The Pensions Regulator (Contribution Notices) (Sum Specified Following Transfer) Regulations (Northern Ireland) 2010

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations prescribe how, following a transfer of the accrued pension rights of two or more members of a defined benefit pension arrangement (“the initial scheme”) to a defined contribution pension arrangement (“the transferee scheme”), the Pensions Regulator (“the Regulator”) is to determine the sum specified in a contribution notice (“the sum”) issued in relation to the transferee scheme.

Regulation 1 provides for citation, commencement and interpretation.

Regulation 2 sets out how the Regulator is to determine the sum in cases where the transfer amounts to an act or failure to act falling within Article 34(5) of Pensions (Northern Ireland) Order 2005 (“the 2005 Order”). In these cases, the Regulator is to estimate what the full liabilities of the initial scheme would be at the time of the act or failure to act, were they to be calculated in accordance with Article 75 of the Pensions (Northern Ireland) Order 1995 (“the liabilities”), identify so much of the liabilities as are attributable to the members transferred, and deduct from those attributed liabilities the aggregate cash value of the transfer credits and rights acquired by the members transferred in the transferee scheme. The sum may be the whole or a specified part of the resulting amount. The Regulator may increase the liabilities by an amount it considers to be appropriate where it is satisfied that, otherwise than as a result of the transfer, the act or failure to act falling within Article 34(5) of the 2005 Order resulted in the amount of the liabilities being less than they would otherwise have been. The Regulator is required, in estimating the full liabilities of the initial scheme, to disregard the reduction in liabilities brought about by the transfer, and to calculate the aggregate cash value of the transfer credits and rights acquired in the transferee scheme as at the time of the acquisition of those credits and rights.

Regulation 3 sets out how the Regulator is to determine the sum in cases where the transfer does not amount to an act or failure to act falling within Article 34(5) of the 2005 Order. Here, the sum is to be either the whole or a specified part of that amount of the shortfall sum in the initial scheme at the relevant time which, in the opinion of the Regulator, is attributable to the members transferred. Subject to one minor qualification, “shortfall sum” has, for these purposes, the meaning set out in Article 35(2) of the 2005 Order. The minor qualification is that the Regulator is required, in identifying the shortfall sum, to disregard any reduction in liabilities brought about by the transfer.

As these Regulations make in relation to Northern Ireland only provision corresponding to provision contained in regulations made by the Secretary of State for Work and Pensions in relation to Great Britain, the requirement to consult under Article 289(1) of the 2005 Order does not apply by virtue of paragraph (2)(e) of that Article.