator’s approval for individual superfund transfers
and sets out the criteria for granting approval.
Chapter 4
sets out requirements that superfunds must meet on an ongoing
basis once they have received a superfund transfer.
Chapter 5
contains special procedures which apply if an “event of concern”
(such as a superfund falling into financial difficulties or breaching regulatory
requirements) takes place.
Chapter 6
makes provision about interpretation of this Part and confers power
to extend this Part to other similar structures.
“Superfund scheme” means a trust-based occupational pension scheme—
that has received a transfer of defined-benefit liabilities from another
trust-based occupational pension scheme,
that is supported by a capital buffer, and
that is not supported by a substantive employer covenant,
or a trust-based occupational pension scheme that is managed or administered with a view to its becoming such a scheme.
A trust-based occupational pension scheme is “supported by a capital buffer”
if a contract or other legally binding arrangement has been entered into under
which assets that are not assets of the scheme—
must be held by a person in connection with the scheme, and
must, in specified circumstances, be made available to the trustees for
the purpose of satisfying liabilities of the scheme.
“Capital buffer”, in relation to a trust-based occupational pension scheme,
means assets that are the subject of a contract or other arrangement of the
kind described in subsection
(2)
in relation to the scheme.
A trust-based occupational pension scheme is “not supported by a substantive
employer covenant” if, based on the employer’s financial position, there is
no realistic prospect of the employer being able to provide the trustees with
material financial support for the purpose of satisfying liabilities of the scheme.
For that purpose the employer’s “financial position” means its financial position ignoring—
any capital buffer, and
any financial support which it may obtain from another person but
to which it is not entitled.
“Superfund”, in relation to a superfund scheme, means the scheme together
with—
any capital buffer, and
any arrangements in place for the management and administration of
the scheme or any capital buffer.
“Superfund transfer” means a transfer of defined-benefit liabilities from a
trust-based occupational pension scheme (whether or not itself a superfund
scheme) to a superfund scheme.
This section applies for the purposes of this Part (unless the context otherwise
requires).
Where a trust-based occupational pension scheme includes two or more
sections—
each section is treated as a separate scheme,
the members of the scheme that are allocated to each section are treated
as the members of that separate scheme,
the assets and liabilities of the scheme that are allocated to each section
are treated as the assets and liabilities of that separate scheme, and
in the case of a superfund scheme, the assets of the capital buffer that
are allocated to each section are treated as the capital buffer in relation
to that separate scheme.
Accordingly, in the case of a superfund scheme, any of the following is treated
as a superfund transfer—
the reallocation of members between sections;
the combination of two or more sections;
the division of one section into two or more.
A “section” of a trust-based occupational pension scheme means
arrangements—
which have effect under the rules of the scheme (including, in the case
of a superfund scheme, the capital buffer arrangement), and
under which particular assets of the scheme (and, in the case of a
superfund scheme, the capital buffer) may only be used to satisfy the
scheme’s liabilities to or in respect of members of the scheme of a
particular description,
and those particular assets, liabilities and members are “allocated” to the section in question.
Where a pension scheme is not part of an authorised superfund, a person
may not—
promote the scheme (generally or to a particular person) with a view
to its receiving a superfund transfer,
enter into any arrangements on behalf of the scheme with a view to
its receiving a superfund transfer, or
cause or permit such promotion to take place or such arrangements
to be entered into.
Subsection (1)
does not apply where the person takes all reasonable steps to
ensure—
in relation to promotion of a scheme, that it is clear from the promotion
that the scheme is not part of an authorised superfund;
in relation to arrangements entered into, that it is clear to every party
to the arrangements, as at the time when the arrangements are entered
into, that the scheme is not part of an authorised superfund.
A person who breaches subsection (1) commits an offence.
A person who commits an offence under subsection (3) is liable—
on summary conviction in England and Wales, to a fine;
on summary conviction in Scotland, to a fine not exceeding the
statutory maximum;
on conviction on indictment, to imprisonment for a term not exceeding
two years or a fine or both.
Section 88A
of the
Pensions Act 2004
(financial penalties) applies to a person
who breaches
subsection (1)
(but see subsection (10) of that section, which
prevents a penalty from being imposed in respect of an act where the person
has been convicted of an offence in respect of the same act, or where
proceedings for such an offence are ongoing).
The Regulator may authorise a superfund if satisfied, based on the superfund’s
organisation, staff, plans, policies and procedures, that it is likely to comply
with the requirements of
Chapters 4
and
5
(ongoing requirements for
superfunds).
An application for authorisation must be made jointly by—
the trustees of the superfund scheme, and
a body corporate that is incorporated in the United Kingdom and that
is involved in the scheme’s management or administration.
An application for authorisation must be made in the manner and form
specified by the Regulator.
The Secretary of State may by regulations make provision about applications
for authorisation, including provision—
about the documents and information that an application must include;
requiring a fee to be paid to the Regulator in respect of an application.
The Regulator must maintain and publish a list of authorised superfunds.
Where a superfund has not yet received a superfund transfer, the Regulator
may withdraw the superfund’s authorisation if no longer satisfied as described
in
subsection (1)
.
Regulations under subsection (4) are subject to the negative procedure.
The Regulator must decide an application under
this Part
before the end of
the period of 6 months beginning with the day on which it received the
application (“the decision period”).
If in a particular case the Regulator considers that the decision period is
insufficient to enable it to decide the application, it may on one or more
occasions extend that period by notice to the applicants; but it may not extend
it beyond the end of the period of 9 months beginning with the day on which
it received the application.
Where an application received by the Regulator fails to comply with
section
62
or regulations made under it (including where the applicants fail to pay
a fee required in respect of the application) the references in
subsections (1)
and
(2)
to the day on which the Regulator receives the application are to the
day on which the failure is remedied.
A person may not make or receive a superfund transfer, or cause or permit
a superfund transfer to be made or received, unless the superfund transfer
is approved under
this Chapter
.
A person who breaches subsection (1) commits an offence.
A person who commits an offence under subsection (2) is liable—
on summary conviction in England and Wales, to a fine;
on summary conviction in Scotland, to a fine not exceeding the
statutory maximum;
on conviction on indictment, to imprisonment for a term not exceeding
2 years or a fine or both.
Section 88A
of the
Pensions Act 2004
(financial penalties) applies to a person
who breaches
subsection (1)
(but see subsection (10) of that section, which
prevents a penalty from being imposed in respect of an act where the person
has been convicted of an offence in respect of the same act, or where
proceedings for such an offence are ongoing).
The Regulator may approve a superfund transfer if—
the receiving superfund is authorised,
the ceding scheme does not have any active members, and
the Regulator is satisfied, based on evidence provided by the trustees
of the ceding scheme and by the responsible body of the receiving
superfund, that each of the onboarding conditions is met in relation
to the transfer.
For the purposes of
this Part
, “the onboarding conditions” in relation to a
superfund transfer are—
that, as at the date of the application, the financial position of the
ceding scheme is not strong enough to enable the trustees to arrange
an insurer buyout;
that the superfund transfer will make it more likely that the transferred
liabilities will be satisfied in full;
that it is reasonable to expect that the capital adequacy threshold will
be met in relation to the receiving superfund immediately following
the superfund transfer;
that it is reasonable to expect that the technical provisions threshold
will be met in relation to the receiving superfund at the end of the
period specified in regulations made by the Secretary of State;
that the receiving superfund is likely to comply with the requirements
of
Chapters 4
and
5
(ongoing requirements of superfunds) after the
superfund transfer takes place.
Approval under
this section
may be given subject to conditions, including as
to—
the superfund transfer being made on terms of a specified description;
the superfund transfer being made within a period of a specified
description;
any of the onboarding conditions continuing to be met for a period
of a specified description after approval is given but before the
superfund transfer is made.
The Secretary of State may by regulations amend
this section
for the purpose
of substituting another condition relating to the financial position of the ceding
scheme for the onboarding condition for the time being in
subsection (2)
(a)
.
The Secretary of State may by regulations make provision about the
onboarding conditions, including provision about—
the information and evidence that the trustees of the ceding scheme
and the responsible body of the receiving superfund must provide for
the purpose of satisfying the Regulator that an onboarding condition
is met;
how the Regulator is to assess whether an onboarding condition is
met;
the conditions that may or must be imposed under subsection (3) .
The Secretary of State may by regulations modify
subsection (2)
in its
application to a superfund transfer of a kind described in
section 60
(3)
(merger
of sections etc).
In relation to a superfund transfer—
“
the ceding scheme” means the scheme from which the transferred
liabilities are transferred (or intended to be transferred);
“
the receiving superfund” means the superfund that includes the
superfund scheme to which the transferred liabilities are transferred
(or intended to be transferred);
“
the transferred liabilities” means the liabilities that are transferred (or
intended to be transferred).
In subsection (1) , “active members” has the same meaning as in Part 1 of the Pensions Act 1995 (see section 124 of that Act).
Regulations under subsection (2) (d) are subject to the negative procedure.
Regulations under subsection (4) or (5) are subject to the affirmative procedure.
Regulations under subsection (6) are subject to the negative procedure.
See also section
66
(which makes special provision in relation to schemes that
are being wound up in particular circumstances).
Where in relation to a superfund transfer the ceding scheme is required to be wound up, or its winding up is required to continue, under section 154(1) of the Pensions Act 2004 (pension protection: requirement to wind up schemes with sufficient assets to meet protected liabilities), section 65 (2) has effect as though—
paragraph (a) were omitted, and
“(b)
that the superfund transfer—
(i)
will increase the proportion of the transferred
liabilities likely to be satisfied, and(ii)
will not lead to any member of the ceding
scheme being worse off than they would be if the superfund transfer were not made;”.
An application for approval under section 65 must be made jointly by—
the trustees of the ceding scheme, and
the responsible body of the receiving superfund.
The application must be made in the manner and form specified by the
Regulator.
The Regulator must decide whether or not to approve a superfund transfer,
and must notify the applicants of its decision, as soon as reasonably practicable
after receiving the application.
The Secretary of State may by regulations make provision about applications
for approval, including about the documents and information that must be
included in an application.
Regulations under subsection (4) are subject to the negative procedure.
The responsible body of an operating superfund must ensure, so far as
reasonably practicable, that the superfund has policies and procedures in
place—
that allow for the superfund to be managed and administered
effectively in the interests of members of the superfund scheme,
that ensure the superfund’s compliance with the requirements of
this
Part
and any other legislation relating to pensions, and
that are proportionate to the scale and nature of the superfund’s
activities.
Those policies and procedures must, in particular, address the following
matters—
how the responsible body, the other members of the superfund group,
and the trustees of the superfund scheme are to interact with each
other, and how any conflicts are to be resolved;
how investment decisions are to be taken in relation to the capital
buffer and the superfund scheme;
the implications of receiving new superfund transfers;
the management of risks.
The responsible body of an operating superfund must ensure that the
superfund meets any conditions specified in regulations made by the Secretary
of State as to—
the corporate form, jurisdiction of incorporation or jurisdiction of tax
residence of a member of the superfund group;
the structure of the superfund group;
the terms of the capital buffer arrangement (including as to how, by
whom, in what jurisdiction and on what terms the capital buffer may
be held);
compliance with tax legislation.
Section 10
of the
Pensions Act 1995
(civil penalties) applies to the responsible
body if it breaches
subsection (1)
or
(3)
.
The Secretary of State may by regulations amend
this section
for the purpose
of adding, removing or varying a matter which the policies and procedures
mentioned in
subsection (1)
must address.
Regulations under subsection (3) or (5) are subject to the affirmative procedure.
The responsible body of an operating superfund must ensure that each of the
management documents—
is prepared in relation to the superfund,
complies with any requirements as to form or content specified in
regulations made by the Secretary of State, and
is kept under review and revised if appropriate.
The responsible body of an operating superfund must ensure, so far as
reasonably practicable, that the superfund is managed and administered in
accordance with the management documents.
“The management documents” means—
a business plan;
a governance manual;
a continuity strategy;
a fees and expenses policy.
In subsection (3) —
“
continuity strategy” means a strategy for protecting the interests of
members of the superfund scheme if an event of concern occurs;
“
fees and expenses policy” means a document setting out how fees and
expenses incurred by the superfund will be funded;
“
governance manual” means a document setting out how and by whom
the superfund is managed and administered.
Section 10
of the
Pensions Act 1995
(civil penalties) applies to the responsible
body if it breaches
subsection (1)
or
(2)
.
The Secretary of State may by regulations amend
this section
for the purpose
of adding, removing or varying a management document in
subsection (3)
.
Regulations under subsection (1) (b) are subject to the negative procedure.
Regulations under subsection (6) are subject to the affirmative procedure.
The responsible body of an operating superfund must ensure that the
superfund has adequate policies and procedures in place for monitoring
whether each financial threshold is met.
Section 10
of the
Pensions Act 1995
(civil penalties) applies to the responsible
body if it breaches
subsection (1)
.
See also
Chapter 5
(events of concern) for the consequences of a financial
threshold ceasing to be met.
“The financial thresholds” means—
the capital adequacy threshold,
the technical provisions threshold,
the protected liabilities threshold, and
the scheme solvency threshold.
“The capital adequacy threshold” is met in relation to a superfund if the total
value of the assets of the scheme and the capital buffer is such that there is
a very high likelihood that the liabilities of the scheme to and in respect of
its members will be satisfied in full.
“The technical provisions threshold” is met in relation to a superfund if the
total value of the assets of the scheme and the capital buffer is greater than
or equal to the scheme’s technical provisions.
“The protected liabilities threshold” is met in relation to a superfund if the
total value of the assets of the scheme and the capital buffer exceeds the
amount of the scheme’s protected liabilities by a percentage specified in
regulations made by the Secretary of State.
“The scheme solvency threshold” is met in relation to a superfund on a given
day if there is no material likelihood that the scheme will fail to satisfy all
the liabilities to and in respect of members that it is required to satisfy during
the 6 months beginning with that day.
In this section —
“
protected liabilities” has the same meaning as in
Chapter 3
of
Part 2
of
the
Pensions Act 2004
(see section 131 of that Act);
“
technical provisions” has the same meaning as in
section 222
of the
Pensions Act 2004
(and a superfund scheme’s technical provisions are
to be calculated for the purposes of this section in the same way as
its technical provisions would be calculated for the purposes of that
section).
The Secretary of State may by regulations make provision about how to
determine whether any of the financial thresholds is met, including about—
how and by whom the value of the assets, liabilities or protected
liabilities of the scheme, or the value of the capital buffer, is to be
determined;
how and by whom the likelihood of something happening is to be
assessed;
what constitutes a “very high” or “material” likelihood (including
provision defining those expressions by reference to particular
percentages or particular criteria).
Regulations under subsection (7) may confer a discretion.
Regulations under subsection (4) or (7) are subject to the affirmative procedure.
A person that is a party to the capital buffer arrangement in relation to an
operating superfund must ensure, so far as it is in their power to do so, that
the capital buffer arrangement requires the release of the capital buffer to the
trustees of the superfund scheme if and to the extent that the release is
required by—
an approved response plan (see sections 87 and 88 ), or
a direction of the Regulator under
section 89
(direction-making powers
following event of concern).
The capital buffer is “released” to the extent that it is transferred or made
available to any person otherwise than—
in the ordinary course of the investment of the capital buffer, or
in payment of fees, expenses, taxes or other charges incurred (in each
case) in connection with the management or administration of the
capital buffer.
Section 88A
of the
Pensions Act 2004
(civil penalties) applies to the person if
they breach
subsection (1)
.
A person that is a party to the capital buffer arrangement in relation to an
operating superfund must ensure, so far as it is in their power to do so, that
the capital buffer arrangement does not permit the release of the capital buffer
to a person other than the trustees of the superfund scheme except in
accordance with
subsection (2)
or
(3)
.
The capital buffer arrangement may permit the release of the whole capital
buffer if—
the superfund scheme has satisfied all of its liabilities to and in respect
of its members, or
an insurer buyout has taken effect in relation to the superfund scheme.
The capital buffer arrangement may permit the release of an amount of the
capital buffer to the extent that the release is a permitted profit extraction.
“Permitted profit extraction”, in relation to a superfund, means a release of
the capital buffer—
that takes place at a time when the capital adequacy threshold is
exceeded to an extent, and has been exceeded for a period of time,
specified in regulations made by the Secretary of State,
that is made to a person of a description specified in the regulations,
and
in relation to which any other requirements specified in the regulations
are met (which may include a requirement for the Regulator’s consent),
and for the purposes of paragraph (a) the capital adequacy threshold is “exceeded” if and to the extent that the total value of the assets of the scheme and the capital buffer is greater than the amount required in order for that threshold to be met.
A person commits an offence if they cause or permit the capital buffer to be
released (to any extent)—
to a person other than the trustees of the superfund scheme, and
otherwise than in accordance with the capital buffer arrangement.
A person guilty of an offence under subsection (5) is liable—
on summary conviction in England and Wales, to a fine;
on summary conviction in Scotland, to a fine not exceeding the
statutory maximum;
on conviction on indictment, to imprisonment for a term not exceeding
seven years or a fine or both.
Section 88A
of the
Pensions Act 2004
(civil penalties) applies to a person who
causes or permits the capital buffer to be released (to any extent)—
to a person other than the trustees of the superfund scheme, and
otherwise than in accordance with the capital buffer arrangement
(but see subsection (10) of that section, which prevents a penalty from being imposed in respect of an act where the person has been convicted of an offence in respect of the same act, or where proceedings for such an offence are ongoing).
Section 10
of the
Pensions Act 1995
(civil penalties) applies to a person who
breaches
subsection (1)
.
Regulations under subsection (4) are subject to the affirmative procedure.
The responsible body of an operating superfund must ensure that this section
is complied with.
The capital buffer must be invested in accordance with a strategy prepared
by or under the supervision of the responsible body (“the capital buffer
investment strategy”).
The capital buffer investment strategy must comply with any requirements
specified in regulations made by the Secretary of State.
The requirements that may be specified by virtue of subsection
(3)
include
requirements as to—
the principles to be followed, and the matters to be taken into account,
in investing the capital buffer;
the form and content of the capital buffer investment strategy.
The capital buffer investment strategy may not be materially altered except
with the agreement of the trustees of the superfund scheme.
The Secretary of State may by regulations make provision about what counts
as a “material” alteration for the purposes of subsection (5).
Section 10
of the
Pensions Act 1995
(civil penalties) applies to the responsible
body if it breaches
subsection (1)
.
Regulations under subsection (3) are subject to the affirmative procedure.
Regulations under subsection (6) are subject to the negative procedure.
The responsible body of an operating superfund must appoint a person to
be responsible for verifying valuations of the capital buffer that are carried
out by or on behalf of the responsible body.
The responsible body must ensure that the person appointed verifies such a
valuation at least once in every period of 12 months.
The responsible body must also ensure that the person appointed verifies
such a valuation—
if asked to do so by the trustees of the superfund scheme, and
where otherwise required by virtue of this Part.
The person appointed—
must not be employed by, or involved in the management or
administration of, a member of the superfund group, and
must be a person who, in the reasonable opinion of the responsible
body, has the appropriate qualifications and experience.
A person may not be appointed without the consent of the trustees of the
superfund scheme.
Section 10
of the
Pensions Act 1995
(civil penalties) applies to the responsible
body if it breaches this section.
The responsible body of an operating superfund must ensure that there is at
all times at least one individual responsible for each key function.
Each of the following activities is a “key function” in relation to a superfund—
taking management decisions;
taking financial decisions;
taking investment decisions;
risk management;
internal audit;
marketing and promotion.
An activity is not a key function so far as it relates only to the superfund
scheme and not to any other part of the superfund.
Section 10
of the
Pensions Act 1995
(civil penalties) applies to the responsible
body if it breaches this section.
The Secretary of State may by regulations amend
this section
for the purpose
of adding, removing or varying a key function in
subsection (2)
.
Regulations under subsection (5) are subject to the affirmative procedure.
An individual may not be responsible for a key function in relation to an
operating superfund unless they are approved by the Regulator to be
responsible for that key function in relation to the superfund.
The Regulator may approve an individual only if satisfied that they are a fit
and proper person to be responsible for that key function in relation to the
superfund.
In deciding whether it is so satisfied the Regulator must take into account,
in particular, any matters specified in regulations made by the Secretary of
State.
The Regulator may not approve an individual to be responsible for risk
management if the individual is already responsible for taking investment
decisions, and vice versa.
An application for approval must be made in the manner and form specified
by the Regulator.
Approval may be given for a specified period or subject to specified conditions
(in which case the person is only approved to be responsible for the key
function in question for that period or while those conditions are met).
Approval may be given in advance of the superfund being authorised or
becoming an operating superfund.
If no longer satisfied as described in
subsection (2)
in relation to an individual,
the Regulator may by notice to the responsible body—
suspend its approval in relation to the individual for a period specified
in the notice, or
revoke its approval in relation to the individual with effect from a
date specified in the notice.
Subsection (1) does not apply to an individual while—
they are responsible for a key function on a temporary basis, and
the Regulator agrees, in light of the particular circumstances of the
case, to the person’s being responsible for the key function on that
basis without approval.
If an individual is responsible for a key function in relation to an operating
superfund in breach of
subsection (1)
,
section 10
of the
Pensions Act 1995
(civil penalties) applies to—
the individual, and
the responsible body.
Regulations under subsection (3) are subject to the negative procedure.
The responsible body of an operating superfund must ensure, so far as
reasonably practicable, that no individual carries out a key function in relation
to the superfund unless the responsible body—
is satisfied, having conducted due diligence in relation to the
individual, that the individual is a fit and proper person to carry out
the key function, and
has issued a certificate to the individual confirming that it is so
satisfied.
The responsible body must keep a register of certificates issued under subsection (1) .
In deciding whether it is satisfied as described in subsection (1)(a), the
responsible body must take into account, in particular, any matters specified
in regulations made by the Secretary of State.
The Secretary of State may by regulations make provision about certificates
issued under
subsection (1)
, including about the period of time for which a
certificate is valid.
Section 10
of the
Pensions Act 1995
(civil penalties) applies to the responsible
body if it breaches
subsection (1)
.
A person may not be a trustee of an operating superfund scheme unless they
are approved by the Regulator to be a trustee of the scheme.
The Regulator may approve a person to be a trustee of a superfund scheme
only if satisfied they are a fit and proper person to be a trustee of the scheme.
In assessing whether a person is a fit and proper person, the Regulator must
take into account, in particular, any matters specified in regulations made by
the Secretary of State.
The Regulator may not approve a person to be a trustee of a superfund
scheme if the person is employed by, or involved in the management or
administration of, a member of the superfund group.
An application for approval must be made in the manner and form specified
by the Regulator.
Approval may be given for a specified period or subject to specified conditions
(in which case the person is approved to be a trustee only for that period or
only while those conditions are met).
Approval may be given in advance of the superfund being authorised or
becoming an operating superfund.
If no longer satisfied as described in
subsection (2)
in relation to a person,
the Regulator may by notice to the person—
suspend its approval in relation to the person for a period specified
in the notice, or
revoke its approval in relation to the person with effect from a date
specified in the notice.
Subsection (1) does not apply to a person while—
they serve as a trustee of a superfund scheme on a temporary basis,
and
the Regulator agrees, in light of the particular circumstances of the
case, to their being a trustee on that basis without approval.
If a person becomes a trustee of an operating superfund scheme in breach of subsection (1) , section 10 of the Pensions Act 1995 applies to—
the person, and
the person who appointed them.
Regulations under subsection (3) are subject to the negative procedure.
The responsible body of an operating superfund must notify the Regulator
of any of the following—
a material deterioration in the investment performance of the capital
buffer;
a material change to any of the management documents;
a material change to the capital buffer arrangement;
a release of any of the capital buffer by way of permitted profit
extraction;
the bringing of proceedings against, or the launching of an
investigation by a public body into, a member of the superfund group;
a breach of any requirement of this Chapter.
The trustees of an operating superfund scheme must notify the Regulator of
any of the following—
a material deterioration in the investment performance of the scheme;
a material change to the rules of the scheme;
the bringing of proceedings against, or the launching of an
investigation by a public body into, the trustees.
A notification under this section must be made—
where the person responsible for the notification is aware in advance
that the event in question is to take place, as soon as reasonably
practicable after it becomes so aware;
otherwise, as soon as reasonably practicable after the event takes place.
A notification under this section must be made in the manner and form
specified by the Regulator.
Section 10 of the Pensions Act 1995 (civil penalties) applies to a person who
breaches this section.
The Secretary of State may by regulations make provision (including provision
amending this section)—
for the purpose of adding, removing or varying a matter to be notified
under
subsection (1)
or
(2)
;
about what counts as “material” for the purposes of any paragraph
of
subsection (1)
or
(2)
.
Regulations under subsection (6) are subject to the affirmative procedure.
The trustees of an operating superfund scheme must provide the Regulator
with regular reports about the financial position of the superfund.
The reports must comply with any requirements specified in regulations made
by the Secretary of State, which may in particular include requirements as
to—
the form and content of reports;
the times at which, and intervals at which, reports are to be provided.
Section 10 of the Pensions Act 1995 (civil penalties) applies to the trustees if
they breach this section.
Regulations under subsection (2) are subject to the negative procedure.
The Regulator may, by notice to the responsible body of an operating
superfund, require the responsible body to submit a return to the Regulator
for the purpose of enabling the Regulator to monitor—
the financial position of the superfund, or
the superfund’s compliance with the requirements of this Chapter.
The notice must specify—
the period within which the return must be submitted, and
the information (or description of information) which the return must
contain.
The Regulator may not require the responsible body to submit a return more
than once in any period of 12 months.
Section 10
of the
Pensions Act 1995
(civil penalties) applies to the responsible
body if it fails to submit a return in accordance with a notice under this
section.
If the Regulator considers or suspects that a requirement of this Chapter has
been breached in relation to an operating superfund, it may give the
responsible body notice of its intention to appoint a person to prepare a report
about the issue to which the alleged breach relates.
Where such notice is given, the responsible body—
must provide the person appointed with whatever assistance the
person reasonably requires, and
must meet the Regulator’s reasonable costs in respect of the report.
Section 10
of the
Pensions Act 1995
(civil penalties) applies to the responsible
body if it fails to comply with
subsection (2)
.
The responsible body of an operating superfund must provide the trustees
of the superfund scheme with whatever information relating to the superfund
the trustees may reasonably request to enable the trustees to comply with
any legislation relating to pensions that applies to them in respect of the
superfund scheme.
Section 10
of the
Pensions Act 1995
(civil penalties) applies to the responsible
body if it fails to comply with
subsection (1)
.
An “event of concern” takes place in relation to a superfund if any of the
following takes place—
any one of the financial thresholds ceases to be met (subject to subsection (4) );
a debt falls due to the trustees of the superfund scheme under
section
75
of the
Pensions Act 1995
;
the capital buffer is released otherwise than in accordance with the
capital buffer arrangement;
an insolvency event becomes, in the opinion of the directors of the
responsible body, likely to occur in relation to the responsible body;
an insolvency event occurs in relation to a member of the superfund
group;
the responsible body notifies the Regulator that it wishes to cease to
be the responsible body;
a material transaction takes place;
a superfund transfer is made to the superfund scheme without
approval under
Chapter 3
;
an application is made under
Chapter 3
for approval of a superfund
transfer in relation to which the ceding scheme is itself a superfund
scheme;
an application is made under
Chapter 3
for approval of a superfund
transfer of a kind described in
section 60
(3)
(merger of sections etc);
the responsible body or the trustees of the superfund scheme receive
a notice from the Regulator stating that, in the Regulator’s opinion,
the recipient of the notice—
has breached a requirement of this Part or of any other
legislation relating to pensions that applies to them in respect
of the superfund, or
is likely to breach such a requirement if remedial action is not
taken;
the Regulator withdraws the superfund’s authorisation under
section
93
.
“Period of concern”, in relation to an event of concern, means the period
beginning when the event takes place and ending—
when the Regulator gives the responsible body a notice under
section
87
(5)
(event of concern resolved) in respect of the event, or
when the superfund scheme is wound up.
In subsection (1) (g) “material transaction” means—
a change in the person or persons who have control of the responsible
body, or
a sale by a member of the superfund group of all or substantially all
of its assets.
The Secretary of State may by regulations provide that an event of concern
within
subsection (1)
(a)
does not take place—
unless the Regulator is satisfied that the financial threshold in question
is not met, or
unless the threshold is not met for a period, or in circumstances,
specified in the regulations (and for that purpose the period or
circumstances specified may involve the exercise of a discretion by
the Regulator).
The Secretary of State may by regulations amend
this section
for the purpose
of adding, removing or varying—
an event of concern in subsection (1) ;
a material transaction in subsection (3) .
In this section —
“
control” has the same meaning as in section 435 of the Insolvency Act
1986;
“
director” includes any person occupying the position of director, by
whatever name called;
“
insolvency event” has the same meaning as in
Part 2
of the
Pensions
Act 2004
(see section 121 of that Act).
Regulations under this section are subject to the affirmative procedure.
A relevant person in relation to an operating superfund must notify the
Regulator as soon as reasonably practicable after becoming aware that an
event of concern—
will or is likely to take place in relation to the superfund, or
has already taken place in relation to the superfund.
No notification need be given if the relevant person knows the Regulator
already to be aware of the circumstances to be notified.
The following are “relevant persons” in relation to an operating superfund—
the responsible body;
the trustees of the superfund scheme;
in relation to the event of concern in
section 85
(1)
(a)
, the actuary
appointed under
section 47
(1)
(b)
of the
Pensions Act 1995
in relation
to the superfund scheme.
If an event of concern takes place in relation to an operating superfund, the
Regulator must require the responsible body or the trustees of the superfund
scheme, or both jointly, to propose a plan for responding to the event of
concern (a “response plan”) within a period specified by the Regulator.
The Regulator must approve a proposed response plan if satisfied, having
regard to the interests of members of the superfund scheme, that the response
plan—
meets the requirements of section 88 (content of response plan), and
is an appropriate plan for responding to the event of concern.
If, having received a proposed response plan, the Regulator is not so
satisfied—
it must explain to the person that proposed the plan why not, and
that person must propose another response plan, within the period
required by the Regulator, that takes account of that explanation.
An approved response plan may be amended, or replaced with a new
approved response plan, by agreement between the person that proposed the
plan and the Regulator.
If the Regulator is satisfied—
that an approved response plan has been carried out, and
that the event of concern in question has been adequately resolved,
it must give a notice to that effect to the person that proposed the plan.
In
subsections (2)
and
(3)
, “proposed response plan” means a response plan
proposed by virtue of
subsection (1)
or
(3)
(b)
.
The requirements mentioned in section 87 (2) (a) are the following.
A response plan must specify—
the outcome which the plan is intended to achieve,
the key steps which are to be taken to achieve that outcome,
when and by whom those steps are to be taken, and
how members of the superfund scheme are to be kept informed about
the carrying out of the plan.
Where the event of concern is the technical provisions threshold ceasing to
be met, the response plan must require the whole of the capital buffer to be
released to the trustees.
Where the event of concern is the scheme solvency threshold ceasing to be
met, the response plan must require so much of the capital buffer to be
released to the trustees as equals the lower of the following—
the amount that would enable the superfund scheme to meet the
requirement in
section 222
(1)
of the
Pensions Act 2004
(requirement
to cover technical provisions);
the total value of the capital buffer.
Where the event of concern is a debt falling due to the trustees of the
superfund scheme under
section 75
of the
Pensions Act 1995
, the response
plan must require so much of the capital buffer to be released to the trustees
as equals the lower of the following—
the amount of the debt;
the total value of the capital buffer.
Where the event of concern is the protected liabilities threshold ceasing to be
met, the response plan must require the immediate winding up of the
superfund scheme.
A response plan must take account of the superfund’s continuity strategy
(but may deviate from it if, in the opinion of the person proposing the plan,
the course of action contemplated by the continuity strategy is not appropriate
in the circumstances).
A response plan must not require the release of the capital buffer (to any
extent) except as set out in
subsection (3)
,
(4)
or
(5)
.
A response plan must meet any other requirements specified in regulations
made by the Secretary of State, including in particular as to how the value
of the capital buffer, or of any assets released from it, is to be determined for
the purposes of a requirement within
subsection (4)
or
(5)
.
Regulations under subsection (9) are subject to the negative procedure.
The Regulator may during a period of concern direct a member of the
superfund group or the trustees of the superfund scheme to do any or all of
the following—
take a specified step that an approved response plan identifies as one
which they are to take;
take a specified step that the Regulator considers likely to enable or
facilitate the carrying out of an approved response plan;
if a person has failed to comply with section 87 (1) or (3) (b) (requirement to propose response plan or revised response plan), take a specified step that the Regulator considers necessary or expedient for the purpose of responding to the event of concern in the interests of members of the superfund scheme;
ensure that for a specified period—
no payments are made out of the assets of the superfund
scheme to or in respect of members;
no transfers of liabilities are made from the superfund scheme.
A direction under
subsection (1)
(c)
may not require the provision of financial
support to the superfund scheme.
A member of the superfund group, and the trustees of the superfund scheme,
must comply with a direction given to them by the Regulator under
this
section
; and if compliance with a direction results in a breach of the rules of
the scheme, the breach is to be disregarded for all purposes.
If an approved response plan contemplates that a person will become the
responsible body of a superfund, and that person agrees to become the
responsible body, the Regulator may direct that that person is to become the
responsible body from a specified time.
In
this section
, “specified” means specified (or of a description specified) in
the direction.
See section 90 for further provision about directions under subsection (1) (d) .
This section applies to a direction under section 89 (1) (d) (a “pause direction”).
The Regulator may make a pause direction only if satisfied that doing so is
reasonably necessary to protect the interests of members of the superfund
scheme.
A pause direction may make different provision for different purposes.
The Regulator must cancel a pause direction if no longer satisfied as described
in
subsection (2)
.
A pause direction, so far as not already cancelled, ceases to have effect when
the period of concern to which it relates comes to an end.
A payment that would have fallen due but for a pause direction falls due
when the pause direction ceases to have effect.
A pause direction within
section 89
(1)
(d)
(ii)
(no transfers of liabilities) does
not affect an order or provision falling within
section 28
(1)
of the
Welfare
Reform and Pensions Act 1999
(pension sharing orders or provisions).
The Secretary of State may by regulations modify any provision of
Part 4ZA
of the
Pension Schemes Act 1993
(transfer rights etc) in its application to a
superfund scheme in relation to which a pause direction has effect containing
provision within
section 89
(1)
(d)
(ii)
(no transfer of liabilities).
Regulations under subsection (8) are subject to the affirmative procedure.
The Regulator may issue a fixed penalty notice to a person if it considers that
the person has failed to comply with a requirement imposed by or under
section 86
,
87
or
89
.
A “fixed penalty notice” is a notice requiring the person to whom it is issued
to pay a penalty within the period specified in the notice.
The penalty—
is to be determined in accordance with regulations made by the
Secretary of State, and
must not exceed £100,000.
A fixed penalty notice must—
state the amount of the penalty,
state the date before which the penalty must be paid, which must be
at least 28 days after the date on which the notice is issued,
specify the failure to which the penalty relates,
state that the Regulator may issue an escalating penalty notice under
section 92
if the person fails to comply with the requirement in
question, and
notify the person to whom the notice is issued of the review process
under
section 43
of the
Pensions Act 2008
and the right of referral to
a tribunal under
section 44
of
that Act
(as applied by subsection
(5)
).
The following sections of the Pensions Act 2008 apply to a penalty notice
under this section as they apply to a penalty notice under section 40 of that
Act—
section 42 (penalty notices: recovery);
section 43 (review of penalty notices);
section 44 (references to First-tier Tribunal or Upper Tribunal).
Regulations under subsection (3) (a) are subject to the negative procedure.
The Regulator may issue an escalating penalty notice to a person if—
it considers that the person has failed to comply with a requirement
imposed by virtue of
section 86
,
87
or
89
,
it has already issued the person with a fixed penalty notice under
section
91
in respect of that failure, and
the period for paying the penalty specified in that notice has passed
without the requirement to which that notice related being complied
with.
An “escalating penalty notice” is a notice requiring a person to pay a penalty
calculated by reference to a daily rate if the person fails before a specified
date to comply with the requirement to which the notice relates.
The daily rate—
is to be determined in accordance with regulations made by the
Secretary of State, and
must not exceed £20,000.
The Regulator may not issue an escalating penalty notice to a person if—
the person has exercised the right of referral to a tribunal under
section
44
of the
Pensions Act 2008
(as applied by section
91
(5)
) in respect of
a fixed penalty notice issued under
section 91
,
the escalating penalty notice relates to the same failure as the fixed
penalty notice, and
the reference in respect of the fixed penalty notice has not been
determined.
An escalating penalty notice must—
specify the failure to which the penalty relates,
state that, if the person fails to comply with the requirement to which
the notice relates before a specified date, the person will be liable to
pay an escalating penalty,
state the daily rate of the escalating penalty and the way in which the
penalty is calculated,
state the date from which the escalating penalty will be payable,
state that the escalating penalty will continue to be payable at the
daily rate until the date on which the person complies with the
requirement to which the notice relates or an earlier date specified in
the notice, and
notify the person to whom the notice is issued of the review process
under
section 43
of the
Pensions Act 2008
and the right of referral to
a tribunal under
section 44
of
that Act
(as applied by subsection
(6)
).
The following sections of the
Pensions Act 2008
apply to an escalating penalty
notice under
this section
as they apply to an escalating penalty notice under
section 41
of
that Act
—
section 42 (penalty notices: recovery);
section 43 (review of penalty notices);
section 44 (references to First-tier Tribunal or Upper Tribunal).
Regulations under subsection (3) (a) are subject to the negative procedure.
The Regulator may during a period of concern withdraw authorisation from a superfund if satisfied that the superfund has failed to comply with the requirements of Chapter 4 or this Chapter .
Where some or all of the capital buffer is released in consequence of a debt
falling due to the trustees of the superfund scheme under
section 75
of the
Pensions Act 1995
, the debt due under that section is treated as reduced by
the value of the assets released (as calculated in accordance with regulations
under
section 88
(9)
).
The Secretary of State may by regulations—
apply any superfunds legislation, with or without modifications, to a
similar structure;
make, in relation to a similar structure, provision that is similar to or
that corresponds to any superfunds legislation.
“Superfunds legislation” means provision made by this Act (including
provision amending other legislation) so far as it applies in relation to
superfunds.
“Similar structure” means arrangements to which this Part does not (ignoring
this section) apply but that involve a trust-based occupational pension
scheme—
that has defined-benefit liabilities, and
that is not supported by a substantive employer covenant
(whether or not the scheme receives, or is managed or administered with a view to its receiving, transfers of defined-benefit liabilities from other schemes).
The power under subsection (1) can be exercised so as to amend an Act.
Regulations under subsection (1) are subject to the affirmative procedure.
This section applies to a pension scheme—
that is established for the purpose of receiving superfund transfers,
and
that, immediately after it is established, is capable of having effect so
as to provide benefits to or in respect of people with service in
employment of a description.
For the purposes of the definition of “occupational pension scheme” in section
1(1) of the Pension Schemes Act 1993, the scheme is assumed to meet the
condition in paragraph (a) of that definition (condition that scheme be
established by employer for the purpose of providing benefits to employees).
For the purposes of the definitions of “employer” in section 124 (1) of the Pensions Act 1995 , section 318 (1) (a) of the Pensions Act 2004 and section 99 of this Act, the scheme is assumed to relate to the description of employment mentioned in subsection (1) (b) above (in addition to any other description of employment to which it relates).
If—
the scheme includes more than one section, and
a section of the scheme is, immediately after the section comes into
being, capable of having effect so as to provide benefits to or in respect
of people with service in employment of a description,
then for the purposes of the definitions mentioned in subsection (3) , both the section and the scheme are assumed to relate to the description of employment mentioned in paragraph (b) (in addition to any other description of employment to which they relate).
In the Pensions Act 1995, in section 75 (deficiencies in the assets), after In relation to a superfund scheme,
section 60
(2)
of the Pension Schemes
subsection (1A) insert—
“(1B)
Act 2026 (sections treated as separate schemes) applies for the purposes
of this section as it applies for the purposes of
Part 3
of that Act.”
In the Occupational Pension Schemes (Preservation of Benefit) Regulations Where— the transferring scheme is required to be wound up, or its winding
paragraph (1) of this regulation has effect as though for “the conditions set
out in paragraphs (2) and (3) of this regulation are” there were substituted
“the condition set out in paragraph (2) of this regulation is”.”
1991 (S.I. 1991/167), in regulation 12 (transfer of member’s accrued rights
without consent), after paragraph (1) insert—
“(1ZA)
(a)
up is required to continue, under section 154(1) of the Pensions Act
2004 (requirement to wind up schemes with sufficient assets to meet
protected liabilities), and
(b)
See also
the Schedule
, which contains amendments to the Pensions Act 2004
that (in some cases) are consequential on this Part.
The provision that may be made by virtue of
section 122
(12)
(a)
(power to
make transitional or saving provision in connection with coming into force
of Act) includes special provision in relation to a superfund that has been
authorised under the interim regime; for example, provision—
for a provision of this Part not to apply to, or to apply differently in
respect of, a superfund that has been authorised under the interim
regime;
for a superfund that has been authorised under the interim regime to
be treated for the purposes of any provision of Chapter 4 or 5 as an
operating superfund.
For the purposes of
subsection (1)
, a superfund is “authorised under the
interim regime” if its name has been published on the Regulator’s website as
a result of its having made a successful application to the Regulator under
the arrangements for the assessment and supervision of superfunds operated
by the Regulator before the coming into force of
this Part
.
In this Part —
“
approved response plan” means a response plan which has been
approved by the Regulator under
section 87
;
“
assets”, in relation to the capital buffer, includes cash;
“
associate”, in relation to a body corporate, has the meaning given in
section 435
(6)
of the
Insolvency Act 1986
(read with section 435(11));
“
authorised”, in relation to a superfund, means authorised under
Chapter
2
(except in section 91);
“
the capital adequacy threshold” has the meaning given by
section 71
(2)
;
“
capital buffer” has the meaning given by
section 59
(3)
;
“
the capital buffer arrangement”, in relation to the capital buffer, means
the contract or other arrangement referred to in
section 59
(2)
;
“
the ceding scheme” has the meaning given by
section 65
(7)
;
“
continuity strategy” has the meaning given by
section 69
(4)
;
“
defined benefits” has the same meaning as in
Part 1
of the
Pensions
Act 2008
(see section 99 of that Act);
“
defined-benefit liability” means a liability to pay defined benefits to a
member of a pension scheme;
“
the employer”, in relation to an occupational pension scheme, means
the employer of persons in the description of employment to which
the scheme in question relates (and see also
section 96
);
“
event of concern” has the meaning given by
section 85
(1)
;
“
the financial thresholds” has the meaning given by
section 71
(1)
;
“
insurer buyout”, in relation to a pension scheme, means an arrangement
under which an insurer takes on responsibility for satisfying all the
liabilities of the scheme in full;
“
key function” has the meaning given by
section 76
(2)
and
(3)
;
“
liabilities”, in relation to a pension scheme, includes present and future
liabilities;
“
the management documents” has the meaning given by
section 69
(3)
;
“
not supported by a substantive employer covenant” has the meaning
given by
section 59
(4)
;
“
occupational pension scheme” has the same meaning as in the
Pension
Schemes Act 1993
(see section 1 of that Act and section 89 above);
“
the onboarding conditions” has the meaning given by
section 65
(2)
(read
with any regulations under section
65
(4)
);
“
operating superfund” means a superfund of which the superfund scheme
is an operating superfund scheme;
“
operating superfund scheme” means a superfund scheme—
that is part of an authorised superfund or of a superfund whose
authorisation has been withdrawn under
section 93
, and
to which one or more superfund transfers have been made;
“
pension scheme” has the meaning given by
section 1
(5)
of the
Pension
Schemes Act 1993
;
“
period of concern” has the meaning given by
section 85
(2)
;
“
permitted profit extraction” has the meaning given by
section 73
(4)
;
“
the protected liabilities threshold” has the meaning given by
section
71
(4)
;
“
the receiving superfund” has the meaning given by
section 65
(7)
;
“
the Regulator” means the Pensions Regulator;
“
release”, in relation to the capital buffer, has the meaning given by
section 72
(2)
;
“
response plan” has the meaning given by
section 87
(1)
;
“
the responsible body”, in relation to an authorised superfund, means—
the body corporate that applied for the superfund to be
authorised (see
section 62
(2)
), or
where the Regulator has directed under
section 89
(4)
that
another person is to become the responsible body, that other
person;
“
the rules of the scheme”, in relation to a trust-based occupational pension
scheme, includes the trust deed;
“
the scheme solvency threshold” has the meaning given by
section 71
(5)
;
“
section” has the meaning given by
section 60
;
“
superfund” has the meaning given by
section 59
(5)
;
“
superfund group”, in relation to a superfund, means the responsible
body and every body corporate—
that is involved in the management or administration of the
superfund, and
that is an associate of the responsible body;
“
superfund scheme” has the meaning given by
section 59
(1)
(read with
section 53);
“
superfund transfer” has the meaning given by
section 59
(6)
;
“
supported by a capital buffer” has the meaning given by
section 59
(2)
;
“
the technical provisions threshold” has the meaning given by
section
71
(3)
;
“
transfer”, in relation to liabilities of a pension scheme, is to be read with
subsection (2)
;
“
the transferred liabilities” has the meaning given by
section 65
(7)
;
“
trust-based occupational pension scheme” means an occupational pension
scheme established under a trust.
References in
this Part
to a transfer of liabilities from one pension scheme to
another are to any transaction whereby—
a person who has present or future rights to receive defined benefits
under the first scheme ceases to have those rights, and
that person instead acquires present or future rights to receive defined
benefits under the second scheme.
The Secretary of State may by regulations amend
this section
for the purpose
of changing the definition of “superfund group”.
Regulations under subsection (3) are subject to the affirmative procedure.
The following provisions of
this section
have effect for the purposes of
this
section
and
sections 101
to
103
.
“GB scheme” means an occupational pension scheme that was a salary-related
contracted-out scheme in England and Wales or Scotland; and for this purpose
an occupational pension scheme was a salary-related contracted-out scheme
in England and Wales or Scotland at any time if the scheme was contracted-out
at that time by virtue of satisfying
section 9
(2)
of the
Pension Schemes Act
1993
(as it then had effect).
“Scheme actuary”, in relation to a GB scheme, means—
the person for the time being appointed as actuary for the scheme
under
section 47
of the
Pensions Act 1995
(professional advisers), or
if there is no person so appointed, a Fellow of the Institute and Faculty
of Actuaries appointed by the trustees or managers of the scheme to
carry out the functions of the scheme actuary under
section 101
.
“Section 37(1)” refers to section 37 (1) of the Pension Schemes Act 1993 (prohibition of alterations to rules of contracted-out schemes in certain circumstances).
“Regulation 42” refers to
regulation 42
of the
Occupational Pension Schemes
(Contracting-out) Regulations 1996
(S.I. 1996/1172) (requirements for alterations
to rules of contracted-out schemes).
References to non-compliance with the requirements of paragraph (2)(a) and
(b) of regulation 42 include non-compliance with the requirement in either
paragraph (2)(a) or (2)(b) (as well as with both requirements).
An alteration purporting to have been made to the rules of a GB scheme is
a “potentially remediable alteration” if—
by virtue of
section 37
(1)
and paragraphs (1) and (2) of regulation 42
(as they had effect at the time), the alteration could not be made unless
the requirements of paragraph (2)(a), (b) and (c) of regulation 42 (as
they then had effect) had been met,
it was treated by the trustees or managers of the scheme, after it was
purportedly made, as a valid alteration,
no positive action has been taken by the trustees or managers of the
scheme on the basis that they consider the alteration to be void (and
so of no legal effect) by reason of non-compliance with the
requirements of paragraph (2)(a) and (b) of regulation 42, and
it is not excluded from the scope of remediation under sections 101 and 102 (see subsection (9)).
In
subsection (7)
(c)
“positive action”, in relation to the purported alteration,
means—
notifying any members of the scheme in writing to the effect that the
trustees or managers consider the alteration to be void (by reason of
non-compliance with the requirements of paragraph (2)(a) and (b) of
regulation 42) and that the scheme will be administered on the basis
that it has no legal effect, or
notifying any members of the scheme in writing (in consequence of
the trustees or managers being of the view mentioned in
subsection
(7)
(c)
) to the effect that the trustees or managers are taking (or have
taken) any other step in relation to the administration of the scheme
which has (or will have) the effect of altering payments to or in respect
of members of the scheme.
An alteration purporting to have been made to the rules of a GB scheme is
excluded from the scope of remediation under sections
101
and
102
if any
question relating to the validity of the alteration, so far as relating to the
requirements of paragraph (2)(a) and (b) of regulation 42—
has, before
this section
comes into force, been determined by the court
in qualifying legal proceedings,
was in issue on or before 5 June 2025 in qualifying legal proceedings,
but has been settled by agreement between the parties at any time
before
this section
comes into force, or
was in issue on or before 5 June 2025 in qualifying legal proceedings
and remains in issue in those proceedings when
this section
comes
into force.
In subsection
(9)
“legal proceedings” means proceedings for the determination
of a dispute that have been brought before a court in the United Kingdom;
and such proceedings are “qualifying legal proceedings” if —
they will determine a dispute as to the rules of the scheme, and
the parties are (or include)—
the trustees or managers of the scheme, and
one or more members or other beneficiaries of the scheme (or
a person acting on behalf of one or more members or other
beneficiaries).
This section applies to any potentially remediable alteration purportedly made
to a GB scheme other than a potentially remediable alteration to which section
102
applies.
If the conditions mentioned in subsection
(3)
are met in relation to it, the
alteration is to be treated for all purposes as having met the requirements of
paragraph (2)(a) and (b) of regulation 42 before it was purportedly made,
and so as having always been a valid alteration so far as those requirements
are concerned.
The conditions are—
that the trustees or managers of the scheme have made a request in
writing to the scheme actuary for the actuary to consider whether or
not, on the assumption that it was validly made, the alteration would
have prevented the scheme from continuing to satisfy the statutory
standard, and
that the scheme actuary has confirmed to the trustees or managers in
writing that in the actuary’s opinion it is reasonable to conclude that,
on the assumption that it was validly made, the alteration would not
have prevented the scheme from continuing to satisfy the statutory
standard.
In this subsection “the statutory standard” means the statutory standard for a contracted-out scheme under section 12A of the Pension Schemes Act 1993 as it had effect at the time the alteration was purportedly made.
A scheme actuary who has received a request as mentioned in subsection (3) (a) in relation to a potentially remediable alteration to a scheme—
may act on the basis of the information available to the actuary, as
long as the actuary considers it sufficient for the purpose of forming
an opinion on the subject-matter of the request;
may take any professional approach (including making assumptions
or relying on presumptions) that is open to the actuary in all the
circumstances of the case.
A condition mentioned in subsection
(3)
may be met by action taken before
(as well as action taken after) this section comes into force.
Subsection (7) applies to a scheme if —
there is an assessment period in relation to the scheme within the
meaning of Part 2 of the Pensions Act 2004, or
the scheme is operating as a closed scheme under section 153 of that
Act.
The powers of the Board of the Pension Protection Fund under section 134
and section 155 of the Pensions Act 2004 to give directions includes power
to give a direction to the trustees or managers of the scheme requiring them—
In subsection (8) —
“
public service scheme” means—
a pension scheme established under section 1 of the Public
Service Pensions Act 2013, or
a statutory pension scheme which is connected with a scheme
referred to in paragraph (a) (and for this purpose “statutory
pension scheme” and “connected” have the meanings given in
that Act);
“
responsible authority”, in relation to a public service scheme, means
the authority that is the responsible authority for the scheme by virtue
of section 2 of, and Schedule 2 to, that Act.
This section applies to any potentially remediable alteration purportedly made
to the rules of—
a GB scheme, or a part of a GB scheme, which has been wound up
before this section comes into force,
a GB scheme, or a part of a GB scheme, for which the Board of the
Pension Protection Fund has, before this section comes into force,
assumed responsibility in accordance with Chapter 3 of Part 2 of the
Pensions Act 2004 (see section 161 of that Act), or
a GB scheme which is a qualifying pension scheme for the purposes
of regulation 9 of the Financial Assistance Scheme Regulations 2005
(S.I. 2005/1986) and in respect of which payments are required to be
made under section 286 of the Pensions Act 2004.
The alteration is to be treated for all purposes as having met the requirements
of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made
and so as having always been a valid alteration so far as those requirements
are concerned.
In
subsection (1)
“specified” means specified in the regulations; and a specified
description of purported alterations may be framed by reference to features
of the alterations or of the schemes purportedly altered by them (or a
combination of both).
Regulations under subsection (1) are subject to the negative procedure.
The Secretary of State may by regulations make incidental, supplementary,
consequential or transitional provision in connection with any provision of
this Chapter (other than this section and section
107
).
Regulations under
subsection (4)
may amend any Act passed before or in the
same Session as this Act.
Regulations under
subsection (4)
are subject to the affirmative procedure if
they contain provision made under subsection (5); otherwise they are subject
to the negative procedure.
“NI scheme” means an occupational pension scheme that was a salary-related
contracted-out scheme in Northern Ireland; and for this purpose an
occupational pension scheme was a salary-related contracted-out scheme in
Northern Ireland at any time if the scheme was contracted-out at that time
by virtue of satisfying section 5(2) of the Pension Schemes (Northern Ireland)
Act 1993 (as it then had effect).
“Scheme actuary”, in relation to an NI scheme, means—
the person for the time being appointed as actuary for the scheme
under Article 47 of the Pensions (Northern Ireland) Order 1995 (S.I.
1995/3213 (N.I. 22)) (professional advisers), or
if there is no person so appointed, a Fellow of the Institute and Faculty
of Actuaries appointed by the trustees or managers of the scheme to
carry out the functions of the scheme actuary under section
105
.
“Section 33(1)” refers to section 33(1) of the Pension Schemes (Northern Ireland)
Act 1993 (prohibition of alterations to rules of contracted-out schemes in
certain circumstances).
“Regulation 42” refers to regulation 42 of the Occupational Pension Schemes
(Contracting-out) Regulations (Northern Ireland) 1996 (S.R. (N.I.) 1996 No.
493).
References to non-compliance with the requirements of paragraph (2)(a) and
(b) of regulation 42 include non-compliance with the requirement in either
paragraph (2)(a) or (2)(b) (as well as with both requirements).
An alteration purporting to have been made to the rules of an NI scheme is
a “potentially remediable alteration” if—
by virtue of section 33(1) and paragraphs (1) and (2) of regulation 42
(as they had effect at the time), the alteration could not be made unless
the requirements of paragraph (2)(a), (b) and (c) of regulation 42 (as
they then had effect) had been met,
it was treated by the trustees or managers of the scheme, after it was
purportedly made, as a valid alteration,
no positive action has been taken by the trustees or managers of the
scheme on the basis that they consider the alteration to be void (and
so of no legal effect) by reason of non-compliance with the
requirements of paragraph (2)(a) and (b) of regulation 42, and
it is not excluded from the scope of remediation under sections 105 and 106 (see subsection (9)).
In
subsection (7)
(c)
“positive action”, in relation to the purported alteration,
means—
notifying any members of the scheme in writing to the effect that the
trustees or managers consider the alteration to be void (by reason of
non-compliance with the requirements of paragraph (2)(a) and (b) of
regulation 42) and that the scheme will be administered on the basis
that it has no legal effect, or
notifying any members of the scheme in writing (in consequence of
the trustees or managers being of the view mentioned in
subsection
(7)
(c)
) to the effect that the trustees or managers are taking (or have
taken) any other step in relation to the administration of the scheme
which has (or will have) the effect of altering payments to or in respect
of members of the scheme.
An alteration purporting to have been made to the rules of an NI scheme is
excluded from the scope of remediation under sections
105
and
106
if any
question relating to the validity of the alteration, so far as relating to the
requirements of paragraph (2)(a) and (b) of regulation 42—
has, before this section comes into force, been determined by the court
in qualifying legal proceedings,
was in issue on or before 5 June 2025 in qualifying legal proceedings,
but has been settled by agreement between the parties at any time
before this section comes into force, or
was in issue on or before 5 June 2025 in qualifying legal proceedings
and remains in issue in those proceedings when this section comes
into force.
In subsection
(9)
“legal proceedings” means proceedings for the determination
of a dispute that have been brought before a court in the United Kingdom;
and such proceedings are “qualifying legal proceedings” if—
they will determine a dispute as to the rules of the scheme, and
the parties are (or include)—
the trustees or managers of the scheme, and
one or more members or other beneficiaries of the scheme (or
a person acting on behalf of one or more members or other
beneficiaries).
This section applies to any potentially remediable alteration purportedly made
to an NI scheme other than a potentially remediable alteration to which section
106
applies.
If the conditions mentioned in subsection
(3)
are met in relation to it, the
alteration is to be treated for all purposes as having met the requirements of
paragraph (2)(a) and (b) of regulation 42 before it was purportedly made,
and so as having always been a valid alteration so far as those requirements
are concerned.
The conditions are—
that the trustees or managers of the scheme have made a request in
writing to the scheme actuary for the actuary to consider whether or
not, on the assumption that it was validly made, the alteration would
have prevented the scheme from continuing to satisfy the statutory
standard, and
that the scheme actuary has confirmed to the trustees or managers in
writing that in the actuary’s opinion it is reasonable to conclude that,
on the assumption that it was validly made, the alteration would not
have prevented the scheme from continuing to satisfy the statutory
standard.
In this subsection “the statutory standard” means the statutory standard for a contracted-out scheme under section 8A of the Pension Schemes (Northern Ireland) Act 1993 as it had effect at the time the alteration was purportedly made.
A scheme actuary who has received a request as mentioned in subsection
(3)(a) in relation to a potentially remediable alteration to a scheme—
may act on the basis of the information available to the actuary, as
long as the actuary considers it sufficient for the purpose of forming
an opinion on the subject-matter of the request;
may take any professional approach (including making assumptions
or relying on presumptions) that is open to the actuary in all the
circumstances of the case.
A condition mentioned in
subsection (3)
may be met by action taken before
(as well as action taken after) this section comes into force.
Subsection (7) applies to an NI scheme if —
there is an assessment period in relation to the scheme within the
meaning of Part 3 of the Pensions (Northern Ireland) Order 2005 (S.I.
2005/255 (N.I. 1)), or
the scheme is operating as a closed scheme under Article 137 of that
Order.
The powers of the Board of the Pension Protection Fund under Article 118
and 139 of the Pensions (Northern Ireland) Order 2005 to give directions
include power to give a direction to the trustees or managers of the scheme
requiring them—
to make a request under subsection (3)(a) in relation to a potentially
remediable alteration to the scheme, and
to take any necessary action to enable or facilitate the making of a
decision by the actuary as to whether to give the confirmation
described in subsection (3)(b) in relation to that alteration.
In subsection (8) —
“
public service scheme” means—
a pension scheme established under section 1 of the Public
Service Pensions (Northern Ireland) Act 2014 (2014 c. 2), or
a statutory pension scheme which is connected with a scheme
referred to in paragraph (a) (and for this purpose “statutory
pension scheme” and “connected” have the meanings given in
that Act);
“
responsible authority”, in relation to a public service scheme, means
the authority that is the responsible authority for the scheme by virtue
of section 2 of and Schedule 2 to that Act.
This section applies to any potentially remediable alteration purportedly made
to the rules of—
an NI scheme, or a part of an NI scheme, which has been wound up
before this section comes into force,
an NI scheme, or a part of an NI scheme, for which the Board of the
Pension Protection Fund has, before this section comes into force,
assumed responsibility in accordance with Chapter 3 of Part 3 of the
Pensions (Northern Ireland) Order 2005 (see Article 145 of that Order),
or
an NI scheme which is a qualifying pension scheme for the purposes
of regulation 9 of the Financial Assistance Scheme Regulations 2005
(S.I. 2005/1986) and in respect of which payments are required to be
made under section 286 of the Pensions Act 2004.
The alteration is be treated for all purposes as having met the requirements
of paragraph (2)(a) and (b) of regulation 42 before it was purportedly made
and so as having always been a valid alteration so far as those requirements
are concerned.
The Department for Communities in Northern Ireland may by regulations
amend any of
sections 104
,
105
and
106
for the purpose of providing for
purported alterations of any specified description to be outside the scope of
remediation under either or both of
sections 105
and
106
.
In
subsection (1)
“specified” means specified in the regulations; and a specified
description of purported alterations may be framed by reference to features
of the alterations or of the schemes purportedly altered by them (or a
combination of both).
Regulations under subsection (1) are subject to negative resolution.
The Department for Communities in Northern Ireland may by regulations
make incidental, supplementary, consequential or transitional provision in
connection with any provision of
this Chapter
(other than section 103 and
this section).
Regulations under
subsection (4)
may amend Northern Ireland legislation, or
an Act of Parliament, passed or made before or in the same Session as this
Act.
Regulations under subsection (4) which contain provision made under subsection (5) —
must be laid before the Northern Ireland Assembly after being made,
take effect on such date as may be specified in the regulations, and
cease to have effect on the expiry of the period of six months beginning
with the day on which they take effect, unless the regulations have
been approved during that period by resolution of the Assembly.
Paragraph (c)
is without prejudice to the validity of anything done under the
regulations or to the making of new regulations.
Regulations under subsection (4) which do not contain provision made under subsection (5) are subject to negative resolution.
In this section “subject to negative resolution” has the meaning given by section 41 (6) of the Interpretation Act (Northern Ireland) 1954 .
The power of the Department for Communities in Northern Ireland to make
regulations under
this section
is exercisable by statutory rule for the purposes
of the
Statutory Rules (Northern Ireland) Order 1979
(S.I. 1979/1573 (N.I.
12)).
In paragraph 28—
“(2)
Where a person is entitled to periodic compensation under
any of those paragraphs, the person is entitled, on the indexation date, to an increase under this paragraph of—(a)
(b)
(c)
in any other case, the amount mentioned in
sub-paragraph (2E) .(2A)
This sub-paragraph applies where, immediately before the
assessment date—(a)
the admissible rules of the scheme included a
requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,(b)
that requirement did not apply only in relation to a
guaranteed minimum pension provided by the scheme, and(c)
that requirement applied in relation to pre-1997
service in respect of which the compensation is payable.(2B)
This sub-paragraph applies where—
(a)
the scheme provided a guaranteed minimum pension
that accrued during the GMP indexation period,(b)
that accrual was in relation to GMP indexed service
in respect of which the compensation is payable, and(c)
immediately before the assessment date the
admissible rules of the scheme—(i)
did not include a requirement of the kind
mentioned in sub-paragraph (2A) (a) ,(ii)
included such a requirement only in relation
to a guaranteed minimum pension provided by the scheme, or(iii)
included such a requirement but that
requirement did not apply in relation to pre-1997 service in respect of which the compensation is payable.(2C)
The amount mentioned in this sub-paragraph is—
(a)
the appropriate percentage of the amount of the
pre-1997 underlying rate immediately before the indexation date, or(b)
where the person first became entitled to the periodic
compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.(2D)
The amount mentioned in this sub-paragraph is—
(a)
the appropriate percentage of the amount of the
notional pre-1997 underlying rate immediately before the indexation date, or(b)
where the person first became entitled to the periodic
compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.(2E)
The amount mentioned in this sub-paragraph is—
(a)
the appropriate percentage of the amount of the
post-1997 underlying rate immediately before the indexation date, or(b)
where the person first became entitled to the periodic
compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.(2F)
In any case where it is unclear to the Board whether,
immediately before the assessment date, the admissible rules of the scheme included a requirement of the kind mentioned in sub-paragraph (2A) (a) , this paragraph has effect as if the scheme included such a requirement.(2G)
In any case where it is unclear to the Board whether,
immediately before the assessment date, a requirement of the scheme of a kind mentioned in sub-paragraph (2A) (a) (including such a requirement included by virtue of sub-paragraph (2F) ) applied in relation to particular pre-1997 service, this paragraph has effect as if the requirement applied in relation to such service.(2H)
In any case where it is unclear to the Board whether the
scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, this paragraph has effect as if the scheme so provided.(2I)
In any case where it is unclear to the Board whether the
accrual of a guaranteed minimum pension provided by the scheme (including by virtue of sub-paragraph (2H) ) was in relation to particular GMP indexed service, this paragraph has effect as if the accrual was in relation to such service.”;
in sub-paragraph (3)—
““
notional pre-1997 underlying rate” means, in the case of
periodic compensation under paragraph 3 or 22, the aggregate of—(a)
a prescribed percentage of so much of the
amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service, and(b)
so much of the amount within sub-paragraph
(3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;“
notional pre-1997 underlying rate” means, in the case of
periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—(a)
a prescribed percentage of so much of the
amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service,(b)
a prescribed percentage of so much of the
amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to pre-1997 service, and“
post-1997 underlying rate” means, in the case of periodic
compensation under paragraph 3 or 22, the aggregate of—(a)
so much of the amount mentioned in
sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service, and(b)
so much of the amount within sub-paragraph
(3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;“
post-1997 underlying rate” means, in the case of periodic
compensation under paragraph 5, 8, 11 or 15, the aggregate of—(a)
so much of the amount mentioned in
sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service,(b)
so much of the amount mentioned in
sub-paragraph (3)(aa) of the paragraph in question as is attributable to post-1997 service, and“
pre-1997 underlying rate” means, in the case of periodic
compensation under paragraph 3 or 22, the aggregate of—(a)
so much of the amount mentioned in
sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service, and(b)
so much of the amount within sub-paragraph
(3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;“
pre-1997 underlying rate” means, in the case of periodic
compensation under paragraph 5, 8, 11 or 15, the aggregate of—(a)
so much of the amount mentioned in
sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service,(b)
so much of the amount mentioned in
sub-paragraph (3)(aa) of the paragraph in question as is attributable to pre-1997 service, and
in sub-paragraph (5)—
in sub-paragraph (6), before the definition of “post-1997 service”
““
“ pensionable service which is within paragraph 36(4)(a) pensionable service which is within paragraph 36(4)(b)
“
insert—
GMP indexation period” means the period beginning with 6
April 1988 and ending with 5 April 1997;
GMP indexed service” means—
(a)
and occurs during the GMP indexation period, or
(b)
and meets such requirements as may be prescribed;
guaranteed minimum pension” has the same meaning as in the
Pension Schemes Act 1993 (see section 8(2) of that Act);”;
in sub-paragraph (7), for “and “pre-1997 service”” substitute “,
“pre-1997 service” and “GMP indexed service””.
“(2)
The Board may also determine the percentage that is to be—
(b)
the appropriate percentage for the purposes of sub-paragraph (2E) of that paragraph,
(and where it does so, the definition of “appropriate percentage” in paragraph 28(3) does not apply in relation to the sub-paragraph in question).”
In paragraph 17—
“(2)
Subject to sub-paragraph (3), the transferee is entitled, on
each indexation date, to an increase of—(a)
where sub-paragraph (2A) applies, the amount
mentioned in sub-paragraph (2E) ;(b)
where sub-paragraph (2B) applies, the amount
mentioned in sub-paragraph (2F) ;(c)
where sub-paragraph (2C) applies, the amount
mentioned in sub-paragraph (2G) ;(d)
where sub-paragraph (2D) applies, the amount
mentioned in sub-paragraph (2H) .(2A)
This sub-paragraph applies where—
(a)
the transferor's PPF compensation is payable in
accordance with paragraph 3, 5, 8, 11, 15 or 22 of Schedule 7 to the Pensions Act 2004 (“the relevant Schedule 7 provisions”), and(b)
immediately before the assessment date—
(i)
the admissible rules of the scheme in respect
of which that compensation is payable included a requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,(ii)
that requirement did not apply only in
relation to a guaranteed minimum pension provided by the scheme, and(iii)
that requirement applied in relation to
pre-1997 service in respect of which that compensation is payable.(2B)
This sub-paragraph applies where—
(a)
the transferor's PPF compensation is payable in
accordance with the relevant Schedule 7 provisions,(b)
the scheme in respect of which that compensation is
payable provided a guaranteed minimum pension that accrued during the GMP indexation period,(c)
that accrual was in relation to GMP indexed service
in respect of which that compensation is payable, and(d)
immediately before the assessment date the
admissible rules of that scheme—(i)
did not include a requirement of the kind
mentioned in sub-paragraph (2A) (b) (i) ,(ii)
included such a requirement only in relation
to a guaranteed minimum pension provided by the scheme, or(iii)
included such a requirement but that
requirement did not apply in relation to pre-1997 service in respect of which the transferor’s PPF compensation is payable.(2C)
This sub-paragraph applies where—
(a)
the transferor's PPF compensation is payable in
accordance with the relevant Schedule 7 provisions, and(2D)
This sub-paragraph applies where the transferor's PPF
compensation is payable otherwise than in accordance with the relevant Schedule 7 provisions.(2E)
The amount mentioned in this sub-paragraph is the aggregate
of the appropriate percentage of the pre-1997 underlying rate and the appropriate percentage of the post-1997 underlying rate.(2F)
The amount mentioned in this sub-paragraph is the aggregate
of the appropriate percentage of the notional pre-1997 underlying rate and the appropriate percentage of the post-1997 underlying rate.(2G)
The amount mentioned in this sub-paragraph is the
appropriate percentage of the post-1997 underlying rate.(2H)
The amount mentioned in this sub-paragraph is the
appropriate percentage of the general underlying rate.”;
“(3A)
(a)
in any case where it is unclear to the Board whether,
immediately before the assessment date, the admissible rules of the scheme included a requirement of the kind mentioned in sub-paragraph
(2A) (b) (i) , those sub-paragraphs have effect as if the scheme included such a requirement;(b)
in any case where it is unclear to the Board whether,
immediately before the assessment date, a requirement of the scheme of a kind mentioned in sub-paragraph (2A) (b) (i) (including such a requirement included by virtue of paragraph (a) ) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;(c)
in any case where it is unclear to the Board whether
the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, those sub-paragraphs have effect as if the scheme so provided;(d)
in any case where it is unclear to the Board whether
the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c) ) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.”;
in sub-paragraph (4)—
in the opening words, for “sub-paragraph (2)” substitute
“sub-paragraphs (2) to
(2H)
”;
““
the general underlying rate”, as at an indexation date, is
the aggregate of—(a)
the general indexed proportion of the aggregate
of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,(b)
so much of any actuarial increase under
paragraph 16A as relates to the amount in paragraph (a) , and“
the notional pre-1997 underlying rate”, as at an indexation
date, is the aggregate of—(a)
the notional pre-1997 indexed proportion of the
aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,(b)
so much of any actuarial increase under
paragraph 16A as relates to the amount in paragraph (a) , and“
the post-1997 underlying rate”, as at an indexation date,
is the aggregate of—(a)
the post-1997 indexed proportion of the
aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,(b)
so much of any actuarial increase under
paragraph 16A as relates to the amount in paragraph (a) , and“
the pre-1997 underlying rate”, as at an indexation date,
is the aggregate of—(a)
the pre-1997 indexed proportion of the aggregate
of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,(b)
so much of any actuarial increase under
paragraph 16A as relates to the amount in paragraph (a) , and
omit sub-paragraphs (5) and (6);
“(6A)
For the purposes of paragraph (a) of the definition of “the
general underlying rate”, “the general indexed proportion” is such proportion as is determined in accordance with regulations made by the Secretary of State.(6B)
For the purposes of paragraph (a) of the definition of “the
notional pre-1997 underlying rate”, “the notional pre-1997 indexed proportion” is such proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of Schedule 7 to the Pensions Act 2004 under which the transferor’s PPF compensation is payable that is attributable to pre-1997 service as may be prescribed.(6C)
For the purposes of paragraph (a) of the definition of “the
post-1997 underlying rate”, “the post-1997 indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of that Schedule under which the transferor’s PPF compensation is payable that is attributable to post-1997 service.(6D)
For the purposes of paragraph (a) of the definition of “the
pre-1997 underlying rate”, “the pre-1997 indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of that Schedule under which the transferor’s PPF compensation is payable that is attributable to pre-1997 service.”;
in sub-paragraph (7), for ““the underlying rate”” substitute ““the
general underlying rate”, the definition of “the notional pre-1997
underlying rate”, the definition of “the post-1997 underlying rate” and
the definition of “the pre-1997 underlying rate””;
in paragraph (9)—
““
GMP indexation period” means the period beginning
with 6 April 1988 and ending with 5 April 1997;“
guaranteed minimum pension” has the same meaning as
in the Pension Schemes Act 1993 (see section 8(2) of that Act);”;
in the definition of “post-1997 service” for “has” substitute “,
“pre-1997 service” and “GMP indexed service” have”;
““
the assessment date”, in relation to a pension scheme,
has the same meaning as in that Schedule (see paragraph 2 of that Schedule);”.
In paragraph 20, in sub-paragraph (1)(b), for “for the purposes of paragraph of the general underlying rate for the purposes of
17(2)” substitute “—
(i)
(ii)
(iii)
sub-paragraph
(2H)
of that paragraph.”
In paragraph 28—
“(2)
Where a person is entitled to periodic compensation under
any of those paragraphs, the person is entitled, on the indexation date, to an increase under this paragraph of—(a)
(b)
(c)
in any other case, the amount mentioned in
sub-paragraph (2E) .(2A)
This sub-paragraph applies where, immediately before the
assessment date—(a)
the admissible rules of the scheme included a
requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,(b)
that requirement did not apply only in relation to a
guaranteed minimum pension provided by the scheme, and(c)
that requirement applied in relation to pre-1997
service in respect of which the compensation is payable.(2B)
This sub-paragraph applies where—
(a)
the scheme provided a guaranteed minimum pension
that accrued during the GMP indexation period,(b)
that accrual was in relation to GMP indexed service
in respect of which the compensation is payable, and(c)
immediately before the assessment date the
admissible rules of the scheme—(i)
did not include a requirement of the kind
mentioned in sub-paragraph (2A) (a) ,(ii)
included such a requirement only in relation
to a guaranteed minimum pension provided by the scheme, or(iii)
included such a requirement but that
requirement did not apply in relation to pre-1997 service in respect of which the compensation is payable.(2C)
The amount mentioned in this sub-paragraph is—
(a)
the appropriate percentage of the amount of the
pre-1997 underlying rate immediately before the indexation date, or(b)
where the person first became entitled to the periodic
compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.(2D)
The amount mentioned in this sub-paragraph is—
(a)
the appropriate percentage of the amount of the
notional pre-1997 underlying rate immediately before the indexation date, or(b)
where the person first became entitled to the periodic
compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.(2E)
The amount mentioned in this sub-paragraph is—
(a)
the appropriate percentage of the amount of the
post-1997 underlying rate immediately before the indexation date, or(b)
where the person first became entitled to the periodic
compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.(2F)
In any case where it is unclear to the Board whether,
immediately before the assessment date, the admissible rules of the scheme included a requirement of the kind mentioned in sub-paragraph (2A) (a) , this paragraph has effect as if the scheme included such a requirement.(2G)
In any case where it is unclear to the Board whether,
immediately before the assessment date, a requirement of the scheme of a kind mentioned in sub-paragraph (2A) (a) (including such a requirement included by virtue of sub-paragraph (2F) ) applied in relation to particular pre-1997 service, this paragraph has effect as if the requirement applied in relation to such service.(2H)
In any case where it is unclear to the Board whether the
scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, this paragraph has effect as if the scheme so provided.(2I)
In any case where it is unclear to the Board whether the
accrual of a guaranteed minimum pension provided by the scheme (including by virtue of sub-paragraph (2H) ) was in relation to particular GMP indexed service, this paragraph has effect as if the accrual was in relation to such service.”;
in sub-paragraph (3)—
““
notional pre-1997 underlying rate” means, in the case of
periodic compensation under paragraph 3 or 22, the aggregate of—(a)
a prescribed percentage of so much of the
amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service, and(b)
so much of the amount within sub-paragraph
(3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;“
notional pre-1997 underlying rate” means, in the case of
periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—(a)
a prescribed percentage of so much of the
amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service,(b)
a prescribed percentage of so much of the
amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to pre-1997 service, and“
post-1997 underlying rate” means, in the case of periodic
compensation under paragraph 3 or 22, the aggregate of—(a)
so much of the amount mentioned in
sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service, and(b)
so much of the amount within sub-paragraph
(3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;“
post-1997 underlying rate” means, in the case of periodic
compensation under paragraph 5, 8, 11 or 15, the aggregate of—(a)
so much of the amount mentioned in
sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service,(b)
so much of the amount mentioned in
sub-paragraph (3)(aa) of the paragraph in question as is attributable to post-1997 service, and“
pre-1997 underlying rate” means, in the case of periodic
compensation under paragraph 3 or 22, the aggregate of—(a)
so much of the amount mentioned in
sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service, and(b)
so much of the amount within sub-paragraph
(3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;“
pre-1997 underlying rate” means, in the case of periodic
compensation under paragraph 5, 8, 11 or 15, the aggregate of—(a)
so much of the amount mentioned in
sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service,(b)
so much of the amount mentioned in
sub-paragraph (3)(aa) of the paragraph in question as is attributable to pre-1997 service, and
in sub-paragraph (5)—
in sub-paragraph (6), before the definition of “post-1997 service”
““
“ pensionable service which is within paragraph 36(4)(a) pensionable service which is within paragraph 36(4)(b)
“
insert—
GMP indexation period” means the period beginning with 6
April 1988 and ending with 5 April 1997;
GMP indexed service” means—
(a)
and occurs during the GMP indexation period, or
(b)
and meets such requirements as may be prescribed;
guaranteed minimum pension” has the same meaning as in the
Pension Schemes Act (see section 4(2) of that Act);”;
in sub-paragraph (7), for “and “pre-1997 service”” substitute “,
“pre-1997 service” and “GMP indexed service””.
“(2)
The Board may also determine the percentage that is to be—
(b)
the appropriate percentage for the purposes of sub-paragraph (2E) of that paragraph,
(and where it does so, the definition of “appropriate percentage” in paragraph 28(3) does not apply in relation to the sub-paragraph in question).”
In paragraph 17—
“(2)
Subject to sub-paragraph (3), the transferee is entitled, on
each indexation date, to an increase of—(a)
where sub-paragraph (2A) applies, the amount
mentioned in sub-paragraph (2E) ;(b)
where sub-paragraph (2B) applies, the amount
mentioned in sub-paragraph (2F) ;(c)
where sub-paragraph (2C) applies, the amount
mentioned in sub-paragraph (2G) ;(d)
where sub-paragraph (2D) applies, the amount
mentioned in sub-paragraph (2H) .(2A)
This sub-paragraph applies where—
(a)
the transferor's PPF compensation is payable in
accordance with paragraph 3, 5, 8, 11, 15 or 22 of Schedule 6 to the 2005 Order (“the relevant Schedule 6 provisions”), and(b)
immediately before the assessment date —
(i)
the admissible rules of the scheme in respect
of which that compensation is payable included a requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,(ii)
that requirement did not apply only in
relation to a guaranteed minimum pension provided by the scheme, and(iii)
that requirement applied in relation to
pre-1997 service in respect of which that compensation is payable.(2B)
This sub-paragraph applies where—
(a)
the transferor's PPF compensation is payable in
accordance with the relevant Schedule 6 provisions,(b)
the scheme in respect of which that compensation is
payable provided a guaranteed minimum pension that accrued during the GMP indexation period,(c)
that accrual was in relation to GMP indexed service
in respect of which that compensation is payable, and(d)
immediately before the assessment date the
admissible rules of that scheme—(i)
did not include a requirement of the kind
mentioned in sub-paragraph (2A) (b) (i) ,(ii)
included such a requirement only in relation
to a guaranteed minimum pension provided by the scheme, or(iii)
included such a requirement but that
requirement did not apply in relation to pre-1997 service in respect of which the transferor’s PPF compensation is payable.(2C)
This sub-paragraph applies where—
(a)
the transferor's PPF compensation is payable in
accordance with the relevant Schedule 6 provisions, and(2D)
This sub-paragraph applies where the transferor's PPF
compensation is payable otherwise than in accordance with the relevant Schedule 6 provisions.(2E)
The amount mentioned in this sub-paragraph is the aggregate
of the appropriate percentage of the pre-1997 underlying rate and the appropriate percentage of the post-1997 underlying rate.(2F)
The amount mentioned in this sub-paragraph is the aggregate
of the appropriate percentage of the notional pre-1997 underlying rate and the appropriate percentage of the post-1997 underlying rate.(2G)
The amount mentioned in this sub-paragraph is the
appropriate percentage of the post-1997 underlying rate.(2H)
The amount mentioned in this sub-paragraph is the
appropriate percentage of the general underlying rate.”;
“(3A)
(a)
in any case where it is unclear to the Board whether,
immediately before the assessment date, the admissible rules of the scheme included a requirement of the kind mentioned in sub-paragraph
(2A) (b) (i) , those sub-paragraphs have effect as if the scheme included such a requirement;(b)
in any case where it is unclear to the Board whether,
immediately before the assessment date, a requirement of the scheme of a kind mentioned in sub-paragraph (2A) (b) (i) (including such a requirement included by virtue of paragraph (a) ) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;(c)
in any case where it is unclear to the Board whether
the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, those sub-paragraphs have effect as if the scheme so provided;(d)
in any case where it is unclear to the Board whether
the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c) ) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.”;
in sub-paragraph (4)—
in the opening words, for “sub-paragraph (2)” substitute
“sub-paragraphs (2) to
(2H)
”;
““
the general underlying rate”, as at an indexation date, is
the aggregate of—(a)
the general indexed proportion of the aggregate
of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,(b)
so much of any actuarial increase under
paragraph 16A as relates to the amount in paragraph (a) , and“
the notional pre-1997 underlying rate”, as at an indexation
date, is the aggregate of—(a)
the notional pre-1997 indexed proportion of the
aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,(b)
so much of any actuarial increase under
paragraph 16A as relates to the amount in paragraph (a) , and“
the post-1997 underlying rate”, as at an indexation date,
is the aggregate of—(a)
the post-1997 indexed proportion of the
aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,(b)
so much of any actuarial increase under
paragraph 16A as relates to the amount in paragraph (a) , and“
the pre-1997 underlying rate”, as at an indexation date,
is the aggregate of—(a)
the pre-1997 indexed proportion of the aggregate
of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,(b)
so much of any actuarial increase under
paragraph 16A as relates to the amount in paragraph (a) , and
omit sub-paragraphs (5) and (6);
“(6A)
For the purposes of paragraph (a) of the definition of “the
general underlying rate”, “the general indexed proportion” is such proportion as is determined in accordance with regulations made by the Department.(6B)
For the purposes of paragraph (a) of the definition of “the
notional pre-1997 underlying rate”, “the notional pre-1997 indexed proportion” is such proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of Schedule 6 to the 2005 Order under which the transferor’s PPF compensation is payable that is attributable to pre-1997 service as may be prescribed.(6C)
For the purposes of paragraph (a) of the definition of “the
post-1997 underlying rate”, “the post-1997 indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of that Schedule under which the transferor’s PPF compensation is payable that is attributable to post-1997 service.(6D)
For the purposes of paragraph (a) of the definition of “the
pre-1997 underlying rate”, “the pre-1997 indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of that Schedule under which the transferor’s PPF compensation is payable that is attributable to pre-1997 service.”;
in sub-paragraph (7), for ““the underlying rate”” substitute ““the
general underlying rate”, the definition of “the notional pre-1997
underlying rate”, the definition of “the post-1997 underlying rate” and
the definition of “the pre-1997 underlying rate””;
“(9)
In this paragraph—
“
GMP indexation period” means the period beginning
with 6 April 1988 and ending with 5 April 1997;“
guaranteed minimum pension” has the same meaning
as in the Pension Schemes Act (see section 4(2) of that Act);“
post-1997 service”, “pre-1997 service” and “GMP
indexed service” have the same meaning as in paragraph 28 of Schedule 6 to the 2005 Order (annual increase in periodic compensation);“
the assessment date”, in relation to a pension scheme,
has the same meaning as in that Schedule (see paragraph 2 of that Schedule).”
In paragraph 20, in sub-paragraph (1)(b), for “for the purposes of paragraph of the general underlying rate for the purposes of
17(2)” substitute “—
(i)
(ii)
(iii)
sub-paragraph
(2H)
of that paragraph.”
The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) are
amended as follows.
In sub-paragraph (2)—
in paragraph (a) of the definition of “underlying rate”, after where
sub-paragraph (2A)
applies, the product where
sub-paragraph (2B)
applies, the product
sub-paragraph (i) insert—
“(ia)
of X multiplied by so much of the expected
pension as is attributable to pre-1997 service;
(ib)
of X multiplied by the relevant percentage of so
much of the expected pension as is attributable
to pre-1997 service;”;
in paragraph (b) of the definition of “underlying rate”—
omit the “and” at the end of sub-paragraph (i);
“(ia)
where sub-paragraph (2A) applies, so
much of the expected pension as is, proportionally, attributable to pre-1997 service;(ib)
where sub-paragraph (2B) applies, the
relevant percentage of so much of the expected pension as is, proportionally, attributable to pre-1997 service; and”;
““
pre-1997 service” means—(a)
pensionable service (whether actual or notional) which
occurs before 6th April 1997; or(b)
where the annual payment is payable to, or in respect
of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred before 6th April 1997;“
relevant percentage” means such percentage as may be
determined by the Secretary of State;”.
“(2A)
This sub-paragraph applies where, immediately before the qualifying
pension scheme began to wind up—(a)
the scheme rules included a requirement for all or any part
of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,(b)
that requirement did not apply only in relation to a
guaranteed minimum pension provided by the scheme, and(c)
that requirement applied in relation to pre-1997 service in
respect of which the annual payment is payable.(2B)
This sub-paragraph applies where—
(a)
the qualifying pension scheme provided a guaranteed
minimum pension that accrued during the GMP indexation period,(b)
that accrual was in relation to GMP indexed service in
respect of which the annual payment is payable, and(c)
immediately before the scheme began to wind up the scheme
rules—(i)
did not include a requirement of the kind mentioned
in sub-paragraph (2A) (a) ,(ii)
included such a requirement only in relation to a
guaranteed minimum pension provided by the scheme, or(iii)
included such a requirement but that requirement
did not apply in relation to pre-1997 service in respect of which the annual payment is payable.(2C)
(a)
in any case where it is unclear to the scheme manager
whether, immediately before the scheme began to wind up, the scheme rules included a requirement of the kind mentioned in sub-paragraph (2A) (a) , those sub-paragraphs have effect as if the scheme included such a requirement;(b)
in any case where it is unclear to the scheme manager
whether, immediately before the scheme began to wind up, a requirement of the scheme of a kind mentioned in sub-paragraph (2A) (a) (including such a requirement included by virtue of paragraph (a) ) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;(c)
in any case where it is unclear to the scheme manager
whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, those sub-paragraphs have effect as if the scheme so provided;(d)
in any case where it is unclear to the scheme manager
whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c) ) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.(2D)
“
GMP indexation period” means the period beginning with 6
April 1988 and ending with 5 April 1997;“
GMP indexed service” means—(a)
pensionable service (whether actual or notional)
which occurs during the GMP indexation period; or(b)
where the annual payment is payable to, or in respect
of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred during the GMP indexation period.”
In sub-paragraph (3)—
after “attributable to” insert “pre-1997 service or”;
for “that amount” substitute “the amount in question”.
In sub-paragraph (2)—
““
EA” means so much of the expected pension as is attributable
to pre-1997 service;“
EB” means the relevant percentage of so much of the expected
pension as is attributable to pre-1997 service;”;
““
pre-1997 service” means—(a)
pensionable service (whether actual or notional) which
occurs before 6th April 1997; or(b)
where the ill health payment is payable to, or in respect
of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred before 6th April 1997;“
relevant percentage” means such percentage as may be
determined by the Secretary of State;”;
in paragraph (b) of the definition of “underlying rate”—
omit the “and” at the end of sub-paragraph (i);
“(ia)
where sub-paragraph (2A) applies, so
much of the amount “A” for the purposes of paragraph 2 as is, proportionately, attributable to pre-1997 service;(ib)
where sub-paragraph (2B) applies, the
relevant percentage of so much of the amount “A” for the purposes of paragraph 2 as is, proportionately, attributable to pre-1997 service; and”.
“(2A)
This sub-paragraph applies where immediately before the qualifying
pension scheme began to wind up—(a)
the scheme rules included a requirement for all or any part
of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,(b)
that requirement did not apply only in relation to a
guaranteed minimum pension provided by the scheme, and(c)
that requirement applied in relation to pre-1997 service in
respect of which the ill health payment is payable.(2B)
This sub-paragraph applies where—
(a)
the qualifying pension scheme provided a guaranteed
minimum pension that accrued during the GMP indexation period,(b)
that accrual was in relation to GMP indexed service in
respect of which the ill health payment is payable, and(c)
immediately before the scheme began to wind up the scheme
rules—(i)
did not include a requirement of the kind mentioned
in sub-paragraph (2A) (a) ,(ii)
included such a requirement only in relation to a
guaranteed minimum pension provided by the scheme, or(iii)
included such a requirement but that requirement
did not apply in relation to pre-1997 service in respect of which the ill health payment is payable.(2C)
(a)
in any case where it is unclear to the scheme manager
whether, immediately before the scheme began to wind up, the scheme rules included a requirement of the kind mentioned in sub-paragraph (2A) (a) , those sub-paragraphs have effect as if the scheme included such a requirement;(b)
in any case where it is unclear to the scheme manager
whether, immediately before the scheme began to wind up, a requirement of the scheme of a kind mentioned in sub-paragraph (2A) (a) (including such a requirement included by virtue of paragraph (a) ) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;(c)
in any case where it is unclear to the scheme manager
whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, those sub-paragraphs have effect as if the scheme so provided;(d)
in any case where it is unclear to the scheme manager
whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c) ) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.(2D)
“
GMP indexation period” means the period beginning with 6
April 1988 and ending with 5 April 1997;“
GMP indexed service” means—(a)
pensionable service (whether actual or notional)
which occurs during the GMP indexation period; or(b)
where the ill health payment is payable to, or in
respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred during the GMP indexation period;“
guaranteed minimum pension” has the meaning given in
section 8(2) of the 1993 Act.”
In sub-paragraph (3)—
after “attributable to” insert “pre-1997 service or”;
for “that amount” substitute “the amount in question”.
In paragraph 6 of Schedule 3 (determination of certain annual payments)—
in sub-paragraph (2)—
in the definition of “underlying rate”, after paragraph (a) where
sub-paragraph (2A)
applies, the product where the beneficiary is a qualifying where the qualifying member where the qualifying member where the beneficiary is a survivor or where
sub-paragraph (2B)
applies, the product where the beneficiary is a qualifying where the qualifying member where the qualifying member where the beneficiary is a survivor or
insert—
“(aa)
of X multiplied by—
(i)
member or a survivor or surviving
dependant of a qualifying member who
died on or after the calculation date—
(aa)
is not a qualifying member to
whom regulation 17D applied,
so much of the revalued
notional pension as is
attributable to pre-1997 service;
or
(bb)
is a qualifying member to
whom regulation 17D applied,
so much of the sum of R-A as
is attributable to pre-1997
service; and
(ii)
surviving dependant in respect of whom
a survivor notional pension has been
determined, so much of the survivor
notional pension as is attributable to the
qualifying member’s pre-1997 service;
(ab)
of X multiplied by—
(i)
member or a survivor or surviving
dependant of a qualifying member who
died on or after the calculation date—
(aa)
is not a qualifying member to
whom regulation 17D applied,
the relevant percentage of so
much of the revalued notional
pension as is attributable to
pre-1997 service; or
(bb)
is a qualifying member to
whom regulation 17D applied,
the relevant percentage of so
much of the sum of R-A as is
attributable to pre-1997 service;
and
(ii)
surviving dependant in respect of whom
a survivor notional pension has been
determined, the relevant percentage of
so much of the survivor notional pension
as is attributable to the qualifying
member’s pre-1997 service;”;
““
pre-1997 service” means—(a)
pensionable service (either actual or notional)
which occurred before 6th April 1997; or(b)
where the pension was payable to, or in respect
of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred before 6th April 1997;“
relevant percentage” means such percentage as may be
determined by the Secretary of State;”;
“(2A)
This sub-paragraph applies where immediately before the
qualifying pension scheme began to wind up—(a)
the scheme rules included a requirement for all or
any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,(b)
that requirement did not apply only in relation to a
guaranteed minimum pension provided by the scheme, and(c)
that requirement applied in relation to pre-1997
service in respect of which the annual payment is payable.(2B)
This sub-paragraph applies where—
(a)
the qualifying pension scheme provided a guaranteed
minimum pension that accrued during the GMP indexation period,(b)
that accrual was in relation to GMP indexed service
in respect of which the annual payment is payable, and(c)
immediately before the scheme began to wind up the
scheme rules—(i)
did not include a requirement of the kind
mentioned in sub-paragraph (2A) (a) ,(ii)
included such a requirement only in relation
to a guaranteed minimum pension provided by the scheme, or(iii)
included such a requirement but that
requirement did not apply in relation to pre-1997 service in respect of which the annual payment is payable.(2C)
(a)
in any case where it is unclear to the scheme manager
whether, immediately before the scheme began to wind up, the scheme rules included a requirement of the kind mentioned in sub-paragraph (2A) (a) , those sub-paragraphs have effect as if the scheme included such a requirement;(b)
in any case where it is unclear to the scheme manager
whether, immediately before the scheme began to wind up, a requirement of the scheme of a kind mentioned in sub-paragraph (2A) (a) (including such a requirement included by virtue of paragraph (a) ) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;(c)
in any case where it is unclear to the scheme manager
whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period those sub-paragraphs have effect as if the scheme so provided;(d)
in any case where it is unclear to the scheme manager
whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c) ) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.(2D)
“
GMP indexation period” means the period beginning
with 6 April 1988 and ending with 5 April 1997;“
GMP indexed service” means—(a)
pensionable service (whether actual or
notional) which occurs during the GMP indexation period; or(b)
where the pension was payable to, or in
respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred during the GMP indexation period;“
guaranteed minimum pension” has the meaning given
in section 8(2) of the 1993 Act.”;
in sub-paragraph (3), after “attributable to” insert “pre-1997 service
and”.
In paragraph 6 of Schedule 5 (determination of certain ill health payments)—
in sub-paragraph (2)—
in the definition of “underlying rate”, after paragraph (a) where
sub-paragraph (2A)
applies, the product where
sub-paragraph (2B)
applies, the product
insert—
“(aa)
of X multiplied by (C x VA);
(ab)
of X multiplied by (C x VB);”;
““
pre-1997 service” means—(a)
pensionable service (either actual or notional)
which occurred before 6th April 1997; or(b)
where the pension was payable to, or in respect
of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred before 6th April 1997;“
relevant percentage” means such percentage as may be
determined by the Secretary of State;”;
““
VA” means—(a)
where the beneficiary is a qualifying member or
a survivor or surviving dependant of a qualifying member who died on or after the calculation date—(i)
where the qualifying member is not a
qualifying member to whom regulation 17D applied, so much of the revalued notional pension as is attributable to pre-1997 service; or(ii)
where the qualifying member is a
qualifying member to whom regulation 17D applied, so much of the sum of R-A as is attributable to pre-1997 service; and(b)
where the beneficiary is a survivor or surviving
dependant in respect of whom a survivor notional pension has been determined, so much of the survivor notional pension as is attributable to the qualifying member’s pre-1997 service;“
VB” means—(a)
where the beneficiary is a qualifying member or
a survivor or surviving dependant of a qualifying member who died on or after the calculation date—(i)
where the qualifying member is not a
qualifying member to whom regulation 17D applied, the relevant percentage of so much of the revalued notional pension as is attributable to pre-1997 service; or(ii)
where the qualifying member is a
qualifying member to whom regulation 17D applied, the relevant percentage of so much of the sum of R-A as is attributable to pre-1997 service; and(b)
where the beneficiary is a survivor or surviving
dependant in respect of whom a survivor notional pension has been determined, the relevant percentage of so much of the survivor notional pension as is attributable to the qualifying member’s pre-1997 service;”;
“(2A)
This sub-paragraph applies where immediately before the
qualifying pension scheme began to wind up—(a)
the scheme rules included a requirement for all or
any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,(b)
that requirement did not apply only in relation to a
guaranteed minimum pension provided by the scheme, and(c)
that requirement applied in relation to pre-1997
service in respect of which the ill health payment is payable.(2B)
This sub-paragraph applies where—
(a)
the qualifying pension scheme provided a guaranteed
minimum pension that accrued during the GMP indexation period,(b)
that accrual was in relation to GMP indexed service
in respect of which the ill health payment is payable, and(c)
immediately before the scheme began to wind up the
scheme rules—(i)
did not include a requirement of the kind
mentioned in sub-paragraph (2A) (a) ,(ii)
included such a requirement only in relation
to a guaranteed minimum pension provided by the scheme, or(iii)
included such a requirement but that
requirement did not apply in relation to pre-1997 service in respect of which the ill health payment is payable.(2C)
(a)
in any case where it is unclear to the scheme manager
whether, immediately before the scheme began to wind up, the scheme rules included a requirement of the kind mentioned in sub-paragraph (2A) (a) , those sub-paragraphs have effect as if the scheme included such a requirement;(b)
in any case where it is unclear to the scheme manager
whether, immediately before the scheme began to wind up, a requirement of the scheme of a kind mentioned in sub-paragraph (2A) (a) (including such a requirement included by virtue of paragraph (a) ) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;(c)
in any case where it is unclear to the scheme manager
whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, those sub-paragraphs have effect as if the scheme so provided;(d)
in any case where it is unclear to the scheme manager
whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c) ) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.(2D)
“
GMP indexation period” means the period beginning
with 6 April 1988 and ending with 5 April 1997;“
GMP indexed service” means—(a)
pensionable service (whether actual or
notional) which occurs during the GMP indexation period; or(b)
where the pension was payable to, or in
respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred during the GMP indexation period;“
guaranteed minimum pension” has the meaning given
in section 8(2) of the 1993 Act.”;
in sub-paragraph (3), after “attributable to” insert “pre-1997 service
and”.
The Pensions Act 1995 is amended in accordance with subsections (2) and (3) .
In section 91 (inalienability of occupational pension)—
in subsection (6) , in the words after paragraph (b) —
for “there is a dispute as to its amount” substitute “a dispute
has arisen as to the amount of the monetary obligation in
question”;
for the words from “the obligation in question” to the end
substitute “one of the following conditions is met.”;
“(6A)
The conditions mentioned in subsection (6) are—
(a)
that the dispute has been resolved by the parties to it;
(b)
that the Pensions Ombudsman has made a
determination under Part 10 of the Pension Schemes
Act 1993 or Part 10 of the Pension Schemes (Northern
Ireland) Act 1993 (investigations) as to the amount of the monetary obligation in question;(c)
that the monetary obligation in question has become
enforceable—(i)
under an order of a competent court, or
(ii)
in consequence of an award of an arbitrator or,
in Scotland, an arbiter to be appointed (failing agreement between the parties) by the sheriff.”
In
section 93
(forfeiture by reference to obligation to employer), in
subsection
(3)
—
for “there is a dispute” substitute “a dispute has arisen”;
“
—
(a)
the dispute has been resolved by the parties to it,
(b)
the Pensions Ombudsman has made a determination
under Part 10 of the Pension Schemes Act 1993 or Part
10 of the Pension Schemes (Northern Ireland) Act 1993 (investigations) as to the amount of the monetary obligation in question, or(c)
the monetary obligation in question has become
enforceable—(i)
under an order of a competent court, or
(ii)
in consequence of an award of an arbitrator or,
in Scotland, an arbiter to be appointed (failing agreement between the parties) by the sheriff.”
The Pensions (Northern Ireland) Order 1995 is amended in accordance with subsections (5) and (6) .
In Article 89 (inalienability of occupational pension)—
in paragraph (6) , in the words after sub-paragraph (b) —
for “there is a dispute as to its amount” substitute “a dispute
has arisen as to the amount of the monetary obligation in
question”;
for the words from “the obligation in question” to the end
substitute “one of the following conditions is met.”;
“(6A)
The conditions mentioned in paragraph (6) are—
(a)
that the dispute has been resolved by the parties to it;
(b)
that the Pensions Ombudsman has made a
determination under Part 10 of the Pension Schemes
(Northern Ireland) Act 1993 or Part 10 of the Pension
Schemes Act 1993 (investigations) as to the amount of the monetary obligation in question;(c)
that the monetary obligation in question has become
enforceable—(i)
under an order of a competent court, or
(ii)
in consequence of an award of an arbitrator.”
In
Article 91
(forfeiture by reference to obligation to employer), in
paragraph
(3)
—
for “there is a dispute” substitute “a dispute has arisen”;
“
—
(a)
the dispute has been resolved by the parties to it,
(b)
the Pensions Ombudsman has made a determination
under Part 10 of the Pension Schemes (Northern Ireland)
Act 1993 or Part 10 of the Pension Schemes Act 1993 (investigations) as to the amount of the monetary obligation in question, or(c)
the monetary obligation in question has become
enforceable—(i)
under an order of a competent court, or
(ii)
in consequence of an award of an arbitrator.”
In the following provisions (which relate to the life expectancy required for a person to be regarded as “terminally ill” for purposes relating to compensation or assistance from the Pension Protection Fund or Financial Assistance Scheme), for “6 months” or “six months” substitute “12 months”—
in the Pensions Act 2004, in Schedule 7, paragraph 25B(3);
in the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1)),
in Schedule 6, paragraph 25B(3);
in the Pensions Act 2008, in Schedule 5, paragraph 12(3);
in the Pensions (No. 2) Act (Northern Ireland) 2008 (c.13 (N.I.)), in
Schedule 4, paragraph 12(3);
in the Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986),
regulations 2(9) and 17(3D)(b)(i).
The Pensions Act 2004 is amended as follows.
In section 113 (investment of funds), in subsection (2)(b), omit “174 or”.
For the italic heading before section 174 substitute “Pension protection levies”.
Omit section 174 (initial levy).
In section 175 (pension protection levies)—
“(1)
For each financial year, the Board—
(a)
may impose a risk-based pension protection levy in
respect of a description of eligible scheme (or in respect of all eligible schemes), and(b)
if it does so, may also impose a scheme-based pension
protection levy in respect of the same or a different description of eligible scheme (or in respect of all eligible schemes).In this Chapter “pension protection levy” means a levy imposed in accordance with this section.”;
“(aa)
the risks associated with a description of scheme which
the Board considers is not supported by a substantive employer covenant;”;
in subsection (5), in the words before paragraph (a), after “financial
year” insert “for which it decides to impose the pension protection
levies (or one of them)”;
omit subsection (7);
“(7A)
For the purposes of subsection (3) (aa) , a scheme is “not
supported by a substantive employer covenant” if, based on the financial position of the employer, there is no realistic prospect of the employer being able to provide the trustees or managers with material financial support for the purpose of satisfying liabilities of the scheme.For that purpose the employer’s “financial position” means its financial position ignoring—
(a)
any capital buffer (within the meaning of Part 3 of the
Pension Schemes Act 2026), and(b)
any financial support which it may obtain from another
person but to which it is not entitled.”;
in subsection (8), omit the definition of “initial period”;
in subsection (10)—
in the words before paragraph (a), for “duty” substitute
“power”;
omit paragraph (b) and the “and” before it.
In section 176 (supplementary provisions about pension protection levies)—
in subsection (1)—
“(a)
no pension protection levies were imposed in
the previous financial year, or”;
in paragraph (b), for “the pension protection levies” substitute
“any pension protection levies”;
omit paragraph (c) and the “or” before it;
“(2)
The Board must publish in the prescribed manner details of—
(a)
any decision to impose, or not to impose, the levies for
a financial year in respect of a description of scheme;(b)
any determination under section 175(5).”
In section 177 (amounts to be raised by the pension protection levies)—
“(A1)
Subsections (1) to (5) apply where the Board decides to impose
one or both of the pension protection levies for a financial year.”;
in each of subsections (1), (2) and (3), for “a financial year” substitute
“the financial year”;
omit subsection (4);
“(5)
The Board must impose pension protection levies for the
financial year in a form which it estimates will raise an amount which does not exceed the sum of—(a)
the amount estimated under subsection (1) in respect
of any pension protection levies imposed for the previous financial year, and(b)
25% of the levy ceiling for the previous financial year.”;
in subsection (8), for the words from “Regulations” to “(6),” substitute
“An order under subsection (6)”;
in subsection (9), omit paragraph (b) and the “and” before it.
In section 178 (levy ceiling)—
in subsection (1), omit “for which levies are required to be imposed
under section 175”;
omit subsection (2);
in subsection (3), in the words before paragraph (a), omit “after the
first year for which levies are imposed under section 175”.
Omit section 180 (transitional provision now spent).
In section 181 (calculation, collection and recovery of levies), in subsection
(1), omit paragraph (a) and the “and” after it.
In section 316 (parliamentary control of subordinate legislation), in subsection
(2), omit paragraph (c).
In section 4A of the Financial Guidance and Claims Act 2018 (specific functions
included in the pensions guidance function)—
in subsection (2)—
omit the “and” after paragraph (b);
“(d)
the Pension Protection Fund, including
information relating to an individual, and(e)
the financial assistance scheme, including
information relating to an individual.”;
““
financial assistance scheme” means the scheme provided for by
regulations under section 286 of the Pensions Act 2004 (financial assistance scheme for members of certain pension schemes);”.
The Pensions Act 2004 is amended as follows.
In section 203 (provision of information relating to the Pension Protection
Fund to members of schemes etc)—
in subsection (1)(a), after “times” insert “or in prescribed
circumstances”;
“(1A)
Regulations under subsection (1)(a) may make provision about
how information is to be provided, including provision requiring—(a)
the use of electronic communications;
(b)
the use of facilities or services specified or of a
description specified in the regulations;(c)
information to be provided in such a way that it can
subsequently be provided by means of—(i)
a qualifying pensions dashboard service, or
(ii)
the pensions dashboard service provided by the
Money and Pensions Service.(1B)
In subsection (1A) —
“
pensions dashboard service” means a pensions dashboard
service within the meaning of section 238A(1);“
qualifying pensions dashboard service” has the meaning
given by section 238A(2).”
In section 238A (qualifying pensions dashboard service), in subsection (4), information of a prescribed description about— the Pension Protection Fund; the financial assistance scheme; Pension Protection Fund information relating to the individual financial assistance scheme information relating to the
after paragraph (b) insert—
“(ba)
(i)
(ii)
(bb)
in question of such description as may be prescribed;
(bc)
individual in question of such description as may be
prescribed;”.
In section 238C (interpretation), in subsection (4), at the appropriate place
““
insert—
financial assistance scheme” means the scheme provided for by
regulations under section 286 (financial assistance scheme for members
of certain pension schemes);”.
Part 1 of the Pensions Act 2008 (pension scheme membership for jobholders)
is amended as follows.
“11A Information to be given to pension schemes
(1)
The Secretary of State may make regulations requiring employers to
provide information relating to—(a)
jobholders who are active members of a qualifying scheme, or
(b)
workers who are active members of a pension scheme that
satisfies the requirements of section 9,to the trustees or managers of the scheme (where the scheme is an occupational pension scheme) or the provider of the scheme (where the scheme is a personal pension scheme).
(2)
Regulations under this section may make provision—
(a)
specifying the information to be provided;
(b)
about when, or the frequency with which, the information (or
a particular item of information) is to be provided;(c)
about how and in what form the information is to be provided.
(3)
The information that regulations under this section may require
employers to provide includes information about persons ceasing to be jobholders or workers within subsection (1) (a) or (b) .”
In section 34 (effect of failure to comply), in subsection (3), for “11” substitute
“
11A
”.
Omit section 116 (power of Secretary of State to pay grants to Board of Pension
Protection Fund).
Omit section 117 (power of Secretary of State to impose administration levy
on pension schemes).
In section 173 (Pension Protection Fund), in subsection (3), before paragraph any sums required to meet expenditure of the Board that is
(a) insert—
“(za)
attributable to the operation or administration of the Pension
Protection Fund,”.
In section 188 (fraud compensation fund), in subsection (3), before paragraph any sums required to meet expenditure of the Board that is
(a) insert—
“(za)
attributable to the operation or administration of the Fraud
Compensation Fund,”.
No amount is payable to the Secretary of State by virtue of section 117 of the
Pensions Act 2004 (administration levy) in respect of the financial years
beginning with 1 April 2023 and 1 April 2024.
In the Pensions Act 2008, in Schedule 10 (interest on late payment of levies),
omit paragraph 3 (which makes an amendment about interest for late payment
of the administration levy that has not been brought into force).
In the Pension Schemes Act 1993, in section 175(1) (general levy)—
omit the “or” at the end of paragraph (d);
“(da)
of the Secretary of State under section 209(6) of the
Pensions Act 2004 (payments to PPF Ombudsman), or”.
In section 209 of the Pensions Act 2004 (ombudsman for the Board of the
Pension Protection Fund), omit subsections (7) and (8).
The Schedule amends the Pensions Act 2004 in consequence of or in connection with this Act.
Regulations under this Act are to be made by statutory instrument.
A power to make regulations under this Act includes power to make
incidental, supplementary, consequential or transitional provision.
A power to make regulations under this Act may be exercised—
either in relation to all cases to which the power extends, or in relation
to those cases subject to specified exceptions, or in relation to any
specified cases or classes of case;
so as to make, as respects the cases in relation to which it is exercised—
the full provision to which the power extends or any less
provision (whether by way of exception or otherwise),
the same provision for all cases in relation to which the power
is exercised, or different provision for different cases or different
classes of case or different provision as respects the same case
or class of case for different purposes of this Act, or
any such provision either unconditionally or subject to any
specified condition.
A power to make regulations under any provision of this Act does not restrict
the width of any power to make regulations under any other provision of
this Act or under any other enactment.
This section does not apply to regulations under section 122 .
Where regulations under this Act are subject to “the affirmative procedure”,
the regulations may not be made unless a draft of the statutory instrument
containing them has been laid before, and approved by a resolution of, each
House of Parliament.
Where regulations under this Act are subject to “the negative procedure”, the
statutory instrument containing them is subject to annulment in pursuance
of a resolution of either House of Parliament.
Any provision that may be made by regulations under this Act subject to the
negative procedure may instead be made by regulations subject to the
affirmative procedure.
Subject as follows, this Act extends to England and Wales and Scotland only.
Sections 104 to 107 extend to Northern Ireland only.
Any amendment, repeal or revocation made by this Act has the same extent
as the provision amended, repealed or revoked.
Any provision of or amendment made by this Act, so far as it confers a power
to make subordinate legislation, comes into force on the day on which this
Act is passed.
So far as not brought into force under
subsection (1)
, this Act comes into force
as follows.
Part 1
comes into force on such day as the Secretary of State may by
regulations appoint.
Part 2 comes into force as follows—
Chapters 1
and
2
come into force on the day on which this Act is
passed;
Chapter 3
comes into force on such day as the Secretary of State may
by regulations appoint;
Chapter 4
comes into force on such day as the Secretary of State and
the Treasury jointly may by regulations appoint;
Chapter 5
comes into force on such day as the Treasury may by
regulations appoint;
Chapter 6
comes into force on such day as the Secretary of State may
by regulations appoint.
Regulations under
subsection (4)
(b)
may not provide for the following to
come into force before 1 January 2030—
section 40 (4) , in respect of the insertion of Condition 1 in section 20 (1A) of the Pensions Act 2008 (Master Trusts to be subject to scale requirement);
section 40
(8)
, in respect of the insertion of section 26
(7A)
of that Act
(group personal pension schemes to be subject to scale requirement)
If section
40
has not been brought into force before the end of 2035 in respect
of the insertion of—
Condition 2 in section 20
(1A)
of the Pensions Act 2008 (asset allocation
requirement: Master Trusts), and
subsection
(7B)
in section 26 of the Pensions Act 2008 (asset allocation
requirement: group personal pension schemes),
section 40 is repealed at the end of that year in respect of the insertion of those provisions.
Part 3
comes into force on such day as the Secretary of State may by
regulations appoint.
Chapter 3 of Part 4 comes into force as follows—
section
113
comes into force on such day as the Secretary of State may
by regulations appoint;
section 116 —
comes into force on 1 April 2026, or,
if this Act is passed after that date, is treated as having come
into force on that date;
section 117 is treated as having come into force on 1 April 2007.
This Part comes into force as follows—
the Schedule
comes into force on such day as the Secretary of State
may by regulations appoint.
Transitional or saving provision may by regulations be made—
Regulations under this section —
may make different provision for different purposes;
are to be made by statutory instrument.
This Act may be cited as the Pension Schemes Act 2026.
The Pensions Act 2004 is amended as follows.
In section 10 (functions exercisable by the Determinations Panel), in section
62
of the Pension Schemes Act 2026 (application for
section 65
of that Act (application for approval of a section
77
of that Act (application for approval of individual section
79
of that Act (application to approve a person to be
subsection (6), at the end insert—
“(m)
authorisation of a superfund);
(n)
superfund transfer);
(o)
to be responsible for key function in relation to superfund);
(p)
a trustee of a superfund scheme).”
In section 70 (duty to report breaches of the law), in subsection (1), at the in relation to an operating superfund— a member of the superfund group; a person who is responsible for a key function.”
end insert—
“(g)
(i)
(ii)
In section 72 (provision of information) subsection (2), after paragraph (c) in relation to an operating superfund— a member of the superfund group, and a person who is responsible for a key function,”.
(but before the “and” that follows it) insert—
“(ca)
(i)
(ii)
In section 73 (inspection of premises), subsection (2) is amended as follows.
In paragraph (e), for “(dc)” substitute “(dd)”.
“(7)
Where the recipient of the notice is—
(a)
a trustee of an operating superfund scheme,
(b)
the responsible body of an operating superfund, or
(c)
a person responsible for a key function in relation to an
operating superfund,subsection (3)(b) has effect as though the figure mentioned there were £100,000.”
“(9)
Where the recipient of the notice is—
(a)
a trustee of an operating superfund scheme,
(b)
the responsible body of an operating superfund, or
(c)
a person responsible for a key function in relation to an
operating superfund,subsection (5)(b) has effect as though the figure mentioned there were £20,000.”
In section 80 (offences of providing false or misleading information), in
subsection (1)(c)—
in the words before sub-paragraph (i), after “under” insert “or by
virtue of any of the following”;
omit the “or” after sub-paragraph (v);
each of sub-paragraphs (i) to (vi) becomes an unnumbered
paragraph;
In section 80A (financial penalty for providing false or misleading
information to Regulator), in subsection (2)(c)—
in the words before sub-paragraph (i), after “under” insert “or by
virtue of any of the following”;
omit the “or” after sub-paragraph (v);
each of sub-paragraphs (i) to (vi) becomes an unnumbered
paragraph;
Section 90 (codes of practice issued by Regulator) is amended as follows.
“(je)
the process for making—
(i)
(ii)
an application for approval of a superfund transfer
under Chapter 3 of that Part of that Act;(jf)
the matters that the Pensions Regulator expects to take into
account in deciding—(i)
whether it is satisfied as described in section 62 (1) of
the Pension Schemes Act 2026 (condition for superfund to be authorised);(ii)
whether it is satisfied as described in section 65 (1) (c) of that Act (“onboarding conditions” for superfund transfers);
(jg)
the discharge of the duties imposed by Chapters 4 and 5 of Part 3 of the Pension Schemes Act 2026 (ongoing
requirements for operating superfunds);”.
In subsection (6), in the definition of “the pensions legislation”—
In section 93 (Regulator’s procedure in relation to its regulatory functions), the power to issue a notice under
section 85
(1)
(k)
of the the power to give a direction under section
89
of the Pension
in subsection (2), after paragraph (pe) (but before the “and” that follows
it) insert—
“(pf)
Pension Schemes Act 2026 (Regulator notice triggering event
of concern for superfund);
(pg)
Schemes Act 2026 (directions in relation to superfund during
period of concern);”.
In section 97 (special procedure: applicable cases), in subsection (5), after the power under
section 62
or
93
of the Pension Schemes the power under
section 77
(8)
or
79
(8)
of the Pension the power to issue a notice under
section 85
(1)
(k)
of the the power to give a direction under section
89
of the Pension
paragraph (tk) insert—
“(tl)
Act 2026 to withdraw authorisation from a superfund;
(tm)
Schemes Act 2026 to suspend or revoke its approval for a
person to be responsible for a key function in relation to a
superfund or to be a trustee of a superfund scheme;
(tn)
Pension Schemes Act 2026 (Regulator notice triggering event
of concern for superfund);
(to)
Schemes Act 2026 (directions in relation to superfund during
period of concern);”.
In section 126 (pension protection: eligible schemes), after subsection (1A) In relation to a superfund scheme,
section 60
(2)
of the Pension
insert—
“(1B)
Schemes Act 2026 (sections treated as separate schemes) applies for
the purposes of this Part as it applies for the purposes of
Part 3
of
the Pension Schemes Act 2026.”
In section 127 (pension protection: duty to assume responsibility for schemes In relation to an eligible scheme that is a superfund scheme, if— an event of concern takes place in relation to the scheme by no qualifying insolvency event occurred in relation to the
this Chapter applies as though a qualifying insolvency event had
occurred in relation to the employer immediately after the event of
concern took place.
following insolvency event), after subsection (4) insert—
“(4A)
(a)
virtue of the protected liabilities threshold ceasing to be met,
and
(b)
employer before the event of concern took place,
(4B)
“(4A)
Regulations may, in relation to a superfund scheme—
(a)
provide that it is for the Regulator to determine which
methods and assumptions are to be used in calculating a scheme’s technical provisions, and(b)
require the Regulator, in making its determination, to take
into account prescribed matters and follow prescribed principles.”
Section 224 (actuarial valuations and reports) is amended as follows.
“(7B)
Where the scheme in question is a superfund scheme, the trustees
must, as soon as reasonably practicable after receiving an actuarial report, send a copy of it to the Regulator together with such other information as may be prescribed.”
In subsection (8), for “or (7A)” substitute “, (7A) or (7B)”.
In section 256 (no indemnification for fines or civil penalties), in subsection
(1)(b), at the end insert “, or
section 18
,
32
or
54
of the Pension Schemes
Act 2026.”
In section 318 (general interpretation), in subsection (1), at the appropriate
places insert—
Schedule 2 (the reserved regulatory functions) is amended as follows.
For the heading of Part 5 substitute “Functions under the Occupational
and Personal Pension Schemes (Consultation by Employers and
Miscellaneous Amendment) Regulations 2006 (S.I. 2006/349)”.
Parts 4A and 4B are moved to after Part 5 and are renumbered as
(respectively) Parts 6 and 7.
Accordingly, paragraphs 44A to 44O are renumbered as (respectively)
paragraphs 46 to 60.
After Part 7 (as moved and renumbered by sub-paragraph
(3)
above) The power under
section 62
(1)
to authorise a superfund. The power under
section 62
(6)
to withdraw authorisation from The power under
section 65
to approve a superfund transfer. The power under
section 77
(1)
to approve an individual to be The power under
section 77
(8)
to suspend or revoke an The power under
section 79
(1)
to approve a person to be a trustee The power under
section 79
(8)
to suspend or revoke a person’s The power under
section 93
to withdraw authorisation from an
insert—
“Part 8
Functions under the Pension Schemes Act 2026
61
62
a superfund that has not yet received a superfund transfer.
63
64
responsible for a key function.
65
individual’s approval to be responsible for a key function.
66
of a superfund scheme.
67
approval to be a trustee of a superfund scheme.
68
operating superfund.”
A
bill
to
Make provision about pension schemes; and for connected purposes.
Brought from the Commons on
Ordered to be Printed, .
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