2005 No. 590

PENSIONS

The Pension Protection Fund (Entry Rules) Regulations 2005

Made10th March 2005

Laid before Parliament10th March 2005

Coming into force as provided for in regulation 1(2)

The Secretary of State for Work and Pensions, in exercise of the powers conferred upon him by sections 120(3) and (4), 121(5), 122(3), (5) and (8), 123(5), 126(1)(b), (3) and (5), 129(1)(b), (3) and (8), 130(5) and (8), 133(3), 134(3)(a)(iii), 135(4), 138(10)(b) and (12), 139(6), 146(1) and (5), 147(1)(a) and (5), 148(8), 150(5) and (6)(a) to (c), 151(4), (6), (8) and (9)(b), 315(2), (4) and (5) and 318(1) and (4)(a) of the Pensions Act 2004 M1, and of all other powers enabling him in that behalf, by this instrument, which contains regulations made before the end of the period of six months beginning with the coming into force of the provisions of the enactment by virtue of which they are made M2, hereby makes the following Regulations:C1

Annotations:

Modifications etc. (not altering text)

Instrument applied (with modifications) (21.2.2009) by The Banking Act 2009 (Parts 2 and 3 Consequential Amendments) Order 2009 (S.I. 2009/317), arts. 1, 3, Sch.

Marginal Citations

2004 c. 35. Section 318(1) is cited because of the meaning there given to “prescribed” and “regulations”. Sections 122(3), 126(1), 129(1)(b), 134(3), 146(1) and 147(1)(a) are modified in their application to multi-employer schemes by the Pension Protection Fund (Multi-employer Schemes) (Modification) Regulations 2005 (S.I. 2005/441) which also modifies other provisions of Part 2 of the Pensions Act 2004. Sections 129(1), 138(12), 146(1), 147(1)(a) and 151(8) are also modified in their application to partially guaranteed schemes by the Pension Protection Fund (Partially Guaranteed Schemes) (Modification) Regulations 2005 (S.I. 2005/277) which also modifies other provisions of Part 2 of the Pensions Act 2004.

See section 317 of the Pensions Act 2004 which provides that the Secretary of State must consult such persons as he considers appropriate before making regulations by virtue of the provisions of that Act (other than Part 8). This duty does not apply where regulations are made before the end of six months beginning with the coming into force of the provisions of that Act by virtue of which the regulations are made.

Citation, commencement and interpretationI11

1

These Regulations may be cited as the Pension Protection Fund (Entry Rules) Regulations 2005.

2

ii

condition B is that—

aa

such a debt became due;

bb

a legally enforceable agreement has been entered into the effect of which is to reduce the amount which may be recovered in respect of the debt; and

cc

the reduced amount has been paid in full before the assessment date;

iii

condition C is that such a debt became due but before the assessment date it is excluded from the value of the assets of the scheme or section because it is unlikely to be recovered without disproportionate costs or within a reasonable time;

iv

condition D is that at the time at which any such person ceased to be the employer of persons in the description of employment to which the scheme or section relates the value of the assets of the scheme or section was such that no such debt was treated as becoming due;

b

in any other case, includes any person who has ceased to be the employer of persons in the description of employment to which the scheme or section relates unless condition A, B, C or D is satisfied where—

i

condition A is that a debt under section 75 of the 1995 Act became due from that employer and the full amount of the debt has been paid;

ii

condition B is that—

aa

such a debt became due;

bb

a legally enforceable agreement has been entered into the effect of which is to reduce the amount which may be recovered in respect of the debt; and

cc

the reduced amount has been paid in full;

iii

condition C is that such a debt became due but it is excluded from the value of the assets of the scheme or section because it is unlikely to be recovered without disproportionate costs or within a reasonable time;

iv

Schemes which are not eligible schemesI22

1

For the purposes of section 126(1)(b) of the Act (eligible schemes), an occupational pension scheme is not an eligible scheme if it is—

a

a public service pension scheme under the provisions of which there is no requirement for assets related to the intended rate or amount of benefit under the scheme to be set aside in advance (disregarding requirements relating to additional voluntary contributions);

b

a scheme which is made under section 7 of the Superannuation Act 1972 M10 (superannuation of persons employed in local government service etc) which provides pensions to persons employed in local government service;

c

a scheme which is made under section 2 of the Parliamentary and Other Pensions Act 1987 M11 (power to provide for pensions for Members of the House of Commons etc);

d

a scheme in respect of which a relevant public authority has given a guarantee or made any other arrangements for the purposes of securing that the assets of the scheme are sufficient to meet its liabilities;

e

F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

f

a scheme which provides relevant benefits within the meaning of section 612(1) of the 1988 Act (interpretation) F2but which is neither a F54tax registered scheme nor a relevant statutory scheme within the meaning of section 611A of that Act M12 (definition of relevant statutory scheme);

F59fa

a tax registered scheme which, immediately before 6th April 2006, was a former approved superannuation fund within the meaning of paragraph 1(1)(b) of Schedule 36 to the Finance Act 2004 (deemed registration of existing schemes);

g

a scheme—

i

which has been categorised by the Commissioners of the Board of Inland Revenue for the purposes of its approval as a centralised scheme for non-associated employers;

ii

which is not contracted-out; and

iii

under the provisions of which the only benefits that may be provided on or after retirement (other than money purchase benefits derived from the payment of voluntary contributions by any person) are lump sum benefits which are not calculated by reference to a member's salary;

h

a scheme—

i

the only benefits provided by which (other than money purchase benefits) are death benefits, and

ii

under the provisions of which no member has accrued rights (other than rights to money purchase benefits);

i

a scheme with such a superannuation fund as is mentioned in section 615(6) of F3the 1988 ActM13 (exemption from tax in respect of certain pensions);

j

a scheme which does not have its main place of administration registered in the United Kingdom;

k

a scheme with fewer than two members;

l

a scheme with fewer than twelve members where all the members are trustees of the scheme and either—

F60i

the provisions of the scheme provide that any decision made by the trustees is made by the unanimous agreement of the trustees who are members of the scheme; or

ii

the scheme has a trustee who is independent in relation to the scheme for the purposes of section 23 of the 1995 Act M14 (power to appoint independent trustees) and is registered in the register maintained by the Authority in accordance with regulations made under subsection (4) of that section;

m

a scheme with fewer than twelve members where all the members are directors of a company which is the sole trustee of the scheme and either—

F61i

the provisions of the scheme provide that any decision made by the company in its capacity as trustee is made by the unanimous agreement of the directors of that company who are members of the scheme; or

ii

one of the directors of the company is independent in relation to the scheme for the purposes of section 23 of the 1995 Act and is registered in the register maintained by the Authority in accordance with regulations made under subsection (4) of that section;

n

the Chatsworth Settlement Estate Pension Scheme F55and;

F56o

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

p

a scheme which, on or after the day appointed for the purposes of section 126(2) of the Act M15, does not have an employer in relation to the scheme and which has not been authorised under section 153 of the Act (closed schemes) to continue as a closed scheme.

2

Except as otherwise provided in F4paragraphs (3) and (4) of this regulation, an occupational pension scheme which would be an eligible scheme but for this paragraph is not an eligible scheme where, at any time, the trustees or managers of the scheme enter into a legally enforceable agreement F30... the effect of which is to reduce the amount of any debt due to the scheme F31... under section 75 of the 1995 Act which may be recovered by, or on behalf of, those trustees or managers.

3

Paragraph (2) shall not apply where—

a

before the beginning of an assessment period—

i

the trustees or managers of the scheme enter into a legally enforceable agreement F32... the effect of which is to reduce the amount of the debt due to the scheme F33... under F34section 75 of the 1995 Act which may be recovered by, or on behalf of, those trustees or managers;

ii

the value of the scheme's assets would be sufficient to secure benefits for or in respect of members of the scheme which correspond to the amount of compensation which would be payable in relation to the scheme in accordance with the pension compensation provisions if the Board were to assume responsibility for the scheme in accordance with Chapter 3 of Part 2 of the Act (pension protection);

iii

an individual appointed to act as the actuary in relation to the scheme (“the actuary”) has provided the Board with a written estimate of the current value of the assets and the protected liabilities of the scheme together with a statement about the effect which the agreement would have on the value of the scheme's assets as recorded in that estimate; and

iv

the Board has determined to validate the estimate and statement provided;

b

before the beginning of an assessment period, the trustees or managers of the scheme enter into a legally enforceable agreementF35..., as part of an arrangement under section 425 of the Companies Act 1985 M16 (power of company to compromise with creditors or members), the effect of which is to reduce the amount of the debt due to the scheme F36... under F37section 75 of the 1995 Act which may be recovered by, or on behalf of, those trustees or managers; or

c

after the beginning of an assessment period, or a further assessment period M17, the Board F39... and has entered into a legally enforceable agreement F40... on behalf of the trustees or managers of the scheme the effect of which is to reduce the amount of the debt due to the scheme F38... under F41section 75 of the 1995 Act which may be recovered by, or on behalf of, those trustees or managers.

F634

Paragraph (2) shall not apply in relation to an eligible scheme where before the beginning of an assessment period in relation to the scheme any of the following is in place—

a

a scheme apportionment arrangement under the Occupational Pension Schemes (Employer Debt) Regulations 2005;

b

a regulated apportionment arrangement under those Regulations;

c

a withdrawal arrangement under those Regulations;

d

an approved withdrawal arrangement under those Regulations.

5

Where the Board has determined to validate or not to validate an estimate and statement provided to it by the actuary under paragraph (3)(a)(iii), it must issue a notice to this effect (“a validation notice”) and must give a copy of that notice to—

a

the trustees or managers of the scheme,

b

the actuary, F42and

F43c

the Regulator.

F43d

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

A notice issued by the Board under paragraph (5) shall be in writing and shall contain the following information—

a

the name or type of the notice issued;

b

the date on which the notice is issued;

c

the date on which the Board received the estimate and statement from the actuary;

d

the Board's determination to validate or not to validate the estimate and statement received from the actuary;

e

a statement of reasons for the Board's determination;

f

the address for communications at which the Board may be contacted in connection with the issue of the notice;

g

whether the issue of the notice by the Board is a reviewable matter and, if so, the time limit for applying for a review of or appeal against the issue of the notice;

h

the date on which the notice issued will become binding; and

i

whether or not the notice issued contains any restricted information and, if so, the nature of the restrictions.

7

The Board's determination to validate or not to validate the estimate and statement provided to it by the actuary under paragraph (3)(a)(iii) above does not take effect—

a

until—

i

the Board has issued a notice under paragraph (5) relating to the determination, and

ii

the period within which the issue of that notice may be reviewed by virtue of Chapter 6 of Part 2 of the Act (reviews, appeals and maladministration) has expired, and

b

if the issue of the notice was so reviewed, until—

i

the review and any reconsideration,

ii

any reference to the PPF Ombudsman in respect of the issue of the notice, and

iii

any appeal against his determination or directions,

has been finally disposed of.

8

In this regulation, “PPF Ombudsman” has the meaning given in section 209 of the Act (the Ombudsman for the Board of the Pension Protection Fund).

F299

In their application to a segregated scheme, paragraphs (2) to (7) shall have effect as if each section of the scheme were a separate scheme.

Schemes which cease to be eligible schemes3

1

Where, after the beginning of an assessment period in relation to an eligible scheme, the scheme ceases to be an eligible scheme in circumstances where—

F57a

the scheme has ceased to be a tax registered scheme; or

b

by reason of the death of a member of the scheme, the scheme becomes a scheme described in regulation 2(1)(k), (l) or (m),

the scheme shall, for the purposes of Part 2 of the Act, be treated as remaining an eligible scheme.

2

Paragraph (1) does not affect the requirement on the Board under section 146(1) of the Act (schemes which become eligible schemes) to refuse to assume responsibility for an eligible scheme if it is satisfied that the scheme was not an eligible scheme throughout the period prescribed in regulation 21.

Notification of insolvency events in respect of employers4

1

The “notification period” in section 120(3) of the Act (duty to notify insolvency events in respect of employers) shall be the period of 14 days beginning on whichever date is the later of—

a

the insolvency date; and

b

the date on which the insolvency practitioner becomes aware of the existence of the scheme.

2

A notice issued by an insolvency practitioner under section 120(2) of the Act shall be in writing and shall contain the following information—

a

the name or type of the notice issued;

b

the date on which the notice is issued;

c

the name, address and pension scheme registration number of the scheme in respect of which the notice is issued;

d

the name of the employer in relation to the scheme in respect of which the notice is issued;

e

the nature of the insolvency event which has occurred and the date of the occurrence of that event;

f

the name of the insolvency practitioner in relation to the employer in relation to the scheme;

g

the date on which the insolvency practitioner in relation to the employer in relation to the scheme was appointed to act or consented to act in relation to that employer or, in any case where the insolvency practitioner is the official receiver, the date on which the official receiver began to act in relation to that employer;

h

the address for communications at which the insolvency practitioner may be contacted by the Board in connection with the issue of the notice; and

i

whether the notice issued contains any commercially sensitive information.

in relation to an industrial and provident society, where there is dissolution by consent of the members under section 58 of the Industrial and Provident Societies Act 1965 M21 (instrument of dissolution).

2

In this regulation—

“administration order” means an order whereby the management of the company or relevant body, as the case may be, is placed in the hands of a person appointed by the court;
“relevant body” means—
1. a
  M22a credit union within the meaning given in section 31(1) of the Credit Unions Act 1979 (interpretation);
2. b
  a limited liability partnership within the meaning given in section 57(6) of the Act (sections 38 to 56: partnerships and limited liability partnerships);
3. c
  a building society within the meaning given in section 119 of the Building Societies Act 1986 (interpretation);
4. d
  a person who has permission to act under Part 4 of the FSMA (permission to carry out regulated activities);
5. e
  the society of Lloyd's and Lloyd's members who have permission under Part 19 of the FSMA (Lloyd's);
6. f
  a friendly society within the meaning given in the Friendly Societies Act 1992; or
7. g
  a society which is registered as an industrial and provident society under the Industrial and Provident Societies Act 1965.

3

In this regulation, a reference to Part 2 of the 1986 Act (administration orders) shall, insofar as it relates to a company or society listed in section 249(1) of the Enterprise Act 2002 (special administration regimes), have effect as if it referred to Part 2 of the 1986 Act as it had effect immediately before the coming into force of section 248 of the Enterprise Act 2002 (replacement of Part 2 of the Insolvency Act 1986).

which is not the employer in relation to an occupational pension scheme in respect of which a relevant public authority has either—

aa

given a guarantee in relation to any part of the scheme, any benefits payable under the scheme or any member of the scheme, or

bb

made any other arrangements for the purposes of securing that the assets of the scheme are sufficient to meet any part of its liabilities; F49...

b

a charity which is not a company or other body corporateF47; or

c

a trade union within the meaning of section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992 (meaning of trade union) in relation to which it is not possible for an insolvency event as defined in, or in regulations made under, section 121 of the Act to occur

F26Applications and notifications to the Board – multi-employer schemes7A

the name or type of notice given;

b

the date on which the notice is given;

c

the name, address and pension scheme registration number of the scheme, or section of the scheme, in respect of which the notice is given;

d

the name of each employer in relation to the scheme, or section of the scheme, in respect of which the notice is given;

e

f

a statement by the Regulator that the person or persons referred to in sub-paragraph (e) is no longer an employer or are no longer employers in relation to the scheme, or section of the scheme, at the time referred to in section 129(4)(b) of the Act; and

g

the date on which the Regulator became aware of the matter in respect of which the statement is provided by it under sub-paragraph (f).

7

Where the Board receives a notice from the Regulator to which paragraph (5) or (6) applies, the notice referred to in section 129(5) of the Act which the Board must give to the trustees or managers of the scheme, or section of the scheme, concerned and copy to any employer in relation to that scheme, or section, shall be in writing and shall contain the following information—

a

the name or type of the notice given;

b

the date on which the notice is given;

c

the name, address and pension scheme registration number of the scheme, or section of the scheme, in respect of which the notice is given;

d

a statement that the Board received the notice from the Regulator under section 129(4)(a) or (b) of the Act and the date on which the notice was received by the Board;

e

where the notice referred to in sub-paragraph (d) is a notice under section 129(4)(a) of the Act, the date on which the Regulator became aware that the employer in relation to the scheme, or section of the scheme, is unlikely to continue as a going concern;

f

where the notice referred to in sub-paragraph (d) is a notice under section 129(4)(b) of the Act, the date on which the Regulator became aware that the person or persons referred to in paragraph (6)(e) is no longer an employer or are no longer employers in relation to the scheme, or section of the scheme, at the time referred to in section 129(4)(b) of the Act;

g

the address for communications at which the Board may be contacted in respect of the giving of the notice; and

h

whether the notice given by the Board contains any restricted information and, if so, the nature of the restrictions.

if section 122(4) of the Act applies and the former insolvency practitioner has not been able to confirm in relation to the scheme that a scheme rescue is not possible, a statement from that insolvency practitioner as to why, in his opinion, that is the case;

j

a statement that the notice issued will not become binding until it has been approved by the Board; and

k

whether, in the opinion of the insolvency practitioner or former insolvency practitioner, the notice issued contains any commercially sensitive information.

the name of the employer in relation to the scheme in respect of which the notice is issued; and

e

a statement that the trustees or managers have decided not to exercise the option to segregate under the scheme.

4

Where, under section 130 of the Act (Board's duty where application or notification received under section 129), the Board is required to issue a notice under subsection (2) (a “scheme failure notice”) or (3) (a “scheme rescue notice”) of that section in relation to—

a

a section of a segregated scheme;

b

a segregated part of a multi-employer section of a segregated scheme; or

c

a segregated part of a non-segregated scheme,

to which this regulation applies, regulation 10 shall have effect and shall be read as if, for the words “the scheme” in each place where they appear in that regulation, there were substituted the words “ the section ” or, as the case may be, “the segregated part”.

Confirmation of scheme status by Board – multi-employer schemes12

1

This regulation applies to—

a

a non-segregated scheme; or

b

a multi-employer section of a segregated scheme,

all or any part of that employer's liability for any debt due from him to the scheme under section 75 of the 1995 Act which has not yet been discharged; and

b

the value of an asset of the scheme arising from a debt or obligation referred to in section 143(5)(a) to (d) of the Act (Board's obligation to obtain valuation of assets and protected liabilities).

Directions15

The prescribed person who may be a “relevant person” in relation to an eligible scheme for the purposes of section 134 of the Act (directions) is any individual who is appointed by the trustees or managers of the scheme as the scheme administrator responsible for the discharge of the functions conferred or imposed on the scheme administrator of the scheme by or under Part 4 of the Finance Act 2004 M34 (pension schemes etc).

Restrictions on winding up, discharge of liabilities etc16

1

Subject to subsection (2) below, the prescribed circumstances in which—

a

a transfer or transfer payment in respect of a member's rights under the scheme rules may be made by the F10trustees or managers of an eligible scheme are where a member has, before the beginning of an assessment period in relation to the scheme—

i

been provided with a written statement of entitlement of the amount of the cash equivalent at the guarantee date of any benefits which have accrued to or in respect of him under the applicable rules pursuant to an application made by that member under section 93A(1) of the 1993 Act M35 (salary related schemes: right to a statement of entitlement);

ii

acquired a right to a guaranteed cash equivalent by virtue of F52section 94(1)(aa) of the 1993 Act (right to a cash equivalent); and

iii

made an application under section 95 of the 1993 Act (ways of taking right to cash equivalent) requiring the F10trustees or managers of an eligible scheme to use the cash equivalent to which he has acquired a right in whichever of the ways specified in subsection (2) of that section and has not withdrawn that application; and

b

other steps may be taken by the F10trustees or managers of an eligible scheme to discharge any liability of the scheme to or in respect of a member of the scheme in respect of—

i

a pension or other benefit (except an ill health pension); and

ii

a refund of contributions,

are where the member became entitled to the pension or benefit or to the refund of contributions before the beginning of an assessment period in relation to the scheme.

2

during the assessment period, a person becomes entitled under the scheme rules to a death in service benefit payable in respect of that member,

that benefit is, for the purposes of section 138(2) of the Act (payment of scheme benefits), to be treated as having become payable before the commencement of the assessment period.

Loans to pay scheme benefits18

1

The prescribed rate of interest referred to in section 139(6) of the Act (loans to pay scheme benefits) shall be the base rate.

2

The rate of interest referred to in paragraph (1) above shall be calculated on a day to day basis from the date on which a loan is made by the Board to the trustees or managers of an eligible scheme to the date of payment and compounded with three-monthly rests.

3

In this regulation—

“base rate” means the rate for the time being quoted by the reference banks as applicable to sterling deposits or, where there is for the time being more than one such base rate, the rate which, when the base rate quoted at each bank is ranked in a descending sequence of four, is the first in the sequence;
“date of payment” means the date on which the full amount of the loan, together with interest, is repaid to the Board by the trustees or managers of the scheme to which the loan has been made;
“reference banks” means the four largest persons for the time being who—
1. a
  have permission under Part 4 of the FSMA (permission to carry on regulated activities) to accept deposits, F12and
2. b
  are incorporated in the United Kingdom and carrying on there a regulated activity of accepting deposits, and quote a base rate applicable to sterling deposits.

4

F13 In paragraph (3), paragraph (b) of the definition of “reference banks” must be read with—

a

section 22 of the FSMA (the classes of activity and categories of investment),

b

any relevant order under that section, and

c

Schedule 2 to that Act (regulated activities).

Withdrawal following issue of section 122(4) notice19

1

A notice issued by the Board under section 148(3) or (4) of the Act (withdrawal following issue of section 122(4) notice) shall be in writing and shall contain the following information—

a

the name or type of notice issued;

b

the date on which the notice is issued;

c

the name, address and pension scheme registration number of the scheme in respect of which the notice is issued;

d

the name of the employer in relation to the scheme in respect of which the notice is issued;

e

if the notice is issued pursuant to a determination by the Board under section 148(3) of the Act, a statement of the Board's determination and the date on which that determination was made;

f

if the notice is issued by the Board under section 148(4) of the Act, a statement by the Board of the basis on which the notice is issued;

g

the address for communications at which the Board may be contacted in connection with the issue of the notice;

h

whether the issue of the notice by the Board is a reviewable matter and, if so, the time limit for applying for a review of or appeal against the issue of the notice;

i

c

a segregated part of—

i

a multi-employer section of a segregated scheme; or

ii

a non-segregated scheme,

as if that section, or segregated part, were a separate occupational pension scheme M36.

Refusal to assume responsibility – new schemes created to replace existing schemes22

1

The prescribed period referred to in section 147(1)(a) of the Act (new schemes created to replace existing schemes) during which the Board must be satisfied that a new occupational pension scheme was established shall be the period of three years preceding the date on which an assessment period began in relation to the scheme.

2

Paragraph (1) above shall have effect in relation to—

a

a section of a segregated scheme,

b

a multi-employer section of a segregated scheme, or

c

a segregated part of—

i

a multi-employer section of a segregated scheme, or

ii

a non-segregated scheme,

as if that section, or segregated part, were a separate occupational pension scheme M37.

Form and content of withdrawal notices issued under sections 146 and 147 of the Act23

1

A notice issued under section 146(2) or 147(2) of the Act (“a withdrawal notice”) shall be in writing and shall contain the following information—

a

the name or type of the notice issued;

b

the date on which the notice is issued;

c

the name, address and pension scheme registration number of the scheme in respect of which the notice is issued,

d

the name of the employer in relation to the scheme in respect of which the notice is issued;

e

a statement that the Board has refused to assume responsibility for the scheme in respect of which the notice is issued;

f

the period in relation to which the Board is satisfied that the scheme in respect of which the notice is issued is not an eligible scheme;

g

a statement of reasons for the Board's decision to refuse to assume responsibility for the scheme in respect of which the notice is issued;

h

whether the issue of the notice by the Board is a reviewable matter and, if so, the time limits for applying for a review of or appeal against the issue of that notice;

i

the date on which the notice issued will become binding;

j

the address for communications at which the Board may be contacted in respect of the issue of the notice; and

k

whether the notice issued contains restricted information and, if so, the nature of any restrictions.

2

Where a notice to which this regulation applies becomes binding, the Board shall issue a notice to that effect (“a binding notice”) which shall be in writing and shall contain the following information—

a

the information described in paragraph (1)(a) to (f) and (j) and (k);

b

the date on which the withdrawal notice referred to in paragraph (1) was issued; and

c

a statement that the withdrawal notice referred to in paragraph (1) has become binding.

the financial transactions of the scheme during the period to which the accounts relate (“the accounting period”);

ii

the amount and disposition of the assets at the end of the accounting period; and

iii

the liabilities of the scheme, other than the liabilities to pay pensions and benefits, after the end of the accounting period; and

c

include a report by the auditor in writing as to whether or not in his opinion the requirements of paragraphs (a) and (b) above are satisfied.

Signed by authority of the Secretary of State for Work and Pensions.

Malcolm WicksMinister of State,Department for Work and Pensions

SCHEDULECONTENTS OF ACCOUNTS AUDITED BY THE AUDITOR OF THE SCHEME

Regulation 25

1

An account of the financial additions to, withdrawals from and changes to the value of the fund during the accounting period.

2

1

A statement, as at the end of the accounting period, of the assets at market value, or trustees' or managers' estimate thereof where the market value is not readily ascertainable, and liabilities of the scheme, other than liabilities to pay pensions and benefits after the end of the accounting period—

a

giving, in the case of any assets which are stated at an estimate of their market value, the reason why the valuation is an estimate;

b

showing the distribution of the F19investments and other assets of the scheme between each of the following categories (where none of the investments falls within a particular category, that fact is not required to be stated), namely—

i

insurance policies;

ii

public sector fixed interest investments and separately quoted securities and unquoted securities;

iii

other fixed interest investments and separately showing quoted securities and unquoted securities;

iv

index-linked securities and separately showing quoted securities and unquoted securities;

v

equities (including convertible shares) and separately showing quoted equities and unquoted equities;

vi

property (which in this paragraph means any right or interest in freehold or leasehold land or buildings);

vii

unit trusts invested in property;

viii

other unit trusts;

ix

managed funds (other than unit trusts) invested in property;

x

other managed funds (not being unit trusts);

xi

loans (whether or not secured by mortgages);

xii

cash deposits and cash in hand;

xiii

investments and other assets not included in heads (i) to (xii) above; and

c

showing separately, in the case of investments in each category, investments in the United Kingdom and investments outside the United Kingdom, and in the case of cash investments mentioned in heads (vii) to (x) of sub-paragraph (b) investments where the company operating the unit trust or managed fund is, and where it is not, a company registered in the United Kingdom.

2

Where the assets include insurance policies which are specifically allocated to the provision of benefits for, and which provide all the benefits payable under the scheme to, particular members or other persons in respect of particular members or both, those policies must be included in the statement and there must be a note of the existence of such policies but that entry need not include their market value or an estimate.

3

Where the assets—

a

are invested only for the purposes of securing additional money purchase benefits derived from F20voluntary contributionsF58...; and

b

are specifically allocated to the provision of additional benefits for particular members or other persons in respect of particular members (or both),

a note that F21paragraphs (a) and (b) apply must be included in the statement, but that entry need not include the market value or an estimate of value of those assets.

3

Where any assets or liabilities are denominated in currencies other than sterling, a translation of those assets into sterling and an explanation of the basis on which they have been translated.

4

Particulars of any investment (other than in UK Government securities) in which more than 5 per cent. of the total value of the net assets of the scheme is invested, and if any such investment is an insurance policy, a statement of its main characteristics.

5

Where the scheme has employer-related investments, within the meaning of section 40(2) of the 1995 Act (restriction on employer related investments), a statement—

a

as to the percentage of the scheme's resources invested in such investments at the end of the accounting period; and

b

if that percentage exceeds 5 per cent., as the percentage of the scheme's resources which are investments to which F62regulation 13 of the Occupational Pension Schemes (Investment) Regulations 2005 (investments to which restrictions do not apply) applies.

6

In respect of every other amount shown in the accounts other than the amounts referred to in paragraph 7, a statement of the corresponding amount for the scheme year previous to the accounting period, except in a case where regulation 2 of the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 M38 (requirement for trustees or managers to obtain documents) is complied with by the trustees or managers of a scheme for the first time.

7

The total amount of the purchases and the total amount of the sales of investments during the accounting period.

8

A statement whether the accounts have been prepared in accordance with the Statement of Recommended Practice, the guidelines (F22“Financial Reports of Pension Schemes”) published by the Pensions Research Accountants Group M39 or another organisation approved for this purpose by the Accounting Standards Board, current at the end of the accounting period and, if not, an indication of where there are any material departures from those guidelines.

(This note is not part of the Regulations)

These Regulations make provision relating to various requirements under Part 2 of the Pensions Act 2004 (c. 35) (“the Act”).

Regulation 1 provides for citation, commencement and interpretation and includes an extension of the meaning of “employer” for the purposes of these Regulations.

Regulation 2 sets out those schemes which are not “eligible schemes” for the purposes of Part 2 of the Act and which are not able to receive compensation from the Board of the Pension Protection Fund (“the Board”) pursuant to the pension compensation provisions in that Part of the Act. The Board is established under section 107 of the Act.

Regulation 3 provides that where, after the beginning of an assessment period in relation to an eligible scheme, the scheme ceases to be an eligible scheme in prescribed circumstances, the scheme shall, for the purposes of Part 2 of the Act, be treated as remaining an eligible scheme.

Regulation 4 makes provision in respect of the period in which an insolvency practitioner is required to notify the Board of the occurrence of an insolvency event in relation to the employer in relation to an eligible scheme. If an insolvency event is a “qualifying insolvency event” within the meaning of Part 2 of the Act, the start of an assessment period will be triggered in relation to an eligible scheme and the scheme will become subject to the various requirements in Part 2 of the Act.

Regulation 5 provides for certain events in relation to certain types of bodies (such as building societies, friendly societies and limited liability partnerships) to be classified as insolvency events for the purposes of Part 2 of the Act.

Regulation 6 sets out the circumstances in which insolvency proceedings in relation to the employer in relation to an eligible scheme are stayed or come to an end. Where these circumstances exist, the insolvency practitioner will be required to issue a notice to the effect that he is not able to confirm whether a scheme rescue has occurred or is not possible. This may lead to the Board ceasing to be involved with a scheme.

Regulation 7 makes provision in respect of applications and notifications to the Board under section 129 of the Act for it to assume responsibility for an eligible scheme in circumstances where the employer in relation to the scheme is unlikely to continue as a going concern and meets prescribed requirements.

Regulation 8 sets out the time limit for making applications to the Board under section 129 of the Act. Regulation 8 also makes provision in respect of the form and content of such applications and about the form and content of notifications to the Board which the Pensions Regulator is required to make in circumstances where it becomes aware that an employer in relation to an eligible scheme is unlikely to continue as a going concern and meets prescribed requirements.

Regulations 9 and 10 set out the circumstances which must exist before an insolvency practitioner in relation to an employer in relation to an eligible scheme or the Board is able to determine whether or not a scheme rescue has occurred or is not possible in relation to the scheme. They also make provision regarding the form and content of the notices which must be issued by the insolvency practitioner or the Board in order to confirm the status of a scheme. Regulations 11 and 12 modify the application of regulations 9 and 10 so as to make similar provision in respect of multi-employer schemes.

Regulation 13 makes provision regarding the form and content of binding notices confirming the status of a scheme. A notice is not binding until the period in respect of which it is possible for the issue of the notice to be reviewed under Chapter 6 of Part 2 of the Act has expired or, if an application for a review has been made, until the review or any subsequent appeal has been conclusively resolved.

Regulation 14 makes provision in respect of the types of payments that may be made to a scheme during an assessment period.

Regulation 15 makes provision in respect of the “relevant person” in relation to an eligible scheme to whom the Board may issue directions under section 134 of the Act.

Regulation 16 provides for the circumstances in which a transfer payment may be made during an assessment period in respect of a member's rights under an eligible scheme. It also provides for the other circumstances in which the trustees or managers of a scheme may take steps to discharge a member's rights under an eligible scheme during an assessment period.

Regulation 17 makes provision in respect of the circumstances where a member of an eligible scheme may postpone the receipt of his entitlement to a pension or lump sum payment under the scheme during an assessment period.

Regulation 18 makes provision in respect of the rate of interest which is payable by the trustees or managers of an eligible scheme to which the Board has made a loan to pay scheme benefits under section 139 of the Act. It also makes provision in respect of how the rate of interest payable is to be calculated.

Regulation 19 makes provision in respect of the form and content of withdrawal notices issued by the Board under section 148 of the Act.

Regulation 20 makes provision in respect of the accrual of benefits under a scheme in respect of an assessment period in relation to an eligible scheme when that assessment period comes to an end.

Regulations 21 and 22 make provision in respect of the period in relation to which the Board is to determine whether or not to refuse to assume responsibility for a scheme under sections 146 and 147 of the Act. Regulation 23 makes provision in respect of the form and content of withdrawal notices issued by the Board under sections 146 and 147 of the Act.

Regulation 24 makes provision in respect of the form and content of applications for reconsideration made under section 151 of the Act. It also makes provision in respect of the time limits for making such applications and the documents which are to accompany the application.

Regulation 25 and the Schedule make provision in respect of the prescribed form and content of the audited scheme accounts and report from the auditor which is to accompany an application for reconsideration.

As these Regulations are made before the expiry of the period of six months beginning with the coming into force of the provisions of the Act by virtue of which they are made, the requirement for the Secretary of State to consult such persons as he considers appropriate does not apply.

An assessment of the compliance costs to business of the measures arising from the Act, including these Regulations, has been placed in the libraries of both Houses of Parliament. Copies may be obtained from the Department for Work and Pensions, Regulatory Impact Unit, 3rd Floor, The Adelphi, 1- 11 John Adam Street, London WC2N 6HT.