The Coal Industry (Protected Persons) Pensions Regulations 1994

Accrued pension rights

5.—(1) Subject to paragraphs (2) and (3), an employer shall at all times ensure that, in respect of each protected person who is or has been in his employment, the assets of that employer’s fund of the relevant scheme in respect of the accrued pension rights of that person which are a liability of that fund are such that, in the event of the winding up of that employer’s fund, there would be available to provide accrued pension rights for such protected person a sum equal to or exceeding the liability of that employer’s fund in respect of those accrued pension rights.

(2) It shall not be a breach of the employer’s duty under paragraph

(1) if the assets of the relevant scheme mentioned in that paragraph at any time do not equal or exceed that liability where—

(a) recommendations as to rates of contribution have been made by a Fellow of the Institute of Actuaries or of the Faculty of Actuaries in:—

(i) a report as at the date of the establishment of the scheme or as at the date of commencement of the employer’s participation in the scheme (if later), and

(ii) a report on a valuation of the scheme as at a date within the previous three and one half years or such lesser period (if any) as may be prescribed under sections 113 and 114 of the Pension Schemes Act 1993 (disclosure of information about schemes to members);

and

(b) the employer has paid all contributions payable by him as recommended in such reports at the times so recommended and has taken all reasonable steps to secure that all contributions payable by the protected person which are required to be paid by him under the scheme have been paid and the employer has taken and continues to take such steps as are reasonable in all the circumstances (having regard to good actuarial practice) to make good any deficiency in respect of the accrued pension rights of that protected person (calculated on the same basis as that applicable under paragraph (1)) stated, whether expressly or by implication, in those reports.

(3) In the event of the total or partial winding up of a relevant scheme, each employer who will, as a result of that total or partial winding up, cease to participate in that scheme, shall cause a valuation to be made by a Fellow of the Institute of Actuaries or of the Faculty of Actuaries of the assets and liabilities of that scheme in respect of the protected persons who are or were in his employment and if the accrued pension rights of any protected person in that scheme shall not be transferred to a relevant scheme and if the valuation required under this paragraph shall indicate that the assets held to provide the accrued pension rights are insufficient to meet the liabilities of the first mentioned scheme in respect of those accrued pension rights, the employer shall forthwith apply a sum equal to the amount of the deficit in respect of each protected person to the purchase of an annuity for the benefit of such person.

(4) If a protected person shall transfer or be transferred to a relevant scheme, a transfer payment shall at his request or with his consent be made in respect of his accrued pension rights to that scheme, and if such payment is made the employer providing that scheme shall procure that the rules of that scheme will secure accrued pension rights which, on the basis of good actuarial practice, are at least equivalent in value to his accrued pension rights so transferred from the former scheme.