The Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations (Northern Ireland) 2015

Notice of termination of employment5B

1

This regulation applies, subject to paragraph (3), where notice of termination of a worker’s employment is given before the end of the period of 6 weeks beginning with the automatic enrolment date or automatic re-enrolment date, as the case may be.

2

Where this regulation applies—

a

sections 3(2) (automatic enrolment) and 5(2) (automatic re-enrolment) are to be read as if for “must” there were substituted “may”;

b

section 7(3) (jobholder’s right to opt in) is to be read as if there were inserted at the end “unless notice of termination of employment of that jobholder has been given (and the jobholder and the employer have not agreed that such notice is withdrawn)”;

c

section 9(2) (workers without qualifying earnings) is to be read as if there were inserted at the end “unless notice of termination of employment of that worker has been given (and the worker and the employer have not agreed that such notice is withdrawn)”.

3

Where a jobholder and employer agree that the notice of termination of the jobholder’s employment referred to in this regulation is withdrawn, paragraphs (1) and (2) cease to apply on the date of that agreement and, subject to paragraph (4), for the purposes of sections 3(2) and 5(2), as the case may be—

a

the automatic enrolment date, or

b

the automatic re-enrolment date,

is the date of that agreement.

4

Where, on the date referred to in paragraph (3), section 3 or 5, as the case may be, does not apply to the jobholder, the next date on which one of those sections applies to that jobholder is to be taken as the automatic enrolment date or automatic re-enrolment date, as the case may be, in relation to that jobholder.

Former members5C

1

This regulation applies where a person (P) is a jobholder and—

a

P ceased to be an active member of a qualifying scheme because of an action or omission by P or an action by the employer at P’s request, or

b

at a time when P was a worker, but not a jobholder, ceased to be an active member of a scheme which would have been a qualifying scheme in relation to P, had P been a jobholder, because of an action or omission by P or an action by the employer at P’s request.

2

This regulation also applies where a jobholder gives notice under section 8 (jobholder’s right to opt out).

3

Where this regulation applies in relation to the jobholder mentioned in paragraph (1) or (2)—

a

during the period of 12 months beginning with the date that jobholder ceased to be an active member or gives notice, sections 3(2) (automatic enrolment) and 5(2) (automatic re-enrolment) are to be read as if for “must” there were substituted “may”, and

b

after the expiry of that period, section 3(2) does not apply.

Tax protection5D

1

This regulation applies where an employer has reasonable grounds to believe that one of the following provisions applies in relation to a jobholder—

a

paragraph 7 or 12 of Schedule 36 to the Finance Act 20046 (pension schemes etc: transitional provisions and savings);

b

paragraph 14 of Schedule 18 to the Finance Act 20117 (lifetime allowance charge);

c

paragraph 1 of Schedule 22 to the Finance Act 20138 (transitional provision relating to reduction in standard lifetime allowance etc);

d

paragraph 1 of Schedule 6 to the Finance Act 20149 (transitional provision relating to new standard lifetime allowance for the tax year 2014-15 etc).

2

Where this regulation applies, in relation to the jobholder referred to in paragraph (1), sections 3(2) (automatic enrolment) and 5(2) (automatic re-enrolment) are to be read as if for “must” there were substituted “may”.

Winding-up lump sum5E

1

This regulation applies to a worker where—

a

that worker has received a winding-up lump sum as defined in paragraph 1010 of Schedule 29 to the Finance Act 2004 (registered pension schemes: authorised lump sums - supplementary);

b

at the time the winding-up lump sum was paid, the worker was employed by the person mentioned in paragraph 10(1)(c) of Schedule 29 to the Finance Act 2004, and

c

since the winding-up lump sum was paid, the worker has ceased to be employed and been re-employed by that person.

2

In relation to the worker to whom this regulation applies—

a

during the period of 12 months beginning with the date on which the winding-up lump sum was paid—

i

sections 3(2) (automatic enrolment) and 5(2) (automatic re-enrolment) are to be read as if for “must” there were substituted “may”, and

ii

sections 7 (jobholder’s right to opt in) and 9 (workers without qualifying earnings) do not apply, and

b

after the expiry of that period, section 3(2) does not apply.

Effect of exercise of discretion5F

1

This regulation applies to an employer who—

a

exercises a discretion under section 3(2) (automatic enrolment) or 5(2) (automatic re-enrolment), as conferred by regulation 5B, 5C, 5D or 5E, so that the prescribed arrangements are made whereby the jobholder will become an active member of an automatic enrolment scheme;

b

makes the arrangements referred to in section 7(3) (jobholder’s right to opt in) for a jobholder, unless notice of termination of employment of that jobholder has been given (and the jobholder and the employer have not agreed that such notice is withdrawn), or

c

makes the arrangements referred to in section 9(2) (workers without qualifying earnings) for a worker, unless notice of termination of employment of that worker has been given (and the worker and the employer have not agreed that such notice is withdrawn).

2

In relation to the employer to whom this regulation applies, the employer is to be treated for all purposes as if the employer were acting under the duty which would apply by virtue of section 3(2) or 5(2) or were required to make the arrangements in section 7(3) or 9(2) but for the provisions of this Part.

Information to be given to workers21

At any time before the end of the period of 6 weeks beginning with the date on which section 7 (jobholder’s right to opt in) or section 9 (workers without qualifying earnings), as the case may be, first applies to a worker, the employer must give in writing—

a

to the jobholder to whom section 7 applies, the information described in—

i

paragraphs 16 and 24 of Schedule 2, or

ii

paragraphs 18 and 24 of Schedule 2, and

b

to the worker to whom section 9 applies, the information described in—

i

paragraphs 17 and 24 of Schedule 2, or

ii

paragraphs 18 and 24 of Schedule 2.

PART 7BAlternative quality requirements: UK defined benefits schemes

Alternative quality requirements for UK defined benefits schemes

32L

1

A defined benefits scheme that has its main administration in the United Kingdom satisfies the quality requirement15 in relation to a jobholder if section 23A(1)(a) (alternative quality requirements for UK defined benefits schemes) is satisfied and for the purpose of that section, the scheme is of a prescribed description if the conditions in paragraph (2) are satisfied.

2

The conditions referred to in paragraph (1) are—

a

the benefits provided to the member are calculated by reference to factors which include the contributions made to the scheme by or on behalf of or in respect of the member;

b

the contributions referred to in sub-paragraph (a) are converted in accordance with the scheme rules, as soon as reasonably practicable and no later than one month after their receipt into the scheme, into a right to an income for life;

c

the benefits payable to the member under the scheme are payable no later than the member’s pensionable age;

d

following any conversion referred to in sub-paragraph (b), the amount of the member’s benefits under the scheme cannot be reduced unless this is at the member’s request;

e

following any valuation of the scheme’s assets and determination of its liabilities, the trustees or managers of the scheme have absolute discretion to use any excess assets to increase the benefits of the members in relation to whose contributions the excess assets may be attributed, and

f

where a member’s benefits are increased using the excess assets referred to in sub-paragraph (e), the amount of those benefits cannot be reduced unless this is at the member’s request.

32M

1

A defined benefits scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if section 23A(1)(b)16 (alternative quality requirements for UK defined benefits schemes) is satisfied.

2

Terms defined for the purpose of section 23A have the meanings prescribed in the following paragraphs.

3

Subject to paragraphs (4) and (6), the relevant members are the active members of the defined benefits scheme of which the jobholder is a member.

4

Where there is or was, as the case may be, a material difference in the cost of providing the benefits accruing for different groups of relevant members over the relevant period by taking into account the criteria under which members accrue or accrued benefits including—

a

the rate at which benefits accrue or accrued;

b

the provision of survivor’s benefits;

c

the normal pension age;

d

the definition of “pensionable earnings” used by the scheme;

e

the method of revaluation provided for by Schedule 217 to the 1993 Act (methods of revaluing accrued pension benefits);

f

the method of an annual increase in the rate of pension provided for under Article 5118 of the 1995 Order (annual increase in rate of pension) or under the scheme rules;

g

the maximum pensionable service period;

h

the calculation of service, and

i

the terms for retirement before normal pension age,

the relevant members are the active members of each such group.

5

For the purposes of paragraph (4), whether a difference in cost is a material difference is to be determined by the actuary.

6

Subject to paragraph (4), in the case of a multi-employer scheme, the employer of the jobholder may choose that the relevant members are the active members who are also employed by that employer.

7

Subject to paragraph (8), the relevant period is—

a

where the most recent written report signed (including by way of an electronic signature (within the meaning given by section 7(2) of the Electronic Communications Act 200019) by an actuary provides details of the cost of accruals by reference to a period which begins later than the date of that report, that period, and

b

in any other case, any period of 12 months.

8

Where, after the date of the report referred to in paragraph (7)(a) or the period referred to in paragraph (7)(b) begins (whether or not it has ended), a change is made to the benefits provided to a relevant member, the relevant period is a period of 12 months commencing with the day on which that change takes effect.

9

Relevant earnings are the earnings which the scheme uses to determine pensionable earnings provided that they are the relevant member’s—

a

qualifying earnings;

b

pensionable earnings where those earnings are equal to or more than that member’s basic pay;

c

pensionable earnings where those earnings are equal to or more than that member’s basic pay and, taking all the relevant members together, the pensionable earnings of those members constitute at least 85% of the earnings of those members in the relevant period;

d

earnings where that member’s pensionable earnings are equal to the whole of that member’s earnings, or

e

basic pay above—

i

the amount of the lower earnings limit specified for the purposes of section 5(1)(a)(i)20 of the Contributions and Benefits Act (earnings limits and thresholds for Class 1 contributions), or

ii

the amount of the basic state pension specified in the first figure in section 44(4)21 of the Contributions and Benefits Act (Category A retirement pension).

10

Subject to paragraph (11), for the purposes of section 23A(1)(b), the prescribed percentage is, in relation to—

a

paragraph (9)(a) and (c), 10%;

b

paragraph (9)(b), 11%;

c

paragraph (9)(d), 9%, and

d

paragraph (9)(e), 13%.

11

Where the scheme does not provide pension benefits payable on the death of a relevant member, the respective percentages mentioned in paragraph (10) are to be reduced by 1%.

12

In this regulation—

• “actuary” means an actuary appointed by the scheme or the employer;

• “basic pay” means the gross earnings of the relevant member from their employment by the employer, disregarding the gross amount of—

  1. a

     any commission, bonuses, overtime or similar payments;

  2. b

     any shift premium pay, as defined in regulation 32K as if—

     1. i

        “jobholder” read “relevant member”, and

     2. ii

        “within a certification period” and “during the certification period” were omitted, and

  3. c

     any reasonable allowance with respect to—

     1. i

        any duty of the relevant member, such as a duty in connection with the role of fire or bomb warden, that is ancillary to the main duties of the relevant member’s employment;

     2. ii

        the cost of relocation of the relevant member to a different place of work;

     3. iii

        in a case not covered by sub-paragraph (ii), the purchase, lease or maintenance of a vehicle;

     4. iv

        in a case not covered by sub-paragraph (ii) or (iii), the purchase, lease or maintenance of an item;

     5. v

        in a case not covered by sub-paragraph (ii), (iii) or (iv), the delivery of a service to the relevant member;

• “multi-employer scheme” means an occupational pension scheme in relation to which there is more than one employer;

• “normal pension age” has the meaning given by section 175 of the 1993 Act;

• “pensionable earnings” means the gross earnings of the relevant member on which contributions are payable to the pension scheme in question by the employer or the relevant member.