The Occupational Pension Schemes (Contracting-out and Modification of Schemes) (Amendment) Regulations (Northern Ireland) 2012

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Occupational Pension Schemes (Contracting-out) Regulations (Northern Ireland) 1996 (“the Contracting-out Regulations”) and the Occupational Pension Schemes (Modification of Schemes) Regulations (Northern Ireland) 2006 (“the Modification of Schemes Regulations”).

Regulation 2 amends regulation 62 of the Contracting-out Regulations to provide for a new fixed rate percentage to be used for the revaluation of a person’s guaranteed minimum pension (if the scheme provides for revaluation by that method in accordance with section 12(2) of the Pension Schemes (Northern Ireland) Act 1993), if they leave contracted-out employment on or after 6th April 2012.

Regulation 3 inserts regulation 7A into the Modification of Schemes Regulations. Regulation 7A provides a power for trustees by resolution to modify their scheme rules for the purposes of amending or removing rules which make special provision for the protected rights of members, where those rules are no longer required, or where the rules no longer reflect a statutory provision, as a result of the coming into operation of the listed statutory provisions which implement the abolition of contracting-out on a defined contribution basis and the abolition of protected rights. Such a resolution must be passed by 6th April 2018 and any modifications must take effect from a date on or after the coming into operation of the statutory provisions to which they relate. The removal of rules relating to protected rights does not affect the member’s underlying entitlement to money purchase benefits under the scheme.

As these Regulations, in so far as they are made under the Pensions (Northern Ireland) Order 1995, 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 117(1) of that Order does not apply by virtue of paragraph (2)(e) of that Article.

An assessment of the cost to business of regulation 3 was included in the Regulatory Impact Assessment which accompanied the Statutory Rules which implement the abolition of contracting-out on a defined contribution basis and the abolition of protected rights (S.R. 2012 Nos. 120 and 124), a copy of which has been laid in the Business Office and the Library of the Northern Ireland Assembly. Copies of that Assessment are available from the Department for Social Development, Social Security Policy and Legislation Division, Level 1, James House, 2-4 Cromac Avenue, Gasworks Business Park, Ormeau Road, Belfast BT7 2JA or from the website: http://www.dsdni.gov.uk/index/ssa/ssani-publications/ssani-pensions-publications.htm. A copy of the Assessment is also annexed to the Explanatory Memorandum which is available alongside this Statutory Rule on the website: http://www.legislation.gov.uk/nisr.