The Occupational Pension Schemes (Deficiency on Winding Up, etc.) Regulations (Northern Ireland) 1996

Schemes which are not money purchase schemes

Calculation of the value of scheme liabilities and assets

3.—(1) The liabilities and assets of a scheme which are to be taken into account for the purposes of Article 75(1) and their amount or value shall be determined, calculated and verified by the actuary—

(a) on the general assumptions specified in regulation 3(2) and (3) of the MFR Regulations;

(b) subject to paragraphs (3) and (4), in accordance with regulations 4 to 8 of the MFR Regulations;

(c) subject to sub-paragraph (d), in so far as the guidance given in GN 27 applies as respects regulations 3(2) and (3) and 4 to 8 of the MFR Regulations, in accordance with that guidance; and

(d) in accordance with the guidance given in GN 19 in so far as that guidance applies for the purposes of these Regulations;

and where in these Regulations (or in the MFR Regulations as applied by this paragraph) there is a reference to the value of any asset or the amount of any liability being calculated or verified in accordance with the opinion of the actuary or as he thinks appropriate, he shall comply with any relevant provision in the guidance given in GN 27 or, as the case may be, GN 19 in making that calculation or verification.

(2) The value of the assets and the amount of the liabilities of a scheme which are to be taken into account for the purposes of Article 75(1) must be certified by the actuary in the form set out in Schedule 1, but if the scheme is being wound up on the date as at which the valuation is made, the actuary shall modify the note at the end of the certificate by omitting the words from “if the scheme” onwards.

(3) For the purposes of this regulation—

(a) references in regulations 3(2), 4, 5, 7 and 8 of the MFR Regulations to the relevant date shall be taken as references to the applicable time;

(b) regulations 4(1), 7(1) and 8(2) of the MFR Regulations shall have effect with the substitution for “the minimum funding requirement is met” of “the value of the assets of the scheme is less than the amount of the liabilities of the scheme”;

(c) regulation 6(1)(b) of the MFR Regulations shall have effect with the addition, at the end, of “(and any amount treated as a debt due to the trustees or managers of the scheme under Article 75(1) by virtue of the valuation in question)”.

(4) In its application for the purposes of this regulation in a case where the applicable time falls after the scheme has begun to be wound up, regulation 6(1) of the MFR Regulations has effect with the addition, after sub-paragraph (c) of the words—

“and for the purposes of sub-paragraph (a), regulation 5(1)(a) of the Occupational Pension Schemes (Investment) Regulations (Northern Ireland) 1996(1) (exclusion of employer-related investments over 5 per cent. of current market value) shall be disregarded.”.

Multi-employer schemes

4.—(1) In its application to a scheme in relation to which there is more than one employer, Article 75 has effect with the following modifications.

(2) After paragraph (1) there shall be inserted the following paragraphs—

“(1A) In the case of a scheme in relation to which there is more than one employer, the amount of the debt due from each employer shall, unless the scheme provides for the total amount of the debt due under paragraph (1) to be otherwise apportioned amongst the employers, be such proportion of that total amount as, in the opinion of the actuary after consultation with the trustees or managers, the amount of the scheme’s liabilities attributable to employment with that employer bears to the total amount of the scheme’s liabilities attributable to employment with any of the employers.

(1B) Where a scheme in relation to which there is more than one employer is divided into two or more sections and the provisions of the scheme are such that—

(a) different sections of the scheme apply to different employers or groups of employers (whether or not more than one section applies to any particular employer or groups including any particular employer),

(b) contributions payable to the scheme by an employer, or by a member in employment under that employer, are allocated to that employer’s section (or, if more than one section applies to the employer, to the section which is appropriate in respect of the employment in question), and

(c) a specified part or proportion of the assets of the scheme is attributable to each section and cannot be used for the purposes of any other such section,

each section of the scheme shall be treated as a separate scheme for the purposes of this Article.

(1C) Where—

(a) a scheme which has been such a scheme as is mentioned in paragraph (1B) is divided into two or more sections some or all of which apply only to members who are not in pensionable service under the section, and

(b) the provisions of the scheme have not been amended so as to prevent the conditions mentioned in paragraph (1B)(a) to (c) being satisfied in relation to two or more sections, but

(c) those conditions have ceased to be satisfied in relation to one or more sections (whether before or after this Article came into operation) by reason only of there being no members in pensionable service under the section and no contributions which are to be allocated to it,

the section in relation to which those conditions have ceased to be satisfied shall be treated as a separate scheme for the purposes of this Article.”.

(3) For paragraph (3) there shall be substituted—

“(3) In this Article, “the applicable time” means—

(a) in relation to a scheme which is being wound up, any time—

(i) after the commencement of the winding up, and

(ii) before a relevant insolvency event has occurred in relation to each of the employers to whom the scheme relates, and

(b) in relation to a scheme which is not being wound up—

(i) in relation only to any employer who ceases to be a person employing persons in the description or category of employment to which the scheme relates at a time when at least one other person continues to employ such persons, immediately before he so ceases, and

(ii) in relation only to any employer in relation to whom a relevant insolvency event occurs, immediately before that event occurs.”.

(4) Where (apart from this paragraph) paragraph (1) does not apply to a scheme by reason of its not being a scheme in relation to which there is more than one employer but, if it did so, paragraph (1C) of Article 75 (as inserted by paragraph (2)) would apply to the scheme, that Article shall have effect with the modifications made by paragraphs (2) and (3).

(5) For the purposes of Article 75(1A) (as inserted by paragraph (2))—

(a) the total amount of the scheme’s liabilities which are attributable to employment with any of the employers; and

(b) the amount of the liabilities attributable to employment with any one employer,

shall be such amount as is determined, calculated and verified by the actuary in accordance with the guidance given in GN 19; and a determination under this paragraph must be certified by the actuary as being in accordance with that guidance.

Former employers

5.—(1) In the application of Article 75 and these Regulations to a scheme which has no active members, “the employer” includes every person who employed persons in the description or category of employment to which the scheme relates immediately before the occurrence of the event after which the scheme ceased to have any active members.

(2) In the application of Article 75 and these Regulations to a scheme, “the employer” includes any person who has ceased on or after 6th April 1997 and before the applicable time to be a person employing persons in the description or category of employment to which the scheme relates, unless—

(a) when he so ceased the scheme was not being wound up and continued to have active members; and

(b) one of the conditions in paragraph (3) is met.

(3) Those conditions are—

(a) that no debt was treated as becoming due from him under Article 75(1) by virtue of his so ceasing;

(b) that such a debt was treated as becoming due from him and has been paid before the applicable time;

(c) that such a debt was treated as becoming due from him but at the applicable time it is excluded from the value of the assets of the scheme by virtue of regulation 6(1)(b) of the MFR Regulations (exclusion of debts unlikely to be recovered).

Ceasing to participate: transitional provision

6.—(1) This regulation applies to a scheme if a person ceased to be a person employing persons in the description or category of employment to which the scheme relates during the period beginning on 19th December 1996 and ending with 5th April 1997 and at a time when the scheme was not being wound up and continued to have active members; and in this regulation “former participator” means a person who so ceased.

(2) In the application of Article 75 and these Regulations to a scheme to which this regulation applies, “employer” includes a former participator, unless before the applicable time a time which was the applicable time in relation to the former participator by virtue of paragraph (3) of this regulation has occurred and—

(a) no debt was then treated as due from him under Article 75(1);

(b) such a debt was then treated as becoming due from him and has been paid before the applicable time; or

(c) such a debt was then treated as becoming due from him but at the applicable time it is excluded from the value of the assets of the scheme by virtue of regulation 6(1)(b) of the MFR Regulations (exclusion of debts unlikely to be recovered).

(3) In the application of Article 75 and these Regulations to a scheme to which this regulation applies which is not being wound up, “the applicable time”, in relation to a former participator only, includes—

(a) the date by reference to which the earliest valuation required by Article 57(1)(a) for the scheme is made; or

(b) the earliest time when a debt is treated under Article 75(1) as becoming due from another person by virtue of Article 75(3)(b)(i) or (ii) (as substituted by regulation 4(3)),

whichever is the earlier.

(1)

S.R. 1996 No. 584