Section 12: Certification that alternative to quality requirement is satisfied
88.Section 12 amends section 28 of the PA 2008 and introduces alternative self-certification arrangements for employers.
89.Employers using money purchase occupational pension schemes, personal pension schemes or hybrid schemes to discharge their enrolment duties will be able to use section 28 to certify that their scheme (in the case of hybrid schemes, the money purchase element) satisfies the relevant quality requirements, where the scheme satisfies certain alternative requirements, to be prescribed in regulations.
90.Subsection (2) makes a consequential amendment to the title of section 28 of the PA 2008 to reflect that certification now applies also to European Economic Area (EEA) schemes following the changes made by section 13.
91.Subsection (3) makes a minor consequential amendment as a result of the changes to section 28.
92.Subsection (4) inserts a new subsection (1A) into section 28. This subsection defines “relevant jobholder” as a jobholder to whom a certificate applies, and provides that a reference to a “scheme” in the section includes a reference to part of a scheme.
93.Subsection (5) amends section 28(2) to include a new paragraph (b). The amended section 28(2) provides that the certificate must state that, in the opinion of the person giving it, the scheme being certified either satisfies the relevant quality requirement, or an alternative prescribed requirement, throughout the certification period.
94.Subsection (6) inserts new subsections (2A), (2B) and (2C) into section 28. These subsections provide that the alternative requirements that the Secretary of State prescribes must meet certain conditions. The requirements must be such that, if all jobholders were active members of schemes to which section 28 applies, for at least 90% of jobholders, the total contributions paid by the employer, and the employer and the jobholder together, would not be likely to be less than if the schemes had met the relevant quality requirement.
95.The Secretary of State is required to apply the test in subsection (2A) when regulations are first made and thereafter carry out a review to ensure that the test continues to be satisfied. The first review must take place in 2017 and subsequent reviews must take place at least every three years.
96.Subsection (8) amends subsection (1)(b) of section 32 of the PA 2008. The amended subsection enables trustees and managers (section 16 amends section 32 to add a reference to managers) of occupational pension schemes to modify their scheme by resolution and with the consent of any employer in relation to the scheme, to comply with:
requirements in section 20(1) of the PA 2008 which relate to the quality requirements for money purchase schemes;
those requirements as modified under section 24(1)(a) of the PA 2008 with respect to hybrid schemes;
an alternative quality requirement prescribed under section 28(2)(b) of the PA 2008.
