Discharge of liabilities by collective money purchase scheme which is winding up12A

1

For the purposes of section 69(4), a collective money purchase scheme may provide for the scheme’s liability to a beneficiary in respect of the beneficiary’s accrued rights to benefits under the scheme to be discharged in accordance with the default discharge option for that beneficiary without the consent of the beneficiary where—

a

the scheme is pursuing continuity option 1 within the meaning of sections 85 (continuity options) and 87 (continuity option 1: discharge of liabilities and winding up) of the Pension Schemes Act 2021; and

b

the trustees of the scheme do not receive a notice from the beneficiary in accordance with paragraph 14 of Schedule 6 to the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 202211 (continuity option 1: transfer out and winding up).

2

In this regulation—

• “beneficiary” has the meaning given by section 87(8) of the Pension Schemes Act 2021;

• “collective money purchase scheme” means a scheme or a section of a scheme which is a collective money purchase scheme for the purposes of Part 2 of the Pension Schemes Act 2021 (collective money purchase benefits: Northern Ireland);

• “default discharge option” has the meaning given by paragraph 1(1) of Schedule 6 to the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022.

• “collective money purchase scheme” means a scheme or a section of a scheme which is a collective money purchase scheme for the purposes of Part 2 of the Pension Schemes Act 2021 (collective money purchase benefits: Northern Ireland);

Collective money purchase scheme during winding-up2A

1

 Chapter 1 of Part 4ZA14 of the Act does not apply to a member of a collective money purchase scheme which is pursuing continuity option 1 within the meaning of sections 85 (continuity options) and 87 (continuity option 1: discharge of liabilities and winding up) of the Pension Schemes Act 2021, during the winding-up period for that scheme.

2

In this regulation, “winding-up period” has the meaning given by paragraph 1(1) of Schedule 6 to the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022 (continuity option 1: transfer out and winding up).

Manner of calculation of initial cash equivalents for collective money purchase benfits7ZC

1

For collective money purchase benefits, the initial cash equivalent is the realisable value of the member’s share at the date of calculation of the available assets of the collective money purchase scheme, and is to be calculated—

a

on an actuarial basis;

b

using assumptions determined in accordance with this regulation; and

c

in accordance with the scheme rules, to the extent that they are consistent with sub-paragraphs (a) and (b).

2

Having taken the advice of the actuary, the trustees must—

a

determine the economic, financial and demographic assumptions; and

b

calculate the initial cash equivalent by using the assumptions so determined.

3

In determining the demographic assumptions, the trustees must have regard to—

a

the main characteristics of the members of the scheme; or

b

where the members of the scheme do not form a large enough group to allow demographic assumptions to be made, the characteristics of a wider population sharing similar characteristics to the members.

4

The trustees must have regard to the scheme’s investment strategy when deciding what assumptions will be included in calculating the discount rates in respect of the member.

5

The trustees must determine the assumptions under this regulation with the aim that, taken as a whole, they should lead to the best estimate of the initial cash equivalent.

6

In this regulation, “the available assets of the collective money purchase scheme” has the meaning given by section 53(2) of the Pension Schemes Act 2021.

4

Where information is made available under this Schedule to a member of a collective money purchase scheme, the information to be made available to such a member also includes—

a

a statement that the Money and Pensions Service provides information about transfers that may assist the member in deciding whether to transfer;

b

an explanation of any potential adverse consequences for the member of transferring before normal pension age;

c

an explanation of the trustees’ duties under section 95A22 (trustees’ further duties: collective money purchase benefits);

d

an explanation that the member will not be able to transfer in the event of the scheme pursuing continuity option 1 within the meaning of sections 85 (continuity options) and 87 (continuity option 1: discharge of liabilities and winding up) of the Pension Schemes Act 2021.

• “actuarial valuation”, in relation to a collective money purchase scheme, has the meaning given by section 71(2) of the Pension Schemes Act 2021;

• “collective money purchase scheme” means a scheme or a section of a scheme that is a collective money purchase scheme for the purposes of Part 2 of the Pension Schemes Act 2021 (collective money purchase benefits: Northern Ireland);

• “multi-annual reduction” has the meaning given by regulation 2 of the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022;

6

This regulation does not apply where regulation 8A applies.

Scheme closure: collective money purchase schemes8A

1

In relation to a collective money purchase scheme, the information specified in paragraphs (2) and (3) must be given in accordance with this regulation.

2

The information listed in paragraphs 30 to 3349 of Schedule 2 must be given as soon as practicable and in any event no more than one month after a decision by the trustees to pursue continuity option 3.

3

The information listed in paragraphs 34 to 38 of Schedule 2 must be given as soon as is practicable and in any event no more than one month after the date on which the Regulator notifies the trustees in accordance with section 89(4) of the 2021 Act (continuity option 3: conversion to closed scheme).

4

The information must be given to all members and beneficiaries of the scheme except for excluded persons.

5

In this regulation, and in Schedule 2, “continuity option 3” is the conversion of the scheme into a closed scheme in accordance with sections 85 (continuity options) and 89 of the 2021 Act and regulations made section 89 of that Act.

Statements of benefits: collective money purchase schemes17A

1

The information mentioned in paragraph (2) must be given in accordance with this regulation to a member of a collective money purchase scheme who is not—

a

an excluded person, or

b

a member to whom benefits under the scheme have, or are about to, become payable.

2

The information is—

a

for active members, the information listed in Parts 1, 2 and 4 of Schedule 6A;

b

for deferred members, the information listed in Parts 1, 2, 3 and 5 of Schedule 6A, and

c

for pension credit members, the information listed in Parts 1 and 3 of Schedule 6A.

3

The information must be given—

a

no more than 12 months after the effective date of the first actuarial valuation, and

b

thereafter, no more than 12 months after the end of each scheme year.

4

In this regulation, “the effective date” is the date by reference to which the available assets of the scheme are determined.

5

A notification need not be given under regulation 27 in relation to the information on the website that is also given to the person in accordance with paragraphs 15 and 16 of Schedule 6A.

2A

In relation to a collective money purchase scheme, information given in accordance with paragraph (2)(a) must include a statement that—

a

there is no promise or guarantee as to the rate or amount of benefits provided under the scheme, and

b

the rate or amount of benefits may fluctuate, which may result in—

i

reduced benefits before benefit becomes payable;

ii

reduced benefits after benefit becomes payable.

3

This regulation does not apply where regulation 22B applies.

Benefit adjustment information: collective money purchase schemes22A

1

Information listed in paragraphs 15 to 2051 of Schedule 7 must be provided in accordance with this regulation to members and beneficiaries of a collective money purchase scheme.

2

The information must be given each time an actuarial valuation is obtained—

a

as soon as reasonably practicable after the certification of the actuarial valuation by the scheme actuary, and

b

no less than 6 weeks before any adjustment to the rate or amount of benefits provided under the scheme following the latest actuarial valuation is applied, where reasonably practicable.

Incorrect benefit adjustments in collective money purchase schemes22B

1

The information listed in paragraphs 21 to 27 of Schedule 7 must be given in accordance with this regulation where—

a

the scheme is a collective money purchase scheme, and

b

a benefit adjustment has not been applied in accordance with the scheme rules or (as the case may be) the latest actuarial valuation.

2

The information must be given as soon as reasonably practicable to members and beneficiaries who have been or will be affected by the failure to apply the benefit adjustment in accordance with the scheme rules or (as the case may be) the latest actuarial valuation.

za

in relation to a collective money purchase scheme, in accordance with paragraph 4 of Schedule 6 to the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022 (continuity option 1: transfer out and winding up);

ba

paragraph (1)(cza);

Additional publication requirements for collective money purchase schemes29B

1

In relation to a collective money purchase scheme, the information specified in paragraphs (2) to (4) must be published in accordance with this regulation.

2

The following information must be published no more than one month after the date on which the Regulator notifies the applicant of its decision to authorise the scheme—

a

a statement explaining the design of the scheme, which must contain the information listed in Part 1 of Schedule 9B, and

b

the scheme’s rules.

3

The information listed in Part 2 of Schedule 9B must be published no more than 3 months after the latest actuarial valuation is sent to the Regulator.

4

The model used to calculate information specified in paragraphs 5, 6, 19, 20 and 23 to 25 of Schedule 6A must be published as soon as reasonably practicable after information is first provided in accordance with regulation 17A.

5

Where there is a change in relation to the information listed in paragraph 4 or 5 of Schedule 9B, the statement mentioned in sub-paragraph (2)(a) must be altered accordingly, and published before or as soon as practicable after the change.

6

Each time the document specified in sub-paragraph (2)(b) is changed after it is first published, the changed version must be published before or as soon as possible after (and in any event within 3 months after) the change.

7

A notification need not be given under regulation 27 in relation to the information on the website that is published in accordance with this regulation.

8

Where a person requests the trustees of the scheme to provide the information referred to in paragraph (2), (3) or (4) in hard copy form, the trustees of the scheme must give that information to the person in hard copy form where, but only where, the trustees are satisfied that it would be unreasonable for that person to obtain it from the website on which it is published.

9

Where information is required to be given in hard copy form in accordance with paragraph (8), it must be given within 2 months of the date the request is made.

10

In this regulation, “published” means made publicly available free of charge on a website.

1A

Where a pension scheme is divided into sections, each section that is a collective money purchase scheme for the purposes of Part 2 of the Pension Schemes Act 2021 (collective money purchase benefits: Northern Ireland) (see section 52(2)(b) of that Act) is to be treated for the purposes of this Article and Articles 34A to 38B58 as a separate occupational pension scheme which is a money purchase scheme.

1A

Where a pension scheme is divided into sections, each section that is a collective money purchase scheme for the purposes of Part 2 of the Pension Schemes Act 2021 (collective money purchase benefits: Northern Ireland) (see section 52(2)(b) of that Act) is to be treated for the purposes of this Article as a separate occupational pension scheme which is a money purchase scheme.