Continuity option 1: transfer out and winding upN.I.
24.—(1) Where the trustees of a Master Trust scheme are required, or decide, to pursue continuity option 1 they must—
(a)identify one or more pension schemes to which (subject to Part 4ZA of the Pension Schemes Act and to provision made by regulations under subsections (2)(b) and (4)) members’ accrued rights and benefits under the Master Trust scheme are proposed to be transferred, and
(b)notify employers and members of the proposed transfer and of such other matters as may be specified in regulations made by the Department.
(2) Each pension scheme proposed under subsection (1)(a) must be—
(a)a Master Trust scheme, or
(b)in such circumstances as may be specified in regulations made by the Department, a pension scheme that has characteristics specified in regulations made by the Department (“an alternative scheme”).
(3) Notification under subsection (1)(b) must be given—
(a)in the manner specified in regulations made by the Department, and
(b)before the end of the time period specified in regulations made by the Department.
(4) The Department—
(a)must make regulations about how continuity option 1 is to be pursued, in a case where a proposed transfer is to a Master Trust scheme;
(b)may make regulations about how continuity option 1 is to be pursued, in a case where a proposed transfer is to an alternative scheme;
(c)may make regulations for the purpose of otherwise giving effect to continuity option 1, in either case.
(5) Regulations under subsection (4)(a) must include provision—
(a)for the purpose of ensuring that members of the Master Trust scheme stop accruing rights and receiving benefits under the scheme;
(b)conferring rights on all or a specified description of members to opt out of the proposed transfer;
(c)conferring rights on all or a specified description of employers to opt out of the proposed transfer;
(d)conferring rights on all or a specified description of members to require the trustees to transfer the members’ accrued rights and benefits to alternative schemes;
(e)conferring rights on all or a specified description of employers to propose the transfer of members’ accrued rights to one or more alternative schemes;
(f)imposing duties on employers and the trustees to inform members of any such proposal;
(g)about how rights conferred by the regulations may be exercised (including the time periods within which they may be exercised);
(h)specifying requirements to be met by a scheme proposed by the trustees or an employer (which may include approval or authorisation by the Regulator in accordance with the regulations);
(i)requiring a scheme proposed by the trustees or an employer to provide the Regulator with a document setting out the levels of administration charges that applied in relation to members of the scheme, in the manner and as at the date specified or described in the regulations;
(j)imposing duties on the trustees to notify all or a specified description of employers and members of their rights under the regulations and of members’ rights under Part 4ZA of the Pension Schemes Act (transfers and contribution refunds);
(k)about the exercise by the trustees of their power to transfer members’ accrued rights and benefits out of a Master Trust scheme in cases where employers and members do not exercise their rights under the regulations or Part 4ZA of the Pension Schemes Act;
(l)about the exercise by the trustees of their power to transfer members’ accrued rights and benefits out of a Master Trust scheme other than by a transfer to a scheme in a specified description of cases;
(m)imposing conditions on the exercise by the trustees of their power to transfer members’ accrued rights and benefits out of a Master Trust scheme in a specified description of cases;
(n)about the winding up of the Master Trust scheme in circumstances where the accrued rights and benefits of the members are, or are to be, transferred out of the scheme;
(o)conferring power on the Regulator to direct the trustees to do things permitted or required by the regulations.
(6) Regulations under subsection (4)(b) may include—
(a)any provision mentioned in subsection (5);
(b)provision deeming any member whose accrued rights or benefits are to be transferred to an alternative scheme to have entered into an agreement with a person of a description specified in the regulations.
(7) In this section references to a transfer of members’ accrued rights and benefits out of a Master Trust scheme include references to the trustees complying with obligations imposed on them under Part 4ZA of the Pension Schemes Act.
(8) Article 10 of the 1995 Order (civil penalties) applies to a person who fails to comply with a requirement imposed by this section.
(9) Regulations under this section may provide for the application of Article 10 of the 1995 Order to a person who fails to comply with a requirement imposed by the regulations.
(10) Regulations under subsections (2)(b) and (4) are subject to the confirmatory procedure.
(11) Other regulations under this section are subject to negative resolution.
Commencement Information
I1S. 24 not in operation at Royal Assent, see s. 44(2)
I2S. 24 in operation at 16.3.2022 for specified purposes by S.R. 2022/110, art. 2(a)