EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations impose obligations on trustees or managers of certain occupational pension schemes in relation to the disclosure of information about transaction costs and charges imposed on members by those schemes. These Regulations implement the duty on the Department for Communities (“the Department”) imposed by section 109 of the Pension Schemes (Northern Ireland) Act 1993 (“the 1993 Act”), as amended by section 43 of the Pensions Act (Northern Ireland) 2015 (“the 2015 Act”), to make regulations requiring the giving and publication of information about administration charges and transaction costs. In addition, they impose obligations concerning the disclosure of information about the pooled funds in which assets are invested by the scheme on behalf of members.
Regulation 1 deals with the coming into operation of these Regulations. In particular, it provides for these Regulations to come into operation from a later date in certain cases where the scheme year ends before 6th April 2018.
Regulation 2 amends regulation 23 of the Occupational Pension Schemes (Scheme Administration) Regulations (Northern Ireland) 1997 (“the Administration Regulations”) which relates to the annual statement regarding governance. The effect of the amendments is to require the trustees or managers of a relevant pension scheme to provide information, in so far as the information relates to the provision of money purchase benefits, about the level of costs and transaction charges applicable to each default arrangement and each fund which members are able to select and in which assets relating to members are invested during the scheme year. A relevant scheme is defined in regulation 1(2) of the Administration Regulations and (with certain exceptions) means an occupational pension scheme which provides money purchase benefits. The trustees or managers of the scheme are also required to provide an illustrative example of the compounding effect of such charges and transaction costs. In complying with these requirements, the trustees or managers must have regard to guidance published from time to time by the Department.
Regulation 3 amends the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations (Northern Ireland) 2014 (“the Disclosure Regulations”). The principal effect of these amendments is to require the trustees or managers of a relevant scheme to publish the information which must be included in the annual statement relating to the default arrangement and charges and transaction costs free of charge on a publicly available website (regulation 3(6)). This includes information about the extent to which the trustees or managers consider the charges and transaction costs represent good value for money. The information must be published in accordance with guidance published from time to time by the Department. It must, however, be given in hard copy form if the trustees or managers are satisfied that it would be unreasonable to require the person to obtain it via the website chosen by the trustees or managers of the scheme.
Regulation 3(3) inserts regulation 12A into the Disclosure Regulations and regulation 3(7) amends Schedule 3 to those Regulations to add to the information that trustees or managers of a relevant pension scheme are required to provide on request. In the case of a relevant scheme, it requires the international securities identification numbers (“the ISIN”) to be provided to members and recognised trade unions in relation to certain securities in which funds are invested by the scheme on behalf of the member to provide money purchase benefits.
Regulation 3(8) adds to the information that trustees or managers of a relevant scheme are required to include in an annual statement of money purchase benefits (see regulation 17 of, and Part 1 of Schedule 6 to, the Disclosure Regulations). It requires the trustees or managers to give the member certain information about where the additional information required to be disclosed as a result of these Regulations can be obtained.
The Pensions (2015 Act) (Commencement No. 6) Order (Northern Ireland) 2018 (S.R. 2018 No. 41 (C. 4)) provides for the coming into operation of section 43 of the 2015 Act, which inserts section 109(5) to (7) into the 1993 Act, some of the enabling provisions under which these Regulations are made, on 9th March 2018.
The Pension Schemes (2016 Act) (Commencement No. 1) Order (Northern Ireland) 2018 (S.R. 2018 No. 43 (C. 5)) provides for the coming into operation of section 38(4) of the Pension Schemes Act (Northern Ireland) 2016, which inserts section 109(2A) into the 1993 Act, another of the enabling provisions under which these Regulations are made, on 9th March 2018.
An assessment of the impact of these Regulations is detailed in a Regulatory Impact Assessment, a copy of which is laid in the Business Office and the Library of the Northern Ireland Assembly and is also annexed to the Explanatory Memorandum which is available alongside this Statutory Rule on the website: http://www.legislation.gov.uk/nisr. Copies of the Assessment and the Guidance “Cost and charge reporting: guidance for trustees and managers of occupational schemes” are available from the Department for Communities, Social Security Policy and Legislation Division, Level 8, Causeway Exchange, 1-7 Bedford Street, Belfast BT2 7EG or from the website: https://www.communities-ni.gov.uk/articles/pension-information.