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The Pensions (Northern Ireland) Order 2005

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ReconsiderationN.I.

Application for reconsiderationN.I.

135.—(1 )F1 Where paragraph (2) or (3) applies in relation to an eligible scheme, the trustees or managers of the scheme may make an application to the Board under this Article for it to assume responsibility for the scheme in accordance with this Chapter.

(2) This paragraph applies where—

(a)a scheme failure notice has been issued under Article 106(2)(a) in relation to the scheme, that notice has become binding and the trustees or managers have received a copy of the binding notice under Article 109(3),

F1(b )[F2the determination made by the Board or valuation obtained by the Board in respect of the scheme under Article 127(2)] has become binding, and

(c )F1the Board would have been required to assume responsibility for the scheme under Article 111 but for the fact that the condition in paragraph (2)(a) of that Article was not satisfied.

(3) This paragraph applies where—

(a)the Board has issued a scheme failure notice under paragraph (2) of Article 114 in relation to the scheme, that notice has become binding and the trustees or managers have received a copy of the binding notice under paragraph (7) of that Article,

F1(b )[F3the determination made by the Board or valuation obtained by the Board in respect of the scheme under Article 127(2)] has become binding, and

(c )F1the Board would have been required to assume responsibility for the scheme under Article 112 but for the fact that the condition in paragraph (2)(a) of that Article was not satisfied.

(4) An application under this Article must be in the prescribed form, contain the prescribed information and be accompanied by—

(a)a protected benefits quotation in the prescribed form, [F4or evidence in the prescribed form which shows that the trustees or managers of the scheme have taken all reasonable steps to obtain a protected benefits quotation but were unable to do so,] and

(b)audited scheme accounts for a period which—

(i)begins with such date as may be determined in accordance with regulations, and

(ii)ends with a date which falls within the prescribed period ending with the day on which the application is made.

(5) An application under this Article must be made within the authorised period.

(6) In this Article “the authorised period” means the prescribed period which begins—

(a)where paragraph (2) applies, with the later of—

(i)the day on which the trustees or managers received the copy of the binding notice mentioned in sub-paragraph (a) of that paragraph, and

(ii)the day on which they received a copy of the binding [F5determination or] valuation mentioned in sub-paragraph (b) of that paragraph, and

(b)where paragraph (3) applies, with the later of—

(i)the day on which the trustees or managers received the copy of the binding notice mentioned in sub-paragraph (a) of that paragraph, and

(ii)the day on which they received a copy of the binding [F6determination or] valuation mentioned in sub-paragraph (b) of that paragraph.

(7) Where the Board receives an application under paragraph (1), it must give a copy of the application to the Regulator.

(8 )F1 F7For the purposes of this Article—

  • “audited scheme accounts”, in relation to a scheme, means—

    (a)

    accounts obtained by the trustees or managers of the scheme ( “the scheme accounts”) which are prepared in accordance with paragraphs (9) to (11) and audited by the auditor in relation to the scheme, and

    (b)

    a report by the auditor, in the prescribed form, as to whether or not such requirements as may be prescribed are satisfied in relation to the scheme accounts;

  • “auditor”, in relation to a scheme, has the meaning given by Article 47 of the 1995 Order;

  • “protected benefits quotation”, in relation to a scheme, means a quotation for one or more annuities from one or more insurers, being companies willing to accept payment in respect of the members from the trustees or managers of the scheme, which would provide in respect of each member of the scheme from the reconsideration time—

    (a)

    benefits for or in respect of the member corresponding to the compensation which would be payable to or in respect of the member in accordance with the pension compensation provisions if the Board assumed responsibility for the scheme by virtue of this Article, or

    (b)

    benefits in accordance with the member's entitlement or accrued rights (including pension credit rights within the meaning of Article 121(1) of the 1995 Order) under the scheme rules (other than his entitlement or rights in respect of money purchase benefits),

    whichever benefits can, in the case of that member, be secured at the lower cost;

  • “the reconsideration time”, in relation to an application under this Article, means the time immediately before the end of the period to which the audited scheme accounts mentioned in paragraph (4)(b) relate.

(9) The scheme accounts are prepared in accordance with this paragraph if, subject to paragraphs (10) and (11), they—

(a )F1include a statement of the assets of the scheme (excluding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules) as at the reconsideration time, and

(b)are prepared in accordance with such other requirements as may be prescribed.

(10) Subject to paragraph (11), regulations under paragraph (4) of Article 127 (other than regulations made by virtue of paragraph (5) of that Article), and guidance under paragraph (6) of that Article, apply to the scheme accounts as they apply for the purposes of a valuation [F8under Article 127(2)(b)].

(11) Regulations may provide that, where an asset of a prescribed description has been acquired during the assessment period, the value assigned to the asset as at the reconsideration time is to be determined, for the purposes of the scheme accounts, in the prescribed manner.

(12) For the purposes of this Article—

(a)regulations may prescribe how the cost of securing the benefits mentioned in paragraph (a) of the definition of “protected benefits quotation” in paragraph (8) is to be determined, calculated and verified, and

(b)subject to any provision made under sub-paragraph (a), that cost is to be determined, calculated and verified in accordance with guidance issued by the Board.

(13) Where the scheme is being wound up, for the purposes of determining the benefits which fall within paragraph (b) of the definition of “protected benefits quotation” in paragraph (8) no account is to be taken of the winding up of the scheme.

F1mod. by SR 2005/55

F2Words in art. 135(2)(b) substituted (2.7.2012 for specified purposes, 23.7.2012 in so far as not already in operation) by Pensions Act (Northern Ireland) 2012 (c. 3), s. 34(3), Sch. 4 para. 9(2); S.R. 2012/265, art. 2(3)(a)(ii)

F3Words in art. 135(3)(b) substituted (2.7.2012 for specified purposes, 23.7.2012 in so far as not already in operation) by Pensions Act (Northern Ireland) 2012 (c. 3), s. 34(3), Sch. 4 para. 9(2); S.R. 2012/265, art. 2(3)(a)(ii)

F4Words in art. 135(4)(a) inserted (2.7.2012 for specified purposes, 23.7.2012 in so far as not already in operation) by Pensions Act (Northern Ireland) 2012 (c. 3), s. 34(3), Sch. 4 para. 14; S.R. 2012/265, art. 2(3)(a)(iii)

F5Words in art. 135(6)(a)(ii) inserted (2.7.2012 for specified purposes, 23.7.2012 in so far as not already in operation) by Pensions Act (Northern Ireland) 2012 (c. 3), s. 34(3), Sch. 4 para. 9(3); S.R. 2012/265, art. 2(3)(a)(ii)

F6Words in art. 135(6)(b)(ii) inserted (2.7.2012 for specified purposes, 23.7.2012 in so far as not already in operation) by Pensions Act (Northern Ireland) 2012 (c. 3), s. 34(3), Sch. 4 para. 9(3); S.R. 2012/265, art. 2(3)(a)(ii)

F7mod. by SR 2005/91

F8Words in art. 135(10) substituted (2.7.2012 for specified purposes, 23.7.2012 in so far as not already in operation) by Pensions Act (Northern Ireland) 2012 (c. 3), s. 34(3), Sch. 4 para. 9(4); S.R. 2012/265, art. 2(3)(a)(ii)

Modifications etc. (not altering text)

Commencement Information

I1Art. 135 partly in operation; art. 135 not in operation at date of making see art. 1(2); art. 135(4)(6)(9)(b) in operation for certain purposes at 25.2.2005 and wholly in operation at 6.4.2005 by S.R. 2005/48, art. 2(4), Sch. Pt. 4; art. 135(8) partly in operation at 25.2.2005 and 6.4.2005 by S.R. 2005/48, art. 2(4), Sch. Pt. 4; art. 135 partly in operation at 6.4.2005 by S.R. 2005/48, art. 2(7), Sch. Pt. 7; art. 135(8) in operation at 1.4.2006 in so far as not already in operation by S.R. 2006/95, art. 2(b), Sch. Pt. 2

Duty to assume responsibility following reconsiderationN.I.

136.—(1 )F9 This Article applies where an application is made in respect of a scheme in accordance with Article 135.

[F10(1A) Paragraph (2) applies where the application is accompanied by a protected benefits quotation.]

(2 )F11 F9The Board must assume responsibility for the scheme in accordance with this Chapter if it is satisfied that the value of the assets of the scheme at the reconsideration time is less than the aggregate of—

(a)the amount quoted in the protected benefits quotation accompanying the application,

(b)the amount at that time of the liabilities of the scheme which are not liabilities to, or in respect of, members of the scheme, and

(c)the estimated costs of winding up the scheme at that time.

[F12(2A) Paragraph (2B) applies where—

(a)the application is accompanied by evidence in the prescribed form which shows that the trustees or managers of the scheme have taken all reasonable steps to obtain a protected benefits quotation but were unable to do so, and

(b)the Board is satisfied that that is the case.

(2B) The Board must assume responsibility for the scheme in accordance with this Chapter if it is satisfied that the value of the assets of the scheme at the reconsideration time is less than the amount of the protected liabilities at that time.]

(3) Where the Board makes a determination for the purposes of paragraph (2) [F13or (2B)], it must issue [F14a notice to that effect (a “determination notice”)] and give a copy of that notice to—

(a)the trustees or managers of the scheme, and

(b)the Regulator.

F15(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5 )F11 But where the Board is satisfied of the matters mentioned in paragraph (2) [F16or (2B)], it is not required to assume responsibility for the scheme [F17under that paragraph] until the determination notice issued under paragraph (3) becomes binding.

(6) For the purposes of paragraph (5) a determination notice is not binding until—

(a)the period within which the issue of the notice may be reviewed by virtue of Chapter 6 has expired, and

(b)if the issue of the notice is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of and the notice has not been revoked, varied or substituted.

(7) Where a determination notice issued under paragraph (3) becomes binding, the Board must as soon as reasonably practicable give a notice to that effect together with a copy of the binding notice to—

(a)the trustees or managers of the scheme, and

(b)the Regulator.

F18(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) The Board may—

(a )F11for the purposes of paragraph (2), obtain its own valuation of the assets of the scheme as at the reconsideration time (within the meaning of Article 135), and

(b )F11for the purposes of paragraph (2)(b), obtain its own valuation of the liabilities of the scheme as at that time;

and where it does so, paragraphs (9)(b), (10) and (11) of Article 135 apply in relation to the valuation as they apply in relation to the scheme accounts (within the meaning of that Article).

(10) [F19Where paragraph (2) applies, regulations] under paragraph (4) of Article 127, and guidance under paragraph (6) of that Article, apply for the purposes of this Article in relation to the estimated costs within paragraph (2)(c) as they apply for the purposes of Article 127 in relation to protected liabilities within Article 115(1)(c).

[F20(10A) The Board may, for the purposes of paragraph (2B), obtain its own valuation of the assets of the scheme and the protected liabilities of the scheme as at the reconsideration time (within the meaning of Article 135).

(10B) A valuation under paragraph (10A) must be prepared in accordance with such requirements as may be prescribed.

(10C) Article 127(3) to (6) applies in relation to a determination under paragraph (2B) and a valuation under paragraph (10A) as it applies in relation to a determination under Article 127(2)(a) and an actuarial valuation obtained under Article 127(2)(b).

(10D) In the application of Article 127 by virtue of paragraph (10C)—

(a)references to the relevant time are to be read as references to the reconsideration time (within the meaning of Article 135), and

(b)references to the pre-approval period are to be read as references to the period which begins immediately after the reconsideration time, and ends immediately before the Board first issues a determination notice under this Article.]

(11 )F11 In this Article references to the assets of the scheme do not include assets representing the value of any rights in respect of money purchase benefits under the scheme rules.

(12) This Article is subject to Articles 130 and 131 (refusal to assume responsibility for a scheme).

F9mod. by SR 2005/91

F11mod. by SR 2005/55

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