Modification of section 175 of the Act for the financial year beginning on 1st April 2006: non-segregated schemes4

1

This regulation applies to a non-segregated scheme for the financial year beginning on 1st April 2006.

2

Section 175 of the Act shall be modified so that it shall be read as if—

a

in the case of a scheme—

i

to which this regulation applies; and

ii

the rules of which contain a requirement—

aa

for the trustees or managers to segregate such part of the assets as is attributable to the liabilities of the scheme to provide pensions or other benefits to or in respect of the pensionable service of some or all of the members of the scheme by reference to an employer in relation to that scheme;

bb

which would be triggered when such an employer ceased to participate in the scheme,

for paragraph (a) of subsection (2) there were substituted—

a

a risk-based pension protection levy is a levy assessed by reference to—

i

the difference between the value of the scheme’s assets (disregarding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules) and the amount of its protected liabilities,

ii

where the Board considers it appropriate, the scheme rules containing a requirement for the trustees or managers of the scheme to segregate such part of the assets of the scheme as is attributable to the scheme’s liabilities to provide pensions or other benefits to or in respect of the pensionable service of some or all of the members by reference to an employer in relation to the scheme in circumstances where that employer ceases to participate in the scheme,

iii

the likelihood of an insolvency event occurring—

aa

where, on or before 31st March 2006, the Board has received sufficient information to assess the likelihood of an insolvency event occurring in relation to each employer in relation to the scheme and such an assessment would reduce the amount of the risk-based pension protection levy which would otherwise be payable, in relation to each employer in relation to that scheme; or

bb

in all other cases, in relation to the employer who on 31st March 2006 has most members of the scheme or, where two or more employers have most members, each of those employers, and

iv

if the Board considers it appropriate, one or more other risk factors mentioned in subsection (3), and

b

in the case of a scheme—

i

to which this regulation applies; and

ii

the rules of which give the trustees or managers an option to segregate such part of the assets as is attributable to the liabilities of the scheme to provide pensions or other benefits to or in respect of the pensionable service of some or all of the members of the scheme by reference to an employer in relation to that scheme when an employer in relation to the scheme ceases to participate in the scheme,

for paragraph (a) of subsection (2) there were substituted—

a

a risk-based pension protection levy is a levy assessed by reference to—

i

the difference between the value of the scheme’s assets (disregarding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules) and the amount of its protected liabilities,

ii

where the Board considers it appropriate, the scheme rules containing an option to segregate such part of the assets of the scheme as is attributable to the scheme’s liabilities to provide pensions or other benefits to or in respect of the pensionable service of some or all of the members by reference to an employer in relation to the scheme in circumstances where that employer ceases to participate in the scheme,

iii

the likelihood of an insolvency event occurring—

aa

where, on or before 31st March 2006, the Board has received sufficient information to assess the likelihood of an insolvency event occurring in relation to each employer in relation to the scheme and such an assessment would reduce the amount of the risk-based pension protection levy which would otherwise be payable, in relation to each employer in relation to that scheme; or

bb

in all other cases, in relation to the employer who on 31st March 2006 has most members of the scheme or, where two or more employers have most members, each of those employers, and

iv

if the Board considers it appropriate, one or more other risk factors mentioned in subsection (3), and

c

in the case of a scheme—

i

to which this regulation applies; and

ii

the rules of which do not contain a requirement—

aa

for the trustees or managers to segregate such part of the assets as is attributable to the liabilities of the scheme to provide pensions or other benefits to or in respect of the pensionable service of some or all of the members of the scheme by reference to an employer in relation to that scheme;

bb

which would be triggered when such an employer ceased to participate in the scheme,

for paragraph (a) of subsection (2) there were substituted—

a

a risk-based pension protection levy is a levy assessed by reference to—

i

the difference between the value of the scheme’s assets (disregarding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules) and the amount of its protected liabilities,

ii

the likelihood of an insolvency event occurring—

aa

where, on or before 31st March 2006, the Board has received sufficient information to assess the likelihood of an insolvency event occurring in relation to all the employers in relation to the scheme and such an assessment would reduce the amount of the risk-based pension protection levy which would otherwise be payable, in relation to all the employers in relation to that scheme; or

bb

in all other cases, in relation to the employer who on 31st March 2006 has most members of the scheme or, where two or more employers have most members, each of those employers, and

iii

if the Board considers it appropriate, one or more other risk factors mentioned in subsection (3), and