The Pension Protection Fund (Multi-employer Schemes) (Modification) Regulations 2005

Modification of sections 175 to 181 of the Act: multi-employer sections of segregated schemes U.K.

75.—(1) This regulation applies to a multi-employer section of a segregated scheme.

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

(a) in the case of a section of a scheme to which this regulation applies, the rules of which contain a requirement for the trustees or managers to segregate such part of the assets as is attributable to the liabilities of the section to provide pensions or other benefits to or in respect of the pensionable service of some or all of the members of the section by reference to an employer in relation to that section which would be triggered when an employer in relation to the section ceased to participate in the scheme, for paragraph (a) of subsection (2), there were substituted the following paragraph—

“(a) [F1 a risk-based pension protection levy is a levy assessed by reference to]—

(i) the difference between the value of the assets of the section (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, whether or not the scheme rules relating to the section contain a requirement for the trustees or managers of the scheme to segregate such part of the assets of the section as is attributable to the liabilities of the section 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 section in circumstances where that employer ceases to participate in the scheme,

(iii) except in relation to any prescribed section or section of a prescribed description, the likelihood of an insolvency event occurring in relation to each employer in relation to the section, 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 section of a scheme to which this regulation applies, 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 section to provide pensions or other benefits to or in respect of the pensionable service of some or all of the members of the section by reference to an employer in relation to that section when an employer in relation to the section ceases to participate in the scheme, for paragraph (a) of subsection (2), there were substituted the following paragraph—

“(a) [F1 a risk-based pension protection levy is a levy assessed by reference to]—

(i) the difference between the value of the assets of the section (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, whether or not the scheme rules relating to the section contain a requirement for the trustees or managers of the scheme to segregate such part of the assets of the section as is attributable to the liabilities of the section 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 section in circumstances where that employer ceases to participate in the scheme,

(iii) except in relation to any prescribed section or section of a prescribed description, the likelihood of an insolvency event occurring in relation to each employer in relation to the section, and

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

(c) in the case of a section of a scheme to which this regulation applies, the rules of which do not contain a requirement for the trustees or managers to segregate such part of the assets as is attributable to the liabilities of the section to provide pensions or other benefits to or in respect of the pensionable service of some or all of the members of the section by reference to an employer in relation to that section which would be triggered when an employer in relation to the section ceased to participate in the scheme, for paragraph (a) of subsection (2), there were substituted the following paragraph—

“(a) [F1 a risk-based pension protection levy is a levy assessed by reference to]—

(i) the difference between the value of the assets of the section (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) except in relation to any prescribed section or section of a prescribed description, the likelihood of an insolvency event occurring in relation to all the employers in relation to the section, and

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

Textual Amendments

F1 Words in reg. 75(2)(a) substituted (1.4.2005) by The Occupational Pension Schemes and Pension Protection Fund (Amendment) Regulations 2005 (S.I. 2005/993), regs. 1(1), 5(10)(c)

Modifications etc. (not altering text)

C1 Reg. 75 excluded (with application in accordance with reg. 5(1) of the amending S.I.) by The Occupational Pension Schemes (Pension Protection Levies) (Transitional Period and Modification for Multi-employer Schemes) Regulations 2006 (S.I. 2006/566), regs. 1(1), 6