The Occupational Pension Schemes (Scheme Funding) Regulations 2005

Regulation 20(1)

SCHEDULE 3 SUPPLEMENTARY AND CONSEQUENTIAL PROVISIONS

Occupational Pension Schemes (Contracting-out) Regulations 1996

1.—(1) The Occupational Pension Schemes (Contracting-out) Regulations 1996(1) are amended as follows.

(2) In regulation 1(2) (interpretation)—

(a) after the definition of “the 1995 Act” insert—

““the 2004 Act” means the Pensions Act 2004;”;

(b) omit the definition of “minimum funding requirement”.

(3) In regulation 6(2) (information to be confirmed by an employer in writing), for sub-paragraph (g) substitute—

“(g) in the case of a scheme to which Part 3 of the 2004 Act (scheme funding) applies, that the requirements of sections 224, 225, 226 (if applicable) and 227 of that Act and any regulations under those provisions are complied with.”.

(4) In regulation 18 (requirement as to the resources of a salary-related contracted-out scheme)—

(a) in paragraph (1), for the words from “the amount of the resources of the scheme must be” to the end substitute “either the resources of the scheme must be sufficient to enable the scheme to meet the statutory funding objective provided for in section 222(1) of the 2004 Act, or the actuary to the scheme must have certified under section 227(6)(b)(i) of that Act that in his opinion the rates shown in the schedule of contributions are such that the statutory funding objective can be expected to be met by the end of the period specified in the recovery plan.”;

(b) in paragraph (2), for “section 56 of the 1995 Act” substitute “Part 3 of the 2004 Act”;

(c) after paragraph (2) add the following paragraph—

“(3) In a case where the trustees of a scheme are authorised under section 288 of the 2004 Act to accept contributions from European employers or approved under section 289 of that Act to accept contributions from a particular European employer, paragraph (1) has effect with the substitution for the words “by the end of the period specified in the recovery plan” of “within two years after the date of the last actuarial valuation under section 224 of the 2004 Act”.”.

(5) In regulation 49(4)(a)(i) (determination of cash equivalent of rights under a scheme which is not a money purchase scheme)—

(a) for “section 56 of the 1995 Act applies (minimum funding requirement)” substitute “Part 3 of the 2004 Act applies (scheme funding)”;

(b) for “subsection (1) of that section” substitute “section 222(1) of that Act”.

(6) In regulation 72 (transitional requirements as to sufficiency of resources of salary-related schemes)—

(a) in paragraph (1A), for “section 58 of the 1995 Act” substitute “section 227 of the 2004 Act”;

(b) in paragraph (3), for “section 56(3) of the 1995 Act (minimum funding requirement)” substitute “section 222(3) of the 2004 Act (statutory funding objective)”;

(c) in paragraph (6), for “section 56 of the 1995 Act” substitute “Part 3 of the 2004 Act”.

(7) The amendments in this paragraph have effect subject to paragraph 17 of Schedule 4.

Occupational Pension Schemes (Disclosure of Information) Regulations 1996

2.—(1) Subject to paragraph 3, the Occupational Pension Schemes (Disclosure of Information) Regulations 1996(2) (“the Disclosure Regulations”) are amended as follows.

(2) In regulation 1(2) (interpretation)—

(a) after the definition of “the 1995 Act” insert—

““the 2004 Act” means the Pensions Act 2004;”;

(b) after the definition of “public service pension scheme” insert—

““the Regulator” means the Pensions Regulator established under section 1 of the 2004 Act;”.

(3) In regulation 5 (information to be made available to individuals)—

(a) in paragraph (1), for “paragraphs (2) to (12)” substitute “paragraphs (2) to (12ZA)”;

(b) after paragraph (12) insert the following paragraph—

“(12ZA) Where the trustees of a scheme to which Part 3 of the 2004 Act applies have obtained an actuarial valuation or report under section 224 of that Act, they shall furnish the information mentioned in paragraphs 17 to 22 of Schedule 2, in the form of a summary funding statement, as of course to all members and beneficiaries (except excluded persons), within a reasonable period after the date by which they are required by that section to ensure that the valuation or report is received by them.”;

(c) after paragraph (12AA) insert the following paragraph—

“(12AB) If a scheme has been modified by the Regulator under section 231(2)(a) of the 2004 Act (modifications as regards the future accrual of benefits), the trustees must inform all active members of the fact within one month of the modification taking effect.”;

(d) in paragraph (12A) (sectionalised multi-employer schemes)—

(i) for “Schedule 5 to the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996” substitute “Schedule 2 to the Occupational Pension Schemes (Scheme Funding) Regulations 2005”;

(ii) for “section 56 of the 1995 Act” substitute “Part 3 of the 2004 Act”, and

(iii) for “section 56 does not apply” substitute “Part 3 does not apply”.

(4) In regulation 6(1)(c) (annual report to contain actuary’s certificate)—

(a) for “section 56 of the 1995 Act” substitute “Part 3 of the 2004 Act”, and

(b) before “that Act” insert “section 227 of”.

(5) For the heading to regulation 7, substitute “Availability of other documents”.

(6) For sub-paragraphs (a) to (c) in regulation 7(1), substitute the following sub-paragraphs—

“(a) the statement of funding principles where required under section 223 of the 2004 Act;

(b) where Part 3 of the 2004 Act applies to the scheme, the last actuarial valuation under section 224 of that Act received by the trustees, or, if an actuarial report under that section was received by them more recently than the last actuarial valuation, both that valuation and any report received subsequently;

(c) any recovery plan prepared under section 226 of the 2004 Act which is currently in force;

(ca) the payment schedule where required under section 87 of the 1995 Act or schedule of contributions where required under section 227 of the 2004 Act, and”.

(7) In Schedule 2 (information to be made available to individuals), after paragraph 16 add—

“17.   A summary, based on the last actuarial valuation under section 224 of the 2004 Act received by the trustees and any actuarial report received subsequently, of the extent to which the assets of the scheme are adequate to cover its technical provisions.

18.   An explanation of any change in the funding position of the scheme—

(a) in the case of the first summary funding statement issued in respect of the scheme, since the last actuarial valuation in respect of the scheme under regulation 30 of the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996(3) (ongoing actuarial valuations), or, if no such valuation was obtained, since the last actuarial valuation under the rules of the scheme, and

(b) in the case of any subsequent summary funding statement, since the date of the last summary funding statement.

19.   The actuary’s estimate of solvency contained in the last actuarial valuation under section 224 of the 2004 Act received by the trustees.

20.   A summary of any recovery plan prepared under section 226 of the 2004 Act which is currently in force.

21.   Whether the scheme has been modified under section 231(2)(a) of the 2004 Act, is subject to directions under section 231(2)(b) of that Act or bound by a schedule of contributions imposed under section 231(2)(c) of that Act, and if so an account of the circumstances in which the modification was made, the direction given or the schedule of conditions imposed.

22.   Whether any payment has been made to the employer under section 37 of the 1995 Act (4)(payment of surplus to employer)—

(a) in the case of the first summary funding statement issued in respect of the scheme, in the 12 months preceding the date on which it is prepared, and

(b) in the case of any subsequent summary funding statement, since the date of the last such statement,

and, if so, the amount of the payment.”.

3.—(1) Until the trustees or managers of a scheme have prepared a schedule of contributions under section 227 of the 2004 Act (in accordance with regulation 9(1) of, or paragraph 5 of Schedule 4 to, these Regulations), the Disclosure Regulations have effect in relation to a scheme to which Part 3 of the 2004 Act applies as if—

(a) the amendments in paragraph 2 of this Schedule had not been made;

(b) those Regulations included the requirement in sub-paragraph (2) of this paragraph, and

(c) regulations 1(2) (so far as material), 10 and 11 of those Regulations applied in respect of that requirement.

(2) The requirement referred to in paragraph (1)(b) is that, before 22nd September in 2006 and each subsequent year the trustees or managers of the scheme furnish all members and beneficiaries (except excluded persons) with the following information, in the form of a summary funding statement—

(a) a summary, based on the last actuarial valuation under regulation 30 of the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996 (“the MFR Regulations”) received by the trustees or managers or, if no such valuation was obtained, the last actuarial valuation under the rules of the scheme, of the extent to which the assets of the scheme are adequate to meet its liabilities as they fall due;

(b) an explanation of any change in the funding position of the scheme—

(i) in the case of the first summary statement issued in respect of the scheme, since the last actuarial valuation in respect of the scheme under regulation 30 of the MFR Regulations, or, if no such valuation was obtained, since the last actuarial valuation under the rules of the scheme, and

(ii) in the case of any subsequent summary funding statement, since the date of the last summary funding statement;

(c) any estimate by the actuary of the solvency of the scheme, or, if the actuary has made more than one estimate of solvency, the latest such estimate;

(i) whether any payment has been made to the employer under section 37 of the 1995 Act—in the case of the first summary funding statement issued in respect of the scheme, in the 12 months preceding the date on which it is prepared, and

(ii) in the case of any subsequent summary funding statement, since the date of the last such statement,

and, if so, the amount of the payment.

(3) The trustees or managers of a scheme are not required to comply with the requirement in sub-paragraph (2) in any year if the scheme had fewer than 100 members during the 12 months ending on 31st August in that year.

(4) A summary funding statement furnished under sub-paragraph (2) must be accompanied by a written statement that further information about the scheme is available, giving the address to which enquiries about it should be sent.

Occupational Pension Schemes (Scheme Administration) Regulations 1996

4.—(1) The Occupational Pension Schemes (Scheme Administration) Regulations 1996(5) are amended as follows.

(2) In regulation 1(2) (interpretation), after the definition of “the 1995 Act” insert—

““the 2004 Act” means the Pensions Act 2004;”.

(3) In regulation 16A(2)(6) (circumstances in which notice of an employer’s failure to make payments to trustees or managers need not be given), for sub-paragraph (b) substitute the following—

“(b) where the scheme is exempt from the requirement to prepare, review and if necessary revise a schedule of contributions under section 227 of the 2004 Act, by virtue of any of sub-paragraphs (a) to (i) and (k) to (m) of regulation 17(1) of the Occupational Pension Schemes (Scheme Funding) Regulations 2005; or”.

Occupational Pension Schemes (Transfer Values) Regulations 1996

5.—(1) The Occupational Pension Schemes (Transfer Values) Regulations 1996(7) are amended as follows.

(2) In regulation 1(2) (interpretation), after the definition of “the 1995 Act” insert—

““the 2004 Act” means the Pensions Act 2004;”.

(3) In regulation 7 (manner of calculation and verification of cash equivalents)—

(a) insert the word “and” at the end of paragraph (3)(b)(ii);

(b) omit the word “and” at the end of paragraph (3)(b)(iii), and

(c) omit paragraphs (3)(b)(iv) and (4).

(4) In regulation 8 (further provisions as to calculation of cash equivalents)—

(a) in paragraph (4), for “section 56 of the 1995 Act (minimum funding requirement)” substitute “Part 3 of the 2004 Act (scheme funding)”;

(b) in paragraph (4B), omit “then, subject to paragraph (4D)”;

(c) omit paragraphs (4D) to (4I), (4K) and (4L);

(d) in paragraph (5)—

(i) for “section 61 of the 1995 Act” substitute “section 232 of the 2004 Act”;

(ii) for “section 56” substitute “Part 3”, and

(iii) for “paragraphs (4), (4A) and (4G)” substitute “paragraphs (4) and (4A)”, and

(e) omit paragraph (6).

Personal and Occupational Pension Schemes (Pensions Ombudsman) Regulations 1996

6.—(1) The Personal and Occupational Pension Schemes (Pensions Ombudsman) Regulations 1996(8) are amended as follows.

(2) In regulation 4(2) (compliance with particular requirements excluded from ombudsman’s jurisdiction), after sub-paragraph (g) add—

• ““or the requirements under Part 3 of the Pensions Act 2004.”.

Occupational Pension Schemes (Winding Up) Regulations 1996

7.—(1) The Occupational Pension Schemes (Winding Up) Regulations 1996(9) are amended as follows.

(2) In regulation 12(3) (winding up of sectionalised schemes etc.)—

(a) for “Schedule 5 to the MFR Regulations” substitute “Schedule 2 to the Occupational Pension Schemes (Scheme Funding) Regulations 2005”, and

(b) for “section 56” substitute “Part 3 of the Pensions Act 2004”.

(3) In regulation 13 (hybrid schemes), omit paragraphs (6) and (7).

Occupational Pension Schemes (Contracting-out) Regulations (Northern Ireland) 1996

8.—(1) The Occupational Pension Schemes (Contracting-out) Regulations (Northern Ireland) 1996(10) are amended as follows.

(2) In regulation 49(4)(a)(i) (determination of cash equivalent of rights under a scheme which is not a money purchase scheme)—

(a) for “Article 56 of the Order applies (minimum funding requirement)” substitute “Part IV of the 2005 Order(11) applies (scheme funding)”, and

(b) for “Article 56(1)” substitute “Article 201(1) of that Order”.

Pension Sharing (Valuation) Regulations 2000

9.—(1) The Pension Sharing (Valuation) Regulations 2000(12) are amended as follows.

(2) In regulation 1(2) (interpretation), after the definition of “the 1999 Act” insert—

““the 2004 Act” means the Pensions Act 2004;”.

(3) In regulation 4 (calculation and verification of cash equivalents)—

(a) insert the word “and” at the end of paragraph (3)(b)(i);

(b) omit the word “and” at the end of paragraph (3)(b)(ii), and

(c) omit paragraphs (3)(b)(iii) and (4).

(4) In regulation 5 (further provisions as to calculation of cash equivalents)—

(a) in paragraph (3), for “section 56 of the 1995 Act” substitute “Part 3 of the 2004 Act”;

(b) in paragraph (3B), omit “then, subject to paragraph (3D)”;

(c) omit paragraphs (3D) to (3I), (3K) and (3L);

(d) in paragraph (4)—

(i) for “Schedule 5 to the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996” substitute “Schedule 2 to the Occupational Pension Schemes (Scheme Funding) Regulations 2005”;

(ii) for “section 56 of the 1995 Act” substitute “Part 3 of the 2004 Act”, and

(iii) for “paragraphs (3), (3A) and (3G)” substitute “paragraphs (3) and (3A)”, and

(e) in paragraph (5), for “paragraphs (3) and (3F)” substitute “paragraph (3)”.

Pension Sharing (Implementation and Discharge of Liability) Regulations 2000

10.—(1) The Pension Sharing (Implementation and Discharge of Liability) Regulations 2000(13) are amended as follows.

(2) In regulation 1(2) (interpretation), after the definition of “the 1999 Act” insert—

““the 2004 Act” means the Pensions Act 2004;”.

(3) In regulation 16 (adjustments to the amount of pension credit)—

(a) in paragraph (2), for “section 56 of the 1995 Act” substitute “Part 3 of the 2004 Act (scheme funding)”;

(b) in paragraph (2B), omit “then, subject to paragraph (2D)”;

(c) omit paragraphs (2D) to (2I), (2K) and (2L), and

(d) in paragraph (3)—

(i) for “Schedule 5 to the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996” substitute “Schedule 2 to the Occupational Pension Schemes (Scheme Funding) Regulations 2005”;

(ii) for “section 56 of the 1995 Act (minimum funding requirement)” substitute “Part 3 of the 2004 Act”, and

(iii) for “paragraphs (2), (2A) and (2G)” substitute “paragraphs (2) and (2A)”.

Pension Sharing (Pension Credit Benefit) Regulations 2000

11.—(1) The Pension Sharing (Pension Credit Benefit) Regulations 2000(14) are amended as follows.

(2) In regulation 1(2) (interpretation), after the definition of “the 1999 Act” insert—

““the 2004 Act” means the Pensions Act 2004;”.

(3) In regulation 24 (calculation and verification of cash equivalents)—

(a) insert the word “and” at the end of paragraph (3)(b)(ii);

(b) omit the word “and” at the end of paragraph (3)(b)(iii), and

(c) omit paragraphs (3)(b)(iv) and (4).

(4) In regulation 27 (increases and reductions of cash equivalents)—

(a) in paragraph (4), for “section 56 of the 1995 Act” substitute “Part 3 of the 2004 Act”;

(b) in paragraph (4B), omit “then, subject to paragraph (4D)”;

(c) omit paragraphs (4D) to (4I), (4K) and (4L);

(d) in paragraph (4M), for “paragraphs (4J) and (4K)” substitute “paragraph (4J)”, and

(e) in paragraph (5)—

(i) for “Schedule 5 to the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996” substitute “Schedule 2 to the Occupational Pension Schemes (Scheme Funding) Regulations 2005”;

(ii) for “section 56 of the 1995 Act” substitute “Part 3 of the 2004 Act”, and

(iii) for “paragraphs (4), (4A) and (4G)” substitute “paragraphs (4) and (4A)”.

Stakeholder Pension Schemes Regulations 2000

12.—(1) The Stakeholder Pension Schemes Regulations 2000(15) are amended as follows.

(2) In regulation 19 (requirement for trustees of a stakeholder pension scheme established under a trust), omit “except the reference to section 56 in section 35(2) and 35(5)(b) of that Act”.

Occupational Pension Schemes (Republic of Ireland Schemes Exemption) Regulations 2000

13.—(1) The Occupational Pension Schemes (Republic of Ireland Schemes Exemption) Regulations 2000(16) are amended as follows.

(2) In regulation 1(3) (interpretation), after the definition of “the 1995 Act” insert—

““the 2004 Act” means the Pensions Act 2004;”.

(3) In regulation 2 (exemption of Republic of Ireland schemes – general provision), after “the 1995 Act” insert “or the 2004 Act”.

(4) In the Schedule, at the end insert—

Provision of the 2004 Act	Purpose of provision
Part 3	Scheme funding

Occupational Pension Schemes (Administration and Audited Accounts) (Amendment) Regulations 2005

14.—(1) The Occupational Pension Schemes (Administration and Audited Accounts) (Amendment) Regulations 2005(17) are amended as follows.

(2) In the substituted regulation 16A of the Occupational Pension Schemes (Scheme Administration) Regulations 1996 set out in regulation 4(5) (circumstances in which trustees or managers do not need to notify failure to pay contributions), for paragraph (d) substitute the following—

“(d) the scheme is exempt from the requirement to prepare, review and if necessary revise a schedule of contributions under section 227 of the 2004 Act, by virtue of any of sub-paragraphs (a) to (i) and (k) to (m) of regulation 17(1) of the Occupational Pension Schemes (Scheme Funding) Regulations 2005.”.

(1)

S.I. 1996/1172; relevant amending instruments are S.I. 1997/786 and 2002/681.

(2)

S.I. 1996/1655; relevant amending instruments are S.I. 1997/786 and 2002/459.

(3)

S.I. 1996/1536. Regulation 30 was amended by S.I. 1997/786.

(4)

Section 37 is substituted by section 250 of the Pensions Act 2004.

(5)

S.I. 1996/1715; relevant amending instruments are S.I. 2000/679 and 2005/2426.

(6)

Regulation 16A was inserted by S.I. 2000/679 and amended by S.I. 2005/2426.

(7)

S.I. 1996/1847; relevant amending instruments are S.I. 1997/786, 2003/1727 and 2005/706.

(8)

S.I. 1996/2475, to which there are amendments not relevant to these Regulations.

(9)

S.I. 1996/3126, to which there are amendments not relevant to these Regulations.

(10)

S.R. (NI) 1996 No. 493; to which there are amendments not relevant to these Regulations.

(11)

For the purposes of these Regulations “2005 Order” refers to S.I. 2005/255 (N.I. 1).

(12)

S.I. 2000/1052; relevant amending instruments are S.I. 2000/2691 and 2005/706.

(13)

S.I. 2000/1053, amended by S.I. 2005/706; there are other amending instruments but none is relevant.

(14)

S.I. 2000/1054, amended by S.I. 2005/706; there are other amending instruments but none is relevant.

(15)

S.I. 2000/1403, to which there are amendments not relevant to these Regulations.

(16)

S.I. 2000/3198, to which there are amendments not relevant to these Regulations.

(17)

S.I. 2005/2426.