The Occupational Pension Schemes (Payments to Employers) Regulations (Northern Ireland) 1997

Distribution of Excess Assets — Schemes Winding Up

Notice of proposal to distribute excess assets to the employer

7.—(1) For the purposes of Article 76 (which sets out the requirements which must be satisfied before a power to distribute assets to the employer on a winding up may be exercised) the prescribed requirements as to notice referred to in Article 76(3)(d) are set out in paragraphs (2) to (5).

(2) Where the trustees or the employer propose to exercise a power such as is referred to in paragraph (1), the trustees or, as the case may be, the employer, shall take all reasonable steps to ensure that each member is given 2 written notices of the proposal in accordance with the following provisions of this regulation.

(3) The first notice shall—

(a) inform the member as to—

(i) the trustees' estimate of the value of the assets remaining after the liabilities of the scheme have been fully discharged and the persons or class of person to whom, and in what proportions, it is proposed that they should be distributed; and

(ii) whether the requirements of Article 76(3) are satisfied;

(b) invite the member, if he wishes, to make written representations in relation to the proposal to the trustees or, as the case may be, to the employer, before a specified date (which is not earlier than 2 months from the date on which the first notice is given);

(c) advise the member—

(i) that a second notice will be given to him if the trustees or the employer, as the case may be, intend to proceed with the proposal; and

(ii) that no excess assets may be distributed to the employer in accordance with the proposal until at least 3 months after the date on which the second notice is given.

(4) The second notice shall be given after the date specified in accordance with paragraph (3)(b) and at least 3 months before the power is exercised. It shall—

(a) contain the information referred to in paragraph (3)(a), including any modifications to the proposal;

(b) advise the member that he may make written representations to the Authority before a specified date (which is not earlier than 3 months from the date on which the second notice is given) if he considers that any of the requirements of Article 76(3) are not satisfied.

(5) For the purposes of paragraph (2)—

(a) a notice shall be treated as having been given to a member if it has been sent to him by post either at the address at which he was last known to be living or, in the case of an active member, at an address at which he is known to be currently employed; and

(b) notices are not required to be given where a member has no known address or where correspondence sent to a member’s last known address has been returned.

Circumstances in which the Authority must be satisfied that the requirements of Article 76 are met

8.—(1) For the purposes of Article 76(2) (which provides that, in prescribed circumstances, the power to distribute assets to the employer on a winding up cannot be exercised unless the Authority are of the opinion that the requirements of Article 76(3) and any prescribed requirements are satisfied) the prescribed circumstances are—

(a) that, subject to paragraph (2) of this regulation, the Authority receive (in relation to any proposal to which that Article applies)—

(i) written representations from a member to the effect that any of the requirements of Article 76(3) are not satisfied; or

(ii) information from any source sufficient to raise a doubt as to whether all those requirements are satisfied; and

(b) the Authority notify the trustees or, as the case may be, the employer in writing that the power should not be exercised until the Authority have confirmed in writing that the Authority are satisfied that those requirements are satisfied.

(2) Where notice has been given to a member in accordance with regulation 7, paragraph (1)(a)(i) shall only apply in the case of representations received by the Authority from the member before the date specified in accordance with regulation 7(4)(b) (expiry date of the second notice).

Additional requirement for the purposes of Article 76

9.—(1) For the purposes of Article 76(2) (which provides for requirements to be prescribed in addition to those mentioned in Article 76(3)) the requirement set out in paragraph (2) of this regulation applies where—

(a) the date specified in accordance with regulation 7(4)(b) (expiry date of the second notice) has passed; and

(b) the trustees or, as the case may be, the employer have not received notification from the Authority in accordance with regulation 8(1)(b).

(2) The requirement is that the trustees or, as the case may be, the employer obtain written confirmation from the Authority that the Authority have not received any representations or information referred to in regulation 8(1)(a) and accordingly Article 76(4) does not apply.

Requirement to increase benefits — maximum limits

10.—(1) For the purposes of Article 77 (which provides, where a scheme prohibits the distribution of assets to the employer, for excess assets to be distributed after benefits have been increased, subject to prescribed limits) the prescribed limits referred to in Article 77(4)(a) are the maximum benefits that may be provided by the scheme as an exempt approved scheme within the meaning of section 592(1) of the Taxes Act 1988.

(2) For the purposes of calculating the maximum benefits referred to in paragraph (1), final remuneration may, if the trustees so determine, be taken to be any one of the following amounts—

(a) the amount of annual remuneration on which the scheme benefits are calculated;

(b) the highest amount of annual remuneration on which, under the rules of the scheme, benefits could be calculated; or

(c) the amount referred to in regulation 5(4)(f)(iii) of the Retirement Benefits Schemes (Restriction on Discretion to Approve) (Additional Voluntary Contributions) Regulations 1993(1) (which is an amount based on the average of the total emoluments paid to an employee during the last 3 years of assessment).

(1)

S.I. 1993/3016