The Occupational and Stakeholder Pension Schemes (Miscellaneous Amendments) Regulations (Northern Ireland) 2013

Citation, commencement and interpretation

1.—(1) These Regulations may be cited as the Occupational and Stakeholder Pension Schemes (Miscellaneous Amendments) Regulations (Northern Ireland) 2013 and shall come into operation on 6th April 2013.

(2) The Interpretation Act (Northern Ireland) 1954(1) shall apply to these Regulations as it applies to an Act of the Assembly.

Amendment of the Occupational Pension Schemes (Preservation of Benefit) Regulations

2.—(1) The Occupational Pension Schemes (Preservation of Benefit) Regulations (Northern Ireland) 1991(2) are amended in accordance with paragraphs (2) to (4).

(2) In regulation 1(2)(3) (interpretation) after the definition of “the Act” insert—

““European pensions institution” has the meaning given in Article 269(8) of the Pensions (Northern Ireland) Order 2005(4);”.

(3) After regulation 11A(5) (further alternative to short service benefit – transfer to an overseas arrangement) insert—

“Further alternative to short service benefit – transfer to a European pensions institution without consent

11B.— (1) For the purposes of section 69(2)(b) and (4)(b) (form of short service benefit and its alternatives), a scheme may, instead of providing short service benefit, provide for the transfer of the member’s accrued rights to a European pensions institution without the member’s consent where the conditions in regulation 12(2)(6) and (3)(7) are satisfied.

(2) For the purposes of paragraph (1) of this regulation, the references to “receiving scheme” in regulation 12(2), (3) and (4A)(8) are to be read as references to “receiving European pensions institution”.

(3) Where it is proposed that a member’s accrued rights are to be transferred in accordance with this regulation, information about the proposed transfer and details of the value of the rights to be transferred (including rights in respect of death in service benefits and survivors’ benefits) shall be furnished to the member not less than one month before the date on which the proposed transfer is due to take place.”.

(4) In regulation 12(2)(a) and (b) (transfer of member’s accrued rights without consent) for “apply to” substitute “relate to persons who are or have been in”.

Amendment of the Occupational Pension Schemes (Contracting-out) Regulations

3.  In regulation 42 of the Occupational Pension Schemes (Contracting-out) Regulations (Northern Ireland) 1996(9) (alteration of rules of contracted-out schemes)—

(a) in paragraph (1)(10) after “paragraph (2)” insert “, (2ZA)”;

(b) in paragraph (2) for “section 5(2B) rights under the scheme” substitute “rights which are to accrue under the scheme in so far as such rights are attributable to an earner’s service in contracted-out employment on or after the date on which the alteration to the rules takes effect (other than rights attributable to the payment of voluntary contributions)”;

(c) after paragraph (2) insert—

“(2ZA) The rules of a salary related contracted-out scheme cannot be altered in relation to any section 5(2B) rights(11) under the scheme unless—

(a) following the alteration, the scheme provides benefits, for the member and for that member’s widow, widower or surviving civil partner, in respect of the period of pensionable service to which the alteration relates and in which the member’s employment was contracted-out under section 5(2B)(12) of the Act (requirements for certification of schemes: general) which are at least equal to the benefits that would be provided by a reference scheme (within the meaning of section 8B(2)(13) of the Act);

(b) the alteration is one to which Article 67(14) of the Order (the subsisting rights provisions) does not apply;

(c) the alteration is one which is not a protected modification or a detrimental modification within the meaning given in Article 67A of the Order (the subsisting rights provisions: interpretation), or

(d) if the alteration is a detrimental modification within the meaning of Article 67A of the Order, the actuarial equivalence requirements provided for in Articles 67C and 67D of the Order (the actuarial equivalence requirements and further provisions) are met in relation to the proposed modification of those rights.

(2ZB) In the case of alterations falling within paragraph (2ZA)(c) or (d), but not falling within paragraph (2ZA)(a) or (b)—

(a) subject to sub-paragraph (b) of this paragraph, the altered scheme must provide for a pension to be paid to the member’s widow, widower or surviving civil partner in respect of the period in which the member’s employment was contracted-out under section 5(2B) of the Act (“the relevant survivor’s post-1997 pension”) which is at least as generous, either as regards the amount of the pension or as regards the circumstances in which it shall be paid, as it would have been before the alteration;

(b) in relation to a member who is an active member of the scheme immediately before the alteration takes effect, the requirement in sub-paragraph (a) of this paragraph shall be deemed to be satisfied if the relevant survivor’s post-1997 pension which the scheme would provide in respect of the member if the member left pensionable service immediately after the alteration is at least as generous as the relevant survivor’s post-1997 pension which the scheme would have provided in respect of the member had the member left service immediately before the alteration.

(2ZC) In paragraph (2ZB)(b) “active member” means a person who is in pensionable service under the scheme.”.

Amendment of the Contracting-out (Transfer and Transfer Payment) Regulations

4.—(1) The Contracting-out (Transfer and Transfer Payment) Regulations (Northern Ireland) 1996(15) are amended in accordance with paragraphs (2) and (3).

(2) In regulation 1(2) (interpretation) for the definition of ““connected employer transfer” and “connected employer transfer payment””(16) substitute—

““connected employer transfer” and “connected employer transfer payment” mean respectively a transfer of guaranteed minimum pensions from a salary related contracted-out scheme to a salary related contracted-out scheme and a transfer payment in respect of section 5(2B) rights(17) from a salary related contracted-out scheme to a salary related contracted-out scheme where either—

(a)

the transferring scheme and the receiving scheme relate to persons who are or have been in employment with the same employer, or

(b)

the transferring scheme and receiving scheme relate to persons who are or have been in employment with different employers, and the earner or person concerned is one of a group of persons in respect of whom transfers or transfer payments are being made from the transferring scheme to the receiving scheme and either—

(i)

the transfer or transfer payment is a consequence of a financial transaction between the employers, or

(ii)

each of the employers is one of a group of companies consisting of a holding company and one or more subsidiaries within the meaning of section 1159(1) of the Companies Act 2006(18),

and in this definition “salary related contracted-out scheme” includes a scheme which was formerly a salary related contracted-out scheme..”.

(3) In regulations 4 (connected employer transfers of guaranteed minimum pensions), 7(2)(b) (transfers of liability in respect of section 5(2B) rights: general ) and 9 (connected employer transfer payments ) omit “to a salary related contracted-out scheme”.

Amendment of the Occupational Pension Schemes (Transfer Values) Regulations

5.  In regulation 2 of the Occupational Pension Schemes (Transfer Values) Regulations (Northern Ireland) 1996(19) (pre-1986 leavers)—

(a) the existing provision shall be numbered paragraph (1);

(b) in paragraph (1)(b), for “the rate of inflation as measured by the retail prices index” substitute “a rate that maintains the value of pensions or other benefits by reference to the rise in the general level of prices”;

(c) after paragraph (1) add—

“(2) For the purposes of paragraph (1)(b), “a rate that maintains the value of pensions or other benefits by reference to the rise in the general level of prices” shall be construed in accordance with regulation 2(b) of the Occupational Pension Schemes (Transfer Values) Regulations 1996(20) (pre-1986 leavers).”.

Amendment of the Occupational Pension Schemes (Winding Up) Regulations

6.  In regulation 6(4) of the Occupational Pension Schemes (Winding Up) Regulations (Northern Ireland) 1996(21) (arrangements for discharge of liabilities under Article 74)—

(a) after “regulation” insert “11B or”;

(b) before “transfer of member’s” insert “further alternative to short service benefit – transfer to a European pensions institution and”.

Amendment of the Pension Sharing (Pension Credit Benefit) Regulations

7.  For regulation 32 of the Pension Sharing (Pension Credit Benefit) Regulations (Northern Ireland) 2000(22) (increase of relevant pension) substitute—

“Increase of relevant pension

32.— (1) Subject to regulations 33 and 34, a relevant pension shall be increased each year by either—

(a) the appropriate percentage, or

(b) where the rules of an occupational pension scheme require the relevant pension to be increased at intervals of not more than 12 months, the relevant percentage.

(2) A relevant pension shall not be increased under paragraph (1) if, under the rules of the occupational pension scheme, it is for the time being increased, and since the relevant date has always been increased, at intervals of not more than 12 months by at least—

(a) the percentage increase in the retail prices index for the reference period, being a period determined, in relation to each periodic increase, under the rules of the scheme, or

(b) if lower, the default percentage for that period.

(3) In paragraph (2) “the relevant date” means—

(a) 1st January 2011 or, if later, the date on which the relevant pension became a pension in payment, or

(b) if the relevant pension was transferred to the occupational pension scheme from another occupational pension scheme as a pension in payment after 1st January 2011, the date of the transfer.

(4) If the relevant pension was transferred to the occupational pension scheme as mentioned in paragraph (3)(b), paragraph (2) does not apply to the relevant pension unless, immediately before the transfer, paragraph (2) (read with this paragraph if relevant) applied to the relevant pension by reference to the scheme from which it was transferred.

(5) In this regulation the default percentage for a period is the percentage for that period which corresponds to—

(a) 5 per cent. per annum in a case where—

(i) the relevant pension is in payment before 6th April 2005, or

(ii) the relevant pension is not in payment before 6th April 2005 but the entitlement to the relevant pension credit arose before that day;

(b) 2.5 per cent. per annum in a case where the entitlement to the relevant pension credit arises on or after 6th April 2005.

(6) This regulation does not apply to a relevant pension provided to give effect to eligible pension credit rights of a member under a qualifying occupational pension scheme which—

(a) is a cash balance benefit, and

(b) first comes into payment on or after 6th April 2013.

(7) In this regulation—

“appropriate percentage” means—

(a)

in a case where entitlement to the relevant pension credit arose before 6th April 2005, the higher revaluation percentage, and

(b)

in a case where entitlement to the relevant pension credit arose on or after 6th April 2005, the lower revaluation percentage,

for the latest revaluation period specified in the order under paragraph 2 of Schedule 2(23) to the Act (methods of revaluing accrued pension benefits) which is in operation at the time of the increase (expressions used in this definition having the same meaning as in that paragraph);

“cash balance benefit” has the same meaning as in Article 51ZB(24);

“consumer prices index” means—

(a)

the general index of consumer prices (for all items) published by the Statistics Board(25), or

(b)

where that index is not published for a month, any substituted index or figures published by the Board;

“relevant percentage” means—

(a)

the percentage increase in the consumer prices index for the reference period, being a period determined, in relation to each periodic increase, under the rules of the scheme, or

(b)

if lower, the default percentage for that period;

“retail prices index” means—

(a)

the general index of retail prices (for all items) published by the Statistics Board, or

(b)

where that index is not published for a month, any substituted index or figures published by the Board.”.

Amendment of the Stakeholder Pension Schemes Regulations

8.—(1) The Stakeholder Pension Schemes Regulations (Northern Ireland) 2000(26) are amended in accordance with paragraphs (2) to (4).

(2) In regulation 2 (manner of establishment) for paragraphs (2)(27) and (3) substitute—

“(2) The manager of the scheme must be a person who is mentioned in section 154(1)(b) of the Finance Act 2004(28) (persons by whom registered pension scheme may be established).”.

(3) In regulation 14(5)(29) (charges etc. – permitted reductions in members’ rights)—

(a) at the end of sub-paragraph (f) add “and”;

(b) at the end of sub-paragraph (g) omit “and”.

(4) In regulation 24(30) (payroll deduction of contributions)—

(a) in paragraphs (1) and (2)(b) omit “make or”;

(b) in paragraph (2) for “make, vary or cease”, in each place where it occurs, substitute “vary”;

(c) in paragraphs (2)(c)(i) and (2B)(d)(i) omit “if that further request is made within 6 months of the employee requesting that the deductions cease”;

(d) in paragraphs (2)(c)(ii) and (2B)(d)(ii) after “the employee may” insert “be able to”.

(e) in paragraph (3)—

(i) at the end of sub-paragraph (a)(ii) omit “and”;

(ii) omit sub-paragraph (b);

(f) omit paragraph (4);

(g) after paragraph (5) insert—

“(5A) Where an employer has withdrawn his designation of a stakeholder pension scheme that has been designated by him for the purposes of Article 5(2)(31) for reasons beyond his control, the employer must immediately cease deducting contributions from the employee’s remuneration and notify the employee in writing as soon as is practicable that designation of that scheme has been withdrawn and deduction of contributions has ceased.

(5B) Where an employer—

(a) is notified that a stakeholder pension scheme that has been designated by the employer for the purposes of Article 5(2) has commenced winding up, or

(b) withdraws designation of a stakeholder pension scheme that has been designated by the employer for the purposes of Article 5(2) for reasons beyond the employer’s control,

the employer need not comply with the requirement in Article 5(5)(32).”;

(h) in paragraph (6) for “(2), (2B) and (3)” substitute “(2) and (2B)”;

(i) in paragraph (7) omit “and in regulation 25”.

Amendment of the Occupational Pension Schemes (Modification of Schemes) Regulations

9.  In regulation 3(e)(ii) of the Occupational Pension Schemes (Modification of Schemes) Regulations (Northern Ireland) 2006(33) (non-application of the subsisting rights provisions)—

(a) after “regulation” insert “11B or”;

(b) before “transfer of member’s” insert “further alternative to short service benefit – transfer to a European pensions institution and”.

Revocations

10.  The following provisions are revoked—

(a) the definition of “the Taxes Act” in regulation 1(3) and regulations 14(5)(h), 22 and 23 of, and paragraph 2(k) of Schedule 3 to, the Stakeholder Pension Schemes Regulations (Northern Ireland) 2000;

(b) regulation 2 of the Stakeholder Pension Schemes (Amendment) Regulations (Northern Ireland) 2001(34);

(c) regulations 14 and 15 of the Stakeholder Pension Schemes (Amendment No. 2) Regulations (Northern Ireland) 2001(35);

(d) regulation 15 of the Personal and Occupational Pension Schemes (Indexation and Disclosure of Information) (Miscellaneous Amendments) Regulations (Northern Ireland) 2005(36);

(e) regulation 5 of the Occupational and Personal Pension Schemes (Miscellaneous Amendments) Regulations (Northern Ireland) 2009(37).

Sealed with the Official Seal of the Department for Social Development on 15th March 2013

(L.S.)

Anne McCleary

A senior officer of the Department for Social Development