C5C4C6C7Part 2The Board of the Pension Protection Fund

Annotations:
Modifications etc. (not altering text)
C7

Pt. 2 applied in part (24.7.2014) by The Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014 (S.I. 2014/1711), regs. 1(1), 42(1), 53, 57 (with regs. 6, 41, 44(1), 47(1), 69(2), 72(1), 76(1)); coming into force immediately after s. 29 of 2011 c. 19 - see S.I. 2014/1683, art. 2

C1C2C3Chapter 1The Board

Annotations:
Modifications etc. (not altering text)
C1

Pt. 2 modified (8.3.2005 for specified purposes, 6.4.2005 in so far as not already in force) by The Pension Protection Fund (Partially Guaranteed Schemes) (Modification) Regulations 2005 (S.I. 2005/277), regs. 1(1), 2-11

C2

Pt. 2 modified in part (9.3.2005 for specified purposes, 1.4.2005 for specified purposes, 6.4.2005 in so far as not already in force (except ch. 4)) by The Pension Protection Fund (Multi-employer Schemes) (Modification) Regulations 2005 (S.I. 2005/441), regs. 1, 2-60, 71, 72

C3

Pt. 2 applied in part (with modifications) (20.7.2005 for specified purposes, 1.9.2005 for specified purposes, 5.12.2005 for specified purposes) by The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986), regs. 1(1), 4, Sch. 1

Establishment

I1107C1C2C3The Board of the Pension Protection Fund

There shall be a body corporate called the Board of the Pension Protection Fund (in this Act referred to as “the Board”).

108C1C2C3Membership of the Board

I21

The Board is to consist of the following members—

a

a chairman,

b

the Chief Executive of the Board, and

c

at least five other persons (“ordinary members”).

I22

The chairman must not be appointed from the staff of the Board or be the chairman of the Regulator.

3

The number of ordinary members must not exceed any maximum number which may be prescribed.

I174

At least two ordinary members must be appointed from the staff of the Board.

I25

No member of the Determinations Panel established by the Regulator under section 9, or member of the staff of the Regulator, is eligible for appointment as a member of the Board.

I26

Any power to appoint ordinary members must be exercised so as to secure that a majority of the members of the Board are non-executive members.

I27

In this Part—

a

references to executive members of the Board are to—

i

the Chief Executive, and

ii

the ordinary members appointed from the staff of the Board, and

b

references to non-executive members of the Board are to members who are not executive members.

I3I22C1C2I23I25C3I27I28109C1C2C3Further provision about the Board

Schedule 5 makes further provision about the Board, including provision as to—

  • the appointment of members,

  • the terms of appointment, tenure and remuneration of members,

  • the appointment of the Chief Executive and other staff,

  • the proceedings of the Board,

  • its accounts, and

  • the status and liability of the Board, its members and staff.

General provision about functions

110C1C2C3Board’s functions

1

The Board must hold, manage and apply, in accordance with this Part and any provision in force in Northern Ireland corresponding to it—

I18a

a fund to be known as the Pension Protection Fund, and

I24b

a fund to be known as the Fraud Compensation Fund.

I262

Sections 175 and 189 make provision for contributions to those funds to be levied by the Board.

I43

The Board also has such other functions as are conferred on it by, or by virtue of, this or any other enactment.

I5111C1C2C3Supplementary powers

The Board may do anything which—

a

is calculated to facilitate the exercise of its functions, or

b

is incidental or conducive to their exercise.

Non-executive functions

112C1C2Non-executive functions

I61

The functions listed in subsection (4) (in this Part referred to as “the non-executive functions”) are functions of the Board.

I62

The Board must establish a committee to discharge the non-executive functions on its behalf.

I63

Only non-executive members of the Board may be members of that committee.

4

The non-executive functions are—

I8a

the duty to keep under review the question whether the Board’s internal financial controls secure the proper conduct of its financial affairs;

I6b

the duty to determine under sub-paragraph (5)(a) of paragraph 12 of Schedule 5, subject to the approval of the Secretary of State, the terms and conditions as to remuneration of any Chief Executive appointed under sub-paragraph (4) of that paragraph;

I6c

the duty to determine under paragraph 13(3)(a) of that Schedule, subject to the approval of the Secretary of State, the terms and conditions as to remuneration of any member of the staff who is also to be an executive member of the Board;

I6d

the duty to determine under paragraph 13(3)(b) of that Schedule, the terms and conditions as to remuneration of any member of the staff of a description prescribed for the purposes of that provision.

I195

The committee established under this section must prepare a report on the discharge of the non-executive functions for inclusion in the Board’s annual report to the Secretary of State under section 119.

I196

The committee’s report must relate to the same period as that covered by the Board’s report.

I87

The members of any sub-committee of the committee (established by virtue of paragraph 15(2) of Schedule 5)—

a

may include persons who are not members of the committee, but

b

must not include persons who are executive members or other staff of the Board.

I88

The committee may authorise any of its sub-committees to discharge on its behalf—

a

any of the non-executive functions;

b

the duty to prepare a report under subsection (5).

Financial matters

I20C1C2113C2C1Investment of funds

1

The Board may invest for the purposes of the prudent management of its financial affairs.

2

When exercising the power conferred by subsection (1) in relation to the Pension Protection Fund, the Board must have regard to—

a

the interests of persons who are or may become entitled to compensation under the pension compensation provisions (see section 162) or any corresponding provisions in force in Northern Ireland, and

b

the effect of the exercise of the power on the rate of any levy which may be imposed under section 174 or 175 or any corresponding provision in force in Northern Ireland and the interests which persons have in the rate of any such levy.

3

When exercising the power conferred by subsection (1) in relation to the Fraud Compensation Fund, the Board must have regard to—

a

the interests of members of occupational pension schemes in relation to which section 189(1), or any corresponding provision in force in Northern Ireland, applies, and

b

the effect of the exercise of the power on the level of any levy which may be imposed under section 189 or any corresponding provision in force in Northern Ireland and the interests which persons have in the rate of any such levy.

4

For the purposes of subsection (1) there must be at least two fund managers.

5

For this purpose “fund manager” means an individual who or firm which is appointed by the Board to manage the fund maintained under section 173 (the Pension Protection Fund).

6

The Board must not appoint an individual or firm as a fund manager unless it is satisfied—

a

in the case of an individual, that the individual has the appropriate knowledge and experience for managing the investments of the Pension Protection Fund, or

b

in the case of a firm, that arrangements are in place to secure that any individual who will exercise functions which the firm has as fund manager will, at the time he exercises those functions, have the appropriate knowledge and experience for managing the investments of that Fund.

114C2C1Investment principles

1

The Board must secure—

I16a

that a statement of investment principles is prepared and maintained, and

I15b

that the statement is reviewed at such intervals, and on such occasions, as may be prescribed and, if necessary, revised.

I162

In this section “statement of investment principles” means a written statement of the investment principles governing determinations about investments made by or on behalf of the Board.

I153

Before preparing or revising a statement of investment principles, the Board must comply with any prescribed requirements.

I154

A statement of investment principles must be in the prescribed form and cover, amongst other things, the prescribed matters.

Annotations:
Commencement Information
I16

S. 114(1)(a)(2) in force at 6.4.2005 by S.I. 2005/275, art. 2(7), Sch. Pt. 7

I15

S. 114(1)(b)(3)(4) in force for the purpose only of conferring power to make regulations, orders or rules, as the case may be, 10.2.2005; and for all other purposes at 6.4.2005 in so far as not already in force by S.I. 2005/275, art. 2(3), Sch. Pt. 3

115C2C1Borrowing

I111

The Board may—

a

borrow from a deposit-taker such sums as it may from time to time require for exercising any of its functions;

b

give security for any money borrowed by it.

I112

The Board may not borrow F4under this section if the effect would be—

a

to take the aggregate amount outstanding in respect of the principal of sums borrowed by it F5under this section over its borrowing limit, or

b

to increase the amount by which the aggregate amount so outstanding exceeds that limit.

I10I123

In this section—

  • “borrowing limit” means such limit as the Secretary of State may specify by order;

  • “deposit-taker” means—

    1. a

      a person who has permission under F1Part 4A of the Financial Services and Markets Act 2000 (c. 8) to accept deposits, F2...

    2. b

      F2...

I114

The definition of “deposit-taker” in subsection (3) must be read with—

a

section 22 of the Financial Services and Markets Act 2000,

b

any relevant order under that section, and

c

Schedule 2 to that Act.

115AF3Loans made by the Secretary of State

1

The Secretary of State may lend money to the Board for the purposes of the exercise of the Board’s functions under Chapter 4 of this Part and any corresponding provision in force in Northern Ireland.

2

A loan under this section may be made on such terms (including as to repayment and interest) as the Secretary of State may determine.

I7116C2C1Grants

The Secretary of State may pay the Board out of money provided by Parliament such sums as he may determine towards any of its expenses, other than expenditure which by virtue of section 173(3) or 188(3) is payable out of—

a

the Pension Protection Fund, or

b

the Fraud Compensation Fund.

117C2C1Administration levy

I131

Regulations may provide for the imposition of a levy (“administration levy”) in respect of eligible schemes (see section 126) for the purpose of meeting—

a

expenditure of the Secretary of State relating to the establishment of the Board;

b

any expenditure of the Secretary of State under section 116.

2

An administration levy is payable to the Secretary of State by or on behalf of—

I14a

the trustees or managers of an eligible scheme, or

b

any other prescribed person.

I133

An administration levy is payable at the prescribed rate and at prescribed times.

I94

Before prescribing a rate under subsection (3), the Secretary of State must consult the Board.

I145

An amount payable by a person on account of an administration levy is a debt due from him to the Secretary of State.

I146

An amount so payable is recoverable by the Secretary of State or, if he so determines, by the Regulator on his behalf.

7

Without prejudice to the generality of subsections (1), (5) and (6), regulations under this section may include provision relating to—

I13a

the collection and recovery of amounts payable by way of levy under this section;

I29b

the circumstances in which any such amount may be waived.

118C2C1Fees

1

Regulations may authorise the Board—

a

to charge prescribed fees;

b

to charge fees sufficient to meet prescribed costs.

2

Regulations under subsection (1) may prescribe, or authorise the Board to determine, the time at which any fee is due.

3

Any fee which is owed to the Board by virtue of regulations under this section may be recovered as a debt due to the Board.

Annual reports

I21C1C2119C1C2Annual reports to Secretary of State

1

The Board must prepare a report for each financial year.

2

Each report—

a

must deal with the activities of the Board in the financial year for which it is prepared, including the matters mentioned in subsection (3), and

b

must include the report prepared under subsection (5) of section 112 by the committee established under that section.

3

The matters referred to in subsection (2)(a) are—

a

the strategic direction of the Board and the manner in which it has been kept under review;

b

the steps taken to scrutinise the performance of the Chief Executive in securing that the Board’s functions are exercised efficiently and effectively;

c

the Board’s objectives and targets and the steps taken to monitor the extent to which they are being met.

4

The Board must send each report to the Secretary of State as soon as practicable after the end of the financial year for which it is prepared.

5

The Secretary of State must lay before each House of Parliament a copy of every report received by him under this section.

6

In this section “financial year” means—

a

the period beginning with the date on which the Board is established and ending with the next following 31st March, and

b

each successive period of 12 months.