The Occupational Pension Schemes (Payments to Employer) Regulations (Northern Ireland) 2006

Explanatory Note

(This note is not part of the Regulations)

These Regulations prescribe the circumstances in which, and the extent to which, payments may be made from certain pension schemes to the employer in relation to that scheme (“the relevant employer”) of the scheme.

Regulations 1 and 2 provide for the citation, commencement and interpretation.

Regulation 3 prescribes that no payment may be made under Article 37 of the Pensions (Northern Ireland) Order 1995 (“the 1995 Order”) except in the case of the types of scheme specified in that regulation.

Regulation 4 prescribes that in the case of a scheme which is subject to the requirements of Part IV of the Pensions (Northern Ireland) Order 2005 (“the 2005 Order”), which is not a regulatory own funds scheme and which is not winding up, prior to a payment to the relevant employer being made there must be an actuarial valuation of the scheme’s assets and liabilities. It also prescribes the assets and liabilities that shall be taken into account when making this valuation.

Regulation 5 prescribes the manner in which the actuary shall value the assets and estimate the value of the liabilities of the scheme.

Regulation 6 prescribes the persons who may prepare and sign a written valuation under Article 37(3)(a) of the 1995 Order.

Regulation 7 prescribes that where a valuation shows that the assets of the scheme exceed the liabilities of the scheme, then the maximum payment that may be made to the employer is the amount of that excess, and that where this is the case the actuary shall certify this on a form set out in Schedule 1.

Regulation 8 prescribes that in the case of a money purchase scheme that holds each member’s fund under a separate insurance policy a scheme may consider making a payment to the relevant employer where the liabilities in relation to any particular member have been secured or paid in full, and the payment to the employer represents the excess of the assets produced by the insurance policy, over and above the member’s entitlement to scheme benefits.

Regulation 9 specifies that, depending on the type of scheme, a valuation certificate shall be valid for a maximum period of either twelve or fifteen months from the date it is prepared.

Regulation 10 prescribes the information that the trustees of the scheme must provide to the scheme members where the trustees propose to exercise a power to make a payment to the relevant employer.

Regulation 11 prescribes the information that the trustees of the scheme must provide to the Regulator where a payment to the relevant employer is to be made.

Regulation 12 provides for exceptions to the requirements of Articles 37 and 76 of the 1995 Order.

Regulation 13 provides for transitional provisions in relation to schemes with existing powers to make payments to employers.

Regulation 14 modifies Article 37 of the 1995 Order in the case of an earmarked scheme.

Regulation 15 prescribes requirements in accordance with which notice shall be given to scheme members where the trustees plan to distribute a scheme surplus when a scheme is winding up.

Regulation 16 provides for circumstances where the Regulator must be satisfied that the provisions of Article 76 of the 1995 Order are satisfied.

Regulation 17 provides that where they have not received notification from the Regulator that the power to pay excess assets to the employer should not be exercised, then the trustees or employers in relation to the scheme should obtain written confirmation from the Regulator that it has not received any representations or information that could impact on payment of surplus assets upon wind up.

Regulations 18 provides for the application of Articles 37 and 76 of the 1995 Order in relation to a scheme with more than one employer.

Regulation 19 and Schedule 2 make consequential revocations.

Schedule 1 prescribes the form required for an actuarial certificate under regulation 7.

The Pensions (2005 Order) (Commencement No. 9) Order (Northern Ireland) 2006 (S.R. 2006 No. 95 (C. 7)) provides for the coming into operation of Articles 227, which substituted Article 37 of the 1995 Order, one of the enabling provisions under which these Regulations are made, and 228(6)(a) of the 2005 Order, another enabling provision under which these Regulations are made, for the purposes only of authorising the making of regulations, on 9^th March 2006 and for all other purposes on 6^th April 2006.

As these Regulations make in relation to Northern Ireland only provision corresponding to provision contained in regulations made by the Secretary of State for Work and Pensions in relation to Great Britain, the requirement to consult under Article 117(1) of the 1995 Order and Article 289(1) of the 2005 Order does not apply by virtue of paragraph (2)(e) of each of those Articles.