[F1PART 7U.K.Valuation of assets and liabilities
Textual Amendments
Application of this PartU.K.
21.—(1) This Part applies to a qualifying pension scheme where—
(a)the qualifying pension scheme has not been fully wound up;
(b)the liabilities of that scheme to or in respect of all members and former members have not been discharged; and
(c)the liabilities of the scheme to or in respect of all members and former members of the scheme have not been, or in the opinion of the scheme manager are unlikely to be, discharged by way of—
(i)binding commitments to purchase annuities;
(ii)the scheme manager having given approval to the trustees of the scheme to purchase annuities under section 286A;
(iii)a transfer of, or transfer payment in respect of, members’ rights;
(iv)such other method of discharging any liability of the scheme for which the scheme manager has given approval under section 135(4C); or
(v)state scheme premiums being paid pursuant to section 55 of the 1993 Act or state scheme rights having been restored under regulation 49 of the Occupational Pension Schemes (Contracting-out) Regulations 1996 or regulation 49 of the Occupational Pension Schemes (Contracting-out) Regulations (Northern Ireland) 1996.
(2) This Part applies to a qualifying member of a qualifying pension scheme where—
(a)the liabilities of that scheme to and in respect of that member have not been, or, in the opinion of the scheme manager, are unlikely to be, fully discharged as a result of any of the methods listed in paragraph (1)(c); or
(b)the liabilities of the scheme to and in respect of that member have not been, or, in the opinion of the scheme manager, are unlikely to be, partially discharged by way of—
(i)a binding commitment to purchase an annuity; or
(ii)the scheme manager having given approval to the trustees of the scheme to purchase an annuity under section 286A.
(3) Notwithstanding paragraph (2)(b), this Part applies to a qualifying member of a qualifying pension scheme where the liabilities of the scheme for and in respect of that member have been partially discharged by one of the methods listed in paragraph (2)(b) if the only liabilities so discharged relate to benefits derived from the payment of voluntary contributions.
(4) In this regulation, no account shall be taken of any money purchase benefits when determining the liabilities of the scheme.
Scheme manager to obtain a valuation of assets and liabilitiesU.K.
22.—(1) Where this Part applies, the scheme manager shall, when it considers it appropriate to do so, instruct the trustees or managers of a qualifying pension scheme to obtain for the scheme manager a valuation of the assets and liabilities of the pension scheme as at the calculation date.
(2) Subject to paragraph (3), where the trustees or managers are instructed to obtain a valuation under paragraph (1), they shall obtain the valuation and it shall include a valuation of the asset share—
(a)of, or in respect of, each qualifying member to whom this Part applies; and
(b)of any other person who is not—
(i)a qualifying member;
(ii)a survivor of a qualifying member; or
(iii)a surviving dependant of a qualifying member,
to whom the scheme has a liability to provide a pension or other benefit which is not a money purchase benefit.
(3) Where the scheme manager is of the opinion that it is not appropriate that a valuation in accordance with paragraph (2)(a) or (b) is obtained in relation to a particular person or category of persons, the valuation shall not include a valuation of that asset share, or, as the case may be, those asset shares.
(4) Where the scheme manager is of the opinion that it is not appropriate to obtain a valuation of some or all of the liabilities of the pension scheme in relation to a particular person or category of persons, the valuation shall not include a valuation of those liabilities.
(5) The valuations referred to in paragraphs (1) and (2) must be—
(a)prepared and signed by a person (“the valuation actuary”)—
(i)who is—
(aa)a Fellow of the Faculty of Actuaries;
(bb)a Fellow of the Institute of Actuaries; or
(cc)a person approved by the Secretary of State; and
(ii)approved by the scheme manager for the purposes of carrying out a valuation under paragraph (1);
(b)prepared in accordance with guidance published from time to time by the Secretary of State;
(c)presented in such manner and form as set out in guidance published from time to time by the scheme manager; and
(d)given to the scheme manager upon completion, together with such information as set out in guidance published from time to time by the Secretary of State.
(6) The scheme manager may direct the trustees or managers whom to appoint as valuation actuary.
(7) When valuing the assets of the scheme, the valuation actuary shall disregard—
(a)any assets representing the value of any rights in respect of money purchase benefits under the scheme rules;
(b)any assets held by or vested in the trustees or managers of the scheme which are to be used prior to transfer of the scheme’s assets in accordance with section 161 (as modified by Schedule 1 to these Regulations) to discharge liabilities in respect of voluntary contributions;
(c)any assets, the value of which is required to discharge the scheme’s pension liabilities to or in respect of a qualifying member to whom this Part does not apply;
(d)any debt due, or treated as due, to the trustees or managers which, in the opinion of the scheme manager, is unlikely to be recovered without disproportionate cost or within a reasonable time;
(e)an amount in respect of the value of any pre-6th April 1997 contract of insurance if—
(i)the trustees or managers have taken all reasonable steps to obtain information concerning that contract of insurance (whether by searching the records of the scheme or otherwise); and
(ii)the information that they provide concerning that contract of insurance is insufficient, in the opinion of the valuation actuary, to conduct a valuation;
(f)any payments made to the trustees or managers of the qualifying pension scheme under regulation 14B (payments in relation to administration and other costs); and
(g)any amount which is required to discharge expenses which have been, or will be reasonably incurred by the trustees or managers of the scheme.
(8) In paragraph (7)(e), “pre-6th April 1997 contract of insurance” means a contract of insurance—
(a)which is a relevant contract of insurance within the meaning given by section 161(8) or Article 145(8);
(b)which was taken out before 6th April 1997; and
(c)of which the trustees or managers are, or should reasonably be, aware.
(9) Where the scheme manager is of the opinion that it is not appropriate for an asset to be disregarded under paragraph (7)(c), the valuation actuary shall not disregard it.
Valuation of assetsU.K.
23.—(1) This regulation is subject to regulation 24.
(2) Subject to paragraphs (3) to (10), for the purposes of the valuation of the assets of a qualifying pension scheme the valuation actuary shall adopt the given value of the assets of the scheme stated in the relevant accounts as the value of those assets as at the calculation date.
(3) The value of a contract of insurance shall be—
(a)where the contract of insurance is a relevant contract of insurance within the meaning given by section 161(8) or Article 145(8), the value of the liability secured; or
(b)subject to paragraph (4), where the contract of insurance is not a relevant contract of insurance within that meaning, the surrender value of the contract of insurance.
(4) Where a contract of insurance is not a relevant contract of insurance within the meaning given by section 161(8) or Article 145(8) and it appears to the valuation actuary that the surrender value of the contract of insurance does not accurately reflect the actual value at the calculation date, the valuation actuary shall adopt such a value as appears to that actuary to be appropriate.
(5) Subject to paragraph (6), where—
(a)a contribution notice has been issued under section 38 or 47 or Article 34 or 43;
(b)a financial support direction has been issued under section 43 or Article 39; or
(c)a restoration order has been made under section 52 or Article 48,
in relation to the qualifying pension scheme, the valuation actuary shall adopt the amount due to the scheme given in the notice, direction or order as the value of the asset.
(6) Where—
(a)an amount is due under a notice, direction or order referred to in paragraph (5); and
(b)the valuation actuary is of the opinion that the amount due in relation to the notice, direction or order will not be recouped in full by the scheme,
the valuation actuary shall adjust the value of the asset referred to in paragraph (5) to the value which, in the opinion of the valuation actuary is likely to be recouped by the trustees or managers of the qualifying pension scheme.
(7) Where the valuation actuary is of the opinion that any debt due, or treated as due, will be recouped in the future, the proportion of the debt that the valuation actuary expects to be recouped shall be treated as an asset of the scheme.
(8) Where—
(a)the valuation actuary has been given notice; or
(b)(i)the valuation actuary is of the opinion; and
(ii)the scheme manager agrees with the valuation actuary’s opinion,
that the value of any asset set out in the relevant accounts, that is not excluded from the valuation, is substantially different at the calculation date from that set out in the relevant accounts, the valuation actuary shall adjust the value of the asset to the market value of the asset at the calculation date.
(9) Where the valuation actuary has been given notice, or is of the opinion, that there exists an asset of the scheme which is not listed in the relevant accounts and which is not excluded from the valuation, the valuation actuary shall adopt such a value for the asset as appears to that actuary to be appropriate.
(10) Where the relevant accounts are not readily available and the scheme manager is of the opinion that it is not necessary for the purposes of this Part to require their preparation, the valuation actuary shall determine the value of the assets as at the calculation date on the basis of such information as the scheme manager considers appropriate.
(11) When acting under this regulation, the valuation actuary shall act in accordance with guidance issued by the Secretary of State.
Power of the scheme manager to determine the value of an assetU.K.
24.—(1) Where the scheme manager is of the opinion that any asset in the scheme has a particular value, the scheme manager may determine the value of that asset of the scheme.
(2) Where the scheme manager makes a determination in accordance with paragraph (1), the valuation actuary shall adopt the value determined by the scheme manager as the value of the asset as at the calculation date.
Approval of valuationU.K.
25.—(1) Where the scheme manager is satisfied that the valuation has been prepared in accordance with this Part, it must—
(a)approve the valuation; and
(b)notify the trustees or managers of the qualifying pension scheme of the approval.
(2) Where the scheme manager is not so satisfied, it must instruct the trustees or managers of the qualifying pension scheme to obtain another valuation under this Part.
(3) Where the scheme manager gives an instruction in accordance with paragraph (2), the trustees or managers of the qualifying pension scheme shall obtain another valuation and it shall be calculated as at the calculation date as determined in relation to the previous valuation.
Binding valuationU.K.
26.—(1) A valuation obtained under regulation 22 is not binding until—
(a)it is approved under regulation 25;
(b)the period within which an application for a review of the approval of the valuation may be made under regulation 5 of the Financial Assistance Scheme (Internal Review) Regulations 2005 (time for making an application for a review of a reviewable determination) has expired; and
(c)where an application referred to in sub-paragraph (b) is made—
(i)the internal review;
(ii)any appeal to the Ombudsman in respect of the approval; and
(iii)any appeal against any determinations or directions given or made by the Ombudsman in respect of such an appeal,
has been finally disposed of.
(2) Where a valuation becomes binding under this regulation the scheme manager must as soon as reasonably practicable give a notice to that effect together with a copy of the binding valuation to—
(a)the trustees or managers of the qualifying pension scheme; and
(b)the Regulator.
(3) The notice given by the scheme manager under paragraph (2) shall contain—
(a)a statement that it is a notice under regulation 26 of the Financial Assistance Scheme Regulations 2005;
(b)the date on which the notice is given;
(c)the name, address and pension scheme registration number of the qualifying pension scheme in respect of which the notice is given;
(d)a statement that the valuation under Part 7 has become binding;
(e)the date on which the notice was given;
(f)the name of the employer in relation to the qualifying pension scheme in respect of which the notice is given; and
(g)whether the notice given by the scheme manager contains any restricted information and, if so, the nature of the restriction.]