The Occupational Pension Schemes (Administration and Audited Accounts) (Amendment) Regulations 2005

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Occupational Pension Schemes (Scheme Administration) Regulations 1996 (S.I. 1996/1715) (“the Scheme Administration Regulations”) and the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 (S.I. 1996/1975) (“the Audited Accounts Regulations”). These amendments implement the European Directive on the activities and supervision of Institutions for Occupational Retirement Provision (Directive 2003/41/EC) (“the Directive”), and are consequential on the coming into force of the Finance Act 2004 (c. 12), and the Pensions Act 2004 (c. 35).

Regulation 2 amends the Audited Accounts Regulations. In particular it amends the exemptions contained in those regulations from the requirement to maintain audited accounts and introduces a “materiality” requirement in relation to the occasions where the auditor of a scheme is required to qualify a scheme’s accounts. It also further amends the Audited Accounts Regulations by removing an obsolete reference.

Regulation 3 amends the Scheme Administration Regulations to come into force in the case of a new scheme on 22nd September 2005, and in the case of an existing scheme on the first day of the scheme year that falls on or after 22nd September 2005. In particular it adds a number of new definitions, amends the exemptions of schemes that are not required to appoint an auditor, and makes other changes that are consequential on these amendments.

Regulation 4 amends the Scheme Administration Regulations to come into force on 6th April 2006. In particular it makes further amendments to the list of schemes which are exempt from the requirement to appoint professional advisers, deletes an obsolete regulation and makes further amendments to the requirements to notify the Authority of the late payment of a contribution.

Regulation 5 provides for the revocation of regulations following the revocation of the enabling power that supported them.

These Regulations transpose the Directive. Article 10 requires that every relevant institution in a member state must provide annual accounts and annual reports in respect of every pension scheme it operates giving a true and fair view of the institution’s assets, liabilities and financial position. It also provides that the accounts shall be approved by an authorised person. Article 5 permits an exemption from these requirements in relation to small pension schemes (those which have fewer than 100 members) and in relation to certain statutory schemes. Regulation 2(1) to (4) and regulation 3 of these Regulations amend the Audited Accounts and Scheme Administration Regulations to delete exemptions which are not within the scope of Article 5.

The transposition of Article 10 of the Directive is detailed in the Transposition Table that accompanied the Act. A copy of that Table has been placed in the libraries of both Houses of Parliament. Copies may be obtained from the Department for Work and Pensions, Better Regulation Unit, 4th floor, Adelphi, 1-11 John Adam Street, London WC2N 6HT.

These Regulations have only a negligible impact on business. Publication of a full Regulatory Impact assessment is not necessary for such legislation.