The Personal and Occupational Pension Schemes (Miscellaneous Amendments) Regulations 1997

The Occupational Pension Schemes (Contracting-out) Regulations 1996 E+W+S

4.—(1) The Occupational Pension Schemes (Contracting-out) Regulations 1996 M1 shall have effect with the following amendments.

(2) In regulation 1(2) for the definition of “section 9(2B) rights" substitute—

““section 9(2B) rights" are—

(a) rights to the payment of pensions and accrued rights to pensions (other than rights attributable to voluntary contributions) under a scheme contracted-out by virtue of section 9(2B) of the 1993 Act, so far as attributable to an earner’s service in contracted-out employment on or after the principal appointed day; and

(b) where a transfer payment has been made to such a scheme, any rights arising under the scheme as a consequence of that payment which are derived directly or indirectly from—

(i) such rights as are referred to in sub-paragraph (a) under another scheme contracted-out by virtue of section 9(2B) of that Act; or

(ii) protected rights under another occupational pension scheme or under a personal pension scheme attributable to payments or contributions in respect of contracted-out employment on or after the principal appointed day;”.

(3) In regulation 2 for paragraph (2) (grounds for discrimination in elections) substitute—

“(2) In making or abstaining from making an election as to the inclusion of an employment in a contracting-out certificate, an employer may discriminate between different earners (otherwise than on the ground of the nature of their employment) in any case where such discrimination would be lawful apart from section 11(3) of the 1993 Act.”.

(4) In regulation 3 (notices by employers of intended elections), for paragraphs (4) and (5) substitute—

“(4) Unless paragraph (5) applies, a notice under this regulation must specify a date of expiry which is not earlier than the date three months after the date on which the notice is given.

(5) Where—

(a) there is no independent trade union recognised in relation to the earners concerned, or

(b) before the notice has been given every such trade union has consented in writing to the notice specifying an earlier date than that which is required under paragraph (4),

the notice may specify an earlier date (but not earlier than the date one month after that on which the notice is given).”.

(5) In regulation 6 in paragraph (2)(f), omit paragraph (i).

(6) At the end of regulation 7 (amendment of an election with a view to the issue of a contracting-out certificate) add the words “ or the date from which it is intended that the certificate is to have effect ”.

(7) At the end of regulation 9(8) (amendment of an election for the variation or surrender of a contracting-out certificate) add the words “ or the date from which it is intended that the variation or surrender is to have effect ”.

(8) In regulation 42 (alteration of rules of contracted-out schemes) for paragraphs (1) and (2) substitute—

“(1) For the purposes of section 37(1) of the 1993 Act (prohibition on alteration of rules of contracted-out scheme unless the alteration is of a prescribed description), the alterations which are prescribed are any alterations which are not prohibited by paragraph (2), (2A) or (2B).

(2) The rules of a salary-related contracted-out scheme cannot be altered in relation to any section 9(2B) rights under the scheme unless—

(a) the trustees of the scheme have informed the actuary in writing of the proposed alteration,

(b) the actuary has considered the proposed alteration and has confirmed to the trustees in writing that he is satisfied that the scheme would continue to satisfy the statutory standard in accordance with section 12A of the 1993 Act if the alteration were made, and

(c) the alteration does not otherwise prevent the scheme from satisfying the conditions of section 9(2B) of that Act.

(2A) The rules of a scheme contracted-out under section 9(3) of that Act (a money purchase contracted-out scheme) cannot be altered in relation to protected rights if the alteration would—

(a) affect any of the matters dealt with in Part III of that Act or any regulations made under that Part which relate to protected rights in a manner which would or might adversely affect any entitlement or accrued rights of any member of the scheme acquired before the alteration takes effect, or

(b) otherwise prevent the scheme from satisfying the conditions of that section.

(2B) The rules of a contracted-out scheme cannot be altered in relation to any guaranteed minimum pensions under the scheme if the alteration would—

(a) affect any of the matters dealt with in Part III of that Act or any regulations made under that Part which relate to guaranteed minimum pensions in a manner which would or might adversely affect any entitlement or accrued rights of any member of the scheme acquired before the alteration takes effect,

(b) affect any of the matters dealt with in sections 87 to 92 (protection of increases in guaranteed minimum pensions) and 109 and 110 of that Act (annual increases of guaranteed minimum pensions) or in any regulations made under those provisions which relate to guaranteed minimum pensions, or

(c) otherwise prevent the scheme from satisfying—

(i) in the case of a salary-related contracted-out scheme, section 9(2) of that Act, or

(ii) in the case of a scheme contracted-out under section 9(3) of that Act, that section.”.

(9) In regulation 48 (special provision for overseas schemes)—

(a) for paragraph (5)(c) substitute—

“(c) except in cases to which regulation 73 applies, for the purposes of section 9(2B)(c)(i) of the 1993 Act, the requirement as to the amount of the resources of the scheme is that, if the scheme were to be wound up at any time, those resources would be sufficient to meet in full the liabilities mentioned in paragraphs (a) to (e) of section 73(3) of the 1995 Act, calculating, determining and valuing those liabilities and resources in a manner approved by the Secretary of State;

(ca) the scheme must provide that, if it is wound up, the assets of the scheme must be applied first towards satisfying the amounts of liabilities mentioned in those paragraphs and, if they are insufficient to satisfy those amounts in full, then—

(i) they must be applied first towards satisfying the amounts of the liabilities mentioned in earlier paragraphs before those mentioned in later paragraphs, and

(ii) where the amounts of the liabilities mentioned in one of those paragraphs cannot be satisfied in full, those amounts must be satisfied in the same proportions; and”;

(b) in paragraph (5)(d) for the words “paragraph (b)" substitute the words “ paragraph (c) ”; and

(c) after paragraph (5) insert—

“(5A) For the purposes of paragraph (5)(c) and (ca), the reference to section 73(3) of the 1995 Act is to that section as modified by paragraphs (3) to (5) of regulation 3 of the Occupational Pension Schemes (Winding Up) Regulations 1996 M2 (whether or not the transitional period mentioned in paragraph (2) of that regulation has expired).”.

(10) In regulation 52 (payment of a contributions equivalent premium) after paragraph (1) insert—

“(1A) On an application made to him for that purpose, the Secretary of State may, in any particular case or class of case, extend the period within which a premium must be paid under paragraph (1)—

(a) if he is satisfied that the circumstances are such that payment of the premium could not reasonably be required to be made within that period, by a period not exceeding six months; and

(b) if he is satisfied that to require earlier payment would be prejudicial to the interests of the earner in respect of whom the premium is payable or of the generality of the members of the scheme, by such further period as he considers reasonable.”.

(11) In regulation 55 (scheme rules about guaranteed minimum pensions) for the words from “earners’s employment" to “1993 Act" substitute the words “ the employment of any earner who has a guaranteed minimum under section 14 of the 1993 Act in relation to a pension provided by the scheme it must include a rule to the effect that ”.

(12) In regulation 60 (trivial commutation of guaranteed minimum pensions)—

(a) in paragraph (3) for the words “paragraph (1)(c)" substitute the words “ paragraph (1)(b) ”; and

(b) in paragraph (4) for the words “paragraph (1)(b)" and “paragraph (1)(c)" substitute respectively the words “ paragraph (1)(a) ” and “ paragraph (1)(b) ”.

(13) In regulation 72 (transitional requirements as to sufficiency of resources of salary-related schemes)—

(a) for paragraph (2) substitute—

“(2) The liabilities referred to in paragraph (1) are the liabilities mentioned in paragraphs (a) to (e) of section 73(3) of the 1995 Act (as modified by paragraphs (3) to (5) of regulation 3 of the Occupational Pension Schemes (Winding Up) Regulations 1996).”;

(b) in paragraph (3) omit the words “Subject to paragraphs (4) and (5)"; and

(c) omit paragraph (4) and (5).

(14) In regulation 76A (transitional arrangements for schemes contracted-out under section 9(2) of the 1993 Act to become contracted-out under section 9(3) of that Act)—

(a) at the end of paragraph (3) add the words “ immediately before the principal appointed day ”;

(b) for paragraph (4) substitute—

“(4) Where a contracting-out certificate for a scheme to which this regulation applies (“the second certificate") is issued after the principal appointed day but not later than 31st January 1998 (or such later date as the Secretary of State may in his discretion permit in any particular case), then the contracting-out certificate in force immediately before the principal appointed day (“the first certificate") shall be deemed to continue in effect during the period beginning with the principal appointed day and ending with the time when the second certificate is issued or 31st January 1998, if it is earlier.

(5) Paragraph (4) does not apply if the first certificate was cancelled or surrendered before the end of that period.

(6) Paragraph (4) is without prejudice to the powers in regulations 8(2)(d) and 47(2) (retrospective effect of issue and cancellation of certificates).”.

(15) After that regulation insert—

“ Former requirements for consent for alterations of rules

76B.   Where any provision of a scheme provides that any alteration of the rules of the scheme, to which section 37(1) of the 1993 Act applied immediately before the principal appointed day, requires, or is void if made without, the consent of the Occupational Pensions Board, to the extent that it so provides it shall cease to have effect.”.

Marginal Citations

M1 S.I. 1996/1172. A relevant amending instrument is S.I. 1996/1577.

M2 S.I. 1996/3126.