Pensions Act 2008

20 Quality requirement: UK money purchase schemes E+W+S

(1) A money purchase scheme [F1 that is not a relevant Master Trust and] that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if under the scheme—

(a) the jobholder's employer must pay contributions in respect of the jobholder;

(b) the employer's contribution, however calculated, must be equal to or more than 3% of the amount of the jobholder's qualifying earnings in the relevant pay reference period;

(c) the total amount of contributions paid by the jobholder and the employer, however calculated, must be equal to or more than 8% of the amount of the jobholder's qualifying earnings in the relevant pay reference period.

[F2 (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.

  See also section 28G (suspension of asset allocation requirement: savers’ interest test) for provision about circumstances in which the asset allocation requirement is suspended.

(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.]

(2) F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) A scheme does not fail to satisfy the quality requirement under this section merely because the trustees or managers of the scheme may on any occasion refuse to accept a contribution below an amount prescribed for the purposes of this section on the grounds that it is below that amount.

[F4 (4) In this section—

• “main scale default arrangement” is to be interpreted in accordance with 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.]

Textual Amendments

F1 Words in s. 20(1) inserted (29.4.2026 for specified purposes) by Pension Schemes Act 2026 (c. 22), ss. 40(3), 133(1)(4)(c)

F2 S. 20(1A)-(1C) inserted (29.4.2026 for specified purposes) by Pension Schemes Act 2026 (c. 22), ss. 40(4), 133(1)(4)(c)

F3 S. 20(2) omitted (6.4.2012) by virtue of The Pensions Act 2007 (Abolition of Contracting-out for Defined Contribution Pension Schemes) (Consequential Amendments) (No. 2) Regulations 2011 (S.I. 2011/1724), art. 3

F4 S. 20(4) inserted (29.4.2026 for specified purposes) by Pension Schemes Act 2026 (c. 22), ss. 40(5), 133(1)(4)(c)

Modifications etc. (not altering text)

C1 S. 20(1) modified (1.7.2012) by The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations (S.I. 2010/772), regs. 1(1) (as amended by S.I. 2012/1257, reg. 3(b)) and 45(2)

Commencement Information

I1 S. 20 wholly in force at 30.6.2012; s. 20 in force for certain purposes at Royal Assent see s. 149(2)(k); s. 20 in force so far as not already in force at 30.6.2012 by S.I. 2012/1682, art. 2(1)(2)(a), Sch. 1