The Occupational Pension Schemes (Charges and Governance) Regulations 2015

Interpretation U.K.

2.—(1) In these Regulations—

“the 1995 Act” means the Pensions Act 1995;

“the 2008 Act” means the Pensions Act 2008 M1 ;

[F1 “the 2021 Act” means the Pension Schemes Act 2021;]

“the Administration Regulations” means the Occupational Pension Schemes (Scheme Administration) Regulations 1996 M2 ;

[F2 “adviser” is a person described in regulation 11A(3); ]

“annually” means per charges year;

“arrangement” means an allocation of contributions to—

(a)

an investment; or

(b)

more than one investment according to a strategy adopted by the trustees or managers;

“charges” means administration charges M3 other than—

(a)

transaction costs;

(b)

where an order of the court provides for the recovery by the trustees or managers of costs incurred in complying with the order, the amount of those costs;

(c)

charges permitted by regulations made under section 24 or 41 (charges in respect of pension sharing costs) of the Welfare Reform and Pensions Act 1999 M4 ;

(d)

winding up costs;

(e)

costs solely associated with the provision of death benefits[F3 ;

(f)

costs solely attributable to holding physical assets;]

“charges year” means a period of 12 months specified for the purposes of the scheme in any scheme document or, if no such year is specified, a period of 12 months commencing on—

(a)

either 1st or 6th April as the trustees or managers may decide; or

(b)

if no such decision is made, 1stApril;

[F1 “collective contribution percentage charge” has the meaning given in regulation 5A(3);]

[F1 “collective existing rights charge” has the meaning given in regulation 5A(3);]

[F1 “collective flat fee charge” has the meaning given in regulation 5A(3);]

[F1 “collective money purchase benefit” has the meaning given in section 1(1) of the 2021 Act;]

[F1 “collective money purchase scheme” has the meaning given in section 1(2) of the 2021 Act;]

[F1 “collective single charge structure” has the meaning given in regulation 5A(2);]

[F4 “commodity” means any goods of a fungible nature that are capable of being delivered, including metals and their ores and alloys, agricultural products and energy such as electricity, but not including cash or financial instruments (within the meaning of article 3 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001);]

“contributing member” is a member of a relevant scheme[F5 , that is not a collective money purchase scheme,] in relation to whom a contribution is being made to that scheme for the purposes of accruing money purchase benefits [F6 (other than collective money purchase benefits)];

“contribution”, in relation to a member, means a payment made by, on behalf of or in respect of that member;

“contribution percentage charge” has the meaning given in regulation 5(3);

“default arrangement” has the meaning given in regulation 3;

“employer” has the meaning given in section 99 of the 2008 Act M5 ;

“executive pension scheme” means a scheme—

(a)

in relation to which a company is the only employer and the sole trustee; and

(b)

the members of which are either current or former directors of the company and include at least one third of the current directors;

“existing rights charge” has the meaning given in regulation 5(3);

“flat fee charge” has the meaning given in regulation 5(3);

“jobholder” has the meaning given in section 99 of the 2008 Act;

[F7 “performance fee” means a fee which—

(a)

is calculated by reference to the returns from investments held by the scheme, whether in terms of the capital appreciation of those investments, the income produced by those investments or otherwise; and

(b)

[F8 in the case of a relevant scheme that is not a collective money purchase scheme,] is not calculated by reference to the value of the member’s rights under the scheme; [F9 or]

(c)

[F10 in the case of a relevant scheme that is a collective money purchase scheme, is not calculated by reference to the value of members’ rights under the scheme;]

“physical asset” means an asset whose value depends on its physical form, including—

(a)

land,

(b)

buildings and other structures on land or sea,

(c)

vehicles, ships, aircraft or rolling stock, and

(d)

commodities;]

[F1 “qualifying collective money purchase scheme” has the meaning given in regulation 3A;]

“qualifying scheme” has the meaning given in section 99 of the 2008 Act;

[F2 “qualifying scheme employer” means an employer in relation to whom a scheme is a qualifying scheme in relation to at least one of its jobholders;]

[F1 “qualifying section employer” means an employer in relation to whom a section of a pension scheme, which is a collective money purchase scheme for the purposes of section 1(2)(b) of the 2021 Act, is being used by a qualifying scheme in relation to at least one of its jobholders;]

“relevant small scheme” means a scheme with fewer than 12 members, where—

(a)

all the members are trustees of the scheme and either—

(i)

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 M6 (power to appoint independent trustees), and is registered in the register maintained by the Authority (as defined in that Act) M7 in accordance with regulations made under subsection (4) of that section; or

(b)

all the members are directors of a company which is the sole trustee of the scheme and either—

(i)

the provisions of the scheme provide that any decision made by the company in its capacity as a trustee is made by the unanimous agreement of the directors 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 (as defined in that Act) in accordance with regulations made under subsection (4) of that section;

[F2 “service provider” means a person who provides an administration service directly to the trustees or managers of a [F11 relevant] scheme;]

“single charge structure” has the meaning given in regulation 5(2);

[F2 “specified scheme” means a relevant scheme[F12 , that is not a collective money purchase scheme for the purposes of section 1(2)(b) of the 2021 Act,] in which at least one qualifying scheme employer participates;]

[F1 “specified section” means a relevant scheme that is a collective money purchase scheme for the purposes of section 1(2)(b) of the 2021 Act in which at least one qualifying section employer participates;]

“transaction costs” means the costs incurred as a result of the buying, selling, lending or borrowing of investments;

“winding up costs” means the costs of winding up the pension scheme including (but not limited to) the cost of —

(a)

legal advice;

(b)

tracing, consulting and communicating with members;

(c)

advice on exiting investments;

(d)

selection of an alternative scheme or investments;

“worker” has the meaning given in section 99 of the 2008 Act;

“writing” includes electronic communication and ‘electronic communication’ has the meaning given in section 15(1) of the Electronic Communications Act 2000 M8 .

[F13 (1A) For the purposes of the definition of “charges”, the costs solely attributable to holding a physical asset include—

(a) the costs of managing and maintaining the asset;

(b) fees for valuing the asset;

(c) the cost of insuring the asset;

(d) ground rent, charges, rates, taxes and utilities bills incurred in relation to the asset.]

(2) For the purposes of paragraph 1(5) of Schedule 18 to the Pensions Act 2014, “relevant scheme” means—

(a) an occupational pension scheme under which all the benefits which may be provided are money purchase benefits [F14 other than collective money purchase benefits]; F15 ...

(b) where some but not all the benefits which may be provided under an occupational pension scheme are money purchase benefits, [F16 other than collective money purchase benefits,] that scheme in so far as it relates to those benefits, other than a scheme with only one member, an executive pension scheme or a relevant small schemeF17 ...[F18 ; or]

[F19 (c) a collective money purchase scheme,]

[F20 (2A) Where a pension scheme is divided into sections, each section that is a collective money purchase scheme for the purposes of Part 1 of the 2021 Act (see section 1(2)(b)) is to be treated for the purposes of these Regulations as a separate scheme.]

(3) Where, in these Regulations, the circumstances require one or more of the calculations listed in paragraph (4) to be made in relation to a period of less than a charges year, that calculation shall be done on a pro rata basis.

[F21 (3A) Where, in these Regulations, a collective flat fee charge is to be calculated and these Regulations have applied to a member of a qualifying collective money purchase scheme for a period of less than a charges year, the charge associated with that member for the purposes of calculating the collective flat fee charge (see regulation 6A(4)(a)) must be calculated on a pro rata basis.]

(4) The calculations referred to in paragraph (3) are—

(a) a charge under a single charge structure;

(b) a flat fee charge;

(c) an existing rights chargeF22 ...

[F23 ;

(d) a charge under a collective single charge structure;

(e) a collective existing rights charge.]

[F24 (5) [F25 When the charges in paragraph (5A) are] calculated on a pro rata basis under paragraph (3) and paragraph (6) applies, no account is to be taken of any performance fee charged within the period for which the calculation is made.

[F26 (5A) For the purposes of paragraph (5), the charges are—

(a) a charge under a single charge structure;

(b) a charge under a collective single charge structure.]

(6) This paragraph applies if the performance fee in question is calculated and deducted from the value of the investments to which it relates each time the value of those investments is calculated for the purposes of buying or selling units.]

Textual Amendments

F1 Words in reg. 2(1) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(2)(a)

F2 Words in reg. 2(1) inserted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 3

F3 Words in reg. 2(1) inserted (1.10.2021) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations 2021 (S.I. 2021/1070), regs. 1(2), 6(2)(a)(i)

F4 Words in reg. 2(1) inserted (1.10.2021) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations 2021 (S.I. 2021/1070), regs. 1(2), 6(2)(a)(ii)

F5 Words in reg. 2(1) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(2)(b)(i)

F6 Words in reg. 2(1) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(2)(b)(ii)

F7 Words in reg. 2(1) inserted (1.10.2021) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations 2021 (S.I. 2021/1070), regs. 1(2), 6(2)(a)(iii)

F8 Words in reg. 2(1) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(2)(c)(i)

F9 Word in reg. 2(1) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(2)(c)(ii)

F10 Words in reg. 2(1) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(2)(c)(iii)

F11 Word in reg. 2(1) substituted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 3

F12 Words in reg. 2(1) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(2)(d)

F13 Reg. 2(1A) inserted (1.10.2021) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations 2021 (S.I. 2021/1070), regs. 1(2), 6(2)(b)

F14 Words in reg. 2(2)(a) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(3)(a)

F15 Word in reg. 2(2) omitted (1.8.2022) by virtue of The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(3)(b)

F16 Words in reg. 2(2)(b) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(3)(c)

F17 Reg. 2(2) comma omitted (1.8.2022) by virtue of The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(3)(d)

F18 Word in reg. 2(2) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(3)(d)

F19 Reg. 2(2)(c) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(3)(e)

F20 Reg. 2(2A) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(4)

F21 Reg. 2(3A) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(5)

F22 Reg. 2 full-stop omitted (1.8.2022) by virtue of The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(6)

F23 Words in reg. 2 inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(6)

F24 Reg. 2(5)(6) inserted (with application in accordance with reg. 1(6) of the amending S.I.) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations 2021 (S.I. 2021/1070), regs. 1(2), 6(2)(c)

F25 Words in reg. 2(5) substituted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(7)

F26 Reg. 2(5A) inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 (S.I. 2022/255), reg. 1(3), Sch. 7 para. 4(8)

Marginal Citations

M1 2008 c. 30.

M2 S.I. 1996/1715.

M3 “Administration charge” is defined in paragraph 1(5) of Schedule 18 to the Pensions Act 2014 (c. 19).

M4 Section 24 was amended by the Family Law Act 1996 (c. 27), section 66 and Schedule 8, paragraph 43A (subject to savings as to which see section 66(2) and Schedule 9, paragraph 5 of that Act) and the Civil Partnership Act 2004 (c. 33), section 261(1) and (4), Schedule 27, paragraph 158(1) to (2) and Schedule 30.

M5 There are amendments to section 99 which are not relevant to these Regulations.

M6 Section 23 was substituted by the 2004 Act, section 36(3).

M7 See section 124(1) of the 1995 Act, substituted by the 2004 Act, section 7(2)(b).

M8 2000 c. 7. Section 15(1) was amended by the Communications Act 2003 (c. 21), section 406(1) and Schedule 17, paragraph 158.