(This note is not part of the Regulations)
Section 144 of the Pension Schemes Act 1993 (which re-enacts provisions previously contained in section 58B of the Social Security Pensions Act 1975) provides for deficiencies in the assets of an occupational pension scheme on a winding up to be a debt due from the employer to the trustees of the scheme. Regulations made under section 58B, namely, the Occupational Pension Schemes (Deficiency on Winding Up etc.) Regulations 1992 (“the 1992 Regulations”), made provision for calculating scheme liabilities and assets and for the modification of section 58B in certain circumstances.
These regulations replace, in amended form, the 1992 Regulations.
Regulation 2 makes new provision in relation to the calculation of scheme assets and liabilities. It provides for such calculations to be made in accordance with the valuation method set out in Guidance Note GN19 published by the Institute of Actuaries and the Faculty of Actuaries.
Regulations 3 and 4 modify section 144.
Regulation 3 re-enacts provision previously contained in the 1992 Regulations concerning the allocation of a debt under section 144 between a number of employers. It also adds new provision in relation to the treatment, in certain circumstances, of each section of a scheme as a separate scheme.
Regulation 4 re-enacts provision previously contained in the 1992 Regulations in relation to schemes in respect of which there are no members in pensionable service. It also makes new provision in relation to certain circumstances where alternative arrangements are made for the payment of benefits.
The report of the Occupational Pensions Board on proposals referred to them, together with a statement by the Secretary of State showing the extent to which these Regulations give effect to their recommendations, is contained in Command Paper Cm. 2531 published by Her Majesty’s Stationery Office. To the extent that these Regulations replace the 1992 Regulations, the Board agreed that proposals need not be referred to them.
These Regulations do not impose any new costs on businesses.