Modifications etc. (not altering text)
C1Pt. 1 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 Pt. 1 (as amended (17.7.2008) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 (S.I. 2008/1903), regs. 1, 5(2), 13)
(1)For the purposes of section 38 the material detriment test is met in relation to an act or failure if the Regulator is of the opinion that the act or failure has detrimentally affected in a material way the likelihood of accrued scheme benefits being received (whether the benefits are to be received as benefits under the scheme or otherwise).
(2)In this section any reference to accrued scheme benefits being received is a reference to benefits the rights to which have accrued by the relevant time being received by, or in respect of, the persons who were members of the scheme before that time.
(3)In this section “the relevant time” means—
(a)in the case of an act, the time of the act, or
(b)in the case of a failure—
(i)the time when the failure occurred, or
(ii)where the failure continued for a period of time, the time which the Regulator determines and which falls within that period;
and, in the case of acts or failures to act forming part of a series, any reference in this subsection to an act or failure is a reference to the last of the acts or failures in that series.
(4)In deciding for the purposes of section 38 whether the material detriment test is met in relation to an act or failure, the Regulator must have regard to such matters as it considers relevant, including (where relevant)—
(a)the value of the assets or liabilities of the scheme or of any relevant transferee scheme,
(b)the effect of the act or failure on the value of those assets or liabilities,
(c)the scheme obligations of any person,
(d)the effect of the act or failure on any of those obligations (including whether the act or failure causes the country or territory in which any of those obligations would fall to be enforced to be different),
(e)the extent to which any person is likely to be able to discharge any scheme obligation in any circumstances (including in the event of insolvency or bankruptcy),
(f)the extent to which the act or failure has affected, or might affect, the extent to which any person is likely to be able to do as mentioned in paragraph (e), and
(g)such other matters as may be prescribed.
(5)In subsection (4) “scheme obligation” means a liability or other obligation (including one that is contingent or otherwise might fall due) to make a payment, or transfer an asset, to—
(a)the scheme, or
(b)any relevant transferee scheme in respect of any persons who were members of the scheme before the relevant time.
(6)In this section—
(a)“relevant transferee scheme” means any work-based pension scheme to which any accrued rights to benefits under the scheme are transferred;
(b)any reference to the assets or liabilities of any relevant transferee scheme is a reference to those assets or liabilities so far as relating to persons who were members of the scheme before the relevant time.
(7)For the purposes of subsection (6)(a) the reference to the transfer of accrued rights of members of a pension scheme to another pension scheme includes a reference to the extinguishing of those accrued rights in consequence of the obligation to make a payment, or transfer an asset, to that other scheme.
(8)In this section—
(a)“work-based pension scheme” has the meaning given by section 5(3);
(b)any reference to rights which have accrued is to be read in accordance with section 67A(6) and (7) of the Pensions Act 1995 (reading any reference in those subsections to a subsisting right as a reference to a right which has accrued).
(9)In deciding for the purposes of this section whether an act or failure has detrimentally affected in a material way the likelihood of accrued scheme benefits being received, the following provisions of this Act are to be disregarded—
(a)Chapter 3 of Part 2 (the Board of the Pension Protection Fund: pension protection), and
(b)section 286 (the financial assistance scheme for members of certain pension schemes).
(10)Regulations may amend any provision of subsections (4) to (8).]
Textual Amendments
F1Ss. 38A, 38B inserted (for specified purposes and with effect in accordance with Sch. 9 para. 15(1) of the amending Act and 29.6.2009 so far as not already in force) by Pensions Act 2008 (c. 30), s. 149(2)(3), Sch. 9 para. 2(2); S.I. 2009/1566, art. 2(1)(b)(ii)