The Occupational and Personal Pension Schemes (Levies – Amendment) Regulations 2012

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Occupational and Personal Pension Schemes (General Levy) Regulations 2005 (S.I. 2005/626) (“the General Levy Regulations”) and the Occupational Pension Schemes (Levies) Regulations 2005 (S.I. 2005/842) (“the Administration Levy Regulations”).

Regulation 2 substitutes regulations 6(2) and 7(2) of the General Levy Regulations. This specifies the new figures to be used in calculating the rate at which the general levy is payable. The new figures apply for each financial year starting with the one which begins on 1st April 2012.

The purpose of the general levy is to meet the expenditure mentioned in section 175(1) of the Pension Schemes Act 1993 (c.48). Specified occupational and personal pension schemes pay the general levy (see regulation 3 of the General Levy Regulations). The general levy is used to fund the Pensions Regulator, the Pensions Advisory Service and the Pensions Ombudsman.

Regulation 3 substitutes regulation 6(2) of the Administration Levy Regulations. This specifies the new figures to be used in calculating the rate at which the administration levy is payable. The new figures apply for each financial year starting with the one which begins on 1st April 2012.

The purpose of the administration levy is to meet the expenditure of the Secretary of State mentioned in section 117(1) of the Pensions Act 2004 (c.35). Eligible occupational pension schemes pay the administration levy (see regulation 4 of the Administration Levy Regulations). The administration levy is used to fund administration expenses of the Board of the Pension Protection Fund.

These Regulations reduce costs for business and civil society organisations overall. A full impact assessment has not been published for these Regulations as they amend an existing statutory levy regime and the associated administrative costs are negligible.