Pension Schemes Act 2021

Authorisation

7 Authorisation of collective money purchase schemes

(1) A person may not operate a collective money purchase scheme unless the scheme is authorised.

(2) Section 10 of the Pensions Act 1995 (civil penalties) applies to a person who breaches subsection (1).

(3) If the Pensions Regulator becomes aware that a collective money purchase scheme is being operated without authorisation, it must notify the trustees of the scheme that the scheme is not authorised.

(4) The notification must—

(a) explain that the notification is a triggering event (see section 31), and

(b) include an explanation of the trustees’ duties under sections 31 to 45.

(5) For the purposes of this section a person “operates” a collective money purchase scheme if, in relation to the scheme, the person accepts—

(a) money paid by a member (or prospective member), or

(b) money paid by an employer (or prospective employer) in respect of contributions, fees, charges or anything else except—

(i) the costs of setting up the scheme, or

(ii) costs relating to obtaining authorisation for the scheme.

8 Application for authorisation

(1) The trustees of a collective money purchase scheme may apply to the Pensions Regulator for authorisation.

(2) An application must be made in the manner and form specified by the Pensions Regulator.

(3) An application must include—

(a) the scheme’s viability report and viability certificate (see section 13), and

(b) the scheme’s continuity strategy (see section 17).

(4) The Secretary of State may by regulations—

(a) specify other information that must be included in an application;

(b) require a fee to be paid to the Pensions Regulator in respect of an application.

(5) In considering an application, the Pensions Regulator may take into account any matters it considers appropriate, including—

(a) additional information provided by the applicant, and

(b) subsequent changes to the application or to any information provided by the applicant.

(6) Regulations under subsection (4) are subject to negative resolution procedure.

9 Decision on application

(1) Where an application is made for authorisation of a collective money purchase scheme under section 8, the Pensions Regulator must decide whether it is satisfied that the scheme meets the authorisation criteria.

(2) The Pensions Regulator must make that decision within the period of six months beginning with the day on which the Pensions Regulator received the application.

(3) The authorisation criteria are—

(a) that the persons involved in the scheme are fit and proper persons (see section 11),

(b) that the design of the scheme is sound (see section 12),

(c) that the scheme is financially sustainable (see section 14),

(d) that the scheme has adequate systems and processes for communicating with members and others (see section 15),

(e) that the systems and processes used in running the scheme are sufficient to ensure that it is run effectively (see section 16), and

(f) that the scheme has an adequate continuity strategy (see section 17).

(4) If the Pensions Regulator is satisfied that the collective money purchase scheme meets the authorisation criteria, it must—

(a) grant the authorisation,

(b) notify the applicant of its decision, and

(c) add the scheme to its list of authorised collective money purchase schemes (see section 26).

(5) If the Pensions Regulator is not satisfied that the collective money purchase scheme meets the authorisation criteria, it must—

(a) refuse to grant the authorisation, and

(b) notify the applicant of its decision.

(6) A notification under subsection (5)(b) must also include—

(a) the reasons for the decision, and

(b) details of the right of referral to the First-tier Tribunal or Upper Tribunal (see section 10).

10 Reference to Tribunal of refusal to grant authorisation

(1) If the Pensions Regulator refuses to grant authorisation to a collective money purchase scheme, the decision may be referred to the Tribunal by—

(a) the trustees, or

(b) any other person who appears to the Tribunal to be directly affected by the decision.

(2) In this section “the Tribunal”, in relation to a reference under subsection (1), means—

(a) the First-tier Tribunal, in any case where it is determined by or under Tribunal Procedure Rules that the First-tier Tribunal is to hear the reference;

(b) the Upper Tribunal, in any other case.