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E+W+S+N.I.

Pensions Act 2004

2004 CHAPTER 35

An Act to make provision relating to pensions and financial planning for retirement and provision relating to entitlement to bereavement payments, and for connected purposes.

[18th November 2004]

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Prospective

Part 1 E+W+S+N.I.The Pensions Regulator

EstablishmentE+W+S+N.I.

1The Pensions RegulatorE+W+S+N.I.

There shall be a body corporate called the Pensions Regulator (in this Act referred to as “the Regulator”).

2Membership of the RegulatorE+W+S+N.I.

(1)The Regulator is to consist of the following members—

(a)a chairman appointed by the Secretary of State,

(b)the Chief Executive of the Regulator, and

(c)at least five other persons appointed by the Secretary of State after consulting the chairman.

(2)The chairman must not be appointed from the staff of the Regulator or be the chairman of the Board of the Pension Protection Fund (see section 108).

(3)At least two of the members appointed under subsection (1)(c) must be appointed from the staff of the Regulator.

(4)In appointing persons under subsection (1)(c) the Secretary of State must secure that a majority of the members of the Regulator are non-executive members.

(5)No member of the staff of the Board of the Pension Protection Fund is eligible for appointment as a member of the Regulator.

(6)In this Part—

(a)references to executive members of the Regulator are to—

(i)the Chief Executive, and

(ii)the members appointed under subsection (1)(c) from the staff of the Regulator, and

(b)references to non-executive members of the Regulator are to members who are not executive members.

3Further provision about the RegulatorE+W+S+N.I.

Schedule 1 makes further provision about the Regulator, including provision as to—

  • the terms of appointment, tenure and remuneration of members,

  • the appointment of the Chief Executive and other staff,

  • the proceedings of the Regulator,

  • its funding and accounts, and

  • the status and liability of the Regulator, its members and staff.

General provisions about functionsE+W+S+N.I.

4Regulator’s functionsE+W+S+N.I.

(1)The Regulator has—

(a)the functions transferred to it from the Occupational Pensions Regulatory Authority by virtue of this Act or any provisions in force in Northern Ireland corresponding to this Act, and

(b)any other functions conferred by, or by virtue of, this or any other enactment.

(2)As regards the exercise of the Regulator’s functions—

(a)the non-executive functions listed in subsection (4) of section 8 must, by virtue of subsection (2) of that section, be discharged by the committee established under that section,

(b)the functions mentioned in the following provisions are exercisable only by the Determinations Panel—

(i)section 10(1) (the power in certain circumstances to determine whether to exercise the functions listed in Schedule 2 and to exercise them), and

(ii)section 99(10) (the functions concerning the compulsory review of certain determinations), and

(c)the exercise of other functions of the Regulator may be delegated by the Regulator under paragraph 20 of Schedule 1.

(3)Subsection (2) is subject to any regulations made by the Secretary of State under paragraph 21 of Schedule 1 (power to limit or permit delegation of functions).

5Regulator’s objectivesE+W+S

(1)The main objectives of the Regulator in exercising its functions are—

(a)to protect the benefits under occupational pension schemes of, or in respect of, members of such schemes,

(b)to protect the benefits under personal pension schemes of, or in respect of, members of such schemes within subsection (2),

(c)to reduce the risk of situations arising which may lead to compensation being payable from the Pension Protection Fund (see Part 2), and

(d)to promote, and to improve understanding of, the good administration of work-based pension schemes.

(2)For the purposes of subsection (1)(b) the members of personal pension schemes within this subsection are—

(a)the members who are employees in respect of whom direct payment arrangements exist, and

(b)where the scheme is a stakeholder pension scheme, any other members.

(3)In this section—

  • stakeholder pension scheme” means a personal pension scheme which is or has been registered under section 2 of the Welfare Reform and Pensions Act 1999 (c. 30) (register of stakeholder schemes);

  • work-based pension scheme” means—

    (a)

    an occupational pension scheme,

    (b)

    a personal pension scheme where direct payment arrangements exist in respect of one or more members of the scheme who are employees, or

    (c)

    a stakeholder pension scheme.

6Supplementary powersE+W+S

The Regulator may do anything (except borrow money) which—

(a)is calculated to facilitate the exercise of its functions, or

(b)is incidental or conducive to their exercise.

7Transfer of OPRA’s functions to the RegulatorE+W+S

(1)Subject to the provisions of this Act, the functions of the Occupational Pensions Regulatory Authority (“OPRA”) conferred by or by virtue of—

(a)the Pension Schemes Act 1993 (c. 48),

(b)the Pensions Act 1995 (c. 26), and

(c)the Welfare Reform and Pensions Act 1999,

are hereby transferred to the Regulator.

(2)Accordingly—

(a)in section 181(1) of the Pension Schemes Act 1993 (which defines “the Regulatory Authority” to mean OPRA), for the definition of “the Regulatory Authority” substitute—

the Regulatory Authority” means the Pensions Regulator;,

(b)in section 124(1) of the Pensions Act 1995 (which defines “the Authority”, in Part 1 of that Act, to mean OPRA), for the definition of “the Authority” substitute—

the Authority” means the Pensions Regulator,,

(c)in section 8(1) of the Welfare Reform and Pensions Act 1999 (c. 30) (which defines “the Authority”, in Part 1 of that Act to mean OPRA), for the definition of “the Authority” substitute—

the Authority” means the Pensions Regulator;, and

(d)in section 33 of that Act (time for discharge of pension credit liability), in subsection (5) for “the Occupational Pensions Regulatory Authority” substitute “ the Pensions Regulator ”.

Non-executive functionsE+W+S+N.I.

8Non-executive functionsE+W+S+N.I.

(1)The functions listed in subsection (4) (in this Part referred to as “the non-executive functions”) are functions of the Regulator.

(2)The Regulator must establish a committee to discharge the non-executive functions on its behalf.

(3)Only non-executive members of the Regulator may be members of the committee.

(4)The non-executive functions are—

(a)the duty to keep under review the question whether the Regulator’s internal financial controls secure the proper conduct of its financial affairs;

(b)the duty to determine under paragraph 8(4)(b) of Schedule 1, subject to the approval of the Secretary of State, the terms and conditions as to remuneration of any Chief Executive appointed under paragraph 8(4)(a) of that Schedule.

(5)The committee established under this section must prepare a report on the discharge of the non-executive functions for inclusion in the Regulator’s annual report to the Secretary of State under section 11.

(6)The committee’s report must relate to the same period as that covered by the Regulator’s report.

(7)The committee may establish sub-committees, and the members of any such sub-committee—

(a)may include persons who are not members of the committee or of the Regulator, but

(b)must not include persons who are executive members or other staff of the Regulator.

(8)The committee may authorise any of its members or any of its sub-committees to discharge on its behalf—

(a)any of the non-executive functions;

(b)the duty to prepare a report under subsection (5).

(9)The committee (or any of its sub-committees) may be authorised under paragraph 20(1) of Schedule 1 to exercise further functions of the Regulator.

(10)This section is subject to any regulations made by the Secretary of State under paragraph 21 of Schedule 1 (power to limit or permit delegation of functions).

The Determinations PanelE+W+S+N.I.

9The Determinations PanelE+W+S+N.I.

(1)The Regulator must establish and maintain a committee consisting of—

(a)a chairman, and

(b)at least six other persons,

(in this Part referred to as “the Determinations Panel”).

(2)The Regulator must appoint as the chairman of the Panel the person nominated in accordance with paragraph 11 of Schedule 1 (nomination by a committee established by the chairman of the Regulator).

(3)The chairman of the Panel must—

(a)decide the number of persons to be appointed as the other members of the Panel, and

(b)nominate a person suitable for each of those appointments.

(4)The Regulator must then appoint as the other members of the Panel the persons nominated by the chairman of the Panel.

(5)The following are ineligible for appointment as members of the Panel—

(a)any member of the Regulator;

(b)any member of the staff of the Regulator;

(c)any member of the Board of the Pension Protection Fund;

(d)any member of the staff of that Board.

(6)The Panel may establish sub-committees consisting of members of the Panel.

(7)Further provision about the Panel is made in Schedule 1, including provision as to the terms of appointment, tenure and remuneration of members and as to its procedure.

10Functions exercisable by the Determinations PanelE+W+S

(1)The Determinations Panel is to exercise on behalf of the Regulator—

(a)the power to determine, in the circumstances described in subsection (2), whether to exercise a reserved regulatory function, and

(b)where it so determines to exercise a reserved regulatory function, the power to exercise the function in question.

(2)Those circumstances are—

(a)where the Regulator considers that the exercise of the reserved regulatory function may be appropriate, or

(b)where an application is made under, or by virtue of, any of the provisions listed in subsection (6) for the Regulator to exercise the reserved regulatory function.

(3)Where subsection (1) applies, the powers mentioned in that subsection are not otherwise exercisable by or on behalf of the Regulator.

(4)For the purposes of this Part, a function of the Regulator is a “reserved regulatory function” if it is a function listed in Schedule 2.

(5)Regulations may amend Schedule 2 by—

(a)adding any function of the Regulator conferred by, or by virtue of, this or any other enactment,

(b)omitting any such function, or

(c)altering the description of any such function contained in that Schedule.

(6)The provisions referred to in subsection (2)(b) are—

(a)section 20(10) (application to permit payments out of an account that is subject to a restraining order);

(b)section 26(2) (application for order validating action taken in contravention of freezing order);

(c)section 41(7) (application for the issue of a revised contribution notice under section 41(9));

(d)section 50(7) (application for the issue of a revised contribution notice under section 50(9));

(e)section 3(3) of the Pensions Act 1995 (c. 26) (application for revocation of prohibition order);

(f)section 4(5) of that Act (application for revocation of a suspension order);

(g)section 7(5A) of that Act (application for appointment of a trustee under section 7(3)(a) or (c) of that Act);

(h)section 29(5) of that Act (application for waiver of disqualification);

(i)section 69(1) of that Act (application for order authorising modification or modifying a scheme);

(j)section 71A(2) of that Act (application for modifying a scheme to secure winding up);

(k)section 99(4A) of the Pension Schemes Act 1993 (c. 48) (application for extension under section 99(4) of that Act of a period for compliance);

(l)section 101J(6)(a) of that Act (application for extension under section 101J(2) of that Act of a period for compliance).

(7)Regulations may amend subsection (6) by—

(a)adding any provision of this or any other enactment to the list in that subsection, or

(b)omitting or altering the description of any provision mentioned in that list.

(8)The Panel may be authorised under paragraph 20(4) or (6) of Schedule 1 to exercise further functions of the Regulator on behalf of the Regulator.

(9)The Panel may authorise any of its members or any of its sub-committees to exercise on its behalf—

(a)any of the functions of the Regulator which are exercisable by the Panel on behalf of the Regulator, or

(b)any of the functions of the Panel under section 93(3), section 99(11) and paragraph 18(2) of Schedule 1 (procedure).

(10)This section is subject to any regulations made by the Secretary of State under paragraph 21 of Schedule 1 (power to limit or permit delegation of functions).

Annual reportE+W+S+N.I.

11Annual reports to Secretary of StateE+W+S+N.I.

(1)The Regulator must prepare a report for each financial year.

(2)Each report—

(a)must deal with the activities of the Regulator in the financial year for which it is prepared, including the matters mentioned in subsection (3), and

(b)must include the report prepared under subsection (5) of section 8 by the committee established under that section.

(3)The matters referred to in subsection (2)(a) are—

(a)the strategic direction of the Regulator and the manner in which it has been kept under review;

(b)the steps taken to scrutinise the performance of the Chief Executive in securing that the Regulator’s functions are exercised efficiently and effectively;

(c)the Regulator’s objectives and targets (including its main objectives as set out in section 5 or in any corresponding provision in force in Northern Ireland) and the steps taken to monitor the extent to which they are being met.

(4)The Regulator must send each report to the Secretary of State as soon as practicable after the end of the financial year for which it is prepared.

(5)The Secretary of State must lay before each House of Parliament a copy of every report received by him under this section.

(6)In this section “financial year” means—

(a)the period beginning with the date on which the Regulator is established and ending with the next following 31st March, and

(b)each successive period of 12 months.

Provision of information, education and assistanceE+W+S

12Provision of information, education and assistanceE+W+S

(1)The Regulator may provide such information, education and assistance as it considers appropriate to those involved in—

(a)the administration of work-based pension schemes, or

(b)advising the trustees or managers in relation to such schemes as to their operation.

(2)To the extent that it is not authorised to do so under subsection (1), the Regulator may also provide such information, education and assistance as it considers appropriate to—

(a)employers in relation to work-based pension schemes,

(b)persons involved in advising such employers as to the operation of such schemes, or

(c)persons upon whom duties are imposed by or by virtue of section 238 (information and advice to employees).

(3)For the purposes of subsection (2), “employers in relation to work-based pension schemes” means, in the case of stakeholder pension schemes, the persons upon whom duties are imposed by or by virtue of section 3 of the Welfare Reform and Pensions Act 1999 (c. 30) (duty of employers to facilitate access to stakeholder pension schemes).

(4)In this section—

  • assistance” does not include financial assistance;

  • stakeholder pension scheme” and “work-based pension scheme” have the same meaning as in section 5 (Regulator’s objectives).

New powers in respect of occupational and personal pension schemesE+W+S

13Improvement noticesE+W+S

(1)If the Regulator is of the opinion that a person—

(a)is contravening one or more provisions of the pensions legislation, or

(b)has contravened one or more of those provisions in circumstances that make it likely that the contravention will continue or be repeated,

it may issue a notice (an “improvement notice”) to that person directing him to take, or refrain from taking, such steps as are specified in the notice in order to remedy or prevent a recurrence of the contravention.

(2)An improvement notice must—

(a)state that the Regulator is of that opinion and specify the provision or provisions of the pensions legislation in question,

(b)contain a statement of the matters which it is asserted constitute the contravention and of the evidence on which that opinion is based, and

(c)in respect of each step specified in the notice, state the period (being a period of not less than 21 days beginning with the date of the notice) within which it must be complied with.

(3)Directions in an improvement notice—

(a)may be framed to any extent by reference to a code of practice issued by the Regulator under section 90, and

(b)may be framed so as to afford the person to whom the notice is issued a choice between different ways of remedying or preventing the recurrence of the contravention.

(4)Directions in an improvement notice may be expressed to be conditional on compliance by a third party with a specified direction, or specified directions, contained in a notice under section 14 (third party notices).

(5)An improvement notice may direct the person to whom it is issued to inform the Regulator, within such period as may be specified in the notice, of how he has complied, or is complying, with the notice.

(6)Where a contravention of a provision of the pensions legislation consists of a failure to take action within a time limit, for the purposes of this section the contravention continues until such time as the action is taken.

(7)In this section “pensions legislation” means any enactment contained in or made by virtue of—

(a)the Pension Schemes Act 1993 (c. 48),

(b)Part 1 of the Pensions Act 1995 (c. 26), other than sections 62 to 66A of that Act (equal treatment),

(c)Part 1 or section 33 of the Welfare Reform and Pensions Act 1999 (c. 30), or

(d)this Act.

(8)If the trustees or managers of an occupational or personal pension scheme fail to comply with an improvement notice issued to them, section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

(9)That section also applies to any other person who, without reasonable excuse, fails to comply with an improvement notice issued to him.

14Third party noticesE+W+S

(1)Where the Regulator is of the opinion that—

(a)a person—

(i)is contravening one or more provisions of the pensions legislation, or

(ii)has contravened one or more of those provisions in circumstances that make it likely that the contravention will continue or be repeated,

(b)the contravention is or was, wholly or partly, a result of a failure of another person (“the third party”) to do any thing, and

(c)that failure is not itself a contravention of the pensions legislation,

the Regulator may issue a notice (a “third party notice”) directing the third party to take, or refrain from taking, such steps as are specified in the notice in order to remedy or prevent a recurrence of his failure.

(2)A third party notice must—

(a)state that the Regulator is of that opinion and specify the provision or provisions of the pensions legislation in question,

(b)contain a statement of—

(i)the matters which it is asserted constitute the contravention of the provision or provisions, and

(ii)the matters which it is asserted constitute the failure by the third party,

and the evidence on which that opinion is based, and

(c)in respect of each step specified in the notice, state the period (being a period of not less than 21 days beginning with the date of the notice) within which it must be complied with.

(3)Directions in a third party notice may be framed so as to afford the third party a choice between different ways of remedying or preventing the recurrence of his failure.

(4)A third party notice may direct the third party to inform the Regulator, within such period as may be specified in the notice, of how he has complied, or is complying, with the notice.

(5)Where a contravention of a provision of the pensions legislation consists of a failure to take action within a time limit, for the purposes of this section the contravention continues until such time as the action is taken.

(6)Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to a person who, without reasonable excuse, fails to comply with a third party notice issued to him.

(7)No duty to which a person is subject is to be regarded as contravened merely because of anything required to be done in compliance with a third party notice.

This is subject to section 311 (protected items).

(8)In this section “pensions legislation” has the same meaning as in section 13.

15Injunctions and interdictsE+W+S

(1)If, on the application of the Regulator, the court is satisfied that—

(a)there is a reasonable likelihood that a particular person will do any act which constitutes a misuse or misappropriation of any of the assets of an occupational or personal pension scheme, or

(b)a particular person has done any such act and there is a reasonable likelihood that he will continue or repeat the act in question or do a similar act,

the court may grant an injunction restraining him from doing so or, in Scotland, an interdict prohibiting him from doing so.

(2)The jurisdiction conferred by this section is exercisable by the High Court or the Court of Session.

16RestitutionE+W+S

(1)If, on the application of the Regulator, the court is satisfied that there has been a misuse or misappropriation of any of the assets of an occupational or personal pension scheme, it may order any person involved to take such steps as the court may direct for restoring the parties to the position in which they were before the misuse or misappropriation occurred.

(2)For this purpose a person is “involved” if he appears to the court to have been knowingly concerned in the misuse or misappropriation of the assets.

(3)The jurisdiction conferred by this section is exercisable by the High Court or the Court of Session.

17Power of the Regulator to recover unpaid contributionsE+W+S

(1)Where any employer contribution payable towards an occupational or personal pension scheme is not paid on or before its due date, the Regulator may, on behalf of the trustees or managers of the scheme, exercise such powers as the trustees or managers have to recover that contribution.

(2)For the purposes of subsection (1), any employer contribution payable towards a personal pension scheme which is not paid on or before its due date is, if not a debt due from the employer to the trustees or managers apart from this subsection, to be treated as if it were such a debt.

(3)In this section—

  • due date”—

    (a)

    in relation to employer contributions payable towards an occupational pension scheme in accordance with a schedule of contributions under section 227, has the same meaning as in section 228,

    (b)

    in relation to employer contributions payable in accordance with a payment schedule under section 87 of the Pensions Act 1995 (c. 26) (schedules of payments to money purchase schemes), has the meaning given by subsection (2)(c) of that section, and

    (c)

    in relation to employer contributions payable towards a personal pension scheme, has the same meaning as in section 111A of the Pension Schemes Act 1993 (c. 48) (monitoring of employer payments to personal pension schemes);

  • employer contribution”—

    (a)

    in relation to an occupational pension scheme, means any contribution payable by or on behalf of the employer towards the scheme in accordance with a schedule of contributions under section 227 of this Act or a payment schedule under section 87 of the Pensions Act 1995 (c. 26) (schedules of payments to money purchase schemes) whether—

    (i)

    on the employer’s own account (but in respect of one or more employees), or

    (ii)

    on behalf of an employee out of deductions from the employee’s earnings, and

    (b)

    in relation to a personal pension scheme, means any contribution payable towards the scheme under direct payment arrangements.

18Pension liberation: interpretationE+W+S

(1)In this section and sections 19 to 21—

(a)pension scheme” means an occupational pension scheme or a personal pension scheme,

(b)deposit-taker” has the meaning given by subsections (8A) and (8B) of section 49 of the Pensions Act 1995, except that, for the purposes of this definition, subsection (8A)(c) of that section has effect with the omission of the words from “or” to the end,

(c)references to money liberated from a pension scheme are to be read in accordance with subsection (2),

(d)liberated member”, in relation to money liberated from a pension scheme, means the member of the pension scheme who is referred to in subsection (2)(a), and

(e)restraining order” means a restraining order under section 20.

(2)Money is to be taken to have been liberated from a pension scheme if—

(a)the money directly or indirectly represents an amount that, in respect of accrued rights of a member of a pension scheme, has been transferred out of the scheme in pursuance of—

(i)a relevant statutory provision, or

(ii)a provision of the applicable rules, other than a relevant statutory provision,

(b)the trustees or managers of the scheme transferred the amount out of the scheme on the basis that a third party (“the liberator”) would secure that the amount was used in an authorised way,

(c)the amount has not been used in an authorised way, and

(d)the liberator has not secured, and is not likely to secure, that the amount will be used in an authorised way.

(3)The following are “relevant statutory provisions” for the purposes of subsection (2)—

(a)section 94(1)(a), (aa) or (b) of the Pension Schemes Act 1993 (c. 48) (right to cash equivalent under Chapter 4 of Part 4 of that Act);

(b)section 101AB(1)(a) of that Act (right to cash transfer sum under Chapter 5 of Part 4 of that Act);

(c)section 101F(1) of that Act (right to cash equivalent of pension credit benefit).

(4)In subsection (2) “authorised way” means—

(a)where the amount concerned is transferred out of the scheme in pursuance of a provision mentioned in subsection (3)(a), a way specified in subsection (2) or, as the case may be, subsection (3) of section 95 of the Pension Schemes Act 1993;

(b)where that amount is transferred out in pursuance of the provision mentioned in subsection (3)(b), a way specified in section 101AE(2) of that Act;

(c)where that amount is transferred out in pursuance of the provision mentioned in subsection (3)(c), a way specified in subsection (2) or, as the case may be, subsection (3) of section 101F of that Act;

(d)where that amount is transferred out in pursuance of a provision of the kind mentioned in subsection (2)(a)(ii), a way that is authorised by the applicable rules for amounts transferred out in pursuance of that provision.

(5)In this section “the applicable rules” has the same meaning as, in the case of the pension scheme concerned, that expression has in section 94 of the Pension Schemes Act 1993.

19Pension liberation: court’s power to order restitutionE+W+S

(1)This section applies where money has been liberated from a pension scheme.

(2)In this section “recoverable property” means (subject to subsection (3))—

(a)the money or any of it, or

(b)property (of any kind and wherever situated) that, directly or indirectly, represents any of the money.

(3)Where a person acquires the beneficial interest in recoverable property in good faith, for value and without notice that the property is, or (as the case may be) represents, money liberated from a pension scheme—

(a)the property ceases to be recoverable property, and

(b)no property that subsequently represents it is recoverable property.

(4)The court, on the application of the Regulator, may make such order as the court thinks just and convenient for the purpose of securing that recoverable property, or money representing its value or proceeds of its sale, is transferred—

(a)towards a pension scheme,

(b)towards an annuity or insurance policy, or

(c)to the liberated member.

(5)An order under subsection (4) may (in particular) direct a person who holds recoverable property, or has any degree of control over recoverable property, to take steps for the purpose mentioned in that subsection.

(6)Where the court makes an order under paragraph (a) of subsection (4), it may by order direct the trustees or managers of the scheme referred to in that paragraph—

(a)to take steps for the purpose mentioned in that subsection;

(b)to apply the property or money transferred, in such manner as the court may direct, for the purpose of providing benefits under that scheme to or in respect of the liberated member.

(7)Regulations may modify any of the provisions of the Pension Schemes Act 1993 (c. 48) as it applies in relation to cases where an order is made under subsection (6).

(8)The jurisdiction conferred by this section is exercisable by the High Court or the Court of Session.

(9)The generality of the jurisdiction conferred by section 16 is not to be taken to be prejudiced by this section.

(10)The generality of the jurisdiction conferred by this section is not to be taken to be prejudiced by section 21.

20Pension liberation: restraining ordersE+W+S

(1)The Regulator may make a restraining order in relation to an account with a deposit-taker if—

(a)it is satisfied that the account contains money which has been liberated from a pension scheme,

(b)it is satisfied that the account is held by or on behalf of—

(i)the liberator, or

(ii)a person who has to, or in practice is likely to, ensure that the account is operated in accordance with the liberator’s directions, and

(c)the order is made pending consideration being given to the making of one or more repatriation orders in relation to the account under section 21.

(2)A restraining order is an order directing that no credit or debit of any amount may be made to the account concerned (“the restrained account”) during the period for which the order has effect.

(3)A restraining order must—

(a)specify the name of the deposit-taker in respect of which it is made,

(b)identify the account in respect of which it is made, and

(c)contain such other information as may be prescribed.

(4)A restraining order—

(a)takes effect when the deposit-taker concerned is notified by the Regulator of the making of the order, and

(b)(subject to subsection (7)) ceases to have effect through expiry of time at the end of the six months beginning with the day when it is made.

(5)The Regulator may, at a time when a restraining order has effect, make an order extending (or further extending) the restraining order.

(6)An order under subsection (5) (an “extension order”) takes effect—

(a)when the deposit-taker concerned is notified by the Regulator of the making of the order, but

(b)only if notification under paragraph (a) occurs at a time when the restraining order concerned has effect.

(7)Where an extension order takes effect—

(a)the restraining order concerned does not cease to have effect through expiry of time until the end of the six months beginning with the time when it would have ceased to have effect through expiry of time had it not been extended, but

(b)for so long as the extension order has effect, no further extension order can take effect before that time in relation to the restraining order.

(8)A restraining order does not prevent the crediting to the restrained account of an amount representing interest payable by the deposit-taker on any amount which is, or has been, in the account.

(9)Where a restraining order has effect, the deposit-taker must return to the payer any money credited to the restrained account in breach of the order.

(10)Where a restraining order has effect, the Regulator may, on an application made by or with the consent of the person by whom the restrained account is held, by order permit a payment specified in the order to be made out of the account if the Regulator is satisfied—

(a)that the payment will be made for the purpose of enabling—

(i)any individual to meet his reasonable living expenses, or

(ii)any person to carry on a trade, business, profession or occupation,

(b)that the beneficial interest in the money out of which the payment will be made belongs—

(i)to the individual, or person, concerned, or

(ii)to a person who consents to the making of the payment, and

(c)that the money out of which the payment will be made is not money liberated from a pension scheme.

(11)Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to a deposit-taker who, without reasonable excuse, fails to comply with any obligation imposed by a restraining order or by this section.

21Pension liberation: repatriation ordersE+W+S

(1)Subsections (2) and (3) apply where—

(a)a restraining order has effect, and

(b)the Regulator is satisfied that the restrained account contains an amount of money liberated from a pension scheme.

(2)The Regulator may by order—

(a)direct the deposit-taker concerned to pay from the account a sum not exceeding that amount—

(i)towards a pension scheme,

(ii)towards an annuity or insurance policy, or

(iii)to the liberated member, and

(b)where it makes an order under paragraph (a)(i), direct the trustees or managers of the scheme to apply the sum, in such manner as the Regulator may direct, for the purpose of providing benefits under the scheme to or in respect of the liberated member.

(3)If it appears to the Regulator, on taking an overall view of transactions taking place before the restraining order was made, that there are two or more individuals each of whom is a person who is or may be the liberated member in relation to some of the money, the Regulator may determine the sums to be paid from the restrained account under subsection (2) on any basis that appears to the Regulator to be just and reasonable.

(4)Regulations may modify any of the provisions of the Pension Schemes Act 1993 (c. 48) as it applies in relation to cases where an order is made under subsection (2)(b).

(5)Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to a deposit-taker who, without reasonable excuse, fails to comply with a direction given to him under subsection (2)(a).

(6)If the trustees or managers of a pension scheme fail to comply with a direction given to them under subsection (2)(b), that section applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

(7)In this section “restrained account” has the meaning given by section 20.

Powers in relation to winding up of occupational pension schemesE+W+S

22Powers to wind up occupational pension schemesE+W+S

In section 11 of the Pensions Act 1995 (powers to wind up occupational pension schemes)—

(a)omit subsection (3),

(b)before subsection (4) insert—

(3A)The Authority may, during an assessment period (within the meaning of section 132 of the Pensions Act 2004 (meaning of “assessment period” for the purposes of Part 2 of that Act)) in relation to an occupational pension scheme, by order direct the scheme to be wound up if they are satisfied that it is necessary to do so in order—

(a)to ensure that the scheme’s protected liabilities do not exceed its assets, or

(b)if those liabilities do exceed its assets, to keep the excess to a minimum.

(3B)In subsection (3A)—

(a)protected liabilities” has the meaning given by section 131 of the Pensions Act 2004, and

(b)references to the assets of the scheme are references to those assets excluding any assets representing the value of any rights in respect of money purchase benefits (within the meaning of that Act) under the scheme.,

(c)at the end of subsection (4) insert— “ This subsection is subject to sections 28, 135 and 219 of the Pensions Act 2004 (winding up order made when freezing order has effect in relation to scheme, during assessment period under Part 2 of that Act etc). ”, and

(d)after subsection (6) insert—

(6A)Subsection (6) does not have effect to authorise the Authority to make an order as mentioned in paragraph (a) or (b) of that subsection, if their doing so would be unlawful as a result of section 6(1) of the Human Rights Act 1998 (unlawful for public authority to act in contravention of a Convention right).

23Freezing ordersE+W+S

(1)This section applies to an occupational pension scheme which is not a money purchase scheme.

(2)The Regulator may make a freezing order in relation to such a scheme if and only if—

(a)the order is made pending consideration being given to the making of an order in relation to the scheme under section 11(1)(c) of the Pensions Act 1995 (c. 26) (power to wind up schemes where necessary to protect the generality of members), and

(b)the Regulator is satisfied that—

(i)there is, or is likely to be if the order is not made, an immediate risk to the interests of members under the scheme or the assets of the scheme, and

(ii)it is necessary to make the freezing order to protect the interests of the generality of the members of the scheme.

But no freezing order may be made in relation to a scheme during an assessment period (within the meaning of section 132) in relation to the scheme (see section 135(11)).

(3)A freezing order is an order directing that during the period for which it has effect—

(a)no benefits are to accrue under the scheme rules to, or in respect of, members of the scheme, and

(b)winding up of the scheme may not begin.

(4)A freezing order may also contain one or more of the following directions which have effect during the period for which the order has effect—

(a)a direction that no new members, or no specified classes of new member, are to be admitted to the scheme;

(b)a direction that—

(i)no further contributions or payments, or

(ii)no further specified contributions or payments,

are to be paid towards the scheme by or on behalf of the employer, any members or any specified members of the scheme;

(c)a direction that any amount or any specified amount which—

(i)corresponds to any contribution which would be due to be paid towards the scheme on behalf of a member but for a direction under paragraph (b), and

(ii)has been deducted from a payment of any earnings in respect of an employment,

is to be repaid to the member in question by the employer;

(d)a direction that no benefits, or no specified benefits, are to be paid to or in respect of any members or any specified members under the scheme rules;

(e)a direction that payments of all benefits or specified benefits under the scheme rules to or in respect of all the members or specified members may only be made from the scheme if they are reduced in a specified manner or by a specified amount;

(f)a direction that—

(i)no transfers or no specified transfers of, or no transfer payments or no specified transfer payments in respect of, any member’s rights under the scheme rules are to be made from the scheme, or

(ii)no other steps or no specified other steps are to be taken to discharge any liability of the scheme to or in respect of a member of the scheme in respect of pensions or other benefits;

(g)a direction that no statements of entitlement are to be provided to members of the scheme under section 93A of the Pension Schemes Act 1993 (c. 48) (salary related schemes: right to statement of entitlement);

(h)a direction that—

(i)no refunds of, or no specified refunds of, or in respect of, contributions paid by or in respect of a member towards the scheme are to be made from the scheme, or

(ii)refunds or specified refunds of, or in respect of, contributions paid by or in respect of a member towards the scheme may only be made from the scheme if they are determined in a specified manner and satisfy such other conditions as may be specified.

(5)In subsection (4)(b)—

(a)the references to contributions do not include contributions due to be paid before the order takes effect, and

(b)the references to payments towards a scheme include payments in respect of pension credits where the person entitled to the credit is a member of the scheme.

(6)A freezing order may not contain a direction under subsection (4)(d) or (e) which reduces the benefits payable to or in respect of a member, for the period during which the order has effect, below the level to which the trustees or managers of the scheme would have power to reduce them if a winding up of the scheme had begun at the time when the freezing order took effect.

(7)A direction under subsection (4)(f) may, in particular, provide that transfers or specified transfers of, or transfer payments or specified transfer payments in respect of, any member’s rights under the scheme rules may not be made from the scheme unless the amounts paid out from the scheme in respect of the transfers or transfer payments are determined in a specified manner and the transfer or transfer payments satisfy such other conditions as may be specified.

(8)A freezing order may also require the trustees or managers of the scheme to obtain an actuarial valuation within a specified period.

(9)A freezing order containing such a requirement must specify—

(a)the date by reference to which the assets and liabilities are to be valued,

(b)the assets and liabilities which are to be taken into account,

(c)the manner in which the valuation must be prepared,

(d)the information and statements which it must contain, and

(e)any other requirements that the valuation must satisfy.

(10)For the purposes of subsection (8)—

  • an actuarial valuation” means a written valuation of the scheme’s assets and liabilities prepared and signed by the actuary;

  • the actuary” means—

    (a)

    the actuary appointed under section 47(1)(b) of the Pensions Act 1995 (c. 26) (professional advisers) in relation to the scheme, or

    (b)

    if no such actuary has been appointed—

    (i)

    a person with prescribed qualifications or experience, or

    (ii)

    a person approved by the Secretary of State.

(11)In this section “specified” means specified in the freezing order.

24Consequences of freezing orderE+W+S

(1)If a freezing order is made in relation to a scheme any action taken in contravention of the order is void except to the extent that the action is validated by an order under section 26.

(2)A freezing order in relation to a scheme does not prevent any increase in a benefit which is an increase which would otherwise accrue in accordance with the scheme or any enactment during the period for which the order has effect, unless the order contains a direction to the contrary.

(3)A freezing order in relation to a scheme does not prevent the scheme being wound up in pursuance of an order under section 11 of the Pensions Act 1995 (power to wind up occupational pension schemes).

(4)If a freezing order contains a direction under section 23(4)(b) that no further contributions, or no further specified contributions, are to be paid towards a scheme during the period for which the order has effect—

(a)any contributions which are the subject of the direction and which would otherwise be due to be paid towards the scheme during that period are to be treated as if they do not fall due, and

(b)any obligation to pay those contributions (including any obligation under section 49(8) of the Pensions Act 1995 to pay amounts deducted corresponding to such contributions) is to be treated as if it does not arise.

(5)If a freezing order contains a direction under section 23(4)(f) (no transfers or discharge of member’s rights) it does not prevent—

(a)giving effect to a pension sharing order or provision, or

(b)giving effect to a pension earmarking order in a case where—

(i)the order requires a payment to be made if a payment in respect of any benefits under the scheme becomes due to a person, and

(ii)a direction under section 23(4)(d) or (e) does not prevent the payment becoming due.

(6)For the purposes of subsection (5)—

  • pension sharing order or provision” means an order or provision falling within section 28(1) of the Welfare Reform and Pensions Act 1999 (c. 30) (activation of pension sharing);

  • pension earmarking order” means—

    (a)

    an order under section 23 of the Matrimonial Causes Act 1973 (c. 18) (financial provision orders in connection with divorce etc) so far as it includes provision made by virtue of section 25B or 25C of that Act (powers to include provision about pensions),

    (b)

    an order under section 12A(2) or (3) of the Family Law (Scotland) Act 1985 (c. 37) (powers in relation to pension lump sums when making a capital sum order), or

    (c)

    an order under Article 25 of the Matrimonial Causes (Northern Ireland) Order 1978 (S.I. 1978/1045 (N.I.15)) so far as it includes provision made by virtue of Article 27B or 27C of that Order (Northern Ireland powers corresponding to those mentioned in paragraph (a)).

(7)Regulations may modify any provisions of—

(a)Chapter 4 of Part 4 of the Pension Schemes Act 1993 (c. 48) (protection for early leavers: transfer values), or

(b)Chapter 5 of that Part (protection for early leavers: cash transfer sums and contribution refunds),

in their application to an occupational pension scheme in relation to which a freezing order is made containing a direction under section 23(4)(f), (g) or (h) (no transfers etc in respect of member’s rights or refunds of contributions etc from the scheme).

(8)Disregarding subsection (1), if a freezing order made in relation to a scheme is not complied with, section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any trustee or manager of the scheme who has failed to take all reasonable steps to secure compliance.

(9)Subsection (8) does not apply in the case of non-compliance with a direction under section 23(4)(c) (direction that certain deducted contributions are to be repaid by the employer).

(10)In such a case, section 10 of the Pensions Act 1995 (civil penalties) applies to an employer who, without reasonable excuse, fails to repay an amount as required by the direction.

25Period of effect etc of freezing orderE+W+S

(1)A freezing order must specify the period for which it has effect.

(2)The period specified must not exceed three months.

(3)The Regulator may on one or more occasions by order extend the period for which the order has effect.

(4)But the total period for which the order has effect must not exceed six months.

(5)This section is subject to sections 27, 28 and 29 (effect of winding up and assessment period on freezing orders).

26Validation of action in contravention of freezing orderE+W+S

(1)If a freezing order is made in relation to a scheme, the Regulator may by order validate action taken in contravention of the order.

(2)Any of the following persons may apply to the Regulator for an order under this section validating particular action—

(a)the trustees or managers of the scheme;

(b)any person directly affected by the action.

27Effect of determination to wind up scheme on freezing orderE+W+S

(1)This section applies where—

(a)the Regulator determines to make an order under section 11 of the Pensions Act 1995 (c. 26) (power to wind up occupational pension schemes) in relation to a scheme (“a winding up order”),

(b)that determination is made during the period for which a freezing order has effect in relation to the scheme,

(c)the case is not one to which the special procedure in section 98 applies (immediate exercise of powers where immediate risk to assets etc), and

(d)the winding up order accordingly cannot be made until the expiry of the period specified in section 96(5) (no exercise during period of referral to the Tribunal etc).

(2)In such a case the freezing order is to continue to have effect until—

(a)where the winding up order is made, it ceases to have effect under section 28 from the time when that order is made, or

(b)the determination to make the winding up order is revoked.

(3)Subsection (2) is subject to the Regulator’s power under section 101 to revoke the freezing order at any time.

28Effect of winding up order on freezing orderE+W+S

(1)This section applies where—

(a)an order is made under section 11 of the Pensions Act 1995 (“the 1995 Act”) (power to wind up occupational pension schemes) in relation to a scheme, and

(b)the order is made during the period for which a freezing order has effect in relation to the scheme.

(2)In such a case—

(a)the winding up of the scheme in pursuance of the order under section 11 of the 1995 Act is to be taken as beginning at the time when the freezing order took effect, and

(b)the freezing order ceases to have effect from the time when the order under section 11 of the 1995 Act is made.

(3)The Regulator may by order direct any specified person—

(a)to take such specified steps as it considers are necessary as a result of the winding up of the scheme being deemed under subsection (2)(a) to have begun at the time when the freezing order took effect, and

(b)to take those steps within a specified period.

(4)If the trustees or managers of a scheme fail to comply with a direction to them contained in an order under this section, section 10 of the 1995 Act (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

(5)That section also applies to any other person who, without reasonable excuse, fails to comply with a direction to him contained in an order under this section.

(6)In this section “specified” means specified in an order under this section.

29Effect of assessment period under Part 2 on freezing orderE+W+S

Where an assessment period (within the meaning of section 132) begins in relation to a scheme, any freezing order in relation to the scheme ceases to have effect when the assessment period begins.

30Power to give a direction where freezing order ceases to have effectE+W+S

(1)This section applies where—

(a)the Regulator revokes a freezing order in relation to a scheme or it otherwise ceases to have effect, and

(b)at the time when the freezing order ceases to have effect, the Regulator has not made an order under section 11 of the Pensions Act 1995 (c. 26) (“the 1995 Act”) in relation to the scheme.

(2)In such a case the Regulator may make an order under this section in relation to the scheme containing a direction that, if specified conditions are met, specified benefits are to accrue under the scheme rules to, or in respect of, specified members of the scheme in respect of specified periods of service being service in employment which but for the freezing order would have qualified the member in question for those benefits under the scheme rules.

(3)The conditions mentioned in subsection (2) may include—

(a)a requirement that specified benefits do not accrue to, or in respect of, a member or a specified member unless a contribution of a specified amount is paid by or on behalf of the member towards the scheme within a specified period;

(b)a requirement that a contribution of a specified amount must be paid by or on behalf of the employer within a specified period;

(c)a requirement that such contributions as are specified under paragraph (a) or (b) are to be accepted for the period for which the freezing order had effect or any part of that period.

(4)Where the freezing order contained a direction under section 23(4)(d) or (e) and any amount of any benefit under the scheme rules was not paid as a result of the direction—

(a)the direction does not affect any entitlement to that benefit, and

(b)any benefit to which a member, or a person in respect of a member, remains entitled at the end of the period for which the freezing order had effect is an amount which falls due to the member or, as the case may be, the person at the end of that period.

(5)If an order made under this section in relation to a scheme is not complied with, section 10 of the 1995 Act (civil penalties) applies to a trustee or a manager of the scheme who has failed to take all reasonable steps to secure compliance.

(6)Subsection (7) applies if—

(a)an order is made under this section in relation to a scheme,

(b)the order contains a requirement as described in subsection (3)(b) that a contribution of a specified amount must be paid by or on behalf of the employer within a specified period, and

(c)the contribution is not paid within that period.

(7)In such a case—

(a)section 10 of the 1995 Act applies to the employer if he has failed, without reasonable excuse, to secure compliance,

(b)the amount which for the time being remains unpaid after the end of the specified period is to be treated as a debt due from the employer to the trustees or managers of the scheme, and

(c)except in prescribed circumstances, the trustees or managers must, within a prescribed period, give notice of the failure to pay to the Regulator and to the member.

(8)If in any case subsection (7)(c) is not complied with, section 10 of the 1995 Act applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

(9)In this section “specified” means specified in an order under this section.

31Notification of trustees, managers, employers and membersE+W+S

(1)This section applies where—

(a)a freezing order is made in relation to a scheme,

(b)an order is made under section 26 validating action taken in contravention of a freezing order made in relation to a scheme,

(c)an order is made under section 28 directing specified steps to be taken following the winding up of a scheme, or

(d)an order is made under section 30 in relation to a scheme where a freezing order ceases to have effect.

(2)The Regulator must, as soon as reasonably practicable after the order has been made, notify—

(a)the trustees or managers of the scheme, and

(b)the employer in relation to the scheme,

of the fact that the order has been made and of its effect.

(3)The Regulator may by order direct the trustees or managers of the scheme to notify—

(a)all the members of the scheme, or

(b)the members of the scheme specified in the order,

of the fact that the order mentioned in subsection (1) has been made and of its effect.

(4)Notification is to be within the period and in the manner specified in the order under subsection (3).

(5)If the trustees or managers of a scheme fail to comply with a direction to them contained in an order made under subsection (3), section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

32Sections 23 to 31: supplementaryE+W+S

(1)An order may be made in relation to a scheme under any of sections 23, 25, 26, 28, 30 and 31—

(a)in spite of any enactment or rule of law, or any rule of the scheme, which would otherwise operate to prevent the order being made, and

(b)without regard to any such enactment, rule of law or rule of the scheme as would otherwise require, or might otherwise be taken to require, the implementation of any procedure or the obtaining of any consent, with a view to the making of the order.

(2)Subsection (1) does not have effect to authorise the Regulator to make an order as mentioned in that subsection if its doing so would be unlawful as a result of section 6(1) of the Human Rights Act 1998 (c. 42) (unlawful for public authority to act in contravention of a Convention right).

Trustees of occupational pension schemesE+W+S

33Prohibition ordersE+W+S

For section 3 of the Pensions Act 1995 (c. 26) (prohibition orders) substitute—

3Prohibition orders

(1)The Authority may by order prohibit a person from being a trustee of—

(a)a particular trust scheme,

(b)a particular description of trust schemes, or

(c)trust schemes in general,

if they are satisfied that he is not a fit and proper person to be a trustee of the scheme or schemes to which the order relates.

(2)Where a prohibition order is made under subsection (1) against a person in respect of one or more schemes of which he is a trustee, the order has the effect of removing him.

(3)The Authority may, on the application of any person prohibited under this section, by order revoke the order either generally or in relation to a particular scheme or description of schemes.

(4)An application under subsection (3) may not be made—

(a)during the period within which the determination to exercise the power to make the prohibition order may be referred to the Tribunal under section 96(3) or 99(7) of the Pensions Act 2004, and

(b)if the determination is so referred, until the reference, and any appeal against the Tribunal’s determination, has been finally disposed of.

(5)A revocation made at any time under this section cannot affect anything done before that time.

(6)The Authority must prepare and publish a statement of the policies they intend to adopt in relation to the exercise of their powers under this section.

(7)The Authority may revise any statement published under subsection (6) and must publish any revised statement.

(8)In this section “the Tribunal” means the Pensions Regulator Tribunal established under section 102 of the Pensions Act 2004.

34Suspension ordersE+W+S

In section 4 of the Pensions Act 1995 (c. 26) (suspension orders)—

(a)after subsection (1)(a) insert—

(aa)pending consideration being given to the institution of proceedings against him for an offence involving dishonesty or deception,,

(b)in subsection (2)—

(i)in paragraph (a) after “paragraph (a)” insert “ or (aa) ”,

(ii)after “have effect” insert “ in relation to a trust scheme ”, and

(iii)after “section 3(1)” insert “ in relation to that scheme ”,

(c)after subsection (5) insert—

(5A)An application under subsection (5) may not be made—

(a)during the period within which the determination to exercise the power to make an order under subsection (1) may be referred to the Tribunal under section 96(3) or 99(7) of the Pensions Act 2004, and

(b)if the determination is so referred, until the reference, and any appeal against the Tribunal’s determination, has been finally disposed of., and

(d)after subsection (6) insert—

(7)In this section “the Tribunal” means the Pensions Regulator Tribunal established under section 102 of the Pensions Act 2004.

35Appointments of trustees by the RegulatorE+W+S

(1)In section 7 of the Pensions Act 1995 (appointment of trustees)—

(a)omit subsection (4), and

(b)after subsection (5) insert—

(5A)An application may be made to the Authority in relation to a trust scheme by—

(a)the trustees of the scheme,

(b)the employer, or

(c)any member of the scheme,

for the appointment of a trustee of the scheme under subsection (3)(a) or (c).

(2)In section 8 of that Act (consequences of appointment of trustees under section 7), for subsections (1) and (2) substitute—

(1)An order under section 7 appointing a trustee may provide for any fees and expenses of trustees appointed under the order to be paid—

(a)by the employer,

(b)out of the resources of the scheme, or

(c)partly by the employer and partly out of those resources.

(2)Such an order may also provide that an amount equal to the amount (if any) paid out of the resources of the scheme by virtue of subsection (1)(b) or (c) is to be treated for all purposes as a debt due from the employer to the trustees of the scheme.

36Independent trusteesE+W+S

(1)Part 1 of the Pensions Act 1995 (c. 26) (occupational pension schemes) is amended as follows.

(2)In section 22 (circumstances in which provisions relating to independent trustees apply)—

(a)in subsection (1)(b) omit “or” at the end of sub-paragraph (i) and after that sub-paragraph insert—

(ia)the interim receiver of the property of a person who is the employer in relation to the scheme, or,

(b)in subsection (2), after “a scheme” insert “ by virtue of subsection (1) ”,

(c)after subsection (2) insert—

(2A)To the extent that it does not already apply by virtue of subsection (1), this section also applies in relation to a trust scheme—

(a)at any time during an assessment period (within the meaning of section 132 of the Pensions Act 2004) in relation to the scheme, and

(b)at any time, not within paragraph (a), when the scheme is authorised under section 153 of that Act (closed schemes) to continue as a closed scheme., and

(d)after subsection (2A) (inserted by paragraph (c) above) insert—

(2B)The responsible person must, as soon as reasonably practicable, give notice of an event within subsection (2C) to—

(a)the Authority,

(b)the Board of the Pension Protection Fund, and

(c)the trustees of the scheme.

(2C)The events are—

(a)the practitioner beginning to act as mentioned in subsection (1)(a), if immediately before he does so this section does not apply in relation to the scheme;

(b)the practitioner ceasing to so act, if immediately after he does so this section does not apply in relation to the scheme;

(c)the official receiver beginning to act in a capacity mentioned in subsection (1)(b)(i), (ia) or (ii), if immediately before he does so this section does not apply in relation to the scheme;

(d)the official receiver ceasing to act in such a capacity, if immediately after he does so this section does not apply in relation to the scheme.

(2D)For the purposes of subsection (2B) “the responsible person” means—

(a)in the case of an event within subsection (2C)(a) or (b) the practitioner, and

(b)in the case of an event within subsection (2C)(c) or (d), the official receiver.

(2E)Regulations may require prescribed persons in prescribed circumstances where this section begins or ceases to apply in relation to a trust scheme by virtue of subsection (2A) to give a notice to that effect to—

(a)the Authority,

(b)the Board of the Pension Protection Fund, and

(c)the trustees of the scheme.

(2F)A notice under subsection (2B), or regulations under subsection (2E), must be in writing and contain such information as may be prescribed.

(3)For sections 23 and 24 (appointment of independent trustees) substitute—

23Power to appoint independent trustees

(1)While section 22 applies in relation to a trust scheme, the Authority may by order appoint as a trustee of the scheme a person who—

(a)is an independent person in relation to the scheme, and

(b)is registered in the register maintained by the Authority in accordance with regulations under subsection (4).

(2)In relation to a particular trust scheme, no more than one trustee may at any time be an independent trustee appointed under subsection (1).

(3)For the purposes of this section a person is independent in relation to a trust scheme only if—

(a)he has no interest in the assets of the employer or of the scheme otherwise than as trustee of the scheme,

(b)he is neither connected with, nor an associate of—

(i)the employer,

(ii)any person for the time being acting as an insolvency practitioner in relation to the employer, or

(iii)the official receiver acting in any of the capacities mentioned in section 22(1)(b) in relation to the employer, and

(c)he satisfies any prescribed requirements;

and any reference in this Part to an independent trustee is to be construed accordingly.

(4)Regulations must provide for the Authority to compile and maintain a register of persons who satisfy the prescribed conditions for registration.

(5)Regulations under subsection (4) may provide—

(a)for copies of the register or of extracts from it to be provided to prescribed persons in prescribed circumstances;

(b)for the inspection of the register by prescribed persons in prescribed circumstances.

(6)The circumstances which may be prescribed under subsection (5)(a) or (b) include the payment by the person to whom the copy is to be provided, or by whom the register is to be inspected, of such reasonable fee as may be determined by the Authority.

(7)This section is without prejudice to the powers conferred by section 7.

(4)In section 25 (appointment and powers of independent trustees: further provisions)—

(a)for subsection (4)(a) substitute—

(a)he must as soon as reasonably practicable give written notice of that fact to the Authority, and,

(b)after subsection (5) insert—

(5A)Section 10 applies to any person who, without reasonable excuse, fails to comply with subsection (4)(a)., and

(c)for subsection (6) substitute—

(6)An order under section 23(1) may provide for any fees and expenses of the trustee appointed under the order to be paid—

(a)by the employer,

(b)out of the resources of the scheme, or

(c)partly by the employer and partly out of those resources.

(7)Such an order may also provide that an amount equal to the amount (if any) paid out of the resources of the scheme by virtue of subsection (6)(b) or (c) is to be treated for all purposes as a debt due from the employer to the trustees of the scheme.

(8)Where, by virtue of subsection (6)(b) or (c), an order makes provision for any fees or expenses of the trustee appointed under the order to be paid out of the resources of the scheme, the trustee is entitled to be so paid in priority to all other claims falling to be met out of the scheme’s resources.

37DisqualificationE+W+S

In section 30 of the Pensions Act 1995 (c. 26) (consequences of disqualification under section 29), for subsection (1) substitute—

(1)Where a person who is a trustee of a trust scheme becomes disqualified under section 29 in relation to the scheme, his becoming so disqualified has the effect of removing him as a trustee.

Contribution notices where avoidance of employer debtE+W+S

38Contribution notices where avoidance of employer debtE+W+S

(1)This section applies in relation to an occupational pension scheme other than—

(a)a money purchase scheme, or

(b)a prescribed scheme or a scheme of a prescribed description.

(2)The Regulator may issue a notice to a person stating that the person is under a liability to pay the sum specified in the notice (a “contribution notice”)—

(a)to the trustees or managers of the scheme, or

(b)where the Board of the Pension Protection Fund has assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 (pension protection), to the Board.

(3)The Regulator may issue a contribution notice to a person only if—

(a)the Regulator is of the opinion that the person was a party to an act or a deliberate failure to act which falls within subsection (5),

(b)the person was at any time in the relevant period—

(i)the employer in relation to the scheme, or

(ii)a person connected with, or an associate of, the employer,

(c)the Regulator is of the opinion that the person, in being a party to the act or failure, was not acting in accordance with his functions as an insolvency practitioner in relation to another person, and

(d)the Regulator is of the opinion that it is reasonable to impose liability on the person to pay the sum specified in the notice.

(4)But the Regulator may not issue a contribution notice, in such circumstances as may be prescribed, to a person of a prescribed description.

(5)An act or a failure to act falls within this subsection if—

(a)the Regulator is of the opinion that the main purpose or one of the main purposes of the act or failure was—

(i)to prevent the recovery of the whole or any part of a debt which was, or might become, due from the employer in relation to the scheme under section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the scheme assets), or

(ii)otherwise than in good faith, to prevent such a debt becoming due, to compromise or otherwise settle such a debt, or to reduce the amount of such a debt which would otherwise become due,

(b)it is an act which occurred, or a failure to act which first occurred—

(i)on or after 27th April 2004, and

(ii)before any assumption of responsibility for the scheme by the Board in accordance with Chapter 3 of Part 2, and

(c)it is either—

(i)an act which occurred during the period of six years ending with the determination by the Regulator to exercise the power to issue the contribution notice in question, or

(ii)a failure which first occurred during, or continued for the whole or part of, that period.

(6)For the purposes of subsection (3)—

(a)the parties to an act or a deliberate failure include those persons who knowingly assist in the act or failure, and

(b)the relevant period” means the period which—

(i)begins with the time when the act falling within subsection (5) occurs or the failure to act falling within that subsection first occurs, and

(ii)ends with the determination by the Regulator to exercise the power to issue the contribution notice in question.

(7)The Regulator, when deciding for the purposes of subsection (3)(d) whether it is reasonable to impose liability on a particular person to pay the sum specified in the notice, must have regard to such matters as the Regulator considers relevant including, where relevant, the following matters—

(a)the degree of involvement of the person in the act or failure to act which falls within subsection (5),

(b)the relationship which the person has or has had with the employer (including, where the employer is a company within the meaning of subsection (11) of section 435 of the Insolvency Act 1986 (c. 45), whether the person has or has had control of the employer within the meaning of subsection (10) of that section),

(c)any connection or involvement which the person has or has had with the scheme,

(d)if the act or failure to act was a notifiable event for the purposes of section 69 (duty to notify the Regulator of certain events), any failure by the person to comply with any obligation imposed on the person by subsection (1) of that section to give the Regulator notice of the event,

(e)all the purposes of the act or failure to act (including whether a purpose of the act or failure was to prevent or limit loss of employment),

(f)the financial circumstances of the person, and

(g)such other matters as may be prescribed.

(8)For the purposes of this section references to a debt due under section 75 of the Pensions Act 1995 (c. 26) include a contingent debt under that section.

(9)Accordingly, in the case of such a contingent debt, the reference in subsection (5)(a)(ii) to preventing a debt becoming due is to be read as including a reference to preventing the occurrence of any of the events specified in section 75(4C)(a) or (b) of that Act upon which the debt is contingent.

(10)For the purposes of this section—

(a)section 249 of the Insolvency Act 1986 (connected persons) applies as it applies for the purposes of any provision of the first Group of Parts of that Act,

(b)section 435 of that Act (associated persons) applies as it applies for the purposes of that Act, and

(c)section 74 of the Bankruptcy (Scotland) Act 1985 (c. 66) (associated persons) applies as it applies for the purposes of that Act.

(11)For the purposes of this section “insolvency practitioner”, in relation to a person, means—

(a)a person acting as an insolvency practitioner, in relation to that person, in accordance with section 388 of the Insolvency Act 1986, or

(b)an insolvency practitioner within the meaning of section 121(9)(b) (persons of a prescribed description).

39The sum specified in a section 38 contribution noticeE+W+S

(1)The sum specified by the Regulator in a contribution notice under section 38 may be either the whole or a specified part of the shortfall sum in relation to the scheme.

(2)Subject to subsection (3), the shortfall sum in relation to a scheme is—

(a)in a case where, at the relevant time, a debt was due from the employer to the trustees or managers of the scheme under section 75 of the Pensions Act 1995 (c. 26) (“the 1995 Act”) (deficiencies in the scheme assets), the amount which the Regulator estimates to be the amount of that debt at that time, and

(b)in a case where, at the relevant time, no such debt was due, the amount which the Regulator estimates to be the amount of the debt under section 75 of the 1995 Act which would become due if—

(i)subsection (2) of that section applied, and

(ii)the time designated by the trustees or managers of the scheme for the purposes of that subsection were the relevant time.

(3)Where the Regulator is satisfied that the act or failure to act falling within section 38(5) resulted—

(a)in a case falling within paragraph (a) of subsection (2), in the amount of the debt which became due under section 75 of the 1995 Act being less than it would otherwise have been, or

(b)in a case falling within paragraph (b) of subsection (2), in the amount of any such debt calculated for the purposes of that paragraph being less than it would otherwise have been,

the Regulator may increase the amounts calculated under subsection (2)(a) or (b) by such amount as the Regulator considers appropriate.

(4)For the purposes of this section “the relevant time” means—

(a)in the case of an act falling within subsection (5) of section 38, the time of the act, or

(b)in the case of a failure to act falling within that subsection—

(i)the time when the failure occurred, or

(ii)where the failure continued for a period of time, the time which the Regulator determines and which falls within that period.

(5)For the purposes of this section—

(a)references to a debt due under section 75 of the 1995 Act include a contingent debt under that section, and

(b)references to the amount of such a debt include the amount of such a contingent debt.

40Content and effect of a section 38 contribution noticeE+W+S

(1)This section applies where a contribution notice is issued to a person under section 38.

(2)The contribution notice must—

(a)contain a statement of the matters which it is asserted constitute the act or failure to act which falls within subsection (5) of section 38,

(b)specify the sum which the person is stated to be under a liability to pay, and

(c)identify any other persons to whom contribution notices have been or are issued as a result of the act or failure to act in question and the sums specified in each of those notices.

(3)Where the contribution notice states that the person is under a liability to pay the sum specified in the notice to the trustees or managers of the scheme, the sum is to be treated as a debt due from the person to the trustees or managers of the scheme.

(4)In such a case, the Regulator may, on behalf of the trustees or managers of the scheme, exercise such powers as the trustees or managers have to recover the debt.

(5)But during any assessment period (within the meaning of section 132) in relation to the scheme, the rights and powers of the trustees or managers of the scheme in relation to any debt due to them by virtue of a contribution notice are exercisable by the Board of the Pension Protection Fund to the exclusion of the trustees or managers and the Regulator.

(6)Where, by virtue of subsection (5), any amount is paid to the Board in respect of a debt due by virtue of a contribution notice, the Board must pay the amount to the trustees or managers of the scheme.

(7)Where the contribution notice states that the person is under a liability to pay the sum specified in the notice to the Board, the sum is to be treated as a debt due from the person to the Board.

(8)Where the contribution notice so specifies, the person to whom the notice is issued (“P”) is to be treated as jointly and severally liable for the debt with any persons specified in the notice who are persons to whom corresponding contribution notices are issued.

(9)For the purposes of subsection (8), a corresponding contribution notice is a notice which—

(a)is issued as a result of the same act or failure to act falling within subsection (5) of section 38 as the act or failure as a result of which P’s contribution notice is issued,

(b)specifies the same sum as is specified in P’s contribution notice, and

(c)specifies that the person to whom the contribution notice is issued is jointly and severally liable with P, or with P and other persons, for the debt in respect of that sum.

(10)A debt due by virtue of a contribution notice is not to be taken into account for the purposes of section 75(2) and (4) of the Pensions Act 1995 (c. 26) (deficiencies in the scheme assets) when ascertaining the amount or value of the assets or liabilities of a scheme.

41Section 38 contribution notice: relationship with employer debtE+W+S

(1)This section applies where a contribution notice is issued to a person (“P”) under section 38 and condition A or B is met.

(2)Condition A is met if, at the time at which the contribution notice is issued, there is a debt due under section 75 of the Pensions Act 1995 (“the 1995 Act”) (deficiencies in the scheme assets) from the employer—

(a)to the trustees or managers of the scheme, or

(b)where the Board of the Pension Protection Fund has assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 (pension protection), to the Board.

(3)Condition B is met if, after the contribution notice is issued but before the whole of the debt due by virtue of the notice is recovered, a debt becomes due from the employer to the trustees or managers of the scheme under section 75 of the 1995 Act.

(4)The Regulator may issue a direction to the trustees or managers of the scheme not to take any or any further steps to recover the debt due to them under section 75 of the 1995 Act pending the recovery of all or a specified part of the debt due to them by virtue of the contribution notice.

(5)If the trustees or managers fail to comply with a direction issued to them under subsection (4), section 10 of the 1995 Act (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

(6)Any sums paid—

(a)to the trustees or managers of the scheme in respect of any debt due to them by virtue of the contribution notice, or

(b)to the Board in respect of any debt due to it by virtue of the contribution notice,

are to be treated as reducing the amount of the debt due to the trustees or managers or, as the case may be, to the Board under section 75 of the 1995 Act.

(7)Where a sum is paid to the trustees or managers of the scheme or, as the case may be, to the Board in respect of the debt due under section 75 of the 1995 Act, P may make an application under this subsection to the Regulator for a reduction in the amount of the sum specified in P’s contribution notice.

(8)An application under subsection (7) must be made as soon as reasonably practicable after the sum is paid to the trustees or managers or, as the case may be, to the Board in respect of the debt due under section 75 of the 1995 Act.

(9)Where such an application is made to the Regulator, the Regulator may, if it is of the opinion that it is appropriate to do so—

(a)reduce the amount of the sum specified in P’s contribution notice by an amount which it considers reasonable, and

(b)issue a revised contribution notice specifying the revised sum.

(10)For the purposes of subsection (9), the Regulator must have regard to such matters as the Regulator considers relevant including, where relevant, the following matters—

(a)the amount paid in respect of the debt due under section 75 of the 1995 Act since the contribution notice was issued,

(b)any amounts paid in respect of the debt due by virtue of that contribution notice,

(c)whether contribution notices have been issued to other persons as a result of the same act or failure to act falling within subsection (5) of section 38 as the act or failure as a result of which P’s contribution notice was issued,

(d)where such contribution notices have been issued, the sums specified in each of those notices and any amounts paid in respect of the debt due by virtue of those notices,

(e)whether P’s contribution notice specifies that P is jointly and severally liable for the debt with other persons, and

(f)such other matters as may be prescribed.

(11)Where—

(a)P’s contribution notice specifies that P is jointly and severally liable for the debt with other persons, and

(b)a revised contribution notice is issued to P under subsection (9) specifying a revised sum,

the Regulator must also issue revised contribution notices to those other persons specifying the revised sum and their joint and several liability with P for the debt in respect of that sum.

(12)For the purposes of this section—

(a)references to a debt due under section 75 of the 1995 Act include a contingent debt under that section, and

(b)references to the amount of such a debt include the amount of such a contingent debt.

42Section 38 contribution notice: clearance statementsE+W+S

(1)An application may be made to the Regulator under this section for the issue of a clearance statement within paragraph (a), (b) or (c) of subsection (2) in relation to circumstances described in the application.

(2)A clearance statement is a statement, made by the Regulator, that in its opinion in the circumstances described in the application—

(a)the applicant would not be, for the purposes of subsection (3)(a) of section 38, a party to an act or a deliberate failure to act falling within subsection (5)(a) of that section,

(b)it would not be reasonable to impose any liability on the applicant under a contribution notice issued under section 38, or

(c)such requirements of that section as may be prescribed would not be satisfied in relation to the applicant.

(3)Where an application is made under this section, the Regulator—

(a)may request further information from the applicant;

(b)may invite the applicant to amend the application to modify the circumstances described.

(4)Where an application is made under this section, the Regulator must as soon as reasonably practicable—

(a)determine whether to issue the clearance statement, and

(b)where it determines to do so, issue the statement.

(5)A clearance statement issued under this section binds the Regulator in relation to the exercise of the power to issue a contribution notice under section 38 to the applicant unless—

(a)the circumstances in relation to which the exercise of the power under that section arises are not the same as the circumstances described in the application, and

(b)the difference in those circumstances is material to the exercise of the power.

Financial support directionsE+W+S

43Financial support directionsE+W+S

(1)This section applies in relation to an occupational pension scheme other than—

(a)a money purchase scheme, or

(b)a prescribed scheme or a scheme of a prescribed description.

(2)The Regulator may issue a financial support direction under this section in relation to such a scheme if the Regulator is of the opinion that the employer in relation to the scheme—

(a)is a service company, or

(b)is insufficiently resourced,

at a time determined by the Regulator which falls within subsection (9) (“the relevant time”).

(3)A financial support direction in relation to a scheme is a direction which requires the person or persons to whom it is issued to secure—

(a)that financial support for the scheme is put in place within the period specified in the direction,

(b)that thereafter that financial support or other financial support remains in place while the scheme is in existence, and

(c)that the Regulator is notified in writing of prescribed events in respect of the financial support as soon as reasonably practicable after the event occurs.

(4)A financial support direction in relation to a scheme may be issued to one or more persons.

(5)But the Regulator may issue such a direction to a person only if—

(a)the person is at the relevant time a person falling within subsection (6), and

(b)the Regulator is of the opinion that it is reasonable to impose the requirements of the direction on that person.

(6)A person falls within this subsection if the person is—

(a)the employer in relation to the scheme,

(b)an individual who—

(i)is an associate of an individual who is the employer, but

(ii)is not an associate of that individual by reason only of being employed by him, or

(c)a person, other than an individual, who is connected with or an associate of the employer.

(7)The Regulator, when deciding for the purposes of subsection (5)(b) whether it is reasonable to impose the requirements of a financial support direction on a particular person, must have regard to such matters as the Regulator considers relevant including, where relevant, the following matters—

(a)the relationship which the person has or has had with the employer (including, where the employer is a company within the meaning of subsection (11) of section 435 of the Insolvency Act 1986 (c. 45), whether the person has or has had control of the employer within the meaning of subsection (10) of that section),

(b)in the case of a person falling within subsection (6)(b) or (c), the value of any benefits received directly or indirectly by that person from the employer,

(c)any connection or involvement which the person has or has had with the scheme,

(d)the financial circumstances of the person, and

(e)such other matters as may be prescribed.

(8)A financial support direction must identify all the persons to whom the direction is issued.

(9)A time falls within this subsection if it is a time which falls within a prescribed period which ends with the determination by the Regulator to exercise the power to issue the financial support direction in question.

(10)For the purposes of subsection (3), a scheme is in existence until it is wound up.

(11)No duty to which a person is subject is to be regarded as contravened merely because of any information or opinion contained in a notice given by virtue of subsection (3)(c).

This is subject to section 311 (protected items).

44Meaning of “service company” and “insufficiently resourced”E+W+S

(1)This section applies for the purposes of section 43 (financial support directions).

(2)An employer (“E”) is a “service company” at the relevant time if—

(a)E is a company within the meaning given by section 735(1) of the Companies Act 1985 (c. 6),

(b)E is a member of a group of companies, and

(c)E’s turnover, as shown in the latest available accounts for E prepared in accordance with section 226 of that Act, is solely or principally derived from amounts charged for the provision of the services of employees of E to other members of that group.

(3)The employer in relation to a scheme is insufficiently resourced at the relevant time if—

(a)at that time the value of the resources of the employer is less than the amount which is a prescribed percentage of the estimated section 75 debt in relation to the scheme, and

(b)there is at that time a person who falls within subsection (6)(b) or (c) of section 43 and the value at that time of that person’s resources is not less than the amount which is the difference between—

(i)the value of the resources of the employer, and

(ii)the amount which is the prescribed percentage of the estimated section 75 debt.

(4)For the purposes of subsection (3)—

(a)what constitutes the resources of a person is to be determined in accordance with regulations, and

(b)the value of a person’s resources is to be determined, calculated and verified in a prescribed manner.

(5)In this section the “estimated section 75 debt”, in relation to a scheme, means the amount which the Regulator estimates to be the amount of the debt which would become due from the employer to the trustees or managers of the scheme under section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the scheme assets) if—

(a)subsection (2) of that section applied, and

(b)the time designated by the trustees or managers of the scheme for the purposes of that subsection were the relevant time.

(6)When calculating the estimated section 75 debt in relation to a scheme under subsection (5), the amount of any debt due at the relevant time from the employer under section 75 of the Pensions Act 1995 (c. 26) is to be disregarded.

(7)In this section “the relevant time” has the same meaning as in section 43.

45Meaning of “financial support”E+W+S

(1)For the purposes of section 43 (financial support directions), “financial support” for a scheme means one or more of the arrangements falling within subsection (2) the details of which are approved in a notice issued by the Regulator.

(2)The arrangements falling within this subsection are—

(a)an arrangement whereby, at any time when the employer is a member of a group of companies, all the members of the group are jointly and severally liable for the whole or part of the employer’s pension liabilities in relation to the scheme;

(b)an arrangement whereby, at any time when the employer is a member of a group of companies, a company (within the meaning given in section 736 of the Companies Act 1985 (c. 6)) which meets prescribed requirements and is the holding company of the group is liable for the whole or part of the employer’s pension liabilities in relation to the scheme;

(c)an arrangement which meets prescribed requirements and whereby additional financial resources are provided to the scheme;

(d)such other arrangements as may be prescribed.

(3)The Regulator may not issue a notice under subsection (1) approving the details of one or more arrangements falling within subsection (2) unless it is satisfied that the arrangement is, or the arrangements are, reasonable in the circumstances.

(4)In subsection (2), “the employer’s pension liabilities” in relation to a scheme means—

(a)the liabilities for any amounts payable by or on behalf of the employer towards the scheme (whether on his own account or otherwise) in accordance with a schedule of contributions under section 227, and

(b)the liabilities for any debt which is or may become due to the trustees or managers of the scheme from the employer whether by virtue of section 75 of the Pensions Act 1995 (deficiencies in the scheme assets) or otherwise.

46Financial support directions: clearance statementsE+W+S

(1)An application may be made to the Regulator under this section for the issue of a clearance statement within paragraph (a), (b) or (c) of subsection (2) in relation to circumstances described in the application and relating to an occupational pension scheme.

(2)A clearance statement is a statement, made by the Regulator, that in its opinion in the circumstances described in the application—

(a)the employer in relation to the scheme would not be a service company for the purposes of section 43,

(b)the employer in relation to the scheme would not be insufficiently resourced for the purposes of that section, or

(c)it would not be reasonable to impose the requirements of a financial support direction, in relation to the scheme, on the applicant.

(3)Where an application is made under this section, the Regulator—

(a)may request further information from the applicant;

(b)may invite the applicant to amend the application to modify the circumstances described.

(4)Where an application is made under this section, the Regulator must as soon as reasonably practicable—

(a)determine whether to issue the clearance statement, and

(b)where it determines to do so, issue the statement.

(5)A clearance statement issued under this section binds the Regulator in relation to the exercise of the power to issue a financial support direction under section 43 in relation to the scheme to the applicant unless—

(a)the circumstances in relation to which the exercise of the power under that section arises are not the same as the circumstances described in the application, and

(b)the difference in those circumstances is material to the exercise of the power.

47Contribution notices where non-compliance with financial support directionE+W+S

(1)This section applies where there is non-compliance with a financial support direction issued in relation to a scheme under section 43.

(2)The Regulator may issue a notice to any one or more of the persons to whom the direction was issued stating that the person is under a liability to pay to the trustees or managers of the scheme the sum specified in the notice (a “contribution notice”).

(3)The Regulator may issue a contribution notice to a person only if the Regulator is of the opinion that it is reasonable to impose liability on the person to pay the sum specified in the notice.

(4)The Regulator, when deciding for the purposes of subsection (3) whether it is reasonable to impose liability on a particular person to pay the sum specified in the notice, must have regard to such matters as the Regulator considers relevant including, where relevant, the following matters—

(a)whether the person has taken reasonable steps to secure compliance with the financial support direction,

(b)the relationship which the person has or has had with the employer (including, where the employer is a company within the meaning of subsection (11) of section 435 of the Insolvency Act 1986 (c. 45), whether the person has or has had control of the employer within the meaning of subsection (10) of that section),

(c)in the case of a person to whom the financial support direction was issued as a person falling within section 43(6)(b) or (c), the value of any benefits received directly or indirectly by that person from the employer,

(d)the relationship which the person has or has had with the parties to any arrangements put in place in accordance with the direction (including, where any of those parties is a company within the meaning of subsection (11) of section 435 of the Insolvency Act 1986, whether the person has or has had control of that company within the meaning of subsection (10) of that section),

(e)any connection or involvement which the person has or has had with the scheme,

(f)the financial circumstances of the person, and

(g)such other matters as may be prescribed.

(5)A contribution notice may not be issued under this section in respect of non-compliance with a financial support direction in relation to a scheme where the Board of the Pension Protection Fund has assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 (pension protection).

48The sum specified in a section 47 contribution noticeE+W+S

(1)The sum specified by the Regulator in a contribution notice under section 47 may be either the whole or a specified part of the shortfall sum in relation to the scheme.

(2)The shortfall sum in relation to a scheme is—

(a)in a case where, at the time of non-compliance, a debt was due from the employer to the trustees or managers of the scheme under section 75 of the Pensions Act 1995 (c. 26) (“the 1995 Act”) (deficiencies in the scheme assets), the amount which the Regulator estimates to be the amount of that debt at that time, and

(b)in a case where, at the time of non-compliance, no such debt was due, the amount which the Regulator estimates to be the amount of the debt under section 75 of the 1995 Act which would become due if—

(i)subsection (2) of that section applied, and

(ii)the time designated by the trustees or managers of the scheme for the purposes of that subsection were the time of non-compliance.

(3)For the purposes of this section “the time of non-compliance” means—

(a)in the case of non-compliance with paragraph (a) of subsection (3) of section 43 (financial support directions), the time immediately after the expiry of the period specified in the financial support direction for putting in place the financial support,

(b)in the case of non-compliance with paragraph (b) of that subsection, the time when financial support for the scheme ceased to be in place,

(c)in the case of non-compliance with paragraph (c) of that subsection, the time when the prescribed event occurred in relation to which there was the failure to notify the Regulator, or

(d)where more than one of paragraphs (a) to (c) above apply, whichever of the times specified in the applicable paragraphs the Regulator determines.

49Content and effect of a section 47 contribution noticeE+W+S

(1)This section applies where a contribution notice is issued to a person under section 47.

(2)The contribution notice must—

(a)contain a statement of the matters which it is asserted constitute the non-compliance with the financial support direction in respect of which the notice is issued, and

(b)specify the sum which the person is stated to be under a liability to pay.

(3)The sum specified in the notice is to be treated as a debt due from the person to the trustees or managers of the scheme.

(4)The Regulator may, on behalf of the trustees or managers of the scheme, exercise such powers as the trustees or managers have to recover the debt.

(5)But during any assessment period (within the meaning of section 132) in relation to the scheme, the rights and powers of the trustees or managers of the scheme in relation to any debt due to them by virtue of a contribution notice, are exercisable by the Board of the Pension Protection Fund to the exclusion of the trustees or managers and the Regulator.

(6)Where, by virtue of subsection (5), any amount is paid to the Board in respect of a debt due by virtue of a contribution notice, the Board must pay the amount to the trustees or managers of the scheme.

(7)The contribution notice must identify any other persons to whom contribution notices have been or are issued in respect of the non-compliance in question and the sums specified in each of those notices.

(8)Where the contribution notice so specifies, the person to whom the notice is issued (“P”) is to be treated as jointly and severally liable for the debt with any persons specified in the notice who are persons to whom corresponding contribution notices are issued.

(9)For the purposes of subsection (8), a corresponding contribution notice is a notice which—

(a)is issued in respect of the same non-compliance with the financial support direction as the non-compliance in respect of which P’s contribution notice is issued,

(b)specifies the same sum as is specified in P’s contribution notice, and

(c)specifies that the person to whom the contribution notice is issued is jointly and severally liable with P, or with P and other persons, for the debt in respect of that sum.

(10)A debt due by virtue of a contribution notice is not to be taken into account for the purposes of section 75(2) and (4) of the Pensions Act 1995 (c. 26) (deficiencies in the scheme assets) when ascertaining the amount or value of the assets or liabilities of a scheme.

50Section 47 contribution notice: relationship with employer debtE+W+S

(1)This section applies where a contribution notice is issued to a person (“P”) under section 47 and condition A or B is met.

(2)Condition A is met if, at the time at which the contribution notice is issued, there is a debt due from the employer to the trustees or managers of the scheme under section 75 of the Pensions Act 1995 (“the 1995 Act”) (deficiencies in the scheme assets).

(3)Condition B is met if, after the contribution notice is issued but before the whole of the debt due by virtue of the notice is recovered, a debt becomes due from the employer to the trustees or managers of the scheme under section 75 of the 1995 Act.

(4)The Regulator may issue a direction to the trustees or managers of the scheme not to take any or any further steps to recover the debt due to them under section 75 of the 1995 Act pending the recovery of all or a specified part of the debt due to them by virtue of the contribution notice.

(5)If the trustees or managers fail to comply with a direction issued to them under subsection (4), section 10 of the 1995 Act (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

(6)Any sums paid—

(a)to the trustees or managers of the scheme in respect of any debt due to them by virtue of the contribution notice, or

(b)to the Board of the Pension Protection Fund in respect of any debt due to it by virtue of the contribution notice (where it has assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 (pension protection)),

are to be treated as reducing the amount of the debt due to the trustees or managers or, as the case may be, to the Board under section 75 of the 1995 Act.

(7)Where a sum is paid to the trustees or managers of the scheme or, as the case may be, to the Board in respect of the debt due under section 75 of the 1995 Act, P may make an application under this subsection to the Regulator for a reduction in the amount of the sum specified in P’s contribution notice.

(8)An application under subsection (7) must be made as soon as reasonably practicable after the sum is paid to the trustees or managers or, as the case may be, to the Board in respect of the debt due under section 75 of the 1995 Act.

(9)Where such an application is made to the Regulator, the Regulator may, if it is of the opinion that it is appropriate to do so—

(a)reduce the amount of the sum specified in P’s contribution notice by an amount which it considers reasonable, and

(b)issue a revised contribution notice specifying the revised sum.

(10)For the purposes of subsection (9), the Regulator must have regard to such matters as the Regulator considers relevant including, where relevant, the following matters—

(a)the amount paid in respect of the debt due under section 75 of the 1995 Act since the contribution notice was issued,

(b)any amounts paid in respect of the debt due by virtue of that contribution notice,

(c)whether contribution notices have been issued to other persons in respect of the same non-compliance with the financial support direction in question as the non-compliance in respect of which P’s contribution notice was issued,

(d)where such contribution notices have been issued, the sums specified in each of those notices and any amounts paid in respect of the debt due by virtue of those notices,

(e)whether P’s contribution notice specifies that P is jointly and severally liable for the debt with other persons, and

(f)such other matters as may be prescribed.

(11)Where—

(a)P’s contribution notice specifies that P is jointly and severally liable for the debt with other persons, and

(b)a revised contribution notice is issued to P under subsection (9) specifying a revised sum,

the Regulator must also issue revised contribution notices to those other persons specifying the revised sum and their joint and several liability with P for the debt in respect of that sum.

51Sections 43 to 50: interpretationE+W+S

(1)In sections 43 to 50—

  • group of companies” means a holding company and its subsidiaries within the meaning given by section 736(1) of the Companies Act 1985 (c. 6) and “member” in relation to such a group is to be construed accordingly;

  • holding company” has the meaning given by section 736(1) of that Act.

(2)For the purposes of those sections—

(a)references to a debt due under section 75 of the Pensions Act 1995 (c. 26) include a contingent debt under that section, and

(b)references to the amount of such a debt include the amount of such a contingent debt.

(3)For the purposes of those sections—

(a)section 249 of the Insolvency Act 1986 (c. 45) (connected persons) applies as it applies for the purposes of any provision of the first Group of Parts of that Act,

(b)section 435 of that Act (associated persons) applies as it applies for the purposes of that Act, and

(c)section 74 of the Bankruptcy (Scotland) Act 1985 (c. 66) (associated persons) applies as it applies for the purposes of that Act.

Transactions at an undervalueE+W+S

52Restoration orders where transactions at an undervalueE+W+S

(1)This section applies in relation to an occupational pension scheme other than—

(a)a money purchase scheme, or

(b)a prescribed scheme or a scheme of a prescribed description.

(2)The Regulator may make a restoration order in respect of a transaction involving assets of the scheme if—

(a)a relevant event has occurred in relation to the employer in relation to the scheme, and

(b)the transaction is a transaction at an undervalue entered into with a person at a time which—

(i)is on or after 27th April 2004, but

(ii)is not more than two years before the occurrence of the relevant event in relation to the employer.

(3)A restoration order in respect of a transaction involving assets of a scheme is such an order as the Regulator thinks fit for restoring the position to what it would have been if the transaction had not been entered into.

(4)For the purposes of this section a relevant event occurs in relation to the employer in relation to a scheme if and when on or after the appointed day—

(a)an insolvency event occurs in relation to the employer, or

(b)the trustees or managers of the scheme make an application under subsection (1) of section 129 or receive a notice from the Board of the Pension Protection Fund under subsection (5)(a) of that section (applications and notifications prior to the Board assuming responsibility for a scheme).

(5)For the purposes of subsection (4)—

(a)the “appointed day” means the day appointed under section 126(2) (no pension protection under Chapter 3 of Part 2 if the scheme begins winding up before the day appointed by the Secretary of State),

(b)section 121 (meaning of “insolvency event”) applies for the purposes of determining if and when an insolvency event has occurred in relation to the employer, and

(c)the reference to an insolvency event in relation to the employer does not include an insolvency event which occurred in relation to him before he became the employer in relation to the scheme.

(6)For the purposes of this section and section 53, a transaction involving assets of a scheme is a transaction at an undervalue entered into with a person (“P”) if the trustees or managers of the scheme or appropriate persons in relation to the scheme—

(a)make a gift to P or otherwise enter into a transaction with P on terms that provide for no consideration to be provided towards the scheme, or

(b)enter into a transaction with P for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by or on behalf of the trustees or managers of the scheme.

(7)In subsection (6) “appropriate persons” in relation to a scheme means a person who, or several persons each of whom is a person who, at the time at which the transaction in question is entered into, is—

(a)a person of a prescribed description, and

(b)entitled to exercise powers in relation to the scheme.

(8)For the purposes of this section and section 53—

  • assets” includes future assets;

  • transaction” includes a gift, agreement or arrangement and references to entering into a transaction are to be construed accordingly.

(9)The provisions of this section apply without prejudice to the availability of any other remedy, even in relation to a transaction where the trustees or managers of the scheme or appropriate persons in question had no power to enter into the transaction.

53Restoration orders: supplementaryE+W+S

(1)This section applies in relation to a restoration order under section 52 in respect of a transaction involving assets of a scheme (“the transaction”).

(2)The restoration order may in particular—

(a)require any assets of the scheme (whether money or other property) which were transferred as part of the transaction to be transferred back—

(i)to the trustees or managers of the scheme, or

(ii)where the Board of the Pension Protection Fund has assumed responsibility for the scheme, to the Board;

(b)require any property to be transferred to the trustees or managers of the scheme or, where the Board has assumed responsibility for the scheme, to the Board if it represents in any person’s hands—

(i)any of the assets of the scheme which were transferred as part of the transaction, or

(ii)property derived from any such assets so transferred;

(c)require such property as the Regulator may specify in the order, in respect of any consideration for the transaction received by the trustees or managers of the scheme, to be transferred—

(i)by the trustees or managers of the scheme, or

(ii)where the Board has assumed responsibility for the scheme, by the Board,

to such persons as the Regulator may specify in the order;

(d)require any person to pay, in respect of benefits received by him as a result of the transaction, such sums (not exceeding the value of the benefits received by him) as the Regulator may specify in the order—

(i)to the trustees or managers of the scheme, or

(ii)where the Board has assumed responsibility for the scheme, to the Board.

(3)A restoration order is of no effect to the extent that it prejudices any interest in property which was acquired in good faith and for value or any interest deriving from such an interest.

(4)Nothing in subsection (3) prevents a restoration order requiring a person to pay a sum of money if the person received a benefit as a result of the transaction otherwise than in good faith and for value.

(5)Where a person has acquired an interest in property from a person or has received a benefit as a result of the transaction and—

(a)he is one of the trustees or managers or appropriate persons who entered into the transaction as mentioned in subsection (6) of section 52, or

(b)at the time of the acquisition or receipt—

(i)he has notice of the fact that the transaction was a transaction at an undervalue,

(ii)he is a trustee or manager, or the employer, in relation to the scheme, or

(iii)he is connected with, or an associate of, any of the persons mentioned in paragraph (a) or (b)(ii),

then, unless the contrary is shown, it is to be presumed for the purposes of subsections (3) and (4) that the interest was acquired or the benefit was received otherwise than in good faith.

(6)For the purposes of this section—

(a)section 249 of the Insolvency Act 1986 (c. 45) (connected persons) applies as it applies for the purposes of any provision of the first Group of Parts of that Act,

(b)section 435 of that Act (associated persons) applies as it applies for the purposes of that Act, and

(c)section 74 of the Bankruptcy (Scotland) Act 1985 (c. 66) (associated persons) applies as it applies for the purposes of that Act.

(7)For the purposes of this section “property” includes—

(a)money, goods, things in action, land and every description of property wherever situated, and

(b)obligations and every description of interest, whether present or future or vested or contingent, arising out of, or incidental to, property.

(8)References in this section to where the Board has assumed responsibility for a scheme are to where the Board has assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 (pension protection).

54Content and effect of a restoration orderE+W+S

(1)This section applies where a restoration order is made under section 52 in respect of a transaction involving assets of a scheme.

(2)Where the restoration order imposes an obligation on a person to do something, the order must specify the period within which the obligation must be complied with.

(3)Where the restoration order imposes an obligation on a person (“A”) to transfer or pay a sum of money to a person specified in the order (“B”), the sum is to be treated as a debt due from A to B.

(4)Where the trustees or managers of the scheme are the persons to whom the debt is due, the Regulator may on their behalf, exercise such powers as the trustees or managers have to recover the debt.

(5)But during any assessment period (within the meaning of section 132) in relation to the scheme, the rights and powers of the trustees or managers of the scheme in relation to any debt due to them by virtue of a restoration order are exercisable by the Board of the Pension Protection Fund to the exclusion of the trustees or managers and the Regulator.

(6)Where, by virtue of subsection (5), any amount is transferred or paid to the Board in respect of a debt due by virtue of a restoration order, the Board must pay the amount to the trustees or managers of the scheme.

55Contribution notice where failure to comply with restoration orderE+W+S

(1)This section applies where—

(a)a restoration order is made under section 52 in respect of a transaction involving assets of a scheme (“the transaction”), and

(b)a person fails to comply with an obligation imposed on him by the order which is not an obligation to transfer or pay a sum of money.

(2)The Regulator may issue a notice to the person stating that the person is under a liability to pay the sum specified in the notice (a “contribution notice”)—

(a)to the trustees or managers of the scheme, or

(b)where the Board of the Pension Protection Fund has assumed responsibility for the scheme in accordance with Chapter 3 of Part 2 (pension protection), to the Board.

(3)The sum specified by the Regulator in a contribution notice may be either the whole or a specified part of the shortfall sum in relation to the scheme.

(4)The shortfall sum in relation to the scheme is the amount which the Regulator estimates to be the amount of the decrease in the value of the assets of the scheme as a result of the transaction having been entered into.

56Content and effect of a section 55 contribution noticeE+W+S

(1)This section applies where a contribution notice is issued to a person under section 55.

(2)The contribution notice must—

(a)contain a statement of the matters which it is asserted constitute the failure to comply with the restoration order under section 52 in respect of which the notice is issued, and

(b)specify the sum which the person is stated to be under a liability to pay.

(3)Where the contribution notice states that the person is under a liability to pay the sum specified in the notice to the trustees or managers of the scheme, the sum is to be treated as a debt due from the person to the trustees or managers of the scheme.

(4)In such a case, the Regulator may, on behalf of the trustees or managers of the scheme, exercise such powers as the trustees or managers have to recover the debt.

(5)But during any assessment period (within the meaning of section 132) in relation to the scheme, the rights and powers of the trustees or managers of the scheme in relation to any debt due to them by virtue of a contribution notice, are exercisable by the Board of the Pension Protection Fund to the exclusion of the trustees or managers and the Regulator.

(6)Where, by virtue of subsection (5), any amount is paid to the Board in respect of a debt due by virtue of a contribution notice, the Board must pay the amount to the trustees or managers of the scheme.

(7)Where the contribution notice states that the person is under a liability to pay the sum specified in the notice to the Board, the sum is to be treated as a debt due from the person to the Board.

Sections 38 to 56: partnerships and limited liability partnershipsE+W+S

57Sections 38 to 56: partnerships and limited liability partnershipsE+W+S

(1)For the purposes of any of sections 38 to 56, regulations may modify any of the definitions mentioned in subsection (2) (as applied by any of those sections) in relation to—

(a)a partnership or a partner in a partnership;

(b)a limited liability partnership or a member of such a partnership.

(2)The definitions mentioned in subsection (1) are—

(a)section 249 of the Insolvency Act 1986 (c. 45) (connected persons),

(b)section 435 of that Act (associated persons),

(c)section 74 of the Bankruptcy (Scotland) Act 1985 (c. 66) (associated persons), and

(d)section 736 of the Companies Act 1985 (c. 6) (meaning of “subsidiary” and “holding company” etc).

(3)Regulations may also provide that any provision of sections 38 to 51 applies with such modifications as may be prescribed in relation to—

(a)any case where a partnership is or was—

(i)the employer in relation to an occupational pension scheme, or

(ii)for the purposes of any of those sections, connected with or an associate of the employer;

(b)any case where a limited liability partnership is—

(i)the employer in relation to an occupational pension scheme, or

(ii)for the purposes of any of those sections, connected with or an associate of the employer.

(4)Regulations may also provide that any provision of sections 52 to 56 applies with such modifications as may be prescribed in relation to a partnership or a limited liability partnership.

(5)For the purposes of this section—

(a)partnership” includes a firm or entity of a similar character formed under the law of a country or territory outside the United Kingdom, and

(b)references to a partner are to be construed accordingly.

(6)For the purposes of this section, “limited liability partnership” means—

(a)a limited liability partnership formed under the Limited Liability Partnerships Act 2000 (c. 12) or the Limited Liability Partnerships Act (Northern Ireland) 2002 (c. 12 (N.I.)), or

(b)an entity which is of a similar character to such a limited liability partnership and which is formed under the law of a country or territory outside the United Kingdom,

and references to a member of a limited liability partnership are to be construed accordingly.

(7)This section is without prejudice to—

(a)section 307 (power to modify this Act in relation to certain categories of scheme), and

(b)section 318(4) (power to extend the meaning of “employer”).

Applications under the Insolvency Act 1986E+W+S

58Regulator’s right to apply under section 423 of Insolvency Act 1986E+W+S

(1)In this section “section 423” means section 423 of the Insolvency Act 1986 (transactions defrauding creditors).

(2)The Regulator may apply for an order under section 423 in relation to a debtor if—

(a)the debtor is the employer in relation to an occupational pension scheme, and

(b)condition A or condition B is met in relation to the scheme.

(3)Condition A is that an actuarial valuation under section 143 obtained by the Board of the Pension Protection Fund in respect of the scheme indicates that the value of the assets of the scheme at the relevant time, as defined by that section, was less than the amount of the protected liabilities, as defined by section 131, at that time.

(4)Condition B is that an actuarial valuation, as defined by section 224(2), obtained by the trustees or managers of the scheme indicates that the statutory funding objective in section 222 is not met.

(5)In a case where the debtor—

(a)has been adjudged bankrupt,

(b)is a body corporate which is being wound up or is in administration, or

(c)is a partnership which is being wound up or is in administration,

subsection (2) does not enable an application to be made under section 423 except with the permission of the court.

(6)An application made under this section is to be treated as made on behalf of every victim of the transaction who is—

(a)a trustee or member of the scheme, or

(b)the Board.

(7)This section does not apply where the valuation mentioned in subsection (3) or (4) is made by reference to a date that falls before the commencement of this section.

(8)Expressions which are defined by section 423 for the purposes of that section have the same meaning when used in this section.

Register of schemesE+W+S+N.I.

59Register of occupational and personal pension schemesE+W+S+N.I.

(1)The Regulator must compile and maintain a register of occupational pension schemes and personal pension schemes which are, or have been, registrable schemes (referred to in this Act as “the register”).

(2)In this section and sections 62 to 65 “registrable scheme” means an occupational pension scheme, or a personal pension scheme, of a prescribed description.

(3)In respect of each registrable scheme, the Regulator must record in the register—

(a)the registrable information most recently provided to it in respect of the scheme, and

(b)if the Regulator has received—

(i)a notice under section 62(5) (scheme which is wound up or ceases to be registrable),

(ii)a copy of a notice under section 160 (transfer notice), or

(iii)any notice, or copy of a notice, under any provision in force in Northern Ireland corresponding to a provision mentioned in sub-paragraph (i) or (ii),

that fact.

(4)In respect of each scheme which has been a registrable scheme, but

(a)has been, or is treated as having been, wound up, or

(b)has ceased to be a registrable scheme,

the Regulator must maintain in the register the registrable information last provided to it in respect of the scheme.

(5)Information recorded in the register must be so recorded in such manner as the Regulator considers appropriate.

(6)In particular, the register may consist of more than one part.

(7)In this section references to “registrable information”, in relation to a scheme to which any provision in force in Northern Ireland corresponding to section 60(2) (“the corresponding Northern Ireland provision”) applies, are to information of any description within the corresponding Northern Ireland provision.

60Registrable informationE+W+S

(1)For the purposes of sections 59 to 65 “registrable information”, in relation to an occupational or personal pension scheme, means information within subsection (2).

(2)That information is—

(a)the name of the scheme;

(b)the address of the scheme;

(c)the full names and addresses of each of the trustees or managers of the scheme;

(d)the status of the scheme with respect to the following matters—

(i)whether new members may be admitted to the scheme;

(ii)whether further benefits may accrue to, or in respect of, members under the scheme;

(iii)whether further contributions may be paid towards the scheme;

(iv)whether any members of the scheme are active members;

(e)the categories of benefits under the scheme;

(f)in the case of an occupational pension scheme—

(i)the name and address of each relevant employer, and

(ii)any other name by which any relevant employer has been known at any time on or after the relevant date;

(g)in the case of an occupational pension scheme, the number of members of the scheme on the later of—

(i)the last day of the scheme year which ended most recently, and

(ii)the day on which the scheme became a registrable scheme; and

(h)such other information as may be prescribed.

(3)Regulations may make provision about the interpretation of any of the descriptions in subsection (2).

(4)For the purposes of subsection (2)(f)—

  • relevant employer” means any person—

    (a)

    who is, or

    (b)

    who, at any time on or after 6th April 1975, has been,

    the employer in relation to the scheme;

  • relevant date”, in relation to a relevant employer, means—

    (a)

    6th April 1975, or

    (b)

    if later, the date on which the relevant employer first became the employer in relation to the scheme.

61The register: inspection, provision of information and reports etcE+W+S

(1)Regulations may provide—

(a)for—

(i)information recorded in the register,

(ii)extracts from the register, or

(iii)copies of the register or of extracts from it,

to be provided to prescribed persons in prescribed circumstances, and

(b)for the inspection of—

(i)the register,

(ii)extracts from the register, or

(iii)copies of the register or of extracts from it,

by prescribed persons in prescribed circumstances.

(2)Regulations under subsection (1) may, in particular—

(a)confer functions on—

(i)the Secretary of State, or

(ii)a person authorised by him for the purposes of the regulations;

(b)make provision with respect to the disclosure of information obtained by virtue of the regulations.

(3)Regulations which contain any provision made by virtue of subsection (2)(b) may, in particular, modify section 82 (restricted information).

(4)The Secretary of State may direct the Regulator to submit to him statistical and other reports concerning—

(a)information recorded in the register, and

(b)the operation of the Regulator’s functions in relation to the register.

(5)A direction under subsection (4) may specify—

(a)the form in which, and

(b)the times at which,

reports required by the direction are to be submitted.

(6)The Secretary of State may publish any report submitted to him by virtue of a direction under subsection (4) in such manner as he considers appropriate.

62The register: duties of trustees or managersE+W+S

(1)Subsection (2) applies where—

(a)a registrable scheme is established, or

(b)an occupational or personal pension scheme otherwise becomes a registrable scheme.

(2)The trustees or managers of the scheme must, before the end of the initial notification period—

(a)notify the Regulator that the scheme is a registrable scheme, and

(b)provide to the Regulator all the registrable information with respect to the scheme.

(3)In subsection (2), the “initial notification period” means the period of three months beginning with—

(a)the date on which the scheme is established, or

(b)if later, the date on which it becomes a registrable scheme.

(4)Where there is a change in any registrable information in respect of a registrable scheme, the trustees or managers of the scheme must as soon as reasonably practicable, notify the Regulator—

(a)of that fact, and

(b)of the new registrable information.

(5)Where a registrable scheme—

(a)ceases to be a registrable scheme, or

(b)is wound up (otherwise than under section 161(2) (effect of Board assuming responsibility for scheme)),

the trustees or managers of the scheme must as soon as reasonably practicable, notify the Regulator of that fact.

(6)If subsection (2), (4) or (5) is not complied with, section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

63Duty of the Regulator to issue scheme return noticesE+W+S

(1)The Regulator must issue scheme return notices in accordance with this section requiring scheme returns to be provided in respect of registrable schemes.

(2)In respect of each registrable scheme, the Regulator—

(a)must issue the first scheme return notice in accordance with subsection (3), and

(b)must issue subsequent scheme return notices in accordance with subsection (4).

(3)The return date specified in a scheme return notice issued in respect of a scheme under subsection (2)(a)—

(a)must fall within the period of three years beginning with—

(i)the date on which the Regulator receives a notice under section 62(2)(a) in respect of the scheme, or

(ii)if earlier, the date on which the Regulator first becomes aware that the scheme is a registrable scheme, and

(b)if the trustees or managers have complied with paragraph (b) of section 62(2), must fall after the end of the period of one year beginning with the date on which they provided the information required by that paragraph to the Regulator.

(4)The return date specified in a scheme return notice issued in respect of a scheme under subsection (2)(b) must fall—

(a)within the period of three years, but

(b)after the end of the period of one year,

beginning with the return date specified in the previous scheme return notice issued in respect of the scheme.

64Duty of trustees or managers to provide scheme returnE+W+S

(1)The trustees or managers of a registrable scheme in respect of which a scheme return notice is issued must, on or before the return date, provide a scheme return to the Regulator.

(2)If a scheme return in respect of a scheme is not provided in compliance with subsection (1), section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any trustee or manager of the scheme who has failed to take all reasonable steps to secure compliance.

65Scheme returns: supplementaryE+W+S

(1)This section has effect for the purposes of sections 63 and 64.

(2)In those sections and this section, in relation to a scheme return notice—

  • return date” means the date specified under subsection (3)(b) in the scheme return notice;

  • scheme return” means a document in the form (if any) specified in the scheme return notice, containing the information required by the notice.

(3)A scheme return notice must specify—

(a)the descriptions of information required by it, and

(b)the return date,

and may specify the form in which that information is to be provided.

(4)A scheme return notice in respect of a registrable scheme—

(a)must require all registrable information in relation to the scheme, and

(b)may require other information which the Regulator reasonably requires for the purposes of the exercise of its functions in relation to the scheme.

(5)The return date specified in a scheme return notice must fall after the end of the period of 28 days beginning with the date on which the notice is issued.

(6)A scheme return notice must be in writing and is treated as issued in respect of a registrable scheme when it is sent to the trustees or managers of the scheme.

Register of prohibited trusteesE+W+S

66Register of prohibited trusteesE+W+S

(1)The Regulator must keep in such manner as it thinks fit a register of all persons who are prohibited under section 3 of the Pensions Act 1995 (“the prohibition register”).

(2)Arrangements made by the Regulator for the prohibition register must secure that the contents of the register are not disclosed or otherwise made available to members of the public except in accordance with section 67.

(3)Nothing in subsection (2) requires the Regulator to exclude any matter from a report published under section 89 (reports of Regulator’s consideration of cases).

67Accessibility of register of prohibited trusteesE+W+S

(1)The Regulator must make arrangements to secure that the prohibition register is open, during its normal working hours, for inspection in person and without notice at—

(a)the principal office used by it for the carrying out of its functions, and

(b)such other of its offices (if any) as it considers to be places where it would be reasonable for a copy of the register to be kept open for inspection.

(2)If a request is made to the Regulator—

(a)to state whether a particular person identified in the request is a person appearing in the prohibition register as prohibited in respect of an occupational trust scheme specified in the request,

(b)to state whether a particular person so identified is a person appearing in that register as prohibited in respect of a particular description of occupational trust schemes so specified, or

(c)to state whether a particular person so identified is a person appearing in that register as prohibited in respect of all occupational trust schemes,

the Regulator must promptly comply with the request in such manner as it considers reasonable.

(3)The Regulator may, in such manner as it considers appropriate, publish a summary of the prohibition register if (subject to subsections (6) to (8)) the summary—

(a)contains all the information described in subsection (4),

(b)arranges that information in the manner described in subsection (5),

(c)does not (except by identifying a person as prohibited in respect of all occupational trust schemes, in respect of a particular description of such schemes or in respect of a particular such scheme) identify any of the schemes in respect of which persons named in the summary are prohibited, and

(d)does not disclose any other information contained in the register.

(4)That information is—

(a)the full names and titles, so far as the Regulator has a record of them, of all the persons appearing in the register as persons who are prohibited,

(b)the dates of birth of such of those persons as are persons whose dates of birth are matters of which the Regulator has a record, and

(c)in the case of each person whose name is included in the published summary, whether that person appears in the register—

(i)as prohibited in respect of only one occupational trust scheme,

(ii)as prohibited in respect of one or more particular descriptions of such schemes, but not in respect of all such schemes, or

(iii)as prohibited in respect of all such schemes.

(5)For the purposes of paragraph (c) of subsection (4), the information in the published register must be arranged in three separate lists, one for each of the descriptions of prohibition specified in the sub-paragraphs of that paragraph.

(6)The Regulator must ensure, in the case of any published summary, that a person is not identified in the summary as a prohibited person if it appears to the Regulator that the determination by virtue of which that person appears in the register—

(a)is the subject of any pending reference, review, appeal or legal proceedings which could result in that person’s removal from the register, or

(b)is a determination which might still become the subject of any such reference, review, appeal or proceedings.

(7)The Regulator must ensure, in the case of any published summary, that the particulars relating to a person do not appear in a particular list mentioned in subsection (5) if it appears to the Regulator that a determination by virtue of which that person’s particulars would appear in that list—

(a)is the subject of any pending reference, review, appeal or legal proceedings which could result in such a revocation or other overturning of a prohibition of that person as would require his particulars to appear in a different list, or

(b)is a determination which might still become the subject of any such reference, review, appeal or proceedings.

(8)Where subsection (7) prevents a person’s particulars from being included in a particular list in the published summary, they must be included, instead, in the list (if any) in which they would have been included if the prohibition to which the reference, review, appeal or proceedings relate or might relate had already been revoked or otherwise overturned.

(9)For the purposes of this section a determination is one which might still become the subject of a reference, review, appeal or proceedings if, and only if, in the case of that determination—

(a)the time for the making of an application for a review or reference, or for the bringing of an appeal or other proceedings, has not expired, and

(b)there is a reasonable likelihood that such an application might yet be made, or that such an appeal or such proceedings might yet be brought.

(10)In this section—

  • name”, in relation to a person any of whose names is recorded by the Regulator as an initial, means that initial;

  • occupational trust scheme” means an occupational pension scheme established under a trust.

Collecting information relevant to the Board of the Pension Protection FundE+W+S

68Information relevant to the BoardE+W+S

The Regulator may collect any information which appears to it to be relevant to the exercise of the functions of the Board of the Pension Protection Fund.

69Duty to notify the Regulator of certain eventsE+W+S

(1)Except where the Regulator otherwise directs, the appropriate person must give notice of any notifiable event to the Regulator.

(2)In subsection (1) “notifiable event” means—

(a)a prescribed event in respect of an eligible scheme, or

(b)a prescribed event in respect of the employer in relation to an eligible scheme.

(3)For the purposes of subsection (1)—

(a)in the case of an event within subsection (2)(a), each of the following is “the appropriate person”—

(i)the trustees or managers of the scheme,

(ii)a person of a prescribed description, and

(b)in relation to an event within subsection (2)(b), each of the following is “the appropriate person”—

(i)the employer in relation to the scheme,

(ii)a person of a prescribed description.

(4)A notice under subsection (1)—

(a)must be in writing, and

(b)subject to subsection (5), must be given as soon as reasonably practicable after the person giving it becomes aware of the notifiable event.

(5)Regulations may require a notice under subsection (1) to be given before the beginning of the prescribed period ending with the notifiable event in question.

(6)No duty to which a person is subject is to be regarded as contravened merely because of any information or opinion contained in a notice under this section.

This is subject to section 311 (protected items).

(7)Where the trustees or managers of a scheme fail to comply with an obligation imposed on them by subsection (1), section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies in relation to any trustee or manager who has failed to take all reasonable steps to secure compliance with that subsection.

(8)That section also applies to any other person who, without reasonable excuse, fails to comply with an obligation imposed on him by subsection (1).

(9)In this section—

  • eligible scheme” has the meaning given by section 126;

  • event” includes a failure to act.

Reporting breaches of the lawE+W+S

70Duty to report breaches of the lawE+W+S

(1)Subsection (2) imposes a reporting requirement on the following persons—

(a)a trustee or manager of an occupational or personal pension scheme;

(b)a person who is otherwise involved in the administration of such a scheme;

(c)the employer in relation to an occupational pension scheme;

(d)a professional adviser in relation to such a scheme;

(e)a person who is otherwise involved in advising the trustees or managers of an occupational or personal pension scheme in relation to the scheme.

(2)Where the person has reasonable cause to believe that—

(a)a duty which is relevant to the administration of the scheme in question, and is imposed by or by virtue of an enactment or rule of law, has not been or is not being complied with, and

(b)the failure to comply is likely to be of material significance to the Regulator in the exercise of any of its functions,

he must give a written report of the matter to the Regulator as soon as reasonably practicable.

(3)No duty to which a person is subject is to be regarded as contravened merely because of any information or opinion contained in a written report under this section.

This is subject to section 311 (protected items).

(4)Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any person who, without reasonable excuse, fails to comply with an obligation imposed on him by this section.

Reports by skilled personsE+W+S

71Reports by skilled personsE+W+S

(1)The Regulator may issue a notice (a “report notice”) to—

(a)the trustees or managers of a work-based pension scheme,

(b)any employer in relation to such a scheme, or

(c)any person who is otherwise involved in the administration of such a scheme,

requiring them or, as the case may be, him to provide the Regulator with a report on one or more specified matters which are relevant to the exercise of any of the Regulator’s functions.

(2)A report notice must require the person appointed to make the report to be a person—

(a)nominated or approved by the Regulator, and

(b)appearing to the Regulator to have the skills necessary to make a report on the matter or matters concerned.

(3)A report notice may require the report to be provided to the Regulator—

(a)in a specified form;

(b)before a specified date.

(4)The costs of providing a report in accordance with a report notice must be met by the person to whom the notice is issued (“the notified person”).

(5)But a report notice may require a specified person (other than the Regulator) to reimburse to the notified person the whole or any part of the costs of providing the report.

(6)Where, by virtue of subsection (5), an amount is required to be reimbursed by a specified person to the notified person, that amount is to be treated as a debt due from the specified person to the notified person.

(7)If the trustees or managers of a work-based pension scheme fail to comply with a report notice issued to them, section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

(8)That section also applies to any other person who, without reasonable excuse, fails to comply with a report notice issued to him.

(9)Where a report notice is issued, any person who is providing (or who at any time has provided) services to the notified person in relation to a matter on which the report is required must give the person appointed to make the report such assistance as he may reasonably require.

(10)The duty imposed by subsection (9) is enforceable, on the application of the Regulator, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988 (c. 36).

(11)In this section—

  • specified”, in relation to a report notice, means specified in the notice;

  • work-based pension scheme” has the same meaning as in section 5 (Regulator’s objectives).

Gathering informationE+W+S

72Provision of informationE+W+S

(1)The Regulator may, by notice in writing, require any person to whom subsection (2) applies to produce any document, or provide any other information, which is—

(a)of a description specified in the notice, and

(b)relevant to the exercise of the Regulator’s functions.

(2)This subsection applies to—

(a)a trustee or manager of an occupational or personal pension scheme,

(b)a professional adviser in relation to an occupational pension scheme,

(c)the employer in relation to—

(i)an occupational pension scheme, or

(ii)a personal pension scheme where direct payment arrangements exist in respect of one or more members of the scheme who are employees, and

(d)any other person appearing to the Regulator to be a person who holds, or is likely to hold, information relevant to the exercise of the Regulator’s functions.

(3)Where the production of a document, or the provision of information, is required by a notice given under subsection (1), the document must be produced, or information must be provided, in such a manner, at such a place and within such a period as may be specified in the notice.

73Inspection of premisesE+W+S

(1)An inspector may, for the purposes of investigating whether, in the case of any occupational pension scheme, the occupational scheme provisions are being, or have been, complied with, at any reasonable time enter premises liable to inspection.

(2)In subsection (1), the “occupational scheme provisions” means provisions contained in or made by virtue of—

(a)any of the following provisions of this Act—

  • this Part;

  • Part 3 (scheme funding);

  • sections 241 to 243 (member-nominated trustees and directors);

  • sections 247 to 249 (requirement for knowledge and understanding);

  • section 252 (UK-based scheme to be trust with effective rules);

  • section 253 (non-European scheme to be trust with UK-resident trustee);

  • section 255 (activities of occupational pension schemes);

  • section 256 (no indemnification for fines or civil penalties);

  • sections 259 and 261 (consultation by employers);

  • Part 7 (cross-border activities within European Union);

  • Part 9 (miscellaneous and supplementary);

(b)either of the following provisions of the Welfare Reform and Pensions Act 1999 (c. 30)—

  • section 33 (time for discharge of pension credit liability);

  • section 45 (information);

(c)any of the provisions of Part 1 of the Pensions Act 1995 (c. 26) (occupational pension schemes), other than—

(i)sections 51 to 54 (indexation), and

(ii)sections 62 to 65 (equal treatment);

(d)any of the following provisions of the Pension Schemes Act 1993 (c. 48)—

  • Chapter 4 of Part 4 (transfer values);

  • Chapter 5 of Part 4 (early leavers: cash transfer sums and contribution refunds);

  • Chapter 2 of Part 4A (pension credit transfer values);

  • section 113 (information);

  • section 175 (levy);

(e)any provisions in force in Northern Ireland corresponding to any provisions within paragraphs (a) to (d).

(3)An inspector may, for the purposes of investigating whether, in the case of a stakeholder scheme—

(a)sections 1 and 2(4) of the Welfare Reform and Pensions Act 1999 (stakeholder pension schemes: registration etc), or

(b)any corresponding provisions in force in Northern Ireland,

are being, or have been, complied with, at any reasonable time enter premises liable to inspection.

(4)An inspector may, for the purposes of investigating whether, in the case of any trust-based personal stakeholder scheme, the trust-based scheme provisions are being, or have been, complied with, at any reasonable time enter premises liable to inspection.

(5)In subsection (4)—

  • trust-based personal stakeholder scheme” means a personal pension scheme which—

    (a)

    is a stakeholder scheme, and

    (b)

    is established under a trust;

    the “trust-based scheme provisions” means any provisions contained in or made by virtue of—

    (a)

    any provision which applies in relation to trust-based personal stakeholder schemes by virtue of paragraph 1 of Schedule 1 to the Welfare Reform and Pensions Act 1999 (c. 30), as the provision applies by virtue of that paragraph, or

    (b)

    any corresponding provision in force in Northern Ireland.

(6)Premises are liable to inspection for the purposes of this section if the inspector has reasonable grounds to believe that—

(a)members of the scheme are employed there,

(b)documents relevant to the administration of the scheme are being kept there, or

(c)the administration of the scheme, or work connected with that administration, is being carried out there.

(7)In this section, “stakeholder scheme” means an occupational pension scheme or a personal pension scheme which is or has been registered under—

(a)section 2 of the Welfare Reform and Pensions Act 1999 (register of stakeholder schemes), or

(b)any corresponding provision in force in Northern Ireland.

74Inspection of premises in respect of employers' obligationsE+W+S

(1)An inspector may, for the purposes of investigating whether an employer is complying, or has complied, with the requirements under—

(a)section 3 of the Welfare Reform and Pensions Act 1999 (duty of employers to facilitate access to stakeholder pension schemes), or

(b)any corresponding provision in force in Northern Ireland,

at any reasonable time enter premises liable to inspection.

(2)Premises are liable to inspection for the purposes of subsection (1) if the inspector has reasonable grounds to believe that—

(a)employees of the employer are employed there,

(b)documents relevant to the administration of the employer’s business are being kept there, or

(c)the administration of the employer’s business, or work connected with that administration, is being carried out there.

(3)In subsections (1) and (2), “employer” has the meaning given by section 3(9) of the Welfare Reform and Pensions Act 1999 (or, where subsection (1)(b) applies, by any corresponding provision in force in Northern Ireland).

(4)An inspector may, for the purposes of investigating whether, in the case of any direct payment arrangements relating to a personal pension scheme, any of the following provisions—

(a)regulations made by virtue of sections 260 and 261 (consultation by employers),

(b)section 111A of the Pension Schemes Act 1993 (c. 48) (monitoring of employers' payments to personal pension schemes), or

(c)any corresponding provisions in force in Northern Ireland,

is being, or has been, complied with, at any reasonable time enter premises liable to inspection.

(5)Premises are liable to inspection for the purposes of subsection (4) if the inspector has reasonable grounds to believe that—

(a)employees of the employer are employed there,

(b)documents relevant to the administration of—

(i)the employer’s business,

(ii)the direct payment arrangements, or

(iii)the scheme to which those arrangements relate,

are being kept there, or

(c)either of the following is being carried out there—

(i)the administration of the employer’s business, the arrangements or the scheme;

(ii)work connected with that administration.

(6)In the application of subsections (4) and (5) in relation to any provision mentioned in subsection (4)(c) (a “corresponding Northern Ireland provision”), references in those subsections to—

  • direct payment arrangements,

  • a personal pension scheme,

  • the employer, or

  • employees of the employer,

are to be read as having the meanings that they have for the purposes of the corresponding Northern Ireland provision.

75Inspection of premises: powers of inspectorsE+W+S

(1)Subsection (2) applies where, for a purpose mentioned in subsection (1), (3) or (4) of section 73 or subsection (1) or (4) of section 74, an inspector enters premises which are liable to inspection for the purposes of that provision.

(2)While there, the inspector—

(a)may make such examination and inquiry as may be necessary for the purpose for which he entered the premises,

(b)may require any person on the premises to produce, or secure the production of, any document relevant to compliance with the regulatory provisions for his inspection,

(c)may take copies of any such document,

(d)may take possession of any document appearing to be a document relevant to compliance with the regulatory provisions or take in relation to any such document any other steps which appear necessary for preserving it or preventing interference with it,

(e)may, in the case of any such document which consists of information which is stored in electronic form and is on, or accessible from, the premises, require the information to be produced in a form—

(i)in which it can be taken away, and

(ii)in which it is legible or from which it can readily be produced in a legible form, and

(f)may, as to any matter relevant to compliance with the regulatory provisions, examine, or require to be examined, either alone or in the presence of another person, any person on the premises whom he has reasonable cause to believe to be able to give information relevant to that matter.

76Inspection of premises: supplementaryE+W+S

(1)This section applies for the purposes of sections 73 to 75.

(2)Premises which are a private dwelling-house not used by, or by permission of, the occupier for the purposes of a trade or business are not liable to inspection.

(3)Any question whether—

(a)anything is being or has been done or omitted which might by virtue of any of the regulatory provisions give rise to a liability for a civil penalty under or by virtue of section 10 of the Pensions Act 1995 (c. 26) or section 168(4) of the Pension Schemes Act 1993 (c. 48) (or under or by virtue of any provision in force in Northern Ireland corresponding to either of them), or

(b)an offence is being or has been committed under any of the regulatory provisions,

is to be treated as a question whether the regulatory provision is being, or has been, complied with.

(4)An inspector applying for admission to any premises for the purposes of section 73 or 74 must, if so required, produce his certificate of appointment.

(5)When exercising a power under section 73, 74 or 75 an inspector may be accompanied by such persons as he considers appropriate.

(6)Any document of which possession is taken under section 75 may be retained—

(a)if the document is relevant to proceedings against any person for any offence which are commenced before the end of the retention period, until the conclusion of those proceedings, and

(b)otherwise, until the end of the retention period.

(7)In subsection (6), “the retention period” means the period comprising—

(a)the period of 12 months beginning with the date on which possession was taken of the document, and

(b)any extension of that period under subsection (8).

(8)The Regulator may, by a direction made before the end of the retention period (including any extension of it under this subsection), extend it by such period not exceeding 12 months as the Regulator considers appropriate.

(9)The regulatory provisions”, in relation to an inspection under subsection (1), (3) or (4) of section 73 or subsection (1) or (4) of section 74, means the provision or provisions referred to in that subsection.

77Penalties relating to sections 72 to 75E+W+S

(1)A person who, without reasonable excuse, neglects or refuses to provide information or produce a document when required to do so under section 72 is guilty of an offence.

(2)A person who without reasonable excuse—

(a)intentionally delays or obstructs an inspector exercising any power under section 73, 74 or 75,

(b)neglects or refuses to produce, or secure the production of, any document when required to do so under section 75, or

(c)neglects or refuses to answer a question or to provide information when so required,

is guilty of an offence.

(3)A person guilty of an offence under subsection (1) or (2) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(4)An offence under subsection (1) or (2)(b) or (c) may be charged by reference to any day or longer period of time; and a person may be convicted of a second or subsequent offence by reference to any period of time following the preceding conviction of the offence.

(5)Any person who intentionally and without reasonable excuse alters, suppresses, conceals or destroys any document which he is or is liable to be required to produce under section 72 or 75 is guilty of an offence.

(6)Any person guilty of an offence under subsection (5) is liable—

(a)on summary conviction, to a fine not exceeding the statutory maximum;

(b)on conviction on indictment, to a fine or imprisonment for a term not exceeding two years, or both.

78WarrantsE+W+S

(1)A justice of the peace may issue a warrant under this section if satisfied on information on oath given by or on behalf of the Regulator that there are reasonable grounds for believing—

(a)that there is on, or accessible from, any premises any document—

(i)whose production has been required under section 72 or 75, or any corresponding provision in force in Northern Ireland, and

(ii)which has not been produced in compliance with that requirement,

(b)that there is on, or accessible from, any premises any document whose production could be so required and, if its production were so required, the document—

(i)would not be produced, but

(ii)would be removed, or made inaccessible, from the premises, hidden, tampered with or destroyed, or

(c)that—

(i)an offence has been committed,

(ii)a person will do any act which constitutes a misuse or misappropriation of the assets of an occupational pension scheme or a personal pension scheme,

(iii)a person is liable to pay a penalty under or by virtue of section 10 of the Pensions Act 1995 (c. 26) (civil penalties) or section 168(4) of the Pension Schemes Act 1993 (c. 48) (civil penalties for breach of regulations), or under or by virtue of any provision in force in Northern Ireland corresponding to either of them, or

(iv)a person is liable to be prohibited from being a trustee of an occupational or personal pension scheme under section 3 of the Pensions Act 1995 (prohibition orders), including that section as it applies by virtue of paragraph 1 of Schedule 1 to the Welfare Reform and Pensions Act 1999 (c. 30) (stakeholder schemes), or under or by virtue of any corresponding provisions in force in Northern Ireland,

and that there is on, or accessible from, any premises any document which relates to whether the offence has been committed, whether the act will be done or whether the person is so liable, and whose production could be required under section 72 or 75 or any corresponding provision in force in Northern Ireland.

(2)A warrant under this section shall authorise an inspector—

(a)to enter the premises specified in the information, using such force as is reasonably necessary for the purpose,

(b)to search the premises and—

(i)take possession of any document appearing to be such a document as is mentioned in subsection (1), or

(ii)take in relation to such a document any other steps which appear necessary for preserving it or preventing interference with it,

(c)to take copies of any such document,

(d)to require any person named in the warrant to provide an explanation of any such document or to state where it may be found or how access to it may be obtained, and

(e)in the case of any such document which consists of information which is stored in electronic form and is on, or accessible from, the premises, to require the information to be produced in a form—

(i)in which it can be taken away, and

(ii)in which it is legible or from which it can readily be produced in a legible form.

(3)In subsection (1), any reference in paragraph (a) or (b) to a document does not include any document which is relevant to whether a person has complied with—

(a)subsection (3) of section 238 (information and advice to employees) or regulations under subsection (4) of that section, or

(b)any provision in force in Northern Ireland which corresponds to that subsection (3) or is made under provision corresponding to that subsection (4),

and is not relevant to the exercise of the Regulator’s functions for any other reason.

(4)For the purposes of subsection (1)(c)(iii), any liability to pay a penalty under—

(a)section 10 of the Pensions Act 1995 (c. 26), or

(b)any corresponding provision in force in Northern Ireland,

which might arise out of a failure to comply with any provision within subsection (3)(a) or (b) is to be disregarded.

(5)References in subsection (2) to such a document as is mentioned in subsection (1) are to be read in accordance with subsections (3) and (4).

(6)When executing a warrant under this section, an inspector may be accompanied by such persons as he considers appropriate.

(7)A warrant under this section continues in force until the end of the period of one month beginning with the day on which it is issued.

(8)Any document of which possession is taken under this section may be retained—

(a)if the document is relevant to proceedings against any person for any offence which are commenced before the end of the retention period, until the conclusion of those proceedings, and

(b)otherwise, until the end of the retention period.

(9)In subsection (8), “the retention period” means the period comprising—

(a)the period of 12 months beginning with the date on which possession was taken of the document, and

(b)any extension of that period under subsection (10).

(10)The Regulator may, by a direction made before the end of the retention period (including any extension of it under this subsection), extend it by such period not exceeding 12 months as the Regulator considers appropriate.

(11)In the application of this section in Scotland—

(a)the reference to a justice of the peace is to be read as a reference to the sheriff, and

(b)the references in subsections (1) and (2)(a) to information are to be read as references to evidence.

79Sections 72 to 78: interpretationE+W+S

(1)This section applies for the purposes of sections 72 to 78.

(2)Document” includes information recorded in any form, and any reference to production of a document, in relation to information recorded otherwise than in a legible form, is to producing a copy of the information—

(a)in a legible form, or

(b)in a form from which it can readily be produced in a legible form.

(3)Inspector” means a person appointed by the Regulator as an inspector.

Provision of false or misleading informationE+W+S

80Offences of providing false or misleading informationE+W+S

(1)Any person who knowingly or recklessly provides the Regulator with information which is false or misleading in a material particular is guilty of an offence if the information—

(a)is provided in purported compliance with a requirement under—

(i)section 62 (the register: duties of trustees or managers),

(ii)section 64 (duty of trustees or managers to provide scheme return),

(iii)section 72 (provision of information), or

(iv)section 75 (inspection of premises: powers of inspectors),

(b)is provided in applying for registration of a pension scheme under section 2 of the Welfare Reform and Pensions Act 1999 (c. 30) (registration of stakeholder pension schemes), or

(c)is provided otherwise than as mentioned in paragraph (a) or (b) but in circumstances in which the person providing the information intends, or could reasonably be expected to know, that it would be used by the Regulator for the purpose of exercising its functions under this Act or the Pensions Act 1995 (c. 26).

(2)Any person guilty of an offence under subsection (1) is liable—

(a)on summary conviction, to a fine not exceeding the statutory maximum;

(b)on conviction on indictment, to a fine or imprisonment for a term not exceeding two years, or both.

Use of informationE+W+S

81Use of informationE+W+S

Information—

(a)contained in the register, or

(b)otherwise held by the Regulator in the exercise of any of its functions,

may be used by the Regulator for the purposes of, or for any purpose connected with or incidental to, the exercise of its functions.

Disclosure of informationE+W+S

82Restricted informationE+W+S

(1)Restricted information must not be disclosed—

(a)by the Regulator, or

(b)by any person who receives the information directly or indirectly from the Regulator.

(2)Subsection (1) is subject to—

(a)subsection (3), and

(b)sections 71(9), 83 to 88 and 235.

(3)Subject to section 88(4), restricted information may be disclosed with the consent of the person to whom it relates and (if different) the person from whom the Regulator obtained it.

(4)For the purposes of this section and sections 83 to 87, “restricted information” means any information obtained by the Regulator in the exercise of its functions which relates to the business or other affairs of any person, except for information—

(a)which at the time of the disclosure is or has already been made available to the public from other sources, or

(b)which is in the form of a summary or collection of information so framed as not to enable information relating to any particular person to be ascertained from it.

(5)Any person who discloses information in contravention of this section is guilty of an offence and liable—

(a)on summary conviction, to a fine not exceeding the statutory maximum;

(b)on conviction on indictment, to a fine or imprisonment for a term not exceeding two years, or both.

83Information supplied to the Regulator by corresponding overseas authoritiesE+W+S

(1)Subject to subsection (2), for the purposes of section 82, “restricted information” includes information which has been supplied to the Regulator, for the purposes of its functions, by an authority which exercises functions corresponding to the functions of the Regulator in a country or territory outside the United Kingdom.

(2)Sections 84 to 87 do not apply to such information as is mentioned in subsection (1), and such information must not be disclosed except—

(a)as provided in section 82(3),

(b)for the purpose of enabling or assisting the Regulator to discharge its functions, or

(c)by or on behalf of—

(i)the Regulator, or

(ii)any public authority (within the meaning of section 6 of the Human Rights Act 1998 (c. 42)) which receives the information directly or indirectly from the Regulator,

for any of the purposes specified in section 17(2)(a) to (d) of the Anti-terrorism, Crime and Security Act 2001 (c. 24) (criminal proceedings and investigations).

(3)Section 18 of the Anti-terrorism, Crime and Security Act 2001 (restriction on disclosure of information for overseas purposes) has effect in relation to a disclosure authorised by subsection (2) as it has effect in relation to a disclosure authorised by any of the provisions to which section 17 of that Act applies.

84Disclosure for facilitating exercise of functions by the RegulatorE+W+S

(1)Section 82 does not preclude the disclosure of restricted information in any case in which disclosure is for the purpose of enabling or assisting the Regulator to exercise its functions.

(2)Subsection (3) applies where, in order to enable or assist the Regulator properly to exercise any of its functions, the Regulator considers it necessary to seek advice from any qualified person on any matter of law, accountancy, valuation or other matter requiring the exercise of professional skill.

(3)Section 82 does not preclude the disclosure by the Regulator to a person qualified to provide that advice of such information as appears to the Regulator to be necessary to ensure that he is properly informed with respect to the matters on which his advice is sought.

85Disclosure for facilitating exercise of functions by the BoardE+W+S

Section 82 does not preclude the disclosure of restricted information in any case in which disclosure is for the purpose of enabling or assisting the Board of the Pension Protection Fund to exercise its functions.

86Disclosure for facilitating exercise of functions by other supervisory authoritiesE+W+S

(1)Section 82 does not preclude the disclosure by the Regulator of restricted information to any person specified in the first column of Schedule 3 if the Regulator considers that the disclosure would enable or assist that person to exercise the functions specified in relation to him in the second column of that Schedule.

(2)The Secretary of State may after consultation with the Regulator—

(a)by order amend Schedule 3 by—

(i)adding any person exercising regulatory functions and specifying functions in relation to that person,

(ii)removing any person for the time being specified in the Schedule, or

(iii)altering the functions for the time being specified in the Schedule in relation to any person, or

(b)by order restrict the circumstances in which, or impose conditions subject to which, disclosure may be made to any person for the time being specified in the Schedule.

87Other permitted disclosuresE+W+S

(1)Section 82 does not preclude the disclosure by the Regulator of restricted information to—

(a)the Secretary of State,

(b)the Commissioners of Inland Revenue or their officers, or

(c)the Department for Social Development in Northern Ireland,

if the disclosure appears to the Regulator to be desirable or expedient in the interests of members of occupational pension schemes or personal pension schemes or in the public interest.

(2)Section 82 does not preclude the disclosure of restricted information—

(a)by or on behalf of—

(i)the Regulator, or

(ii)any public authority (within the meaning of section 6 of the Human Rights Act 1998 (c. 42)) which receives the information directly or indirectly from the Regulator,

for any of the purposes specified in section 17(2)(a) to (d) of the Anti-terrorism, Crime and Security Act 2001 (c. 24) (criminal proceedings and investigations),

(b)in connection with any proceedings arising out of—

(i)this Act,

(ii)the Welfare Reform and Pensions Act 1999 (c. 30),

(iii)the Pensions Act 1995 (c. 26), or

(iv)the Pension Schemes Act 1993 (c. 48),

or any corresponding enactment in force in Northern Ireland, or any proceedings for breach of trust in relation to an occupational pension scheme,

(c)with a view to the institution of, or otherwise for the purposes of, proceedings under—

(i)section 7 or 8 of the Company Directors Disqualification Act 1986 (c. 46), or

(ii)Article 10 or 11 of the Companies (Northern Ireland) Order 1989 (S.I. 1989/2404 (N.I. 18)) or of the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4)),

(d)in connection with any proceedings under—

(i)the Insolvency Act 1986 (c. 45), or

(ii)the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)),

which the Regulator has instituted or in which it has a right to be heard,

(e)with a view to the institution of, or otherwise for the purposes of, any disciplinary proceedings relating to the exercise of his professional duties by a solicitor, an actuary, an accountant or an insolvency practitioner,

(f)with a view to the institution of, or otherwise for the purposes of, any disciplinary proceedings relating to the exercise by a public servant of his functions,

(g)for the purpose of enabling or assisting an authority in a country outside the United Kingdom to exercise functions corresponding to those of the Regulator under this Act, the Welfare Reform and Pensions Act 1999 (c. 30), the Pensions Act 1995 (c. 26) or the Pension Schemes Act 1993 (c. 48), or

(h)in pursuance of a Community obligation.

(3)In subsection (2)(f), “public servant” means an officer or servant of the Crown or of any prescribed authority.

(4)Section 82 does not preclude the disclosure by the Regulator of restricted information to—

(a)the Director of Public Prosecutions,

(b)the Director of Public Prosecutions for Northern Ireland,

(c)the Lord Advocate,

(d)a procurator fiscal, or

(e)a constable.

(5)Section 82 does not preclude the disclosure of restricted information in any case where the disclosure is required by or by virtue of an enactment.

(6)Section 82 does not preclude the disclosure of restricted information in any case where the disclosure is to a Regulator-appointed trustee of an occupational pension scheme for the purpose of enabling or assisting him to exercise his functions in relation to the scheme.

(7)In subsection (6), “Regulator-appointed trustee” means a trustee appointed by the Regulator under section 7 or 23(1) of the Pensions Act 1995 or any corresponding provision in force in Northern Ireland.

(8)Section 82 does not preclude the disclosure by any person mentioned in subsection (1) or (4) of restricted information obtained by the person by virtue of that subsection, if the disclosure is made with the consent of the Regulator.

(9)Section 82 does not preclude the disclosure by any person specified in the first column of Schedule 3 of restricted information obtained by the person by virtue of section 86(1), if the disclosure is made—

(a)with the consent of the Regulator, and

(b)for the purpose of enabling or assisting the person to exercise any functions specified in relation to him in the second column of the Schedule.

(10)Before deciding whether to give its consent to such a disclosure as is mentioned in subsection (8) or (9), the Regulator must take account of any representations made to it, by the person seeking to make the disclosure, as to the desirability of the disclosure or the necessity for it.

(11)Section 18 of the Anti-terrorism, Crime and Security Act 2001 (c. 24) (restriction on disclosure of information for overseas purposes) has effect in relation to a disclosure authorised by subsection (2) as it has effect in relation to a disclosure authorised by any of the provisions to which section 17 of that Act applies.

88Tax informationE+W+S

(1)This section applies to information held by any person in the exercise of tax functions about any matter which is relevant, for the purposes of those functions, to tax or duty in the case of an identifiable person (in this section referred to as “tax information”).

(2)No obligation as to secrecy imposed by section 182 of the Finance Act 1989 (c. 26) or otherwise shall prevent the disclosure of tax information to the Regulator for the purpose of enabling or assisting the Regulator to discharge its functions.

(3)Where tax information is disclosed to the Regulator by virtue of subsection (2) above or section 19 of the Anti-terrorism, Crime and Security Act 2001 (disclosure of information held by revenue departments), it must, subject to subsection (4), be treated for the purposes of section 82 as restricted information.

(4)Sections 82(3), 83 to 87 and 235 do not apply to tax information which is disclosed to the Regulator as mentioned in subsection (3), and such information may not be disclosed by the Regulator or any person who receives the information directly or indirectly from the Regulator except—

(a)to, or in accordance with authority given by, the Commissioners of Inland Revenue or the Commissioners of Customs and Excise, or

(b)with a view to the institution of, or otherwise for the purposes of, any criminal proceedings.

(5)In this section “tax functions” has the same meaning as in section 182 of the Finance Act 1989.

ReportsE+W+S

89Publishing reports etcE+W+S

(1)The Regulator may, if it considers it appropriate to do so in any particular case, publish a report of the consideration given by it to the exercise of its functions in relation to that case and the results of that consideration.

(2)The publication of a report under subsection (1) may be in such form and manner as the Regulator considers appropriate.

(3)For the purposes of the law of defamation, the publication of any matter by the Regulator is privileged unless the publication is shown to be made with malice.

Codes of practiceE+W+S

90Codes of practiceE+W+S

(1)The Regulator may issue codes of practice—

(a)containing practical guidance in relation to the exercise of functions under the pensions legislation, and

(b)regarding the standards of conduct and practice expected from those who exercise such functions.

(2)The Regulator must issue one or more such codes of practice relating to the following matters—

(a)what constitutes a “reasonable” period for the purposes of any provision of the pensions legislation (other than any enactment contained in or made by virtue of Part 2) which requires any action to be taken within such a period;

(b)the discharge of the duty imposed by section 69 (duty to notify Regulator of certain events);

(c)the discharge of the duty imposed by section 70 (duty to report breaches of the law);

(d)the discharge of duties imposed on trustees or managers of occupational pension schemes by, or by virtue of, Part 3 (scheme funding);

(e)the discharge of the duties imposed by sections 241 and 242 (member-nominated trustees and directors);

(f)the obligations imposed by sections 247 and 248 (requirements for knowledge and understanding: individual and corporate trustees);

(g)the discharge of the duty imposed by section 49(9)(b) of the Pensions Act 1995 (c. 26) (duty of trustees or managers of occupational pension schemes to report material failures by employers to pay contributions deducted from employee’s earnings timeously);

(h)the discharge of the duties imposed by sections 67 to 67I of that Act (the subsisting rights provisions);

(i)the discharge of the duty imposed by section 88(1) of that Act (duties of trustees and managers of money purchase schemes to report failures to pay employer contributions etc timeously);

(j)the discharge of the duty imposed by section 111A(7A) of the Pension Schemes Act 1993 (c. 48) (duty of trustees or managers of personal pension schemes to report material failures to pay employer contributions timeously);

(k)such other matters as are prescribed for the purposes of this section.

(3)The Regulator may from time to time revise the whole or any part of a code of practice issued under this section and issue that revised code.

(4)A failure on the part of any person to observe any provision of a code of practice does not of itself render that person liable to any legal proceedings.

This is subject to section 13(3)(a) and (8) (power for improvement notice to direct that person complies with code of practice and civil penalties for failure to comply).

(5)A code of practice issued under this section is admissible in evidence in any legal proceedings and, if any provision of such a code appears to the court or tribunal concerned to be relevant to any question arising in the proceedings, it must be taken into account in determining that question.

(6)In this section—

  • legal proceedings” includes proceedings of the Pensions Ombudsman, proceedings of the Ombudsman for the Board of the Pension Protection Fund and proceedings of the Board of the Pension Protection Fund under section 207 or 208; and

  • the pensions legislation” means any enactment contained in or made by virtue of—

    (a)

    the Pension Schemes Act 1993 (c. 48),

    (b)

    Part 1 of the Pensions Act 1995 (c. 26), other than sections 62 to 66A of that Act (equal treatment),

    (c)

    Part 1 or section 33 of the Welfare Reform and Pensions Act 1999 (c. 30), or

    (d)

    this Act.

(7)Sections 91 and 92 make provision about the procedure to be followed when a code of practice is issued or revoked.

91Procedure for issue and publication of codes of practiceE+W+S

(1)Where the Regulator proposes to issue a code of practice it must prepare and publish a draft of the code.

(2)Where the Regulator publishes a draft under subsection (1), it must consult—

(a)such persons as it considers appropriate, and

(b)any other persons the Secretary of State requires it to consult.

(3)Having considered any representations made on the draft, the Regulator must make such modifications to it as it considers appropriate.

(4)Subsections (2) and (3) do not apply—

(a)to a code made for the purpose only of consolidating other codes issued under section 90, or

(b)to a code if the Secretary of State considers consultation inexpedient by reason of urgency.

(5)If the Regulator determines to proceed with a draft, it must send it to the Secretary of State who—

(a)if he approves of it, must lay it before Parliament, and

(b)if he does not approve of it, must publish details of his reasons for withholding approval.

(6)Where a draft is laid before Parliament under subsection (5)(a)—

(a)if within the period mentioned in subsection (7) either House so resolves, no further proceedings may be taken on the draft code;

(b)if no such resolution is passed, the Regulator must issue the code in the form of the draft.

(7)The period referred to in subsection (6)(a) is the period of 40 days—

(a)beginning with the day on which the draft is laid before Parliament (or, if it is laid before the two Houses on different days, with the later of the two days), and

(b)ignoring any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.

(8)The fact that no further proceedings may be taken on a draft code in accordance with subsection (6)(a) does not prevent the laying of a new draft.

(9)A code issued in accordance with subsection (6)(b) shall come into effect on such day as the Secretary of State may by order appoint.

Without prejudice to section 315, such an order may contain such transitional provisions or savings as appear to the Secretary of State to be necessary or expedient in connection with the code of practice brought into operation.

(10)The Regulator must arrange for any code issued by it under section 90 to be published in the way appearing to it to be appropriate.

(11)The Regulator may charge a reasonable fee for providing a person with a copy of a code published under this section.

(12)This section applies to a revised code as it applies to the first issue of a code.

92Revocation of codes of practiceE+W+S

(1)A code of practice may be revoked by the Secretary of State by order.

(2)An order under this section may be made only with the consent of the Regulator.

(3)Without prejudice to section 315, an order under this section may contain such savings as appear to the Secretary of State to be necessary or expedient in connection with the revocation of the code.

Exercise of regulatory functionsE+W+S

93The Regulator’s procedure in relation to its regulatory functionsE+W+S

(1)The Regulator must determine the procedure that it proposes to follow in relation to the exercise of its regulatory functions.

(2)For the purposes of this Part the “regulatory functions” of the Regulator are—

(a)the power to issue an improvement notice under section 13,

(b)the power to issue a third party notice under section 14,

(c)the reserved regulatory functions (see Schedule 2),

(d)the power to issue a clearance statement under section 42,

(e)the power to issue a notice under section 45(1) approving the details of arrangements,

(f)the power to issue a clearance statement under section 46,

(g)the power to vary or revoke under section 101 (to the extent that it does not fall within paragraph (c)),

(h)the power to make an order under section 154(8),

(i)the power to make an order under section 219(4),

(j)the power to grant or revoke authorisation under section 288,

(k)the power to grant or revoke approval under section 289,

(l)the power to issue a notice under section 293(5),

(m)the power by direction under section 2(3)(a) of the Welfare Reform and Pensions Act 1999 (c. 30) to refuse to register a scheme under section 2 of that Act,

(n)the power to make an order under section 7 of the Pensions Act 1995 (c. 26) appointing a trustee (to the extent that it does not fall within paragraph (c)),

(o)the power to make an order under section 23 of that Act appointing an independent trustee,

(p)the power to give directions under section 72B of that Act (directions facilitating winding up), and

(q)such other functions of the Regulator as may be prescribed.

(3)The Determinations Panel must determine the procedure to be followed by it in relation to any exercise by it on behalf of the Regulator of—

(a)the power to determine whether to exercise a regulatory function, and

(b)where the Panel so determines to exercise a regulatory function, the power to exercise the function in question.

(4)The procedure determined under this section—

(a)must provide for the procedure required under—

(i)section 96 (standard procedure), and

(ii)section 98 (special procedure), and

(b)may include such other procedural requirements as the Regulator or, as the case may be, the Panel considers appropriate.

(5)This section is subject to—

(a)sections 99 to 104 (the remaining provisions concerning the procedure in relation to the regulatory functions), and

(b)any regulations made by the Secretary of State under paragraph 19 of Schedule 1.

94Publication of procedure in relation to regulatory functionsE+W+S

(1)The Regulator must issue a statement of the procedure determined under section 93.

(2)The Regulator must arrange for the statement to be published in the way appearing to it to be appropriate.

(3)The Regulator may charge a reasonable fee for providing a person with a copy of the statement.

(4)If the procedure determined under section 93 is changed in a material way, the Regulator must publish a revised statement.

(5)The Regulator must, without delay, give the Secretary of State a copy of any statement which it issues under this section.

95Application of standard and special procedureE+W+S

(1)The Regulator must comply with the standard procedure (see section 96) or, where section 97 applies, the special procedure (see section 98) in a case where—

(a)the Regulator considers that the exercise of one or more of the regulatory functions may be appropriate, or

(b)an application is made under or by virtue of—

(i)any of the provisions listed in section 10(6), or

(ii)any prescribed provision of this or any other enactment,

for the Regulator to exercise a regulatory function.

(2)For the purposes of section 96, references to the regulatory action under consideration in a particular case are—

(a)in a case falling within subsection (1)(a), references to the exercise of the one or more regulatory functions which the Regulator considers that it may be appropriate to exercise, and

(b)in a case falling within subsection (1)(b), references to the exercise of the regulatory function which is the subject-matter of the application.

(3)Neither section 96 (standard procedure) nor section 98 (special procedure) apply in relation to a determination whether to exercise a regulatory function on a review under section 99 (compulsory review of regulatory action).

96Standard procedureE+W+S

(1)The procedure determined under section 93 must make provision for the standard procedure.

(2)The “standard procedure” is a procedure which provides for—

(a)the giving of notice to such persons as it appears to the Regulator would be directly affected by the regulatory action under consideration (a “warning notice”),

(b)those persons to have an opportunity to make representations,

(c)the consideration of any such representations and the determination whether to take the regulatory action under consideration,

(d)the giving of notice of the determination to such persons as appear to the Regulator to be directly affected by it (a “determination notice”),

(e)the determination notice to contain details of the right of referral to the Tribunal under subsection (3),

(f)the form and further content of warning notices and determination notices and the manner in which they are to be given, and

(g)the time limits to be applied at any stage of the procedure.

(3)Where the standard procedure applies, the determination which is the subject-matter of the determination notice may be referred to the Tribunal (see section 102) by—

(a)any person to whom the determination notice is given as required under subsection (2)(d), and

(b)any other person who appears to the Tribunal to be directly affected by the determination.

(4)Subsection (3) does not apply where the determination which is the subject-matter of the determination notice is a determination to issue a clearance statement under section 42 or 46.

(5)Where the determination which is the subject-matter of the determination notice is a determination to exercise a regulatory function and subsection (3) applies, the Regulator must not exercise the function—

(a)during the period within which the determination may be referred to the Tribunal (see section 103(1)), and

(b)if the determination is so referred, until the reference, and any appeal against the Tribunal’s determination, has been finally disposed of.

(6)Subsection (5) does not apply where the determination is a determination to exercise any of the following functions—

(a)the power to make a direction under section 76(8) extending the retention period for documents taken into possession under section 75;

(b)the power to make a direction under section 78(10) extending the retention period for documents taken into possession under that section;

(c)the power to make an order under section 154(8);

(d)the power to make an order under section 219(4);

(e)the power to grant or revoke authorisation under section 288;

(f)the power to grant or revoke approval under section 289;

(g)the power to issue a notice under section 293(5);

(h)the power to make an order under section 3(1) of the Pensions Act 1995 (c. 26) prohibiting a person from being a trustee;

(i)the power to make an order under section 3(3) of that Act revoking such an order;

(j)the power to make an order under section 4(1) of that Act suspending a trustee;

(k)the power to make an order under section 4(2) of that Act extending the period for which an order under section 4(1) of that Act has effect;

(l)the power to make an order under section 4(5) of that Act revoking an order under section 4(1) of that Act suspending a trustee;

(m)the power to make an order under section 7 of that Act appointing a trustee;

(n)the power under section 9 of that Act to exercise by order the same jurisdiction and powers as the High Court or the Court of Session for vesting property in, or transferring property to, trustees in consequence of the appointment or removal of a trustee;

(o)the power to make an order under section 23 of that Act appointing an independent trustee;

(p)the power under section 29(5) of that Act to give a notice waiving a disqualification under section 29 of that Act;

(q)the power under section 30(2) of that Act to exercise by order the same jurisdiction and powers as the High Court or the Court of Session for vesting property in, or transferring property to, the trustees where a trustee becomes disqualified under section 29 of that Act;

(r)the power to give directions under section 72B of that Act facilitating a winding up;

(s)the power by direction under section 99(4) of the Pension Schemes Act 1993 (c. 48) to grant an extension of the period within which the trustees or managers of a scheme are to carry out certain duties;

(t)the power by direction under section 101J(2) of that Act to extend the period for compliance with a transfer notice;

(u)such other regulatory functions as may be prescribed;

(v)the power under section 101(1)(b) to vary or revoke in relation to the exercise of any of the regulatory functions mentioned in paragraphs (a) to (u) other than those mentioned in paragraph (i) or (l).

97Special procedure: applicable casesE+W+S

(1)The special procedure in section 98 (and not the standard procedure) applies to—

(a)a case falling within subsection (2),

(b)a case falling within subsection (3), and

(c)a case falling within subsection (4).

(2)A case falls within this subsection if—

(a)the Regulator considers that it may be necessary to exercise a regulatory function listed in subsection (5) immediately because there is, or the Regulator considers it likely that if a warning notice were to be given there would be, an immediate risk to—

(i)the interests of members under an occupational or personal pension scheme, or

(ii)the assets of such a scheme,

(b)the Regulator accordingly dispenses with the giving of a warning notice and an opportunity to make representations as described in section 96(2)(a) and (b), and

(c)the Regulator determines to exercise the function immediately on the basis that it is necessary to do so because there is, or the Regulator considers it likely that if the function were not exercised immediately there would be, an immediate risk to—

(i)the interests of members under an occupational or personal pension scheme, or

(ii)the assets of such a scheme.

(3)A case falls within this subsection if—

(a)the Regulator gives a warning notice as described in section 96(2)(a) in relation to a determination whether to exercise a regulatory function listed in subsection (5), and

(b)before it has considered the representations of those persons to whom the warning notice is given, the Regulator determines to exercise the function immediately on the basis that it is necessary to do so because there is, or the Regulator considers it likely that if the function were not exercised immediately there would be, an immediate risk to—

(i)the interests of members under an occupational or personal pension scheme, or

(ii)the assets of such a scheme.

(4)A case falls within this subsection if the Regulator—

(a)gives a warning notice as described in section 96(2)(a) in relation to a determination whether to exercise a regulatory function which—

(i)is listed in subsection (5), and

(ii)is not a function listed in section 96(6) (functions which may be exercised immediately under the standard procedure),

(b)considers the representations of those persons to whom the warning notice is given, and

(c)determines to exercise the function immediately on the basis that it is necessary to do so because there is, or the Regulator considers it likely that if the function were not exercised immediately there would be, an immediate risk to—

(i)the interests of members under an occupational or personal pension scheme, or

(ii)the assets of such a scheme.

(5)The regulatory functions referred to in subsections (2), (3) and (4) are—

(a)the power to make or extend a restraining order under section 20;

(b)the power to make a freezing order under section 23;

(c)the power to make an order under section 25(3) extending the period for which a freezing order has effect;

(d)the power to make an order under section 26 validating action taken in contravention of a freezing order;

(e)the power to make an order under section 28 directing that specified steps are taken;

(f)the power to make an order under section 30 giving a direction where a freezing order ceases to have effect;

(g)the power to make an order under section 31(3) directing the notification of members;

(h)the power to make an order under section 231 modifying a scheme, giving directions or imposing a schedule of contributions;

(i)the power to make an order under section 3(1) of the Pensions Act 1995 (c. 26) prohibiting a person from being a trustee;

(j)the power to make an order under section 3(3) of that Act revoking such an order;

(k)the power to make an order under section 4(1) of that Act suspending a trustee;

(l)the power to make an order under section 4(5) of that Act revoking such an order;

(m)the power to make an order under section 7 of that Act appointing a trustee;

(n)the power under section 9 of that Act to exercise by order the same jurisdiction and powers as the High Court or the Court of Session for vesting property in, or transferring property to, trustees in consequence of the appointment or removal of a trustee;

(o)the power to make an order under section 11 of that Act directing or authorising an occupational pension scheme to be wound up;

(p)the power to make an order under section 23 of that Act appointing an independent trustee;

(q)the power under section 29(5) of that Act to give a notice waiving a disqualification under section 29 of that Act;

(r)the power under section 30(2) of that Act to exercise by order the same jurisdiction and powers as the High Court or the Court of Session for vesting property in, or transferring property to, the trustees where a trustee becomes disqualified under section 29 of that Act;

(s)the power to make an order under section 67G(2) of that Act by virtue of which any modification of, or grant of rights under, an occupational pension scheme is void to any extent;

(t)the power to make an order under section 67H(2) of that Act prohibiting, or specifying steps to be taken in relation to, the exercise of a power to modify an occupational pension scheme;

(u)such other regulatory functions as may be prescribed;

(v)the power under section 101(1)(b) to vary or revoke in relation to the exercise of any of the regulatory functions mentioned in paragraphs (a) to (u) other than those mentioned in paragraph (j) or (l).

98Special procedureE+W+S

(1)The procedure determined under section 93 must make provision for the special procedure.

(2)The “special procedure” is a procedure which provides for—

(a)the giving of notice of the determination to exercise the regulatory function to such persons as appear to the Regulator to be directly affected by it (a “determination notice”),

(b)the determination notice to contain details of the requirement for the Regulator to review the determination under section 99(1) and of any subsequent right of referral to the Tribunal under section 99(7),

(c)the persons to whom the determination notice was given (as required under paragraph (a)) to have an opportunity to make representations in relation to the determination before it is reviewed under section 99(1),

(d)the consideration of any such representations before the determination on the review,

(e)the giving of a notice in accordance with section 99(4) of the determination on the review (a “final notice”),

(f)the final notice to contain details of the right of referral to the Tribunal under section 99(7),

(g)the form and further content of determination notices and final notices and the manner in which they are to be given, and

(h)the time limits to be applied at any stage of the procedure.

99Compulsory reviewE+W+S

(1)In a case where the special procedure applies, the Regulator must review the determination to exercise the regulatory function.

(2)The review must be determined as soon as reasonably practicable.

(3)The Regulator’s powers on a review under this section include power to—

(a)confirm, vary or revoke the determination,

(b)confirm, vary or revoke any order, notice or direction made, issued or given as a result of the determination,

(c)substitute a different determination, order, notice or direction,

(d)deal with the matters arising on the review as if they had arisen on the original determination, and

(e)make savings and transitional provision.

(4)When the Regulator has completed a review under this section a notice of its determination on the review must be given to such persons as appear to it to be directly affected by its determination on the review.

(5)If the final notice contains a determination to exercise a different regulatory function to the function which was the subject-matter of the determination notice, then the final notice may not be given unless—

(a)such persons as appear to the Regulator to be directly affected by the exercise of the regulatory function have been given an opportunity to make representations, and

(b)the Regulator has considered any such representations before it makes its determination on the review.

(6)Subsection (5) does not apply if the regulatory function is listed in section 97(5) and the Regulator determines to exercise it immediately on the basis that it is necessary to do so because there is, or the Regulator considers it likely that if the function were not exercised immediately there would be, an immediate risk to—

(a)the interests of members under an occupational or personal pension scheme, or

(b)the assets of such a scheme.

(7)The determination which is the subject-matter of a final notice may be referred to the Tribunal (see section 102) by—

(a)any person to whom the final notice is given as required under subsection (4), and

(b)any other person who appears to the Tribunal to be directly affected by the determination.

(8)Where that determination is a determination to exercise a different regulatory function to the function which was the subject-matter of the determination notice, the Regulator must not exercise the regulatory function—

(a)during the period within which the determination may be referred to the Tribunal (see section 103(1)), and

(b)if the determination is so referred, until the reference, and any appeal against the Tribunal’s determination, has been finally disposed of.

(9)Subsection (8) does not apply where—

(a)the regulatory function in question is a function listed in section 96(6) (functions which may be exercised immediately under the standard procedure), or

(b)the regulatory function in question is a function listed in section 97(5) (functions which may be exercised immediately under the special procedure) and the Regulator determines to exercise it immediately on the basis described in subsection (6).

(10)The functions of the Regulator under this section are exercisable on behalf of the Regulator by the Determinations Panel (and are not otherwise exercisable by or on behalf of the Regulator).

(11)The Panel must determine the procedure that it proposes to follow in relation to the exercise of those functions.

(12)Section 94 (publication of Regulator’s procedure) applies in relation to the procedure determined under subsection (11) as it applies to the procedure determined under section 93 (procedure in relation to the regulatory functions).

100Duty to have regard to the interests of members etcE+W+S

(1)The Regulator must have regard to the matters mentioned in subsection (2)—

(a)when determining whether to exercise a regulatory function—

(i)in a case where the requirements of the standard or special procedure apply, or

(ii)on a review under section 99, and

(b)when exercising the regulatory function in question.

(2)Those matters are—

(a)the interests of the generality of the members of the scheme to which the exercise of the function relates, and

(b)the interests of such persons as appear to the Regulator to be directly affected by the exercise.

101Powers to vary or revoke orders, notices or directions etcE+W+S

(1)The Regulator may vary or revoke—

(a)any determination by the Regulator whether to exercise a regulatory function, or

(b)any order, notice or direction made, issued or given by the Regulator in the exercise of a regulatory function.

(2)Subsection (1)(b) does not apply to—

(a)an order under section 3(3) of the Pensions Act 1995 (c. 26) revoking a prohibition order under that section,

(b)an order under section 4(5) of that Act revoking a suspension order under that section,

(c)a direction under section 2(3) of the Welfare Reform and Pensions Act 1999 (c. 30) refusing to register a scheme under section 2 of that Act or removing a scheme from the register of stakeholder pension schemes, or

(d)such other orders, notices or directions made, issued or given by the Regulator, in the exercise of a regulatory function, as may be prescribed.

(3)A variation or revocation of an order, a notice or a direction must be made by an order, a notice or a direction (as the case may be).

(4)A variation or revocation made under this section must take effect from a specified time which must not be a time earlier than the time when the variation or revocation is made.

(5)The power to vary or revoke under this section—

(a)is not to be treated for the purposes of subsection (1) as a regulatory function, and

(b)is in addition to any such power which is conferred on the Regulator by, or by virtue of, this or any other enactment.

The Pensions Regulator TribunalE+W+S+N.I.

102The Pensions Regulator TribunalE+W+S+N.I.

(1)There shall be a tribunal to be known as the Pensions Regulator Tribunal (in this Act referred to as “the Tribunal”).

(2)The Tribunal is to have the functions conferred on it by this Act or any provisions in force in Northern Ireland corresponding to this Act.

(3)The Lord Chancellor may by rules make such provision as appears to him to be necessary or expedient in respect of the conduct of proceedings before the Tribunal.

(4)Schedule 4 (which makes provision as respects the Tribunal and its proceedings) has effect.

(5)But that Schedule does not limit the Lord Chancellor’s powers under this section.

103References to the TribunalE+W+S

(1)A reference to the Tribunal under this Act must be made—

(a)in the case of a reference under section 96(3) (referral following determination under standard procedure), during the period of 28 days beginning with the day on which the determination notice in question is given,

(b)in the case of a reference under section 99(7) (referral following determination under special procedure), during the period of 28 days beginning with the day on which the final notice in question is given, or

(c)in either case, during such other period as may be specified in rules made under section 102.

(2)Subject to rules made under section 102, the Tribunal may allow a reference to be made after the end of the relevant period specified in or under subsection (1).

(3)On a reference, the Tribunal may consider any evidence relating to the subject-matter of the reference, whether or not it was available to the Regulator at the material time.

(4)On a reference, the Tribunal must determine what (if any) is the appropriate action for the Regulator to take in relation to the matter referred to the Tribunal.

(5)On determining a reference, the Tribunal must remit the matter to the Regulator with such directions (if any) as the Tribunal considers appropriate for giving effect to its determination.

(6)Those directions may include directions to the Regulator—

(a)confirming the Regulator’s determination and any order, notice or direction made, issued or given as a result of it;

(b)to vary or revoke the Regulator’s determination, and any order, notice or direction made, issued or given as a result of it;

(c)to substitute a different determination, order, notice or direction;

(d)to make such savings and transitional provision as the Tribunal considers appropriate.

(7)The Regulator must act in accordance with the determination of, and any direction given by, the Tribunal (and accordingly sections 96 to 99 (standard and special procedure) do not apply).

(8)The Tribunal may, on determining a reference, make recommendations as to the procedure followed by the Regulator or the Determinations Panel.

(9)An order of the Tribunal may be enforced—

(a)as if it were an order of a county court, or

(b)in Scotland, as if it were an order of the Court of Session.

104Appeal on a point of lawE+W+S

(1)A party to a reference to the Tribunal may with permission appeal—

(a)to the Court of Appeal, or

(b)in Scotland, to the Court of Session,

on a point of law arising from a decision of the Tribunal disposing of the reference.

(2)Permission” means permission given by—

(a)the Tribunal, or

(b)if it is refused by the Tribunal, by the Court of Appeal or, in Scotland, the Court of Session.

(3)If, on an appeal under subsection (1), the court considers that the decision of the Tribunal was wrong in law, it may—

(a)remit the matter to the Tribunal for rehearing and determination by it under section 103, or

(b)itself make a determination.

(4)An appeal may not be brought from a decision of the Court of Appeal under subsection (3) except with the leave of—

(a)the Court of Appeal, or

(b)the House of Lords.

(5)An appeal lies, with the leave of the Court of Session or the House of Lords, from any decision of the Court of Session under this section, and such leave may be given on such terms as to costs, expenses or otherwise as the Court of Session or the House of Lords may determine.

(6)Rules made under section 102 may make provision for regulating or prescribing any matters incidental to or consequential on an appeal under this section.

105Redetermination etc by the TribunalE+W+S

(1)This section applies where an application is made to the Tribunal for permission under section 104(2)(a) to appeal from a decision of the Tribunal disposing of a reference.

(2)If the person who constitutes, or is the chairman of, the Tribunal for the purposes of dealing with that application considers that the decision of the Tribunal disposing of the reference was wrong in law, he may set aside the decision and refer the matter—

(a)for rehearing and redetermination by the Tribunal under section 103, or

(b)for rehearing and determination under that section by a differently constituted Tribunal.

106Legal assistance schemeE+W+N.I.

(1)The Lord Chancellor may by regulations establish a scheme governing the provision of legal assistance in connection with proceedings before the Tribunal.

(2)The legal assistance scheme may, in particular, make provision as to—

(a)the kinds of legal assistance that may be provided;

(b)the persons by whom legal assistance may be provided;

(c)the manner in which applications for legal assistance are to be made;

(d)the criteria on which eligibility for legal assistance is to be determined;

(e)the persons or bodies by whom applications are to be determined;

(f)appeals against refusals of applications;

(g)the revocation or variation of decisions;

(h)its administration and the enforcement of its provisions.

(3)Legal assistance under the scheme may be provided subject to conditions or restrictions.

(4)Those conditions may include conditions as to the making of contributions by the person to whom the assistance is provided.

(5)The Lord Chancellor must fund, out of money provided by Parliament, the costs of the scheme including the costs of legal assistance provided under it.

(6)In this Part “the legal assistance scheme” means any scheme in force by virtue of subsection (1).

Prospective

Part 2 E+W+S+N.I.The Board of the Pension Protection Fund

Chapter 1E+W+S+N.I.The Board

EstablishmentE+W+S+N.I.

107The Board of the Pension Protection FundE+W+S+N.I.

There shall be a body corporate called the Board of the Pension Protection Fund (in this Act referred to as “the Board”).

108Membership of the BoardE+W+S+N.I.

(1)The Board is to consist of the following members—

(a)a chairman,

(b)the Chief Executive of the Board, and

(c)at least five other persons (“ordinary members”).

(2)The chairman must not be appointed from the staff of the Board or be the chairman of the Regulator.

(3)The number of ordinary members must not exceed any maximum number which may be prescribed.

(4)At least two ordinary members must be appointed from the staff of the Board.

(5)No member of the Determinations Panel established by the Regulator under section 9, or member of the staff of the Regulator, is eligible for appointment as a member of the Board.

(6)Any power to appoint ordinary members must be exercised so as to secure that a majority of the members of the Board are non-executive members.

(7)In this Part—

(a)references to executive members of the Board are to—

(i)the Chief Executive, and

(ii)the ordinary members appointed from the staff of the Board, and

(b)references to non-executive members of the Board are to members who are not executive members.

109Further provision about the BoardE+W+S+N.I.

Schedule 5 makes further provision about the Board, including provision as to—

  • the appointment of members,

  • the terms of appointment, tenure and remuneration of members,

  • the appointment of the Chief Executive and other staff,

  • the proceedings of the Board,

  • its accounts, and

  • the status and liability of the Board, its members and staff.

General provision about functionsE+W+S+N.I.

110Board’s functionsE+W+S+N.I.

(1)The Board must hold, manage and apply, in accordance with this Part and any provision in force in Northern Ireland corresponding to it—

(a)a fund to be known as the Pension Protection Fund, and

(b)a fund to be known as the Fraud Compensation Fund.

(2)Sections 175 and 189 make provision for contributions to those funds to be levied by the Board.

(3)The Board also has such other functions as are conferred on it by, or by virtue of, this or any other enactment.

111Supplementary powersE+W+S+N.I.

The Board may do anything which—

(a)is calculated to facilitate the exercise of its functions, or

(b)is incidental or conducive to their exercise.

Non-executive functionsE+W+S+N.I.

112Non-executive functionsE+W+S+N.I.

(1)The functions listed in subsection (4) (in this Part referred to as “the non-executive functions”) are functions of the Board.

(2)The Board must establish a committee to discharge the non-executive functions on its behalf.

(3)Only non-executive members of the Board may be members of that committee.

(4)The non-executive functions are—

(a)the duty to keep under review the question whether the Board’s internal financial controls secure the proper conduct of its financial affairs;

(b)the duty to determine under sub-paragraph (5)(a) of paragraph 12 of Schedule 5, subject to the approval of the Secretary of State, the terms and conditions as to remuneration of any Chief Executive appointed under sub-paragraph (4) of that paragraph;

(c)the duty to determine under paragraph 13(3)(a) of that Schedule, subject to the approval of the Secretary of State, the terms and conditions as to remuneration of any member of the staff who is also to be an executive member of the Board;

(d)the duty to determine under paragraph 13(3)(b) of that Schedule, the terms and conditions as to remuneration of any member of the staff of a description prescribed for the purposes of that provision.

(5)The committee established under this section must prepare a report on the discharge of the non-executive functions for inclusion in the Board’s annual report to the Secretary of State under section 119.

(6)The committee’s report must relate to the same period as that covered by the Board’s report.

(7)The members of any sub-committee of the committee (established by virtue of paragraph 15(2) of Schedule 5)—

(a)may include persons who are not members of the committee, but

(b)must not include persons who are executive members or other staff of the Board.

(8)The committee may authorise any of its sub-committees to discharge on its behalf—

(a)any of the non-executive functions;

(b)the duty to prepare a report under subsection (5).

Financial mattersE+W+S+N.I.

113Investment of fundsE+W+S+N.I.

(1)The Board may invest for the purposes of the prudent management of its financial affairs.

(2)When exercising the power conferred by subsection (1) in relation to the Pension Protection Fund, the Board must have regard to—

(a)the interests of persons who are or may become entitled to compensation under the pension compensation provisions (see section 162) or any corresponding provisions in force in Northern Ireland, and

(b)the effect of the exercise of the power on the rate of any levy which may be imposed under section 174 or 175 or any corresponding provision in force in Northern Ireland and the interests which persons have in the rate of any such levy.

(3)When exercising the power conferred by subsection (1) in relation to the Fraud Compensation Fund, the Board must have regard to—

(a)the interests of members of occupational pension schemes in relation to which section 189(1), or any corresponding provision in force in Northern Ireland, applies, and

(b)the effect of the exercise of the power on the level of any levy which may be imposed under section 189 or any corresponding provision in force in Northern Ireland and the interests which persons have in the rate of any such levy.

(4)For the purposes of subsection (1) there must be at least two fund managers.

(5)For this purpose “fund manager” means an individual who or firm which is appointed by the Board to manage the fund maintained under section 173 (the Pension Protection Fund).

(6)The Board must not appoint an individual or firm as a fund manager unless it is satisfied—

(a)in the case of an individual, that the individual has the appropriate knowledge and experience for managing the investments of the Pension Protection Fund, or

(b)in the case of a firm, that arrangements are in place to secure that any individual who will exercise functions which the firm has as fund manager will, at the time he exercises those functions, have the appropriate knowledge and experience for managing the investments of that Fund.

114Investment principlesE+W+S+N.I.

(1)The Board must secure—

(a)that a statement of investment principles is prepared and maintained, and

(b)that the statement is reviewed at such intervals, and on such occasions, as may be prescribed and, if necessary, revised.

(2)In this section “statement of investment principles” means a written statement of the investment principles governing determinations about investments made by or on behalf of the Board.

(3)Before preparing or revising a statement of investment principles, the Board must comply with any prescribed requirements.

(4)A statement of investment principles must be in the prescribed form and cover, amongst other things, the prescribed matters.

115BorrowingE+W+S+N.I.

(1)The Board may—

(a)borrow from a deposit-taker such sums as it may from time to time require for exercising any of its functions;

(b)give security for any money borrowed by it.

(2)The Board may not borrow if the effect would be—

(a)to take the aggregate amount outstanding in respect of the principal of sums borrowed by it over its borrowing limit, or

(b)to increase the amount by which the aggregate amount so outstanding exceeds that limit.

(3)In this section—

  • borrowing limit” means such limit as the Secretary of State may specify by order;

  • deposit-taker” means—

    (a)

    a person who has permission under Part 4 of the Financial Services and Markets Act 2000 (c. 8) to accept deposits, or

    (b)

    an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to that Act which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to accept deposits.

(4)The definition of “deposit-taker” in subsection (3) must be read with—

(a)section 22 of the Financial Services and Markets Act 2000,

(b)any relevant order under that section, and

(c)Schedule 2 to that Act.

116GrantsE+W+S

The Secretary of State may pay the Board out of money provided by Parliament such sums as he may determine towards any of its expenses, other than expenditure which by virtue of section 173(3) or 188(3) is payable out of—

(a)the Pension Protection Fund, or

(b)the Fraud Compensation Fund.

117Administration levyE+W+S

(1)Regulations may provide for the imposition of a levy (“administration levy”) in respect of eligible schemes (see section 126) for the purpose of meeting—

(a)expenditure of the Secretary of State relating to the establishment of the Board;

(b)any expenditure of the Secretary of State under section 116.

(2)An administration levy is payable to the Secretary of State by or on behalf of—

(a)the trustees or managers of an eligible scheme, or

(b)any other prescribed person.

(3)An administration levy is payable at the prescribed rate and at prescribed times.

(4)Before prescribing a rate under subsection (3), the Secretary of State must consult the Board.

(5)An amount payable by a person on account of an administration levy is a debt due from him to the Secretary of State.

(6)An amount so payable is recoverable by the Secretary of State or, if he so determines, by the Regulator on his behalf.

(7)Without prejudice to the generality of subsections (1), (5) and (6), regulations under this section may include provision relating to—

(a)the collection and recovery of amounts payable by way of levy under this section;

(b)the circumstances in which any such amount may be waived.

118FeesE+W+S+N.I.

(1)Regulations may authorise the Board—

(a)to charge prescribed fees;

(b)to charge fees sufficient to meet prescribed costs.

(2)Regulations under subsection (1) may prescribe, or authorise the Board to determine, the time at which any fee is due.

(3)Any fee which is owed to the Board by virtue of regulations under this section may be recovered as a debt due to the Board.

Annual reportsE+W+S+N.I.

119Annual reports to Secretary of StateE+W+S+N.I.

(1)The Board must prepare a report for each financial year.

(2)Each report—

(a)must deal with the activities of the Board in the financial year for which it is prepared, including the matters mentioned in subsection (3), and

(b)must include the report prepared under subsection (5) of section 112 by the committee established under that section.

(3)The matters referred to in subsection (2)(a) are—

(a)the strategic direction of the Board and the manner in which it has been kept under review;

(b)the steps taken to scrutinise the performance of the Chief Executive in securing that the Board’s functions are exercised efficiently and effectively;

(c)the Board’s objectives and targets and the steps taken to monitor the extent to which they are being met.

(4)The Board must send each report to the Secretary of State as soon as practicable after the end of the financial year for which it is prepared.

(5)The Secretary of State must lay before each House of Parliament a copy of every report received by him under this section.

(6)In this section “financial year” means—

(a)the period beginning with the date on which the Board is established and ending with the next following 31st March, and

(b)each successive period of 12 months.

Chapter 2E+W+SInformation relating to employer’s insolvency etc

Insolvency eventsE+W+S

120Duty to notify insolvency events in respect of employersE+W+S

(1)This section applies where, in the case of an occupational pension scheme, an insolvency event occurs in relation to the employer.

(2)The insolvency practitioner in relation to the employer must give a notice to that effect within the notification period to—

(a)the Board,

(b)the Regulator, and

(c)the trustees or managers of the scheme.

(3)For the purposes of subsection (2) the “notification period” is the prescribed period beginning with the later of—

(a)the insolvency date, and

(b)the date the insolvency practitioner becomes aware of the existence of the scheme.

(4)A notice under this section must be in such form and contain such information as may be prescribed.

121Insolvency event, insolvency date and insolvency practitionerE+W+S

(1)In this Part each of the following expressions has the meaning given to it by this section—

  • “insolvency event”

  • “insolvency date”

  • “insolvency practitioner”.

(2)An insolvency event occurs in relation to an individual where—

(a)he is adjudged bankrupt or sequestration of his estate has been awarded;

(b)the nominee in relation to a proposal for a voluntary arrangement under Part 8 of the Insolvency Act 1986 (c. 45) submits a report to the court under section 256(1) or 256A(3) of that Act which states that in his opinion a meeting of the individual’s creditors should be summoned to consider the debtor’s proposal;

(c)a deed of arrangement made by or in respect of the affairs of the individual is registered in accordance with the Deeds of Arrangement Act 1914 (c. 47);

(d)he executes a trust deed for his creditors or enters into a composition contract;

(e)he has died and—

(i)an insolvency administration order is made in respect of his estate in accordance with an order under section 421 of the Insolvency Act 1986, or

(ii)a judicial factor appointed under section 11A of the Judicial Factors (Scotland) Act 1889 (c. 39) is required by that section to divide the individual’s estate among his creditors.

(3)An insolvency event occurs in relation to a company where—

(a)the nominee in relation to a proposal for a voluntary arrangement under Part 1 of the Insolvency Act 1986 submits a report to the court under section 2 of that Act (procedure where nominee is not the liquidator or administrator) which states that in his opinion meetings of the company and its creditors should be summoned to consider the proposal;

(b)the directors of the company file (or in Scotland lodge) with the court documents and statements in accordance with paragraph 7(1) of Schedule A1 to that Act (moratorium where directors propose voluntary arrangement);

(c)an administrative receiver within the meaning of section 251 of that Act is appointed in relation to the company;

(d)the company enters administration within the meaning of paragraph 1(2)(b) of Schedule B1 to that Act;

(e)a resolution is passed for a voluntary winding up of the company without a declaration of solvency under section 89 of that Act;

(f)a meeting of creditors is held in relation to the company under section 95 of that Act (creditors' meeting which has the effect of converting a members' voluntary winding up into a creditors' voluntary winding up);

(g)an order for the winding up of the company is made by the court under Part 4 or 5 of that Act.

(4)An insolvency event occurs in relation to a partnership where—

(a)an order for the winding up of the partnership is made by the court under any provision of the Insolvency Act 1986 (c. 45) (as applied by an order under section 420 of that Act (insolvent partnerships));

(b)sequestration is awarded on the estate of the partnership under section 12 of the Bankruptcy (Scotland) Act 1985 (c. 66) or the partnership grants a trust deed for its creditors;

(c)the nominee in relation to a proposal for a voluntary arrangement under Part 1 of the Insolvency Act 1986 (as applied by an order under section 420 of that Act) submits a report to the court under section 2 of that Act (procedure where nominee is not the liquidator or administrator) which states that in his opinion meetings of the members of the partnership and the partnership’s creditors should be summoned to consider the proposal;

(d)the members of the partnership file with the court documents and statements in accordance with paragraph 7(1) of Schedule A1 to that Act (moratorium where directors propose voluntary arrangement) (as applied by an order under section 420 of that Act);

(e)an administration order under Part 2 of that Act (as applied by section 420 of that Act) is made in relation to the partnership.

(5)An insolvency event also occurs in relation to a person where an event occurs which is a prescribed event in relation to such a person.

(6)Except as provided by subsections (2) to (5), for the purposes of this Part an event is not to be regarded as an insolvency event in relation to a person.

(7)The Secretary of State may by order amend subsection (4)(e) to make provision consequential upon any order under section 420 of the Insolvency Act 1986 (insolvent partnerships) applying the provisions of Part 2 of that Act (administration) as amended by the Enterprise Act 2002 (c. 40).

(8)Insolvency date”, in relation to an insolvency event, means the date on which the event occurs.

(9)Insolvency practitioner”, in relation to a person, means—

(a)a person acting as an insolvency practitioner, in relation to that person, in accordance with section 388 of the Insolvency Act 1986;

(b)in such circumstances as may be prescribed, a person of a prescribed description.

(10)In this section—

  • company” means a company within the meaning given by section 735(1) of the Companies Act 1985 (c. 6) or a company which may be wound up under Part 5 of the Insolvency Act 1986 (c. 45) (unregistered companies);

  • person acting as an insolvency practitioner”, in relation to a person, includes the official receiver acting as receiver or manager of any property of that person.

(11)In applying section 388 of the Insolvency Act 1986 under subsection (9) above—

(a)the reference in section 388(2)(a) to a permanent or interim trustee in sequestration must be taken to include a reference to a trustee in sequestration, and

(b)section 388(5) (which includes provision that nothing in the section applies to anything done by the official receiver or the Accountant in Bankruptcy) must be ignored.

Status of schemeE+W+S

122Insolvency practitioner’s duty to issue notices confirming status of schemeE+W+S

(1)This section applies where an insolvency event has occurred in relation to the employer in relation to an occupational pension scheme.

(2)An insolvency practitioner in relation to the employer must—

(a)if he is able to confirm that a scheme rescue is not possible, issue a notice to that effect (a “scheme failure notice”), or

(b)if he is able to confirm that a scheme rescue has occurred, issue a notice to that effect (a “withdrawal notice”).

(3)Subsection (4) applies where—

(a)in prescribed circumstances, insolvency proceedings in relation to the employer are stayed or come to an end, or

(b)a prescribed event occurs.

(4)If a person who was acting as an insolvency practitioner in relation to the employer immediately before this subsection applies has not been able to confirm in relation to the scheme—

(a)that a scheme rescue is not possible, or

(b)that a scheme rescue has occurred,

he must issue a notice to that effect.

(5)For the purposes of this section—

(a)a person is able to confirm that a scheme rescue has occurred in relation to an occupational pension scheme if, and only if, he is able to confirm such matters as are prescribed for the purposes of this paragraph, and

(b)a person is able to confirm that a scheme rescue is not possible, in relation to such a scheme if, and only if, he is able to confirm such matters as are prescribed for the purposes of this paragraph.

(6)Where an insolvency practitioner or former insolvency practitioner in relation to the employer issues a notice under this section, he must give a copy of that notice to—

(a)the Board,

(b)the Regulator, and

(c)the trustees or managers of the scheme.

(7)A person must comply with an obligation imposed on him by subsection (2), (4) or (6) as soon as reasonably practicable.

(8)Regulations may require notices issued under this section—

(a)to be in a prescribed form;

(b)to contain prescribed information.

123Approval of notices issued under section 122E+W+S

(1)This section applies where the Board receives a notice under section 122(6) (“the section 122 notice”).

(2)The Board must determine whether to approve the section 122 notice.

(3)The Board must approve the section 122 notice if, and only if, it is satisfied—

(a)that the insolvency practitioner or former insolvency practitioner who issued the notice was required to issue it under that section, and

(b)that the notice complies with any requirements imposed by virtue of subsection (8) of that section.

(4)Where the Board makes a determination for the purposes of subsection (2), it must issue a determination notice and give a copy of that notice to—

(a)the Regulator,

(b)the trustees or managers of the scheme,

(c)the insolvency practitioner or the former insolvency practitioner who issued the section 122 notice,

(d)any insolvency practitioner in relation to the employer (who does not fall within paragraph (c)), and

(e)if there is no insolvency practitioner in relation to the employer, the employer.

(5)In subsection (4) “determination notice” means a notice which is in the prescribed form and contains such information about the determination as may be prescribed.

Board’s dutiesE+W+S

124Board’s duty where there is a failure to comply with section 122E+W+S

(1)This section applies where in relation to an occupational pension scheme—

(a)the Board determines under section 123 not to approve a notice issued under section 122 by an insolvency practitioner or former insolvency practitioner in relation to the employer, or

(b)an insolvency practitioner or former insolvency practitioner in relation to the employer fails to issue a notice under section 122 and the Board is satisfied that such a notice ought to have been issued under that section.

(2)The obligations on the insolvency practitioner or former insolvency practitioner imposed by subsections (2) and (4) of section 122 are to be treated as obligations imposed on the Board and the Board must accordingly issue a notice as required under that section.

(3)Subject to subsections (4) and (5), where a notice is issued under section 122 by the Board by virtue of this section, it has effect as if it were a notice issued under section 122 by an insolvency practitioner or, as the case may be, former insolvency practitioner in relation to the employer.

(4)Where a notice is issued under section 122 by virtue of this section, section 122(6) does not apply and the Board must, as soon as reasonably practicable, give a copy of the notice to—

(a)the Regulator,

(b)the trustees or managers of the scheme,

(c)the insolvency practitioner or former insolvency practitioner mentioned in subsection (1),

(d)any insolvency practitioner in relation to the employer (who does not fall within paragraph (c)), and

(e)if there is no insolvency practitioner in relation to the employer, the employer.

(5)Where the Board—

(a)is required to issue a notice under section 122 by virtue of this section, and

(b)is satisfied that the notice ought to have been issued at an earlier time,

it must specify that time in the notice and the notice is to have effect as if it had been issued at that time.

125Binding notices confirming status of schemeE+W+S

(1)Subject to subsection (2), for the purposes of this Part, a notice issued under section 122 is not binding until—

(a)the Board issues a determination notice under section 123 approving the notice,

(b)the period within which the issue of the determination notice under that section may be reviewed by virtue of Chapter 6 has expired, and

(c)if the issue of the determination notice is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of and the determination notice has not been revoked, varied or substituted.

(2)Where a notice is issued under section 122 by the Board by virtue of section 124, the notice is not binding until—

(a)the period within which the issue of the notice may be reviewed by virtue of Chapter 6 has expired, and

(b)if the issue of the notice is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of and the notice has not been revoked, varied or substituted.

(3)Where a notice issued under section 122 becomes binding, the Board must as soon as reasonably practicable give a notice to that effect together with a copy of the binding notice to—

(a)the Regulator,

(b)the trustees or managers of the scheme,

(c)the insolvency practitioner or former insolvency practitioner who issued the notice under section 122 or, where that notice was issued by the Board by virtue of section 124, the insolvency practitioner or former insolvency practitioner mentioned in subsection (1) of that section,

(d)any insolvency practitioner in relation to the employer (who does not fall within paragraph (c)), and

(e)if there is no insolvency practitioner in relation to the employer, the employer.

(4)A notice under subsection (3)—

(a)must be in the prescribed form and contain such information as may be prescribed, and

(b)where it is given in relation to a withdrawal notice issued under section 122(2)(b) which has become binding, must state the time from which the Board ceases to be involved with the scheme (see section 149).

Chapter 3E+W+S+N.I.Pension protection

Eligible schemesE+W+S

126Eligible schemesE+W+S

(1)Subject to the following provisions of this section, in this Part references to an “eligible scheme” are to an occupational pension scheme which—

(a)is not a money purchase scheme, and

(b)is not a prescribed scheme or a scheme of a prescribed description.

(2)A scheme is not an eligible scheme if it is being wound up immediately before the day appointed by the Secretary of State by order for the purposes of this subsection.

(3)Regulations may provide that where—

(a)an assessment period begins in relation to an eligible scheme (see section 132), and

(b)after the beginning of that period, the scheme ceases to be an eligible scheme,

the scheme is, in such circumstances as may be prescribed, to be treated as remaining an eligible scheme for the purposes of such of the provisions mentioned in subsection (4) as may be prescribed.

(4)Those provisions are—

(a)any provision of this Part, and

(b)any other provision of this Act in which “eligible scheme” has the meaning given by this section.

(5)Regulations may also provide that a scheme which would be an eligible scheme in the absence of this subsection is not an eligible scheme in such circumstances as may be prescribed.

Circumstances in which Board assumes responsibility for eligible schemesE+W+S

127Duty to assume responsibility for schemes following insolvency eventE+W+S

(1)This section applies where a qualifying insolvency event has occurred in relation to the employer in relation to an eligible scheme.

(2)The Board must assume responsibility for the scheme in accordance with this Chapter if—

(a)the value of the assets of the scheme at the relevant time was less than the amount of the protected liabilities at that time (see sections 131 and 143),

(b)after the relevant time a scheme failure notice is issued under section 122(2)(a) in relation to the scheme and that notice becomes binding, and

(c)a withdrawal event has not occurred in relation to the scheme in respect of a withdrawal notice which has been issued during the period—

(i)beginning with the occurrence of the qualifying insolvency event, and

(ii)ending immediately before the issuing of the scheme failure notice under section 122(2)(a),

and the occurrence of such a withdrawal event in respect of a withdrawal notice issued during that period is not a possibility (see section 149).

(3)For the purposes of this section, in relation to an eligible scheme an insolvency event (“the current event”) in relation to the employer is a qualifying insolvency event if—

(a)it occurs on or after the day appointed under section 126(2), and

(b)it—

(i)is the first insolvency event to occur in relation to the employer on or after that day, or

(ii)does not occur within an assessment period (see section 132) in relation to the scheme which began before the occurrence of the current event.

(4)For the purposes of this section—

(a)the reference in subsection (2)(a) to the assets of the scheme is a reference to those assets excluding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules, and

(b)the relevant time” means the time immediately before the qualifying insolvency event occurs.

(5)This section is subject to sections 146 and 147 (cases where Board must refuse to assume responsibility for a scheme).

128Duty to assume responsibility for schemes following application or notificationE+W+S

(1)This section applies where, in relation to an eligible scheme, the trustees or managers of the scheme—

(a)make an application under subsection (1) of section 129 (a “section 129 application”), or

(b)receive a notice from the Board under subsection (5)(a) of that section (a “section 129 notification”).

(2)The Board must assume responsibility for the scheme in accordance with this Chapter if—

(a)the value of the assets of the scheme at the relevant time was less than the amount of the protected liabilities at that time (see sections 131 and 143),

(b)after the relevant time the Board issues a scheme failure notice under section 130(2) in relation to the scheme and that notice becomes binding, and

(c)a withdrawal event has not occurred in relation to the scheme in respect of a withdrawal notice which has been issued during the period—

(i)beginning with the making of the section 129 application or, as the case may be, the receipt of the section 129 notification, and

(ii)ending immediately before the issuing of the scheme failure notice under section 130(2),

and the occurrence of such a withdrawal event in respect of a withdrawal notice issued during that period is not a possibility (see section 149).

(3)In subsection (2)—

(a)the reference in paragraph (a) to the assets of the scheme is a reference to those assets excluding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules, and

(b)the relevant time” means the time immediately before the section 129 application was made or, as the case may be, the section 129 notification was received.

(4)An application under section 129(1) or notification under section 129(5)(a) is to be disregarded for the purposes of subsection (1) if it is made or given during an assessment period (see section 132) in relation to the scheme which began before the application was made or notification was given.

(5)This section is subject to sections 146 and 147 (cases where Board must refuse to assume responsibility for a scheme).

129Applications and notifications for the purposes of section 128E+W+S

(1)Where the trustees or managers of an eligible scheme become aware that—

(a)the employer in relation to the scheme is unlikely to continue as a going concern, and

(b)the prescribed requirements are met in relation to the employer,

they must make an application to the Board for it to assume responsibility for the scheme under section 128.

(2)Where the Board receives an application under subsection (1), it must give a copy of the application to—

(a)the Regulator, and

(b)the employer.

(3)An application under subsection (1) must—

(a)be in the prescribed form and contain the prescribed information, and

(b)be made within the prescribed period.

(4)Where the Regulator becomes aware that—

(a)the employer in relation to an eligible scheme is unlikely to continue as a going concern, and

(b)the requirements mentioned in subsection (1)(b) are met in relation to the employer,

it must give the Board a notice to that effect.

(5)Where the Board receives a notice under subsection (4), it must—

(a)give the trustees or managers of the scheme a notice to that effect, and

(b)give the employer a copy of that notice.

(6)The duty imposed by subsection (1) does not apply where the trustees or managers of an eligible scheme become aware as mentioned in that subsection by reason of a notice given to them under subsection (5).

(7)The duty imposed by subsection (4) does not apply where the Regulator becomes aware as mentioned in that subsection by reason of a copy of an application made by the trustees or managers of the eligible scheme in question given to the Regulator under subsection (2).

(8)Regulations may require notices under this section to be in the prescribed form and contain the prescribed information.

130Board’s duty where application or notification received under section 129E+W+S

(1)This section applies where the Board—

(a)receives an application under subsection (1) of section 129 and is satisfied that paragraphs (a) and (b) of that subsection are satisfied in relation to the application, or

(b)is notified by the Regulator under section 129(4).

(2)If the Board is able to confirm that a scheme rescue is not possible, it must as soon as reasonably practicable issue a notice to that effect (a “scheme failure notice”).

(3)If the Board is able to confirm that a scheme rescue has occurred, it must as soon as reasonably practicable issue a notice to that effect (a “withdrawal notice”).

(4)The Board must, as soon as reasonably practicable, give a copy of any notice issued under subsection (2) or (3) to—

(a)the Regulator,

(b)the trustees or managers of the scheme, and

(c)the employer.

(5)For the purposes of this section—

(a)the Board is able to confirm that a scheme rescue has occurred in relation to an occupational pension scheme if, and only if, it is able to confirm such matters as are prescribed for the purposes of this paragraph, and

(b)the Board is able to confirm that a scheme rescue is not possible in relation to such a scheme if, and only if, it is able to confirm such matters as are prescribed for the purposes of this paragraph.

(6)For the purposes of this Part a notice issued under subsection (2) or (3) is not binding until—

(a)the period within which the issue of the notice may be reviewed by virtue of Chapter 6 has expired, and

(b)if the issue of the notice is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of and the notice has not been revoked, varied or substituted.

(7)Where a notice issued under subsection (2) or (3) becomes binding, the Board must as soon as reasonably practicable give a notice to that effect together with a copy of the binding notice to—

(a)the Regulator,

(b)the trustees or managers of the scheme, and

(c)the employer.

(8)Notices under this section must be in the prescribed form and contain such information as may be prescribed.

(9)A notice given under subsection (7) in relation to a withdrawal notice under subsection (3) which has become binding must state the time from which the Board ceases to be involved with the scheme (see section 149).

131Protected liabilitiesE+W+S

(1)For the purposes of this Chapter the protected liabilities, in relation to an eligible scheme, at a particular time (“the relevant time”) are—

(a)the cost of securing benefits for and in respect of members of the scheme which correspond to the compensation which would be payable, in relation to the scheme, in accordance with the pension compensation provisions (see section 162) if the Board assumed responsibility for the scheme in accordance with this Chapter,

(b)liabilities of the scheme which are not liabilities to, or in respect of, its members, and

(c)the estimated cost of winding up the scheme.

(2)For the purposes of determining the cost of securing benefits within subsection (1)(a), references in sections 140 to 142 and Schedule 7 (pension compensation provisions) to the assessment date are to be read as references to the date on which the time immediately after the relevant time falls.

Restrictions on schemes during the assessment periodE+W+S

132Assessment periodsE+W+S

(1)In this Part references to an assessment period are to be construed in accordance with this section.

(2)Where, in relation to an eligible scheme, a qualifying insolvency event occurs in relation to the employer, an assessment period—

(a)begins with the occurrence of that event, and

(b)ends when—

(i)the Board ceases to be involved with the scheme (see section 149),

(ii)the trustees or managers of the scheme receive a transfer notice under section 160, or

(iii)the conditions in section 154(2) (no scheme rescue but sufficient assets to meet protected liabilities etc) are satisfied in relation to the scheme,

whichever first occurs.

(3)In subsection (2) “qualifying insolvency event” has the meaning given by section 127(3).

(4)Where, in relation to an eligible scheme, an application is made under section 129(1) or a notification is received under section 129(5)(a), an assessment period—

(a)begins when the application is made or the notification is received, and

(b)ends when—

(i)the Board ceases to be involved with the scheme (see section 149),

(ii)the trustees or managers of the scheme receive a transfer notice under section 160, or

(iii)the conditions in section 154(2) (no scheme rescue but sufficient assets to meet protected liabilities etc) are satisfied in relation to the scheme,

whichever first occurs.

(5)For the purposes of subsection (4) an application under section 129(1) or notification under section 129(5)(a) is to be disregarded if it is made or given during an assessment period in relation to the scheme which began before the application was made or notification was given.

(6)This section is subject to section 159 (which provides for further assessment periods to begin in certain circumstances where schemes are required to wind up or continue winding up under section 154).

133Admission of new members, payment of contributions etcE+W+S

(1)This section applies where there is an assessment period in relation to an eligible scheme.

(2)No new members of any class may be admitted to the scheme during the assessment period.

(3)Except in prescribed circumstances and subject to prescribed conditions, no further contributions (other than those due to be paid before the beginning of the assessment period) may be paid towards the scheme during the assessment period.

(4)Any obligation to pay contributions towards the scheme during the assessment period (including any obligation under section 49(8) of the Pensions Act 1995 (c. 26) to pay amounts deducted corresponding to such contributions) is to be read subject to subsection (3) and section 150 (obligation to pay contributions when assessment period ends).

(5)No benefits may accrue under the scheme rules to, or in respect of, members of the scheme during the assessment period.

(6)Subsection (5) does not prevent any increase, in a benefit, which would otherwise accrue in accordance with the scheme or any enactment.

This subsection is subject to section 138 (which limits the scheme benefits payable during an assessment period).

(7)Subsection (5) does not prevent the accrual of money purchase benefits to the extent that they are derived from income or capital gains arising from the investment of payments which are made by, or in respect of, a member of the scheme.

(8)Where a person is entitled to a pension credit derived from another person’s shareable rights under the scheme, nothing in this section prevents the trustees or managers of the scheme discharging their liability in respect of the credit under Chapter 1 of Part 4 of the Welfare Reform and Pensions Act 1999 (c. 30) (sharing of rights under pension arrangements) by conferring appropriate rights under the scheme on that person.

(9)In subsection (8)—

  • appropriate rights” has the same meaning as in paragraph 5 of Schedule 5 to that Act (pension credits: mode of discharge);

  • shareable rights” has the same meaning as in Chapter 1 of Part 4 of that Act (sharing of rights under pension arrangements).

(10)Any action taken in contravention of this section is void.

(11)Disregarding subsection (10), section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager of a scheme who fails to take all reasonable steps to secure compliance with this section.

134DirectionsE+W+S

(1)This section applies where there is an assessment period in relation to an eligible scheme.

(2)With a view to ensuring that the scheme’s protected liabilities do not exceed its assets or, if they do exceed its assets, that the excess is kept to a minimum, the Board may give a relevant person in relation to the scheme directions regarding the exercise during that period of his powers in respect of—

(a)the investment of the scheme’s assets,

(b)the incurring of expenditure,

(c)the instigation or conduct of legal proceedings, and

(d)such other matters as may be prescribed.

(3)In subsection (2)—

(a)relevant person” in relation to a scheme means—

(i)the trustees or managers of the scheme,

(ii)the employer in relation to the scheme, or

(iii)such other persons as may be prescribed, and

(b)the reference to the assets of the scheme is a reference to those assets excluding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules.

(4)The Board may revoke or vary any direction under this section.

(5)Where a direction under this section given to the trustees or managers of a scheme is not complied with, section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any such trustee or manager who has failed to take all reasonable steps to secure compliance with the direction.

(6)That section also applies to any other person who, without reasonable excuse, fails to comply with a direction given to him under this section.

135Restrictions on winding up, discharge of liabilities etcE+W+S

(1)This section applies where there is an assessment period in relation to an eligible scheme.

(2)Subject to subsection (3), the winding up of the scheme must not begin during the assessment period.

(3)Subsection (2) does not apply to the winding up of the scheme in pursuance of an order by the Regulator under section 11(3A) of the Pensions Act 1995 (Regulator’s powers to wind up occupational pension schemes to protect Pension Protection Fund) directing the scheme to be wound up (and section 219 makes provision for the backdating of the winding up).

(4)During the assessment period, except in prescribed circumstances and subject to prescribed conditions—

(a)no transfers of, or transfer payments in respect of, any member’s rights under the scheme rules are to be made from the scheme, and

(b)no other steps may be taken to discharge any liability of the scheme to or in respect of a member of the scheme in respect of—

(i)pensions or other benefits, or

(ii)such other liabilities as may be prescribed.

(5)Subsection (4)—

(a)is subject to section 138, and

(b)applies whether or not the scheme was being wound up immediately before the assessment period or began winding up by virtue of subsection (3).

(6)Subsection (7) applies where, on the commencement of the assessment period—

(a)a member’s pensionable service terminates, and

(b)he becomes a person to whom Chapter 5 of Part 4 of the Pension Schemes Act 1993 (c. 48) (early leavers: cash transfer sums and contribution refunds) applies.

Section 150(5) (retrospective accrual of benefits in certain circumstances) is to be disregarded for the purposes of determining whether a member falls within paragraph (a) or (b).

(7)Where this subsection applies, during the assessment period—

(a)no right or power conferred by that Chapter may be exercised, and

(b)no duty imposed by that Chapter may be discharged.

(8)Where a person is entitled to a pension credit derived from another person’s shareable rights (within the meaning of Chapter 1 of Part 4 under of the Welfare Reform and Pensions Act 1999 (c. 30) (sharing of rights under pension arrangements)) under the scheme, nothing in subsection (4) prevents the trustees or managers of the scheme discharging their liability in respect of the credit in accordance with that Chapter.

(9)Any action taken in contravention of this section is void, except to the extent that the Board validates the action (see section 136).

(10)Disregarding subsection (9), where there is a contravention of this section, section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance with this section.

(11)The Regulator may not make a freezing order (see section 23) in relation to the scheme during the assessment period.

136Power to validate contraventions of section 135E+W+S

(1)The Board may validate an action for the purposes of section 135(9) only if it is satisfied that to do so is consistent with the objective of ensuring that the scheme’s protected liabilities do not exceed its assets or, if they do exceed its assets, that the excess is kept to a minimum.

(2)Where the Board determines to validate, or not to validate, any action of the trustees or managers for those purposes, it must issue a notice to that effect and give a copy of that notice to—

(a)the Regulator,

(b)the trustees or managers of the scheme,

(c)any insolvency practitioner in relation to the employer or, if there is no such insolvency practitioner, the employer, and

(d)any other person who appears to the Board to be directly affected by the determination.

(3)A notice under subsection (2) must contain a statement of the Board’s reasons for the determination.

(4)The validation of an action does not take effect—

(a)until—

(i)the Board has issued a notice under subsection (2) relating to the determination, and

(ii)the period within which the issue of that notice may be reviewed by virtue of Chapter 6 has expired, and

(b)if the issue of the notice is so reviewed, until—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of.

(5)In subsection (1) the reference to the assets of the scheme is a reference to those assets excluding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules.

137Board to act as creditor of the employerE+W+S

(1)Subsection (2) applies where there is an assessment period in relation to an eligible scheme.

(2)During the assessment period, the rights and powers of the trustees or managers of the scheme in relation to any debt (including any contingent debt) due to them by the employer, whether by virtue of section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the scheme assets) or otherwise, are exercisable by the Board to the exclusion of the trustees or managers.

(3)Where, by virtue of subsection (2), any amount is paid to the Board in respect of such a debt, the Board must pay that amount to the trustees or managers of the scheme.

138Payment of scheme benefitsE+W+S

(1)Subsections (2) and (3) apply where there is an assessment period in relation to an eligible scheme.

(2)The benefits payable to or in respect of any member under the scheme rules during the assessment period must be reduced to the extent necessary to ensure that they do not exceed the compensation which would be payable to or in respect of the member in accordance with this Chapter if—

(a)the Board assumed responsibility for the scheme in accordance with this Chapter, and

(b)the assessment date referred to in Schedule 7 were the date on which the assessment period began.

(3)But where, on the commencement of the assessment period—

(a)a member’s pensionable service terminates, and

(b)he becomes a person to whom Chapter 5 of Part 4 of the Pension Schemes Act 1993 (c. 48) (early leavers: cash transfer sums and contribution refunds) applies,

no benefits are payable to or in respect of him under the scheme during the assessment period.

(4)Section 150(5) (retrospective accrual of benefits in certain circumstances) is to be disregarded for the purposes of determining whether a member falls within paragraph (a) or (b) of subsection (3).

(5)Nothing in subsection (3) prevents the payment of benefits attributable (directly or indirectly) to a pension credit, during the assessment period, in accordance with subsection (2).

(6)Where at any time during the assessment period the scheme is being wound up, subject to any reduction required under subsection (2) and to subsection (3), the benefits payable to or in respect of any member under the scheme rules during that period are the benefits that would have been so payable in the absence of the winding up of the scheme.

(7)Subsections (2), (3) and (6) are subject to sections 150(1) to (3) and 154(13) (which provide for the adjustment of amounts paid during an assessment period when that period ends other than as a result of the Board assuming responsibility for the scheme).

(8)For the purposes of subsections (2) and (3) the trustees or managers of the scheme may take such steps as they consider appropriate (including steps adjusting future payments under the scheme rules) to recover any overpayment or pay any shortfall.

(9)Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to a trustee or manager of a scheme who fails to take all reasonable steps to secure compliance with subsections (2) and (3).

(10)Regulations may provide that, where there is an assessment period in relation to an eligible scheme—

(a)in such circumstances as may be prescribed subsection (2) does not operate to require the reduction of benefits payable to or in respect of any member;

(b)the commencement of a member’s pension or payment of a member’s lump sum or other benefits is, in such circumstances and on such terms and conditions as may be prescribed, to be postponed for the whole or any part of the assessment period for which he continues in employment after attaining normal pension age.

(11)For the purposes of subsection (10)—

(a)normal pension age”, in relation to an eligible scheme and any pension or other benefit under it, means the age specified in the scheme rules as the earliest age at which the pension or other benefit becomes payable without actuarial adjustment (disregarding any scheme rule making special provision as to early payment on the grounds of ill health), and

(b)where different ages are so specified in relation to different parts of a pension or other benefit—

(i)subsection (10) has effect as if those parts were separate pensions or, as the case may be, benefits, and

(ii)in relation to a part of a pension or other benefit, the reference in that subsection to normal pension age is to be read as a reference to the age specified in the scheme rules as the earliest age at which that part becomes so payable.

(12)Regulations may provide that, in prescribed circumstances, where—

(a)a member of the scheme died before the commencement of the assessment period, and

(b)during the assessment period, a person becomes entitled under the scheme rules to a benefit of a prescribed description in respect of the member,

the benefit, or any part of it, is, for the purposes of subsection (2), to be treated as having become payable before the commencement of the assessment period.

(13)Nothing in subsection (2) or (3) applies to money purchase benefits.

139Loans to pay scheme benefitsE+W+S

(1)Subsection (2) applies where section 138(2) applies in relation to an eligible scheme.

(2)Where the Board is satisfied that the trustees or managers of the scheme are not able to pay benefits under the scheme rules (reduced in accordance with section 138(2)) as they fall due, it may, on an application by the trustees or managers, lend to them such amounts as the Board considers appropriate for the purpose of enabling them to pay those benefits.

(3)Where an amount lent to the trustees or managers of a scheme under subsection (2) is outstanding at—

(a)the time the Board ceases to be involved with the scheme, or

(b)if earlier—

(i)the time during the assessment period when an order is made under section 11(3A) of the Pensions Act 1995 (c. 26) directing the winding up of the scheme, or

(ii)where no such order is made during that period, the time when the assessment period ends because the conditions in section 154(2) or (5) are satisfied,

that amount, together with the appropriate interest on it, falls to be repaid by the trustees or managers of the scheme to the Board at that time.

(4)No loan may be made under subsection (2) after the time mentioned in subsection (3)(b)(i).

(5)In subsection (2) the reference to “benefits” does not include money purchase benefits.

(6)In subsection (3) “the appropriate interest” on an amount lent under subsection (2) means interest at the prescribed rate from the time the amount was so lent until repayment.

(7)Subject to this section, the Board may make a loan under subsection (2) on such terms as it thinks fit.

Ill health pensionsE+W+S

140Reviewable ill health pensionsE+W+S

(1)This section applies where there is an assessment period in relation to an eligible scheme.

(2)The Board may review a reviewable ill health pension in respect of a member if—

(a)disregarding section 141, the member would be entitled to compensation under paragraph 3 of Schedule 7 in respect of the pension if the Board assumed responsibility for the scheme,

(b)the member did not attain normal pension age in respect of the pension before the assessment date, and

(c)the pension is attributable to the member’s pensionable service.

(3)An ill health pension in respect of a member is reviewable for the purposes of subsection (2) if the member is entitled to the pension by reason of an award under the scheme rules (“the award”) which was made—

(a)in the period of three years ending immediately before the assessment date, or

(b)before the end of the prescribed period beginning with the assessment date, in response to an application made before that date.

(4)Where—

(a)before the assessment date, an application was made under the scheme for the award of a pension before normal pension age by virtue of any provision of the scheme rules making special provision as to early payment of pension on grounds of ill health, and

(b)the trustees or managers of the scheme failed to decide the application before the end of the period mentioned in subsection (3)(b),

section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure that the application was decided before the end of that period.

(5)Where—

(a)the award was made in response to an application which—

(i)was made on or after the assessment date, or

(ii)was made before that date but not decided by the trustees or managers of the scheme before the end of the period mentioned in subsection (3)(b), and

(b)in the absence of this subsection, the award would take effect before the assessment date,

the award is, for the purposes of determining the compensation payable under this Chapter in a case where the Board assumes responsibility for the scheme, to be treated as taking effect after the date on which the decision to make the award was made.

(6)Regulations must prescribe the procedure to be followed in relation to the review of a pension under this section and any subsequent decision under section 141.

141Effect of a reviewE+W+S

(1)This section applies where, during an assessment period in relation to an eligible scheme, the Board reviews an ill health pension by virtue of section 140.

(2)Where the conditions of subsection (3) are satisfied, the Board may determine that the compensation payable in respect of the pension, in a case where the Board assumes responsibility for the scheme, is to be determined in the prescribed manner on and after the relevant date.

(3)The conditions are—

(a)that the annual rate of compensation which would be payable under this Part in respect of the pension at the assessment date, if the Board assumed responsibility for the scheme, exceeds the notional reviewed rate of compensation in respect of the pension,

(b)that the Board is satisfied—

(i)that the decision to make the award was made in ignorance of, or was based upon a mistake as to, a material fact relevant to the decision,

(ii)that, at the time that decision was made, the member knew or could reasonably have been expected to know of that fact and that it was relevant to the decision, and

(iii)that, had the trustees or managers known about, or not been mistaken as to, that fact, they could not reasonably have decided to make the award, and

(c)that the Board is not satisfied that the criteria in the admissible rules governing entitlement to early payment of pension on grounds of ill health were satisfied in respect of the member at any time after that decision but before the assessment date.

(4)For the purposes of subsection (2) “the relevant date” means the date during the assessment period on which a scheme valuation in relation to the scheme becomes binding.

(5)The power to make a decision in respect of the pension under subsection (2) may only be exercised at a time which falls—

(a)during the assessment period but before the time the Board first approves a scheme valuation under section 144 in relation to the scheme, and

(b)within a reasonable period beginning with the assessment date or, where the decision to make the award was made at a later date, that date.

(6)Regulations made for the purposes of subsection (2) may, in particular, include provision applying any provision of Schedule 7 with such modifications as may be prescribed.

142Sections 140 and 141: interpretationE+W+S

(1)For the purposes of sections 140 and 141—

  • admissible rules” is to be construed in accordance with Schedule 7;

  • assessment date” means the date on which the assessment period begins;

  • ill health pension”, in relation to a scheme, means a pension which, immediately before the assessment date, is a pension to which a person is entitled under the admissible rules in circumstances where that entitlement arose before normal pension age by virtue of any provision of the admissible rules making special provision as to early payment of pension on grounds of ill health;

  • normal pension age”, in relation to a scheme and any pension under it, means the age specified in the admissible rules as the earliest age at which the pension becomes payable without actuarial adjustment (disregarding any admissible rule making special provision as to early payment on the grounds of ill health) and sub-paragraphs (2) and (3) of paragraph 34 of Schedule 7 apply in relation to this section as they apply in relation to that Schedule;

“notional reviewed rate of compensation”, in respect of an ill health pension, means—

(a)the annual rate of compensation which would be payable in respect of the pension at the assessment date, if the Board assumed responsibility for the scheme and the compensation so payable at that date was determined in accordance with regulations under section 141(2), or

(b)if no such compensation would have been so payable at that date, nil;

  • pensionable service” is to be construed in accordance with Schedule 7;

  • scheme valuation”, in relation to a scheme, means a valuation under section 143 of the assets and protected liabilities of the scheme as at the time immediately before the assessment period begins.

(2)For the purposes of section 140(4)—

(a)the definition of “normal pension age” in subsection (1), and

(b)sub-paragraphs (2) and (3) of paragraph 34 of Schedule 7 as they apply by virtue of that definition,

have effect as if the references in those provisions to the admissible rules were references to the scheme rules.

(3)Paragraph 37(4) of Schedule 7 (references to “ill health” to be construed in accordance with regulations) applies in relation to sections 140 and 141 and this section as if, in that provision, the reference to that Schedule included a reference to those sections and this section.

(4)In those sections references to the Board assuming responsibility for the scheme are to the Board assuming responsibility for the scheme in accordance with this Chapter at the time the assessment period in question comes to an end.

Valuation of assets and liabilitiesE+W+S

143Board’s obligation to obtain valuation of assets and protected liabilitiesE+W+S

(1)This section applies in a case within subsection (1) of section 127 or 128.

(2)For the purposes of determining whether the condition in subsection (2)(a) of the section in question is satisfied, the Board must, as soon as reasonably practicable, obtain an actuarial valuation of the scheme as at the relevant time.

(3)For those purposes, regulations may provide that any of the following are to be regarded as assets or protected liabilities of the scheme at the relevant time if prescribed requirements are met—

(a)a debt due to the trustees or managers of the scheme by virtue of a contribution notice issued under section 38, 47 or 55 during the pre-approval period;

(b)an obligation arising under financial support for the scheme (within the meaning of section 45) put in place during the pre-approval period in accordance with a financial support direction issued under section 43;

(c)an obligation imposed by a restoration order made under section 52 during the pre-approval period in respect of a transaction involving assets of the scheme.

(4)For the purposes of this section, regulations may prescribe how—

(a)the assets and the protected liabilities of eligible schemes, and

(b)their amount or value,

are to be determined, calculated and verified.

(5)Regulations under subsection (4) may provide, in particular, that when calculating the amount or value of assets or protected liabilities of an eligible scheme at the relevant time which consist of any of the following—

(a)a debt (including any contingent debt) due to the trustees or managers of the scheme from the employer under section 75 of the Pensions Act 1995 (c. 26) (deficiencies in the scheme assets),

(b)a debt due to the trustees or managers of the scheme by virtue of a contribution notice issued under section 38, 47 or 55,

(c)an obligation arising under financial support for the scheme (within the meaning of section 45) put in place in accordance with a financial support direction issued under section 43, or

(d)an obligation imposed by a restoration order made under section 52 in respect of a transaction involving assets of the scheme,

account must be taken in the prescribed manner of prescribed events which occur during the pre-approval period.

(6)Subject to any provision made under subsection (4), the matters mentioned in paragraphs (a) and (b) of that subsection are to be determined, calculated and verified in accordance with guidance issued by the Board.

(7)In calculating the amount of any liabilities for the purposes of this section, a provision of the scheme rules which limits the amount of the scheme’s liabilities by reference to the value of its assets is to be disregarded.

(8)The duty imposed by subsection (2) ceases to apply if and when the Board ceases to be involved with the scheme.

(9)Nothing in subsection (2) requires the actuarial valuation to be obtained during any period when the Board considers that an event may occur which, by virtue of regulations under subsection (3) or (4), may affect the value of the assets or the amount of the protected liabilities of the scheme for the purposes of the valuation.

(10)In a case where there are one or more reviewable ill health pensions (within the meaning of section 140), nothing in subsection (2) requires the actuarial valuation to be obtained during the period mentioned in section 141(5)(b) (period during which Board may exercise its power to make a decision following a review) relating to any such pension.

(11)For the purposes of this section—

(a)actuarial valuation”, in relation to the scheme, means a written valuation of the assets and protected liabilities of the scheme which—

(i)is in the prescribed form and contains the prescribed information, and

(ii)is prepared and signed by—

(a)a person with prescribed qualifications or experience, or

(b)a person approved by the Secretary of State,

(b)the pre-approval period”, in relation to the scheme, means the period which—

(i)begins immediately after the relevant time, and

(ii)ends immediately before the time the Board first approves a valuation of the scheme under section 144 after the relevant time,

(c)“the relevant time”—

(i)in a case within subsection (1) of section 127, has the meaning given in subsection (4)(b) of that section, and

(ii)in a case within subsection (1) of section 128, has the meaning given in subsection (3)(b) of that section, and

(d)references to “assets” do not include assets representing the value of any rights in respect of money purchase benefits under the scheme rules.

144Approval of valuationE+W+S

(1)This section applies where the Board obtains a valuation in respect of a scheme under section 143.

(2)Where the Board is satisfied that the valuation has been prepared in accordance with that section, it must—

(a)approve the valuation, and

(b)give a copy of the valuation to—

(i)the Regulator,

(ii)the trustees or managers of the scheme, and

(iii)any insolvency practitioner in relation to the employer or, if there is no such insolvency practitioner, the employer.

(3)Where the Board is not so satisfied, it must obtain another valuation under that section.

145Binding valuationsE+W+S

(1)For the purposes of this Chapter a valuation obtained under section 143 is not binding until—

(a)it is approved under section 144,

(b)the period within which the approval may be reviewed by virtue of Chapter 6 has expired, and

(c)if the approval is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the approval, and

(iii)any appeal against his determination or directions,

has been finally disposed of.

(2)For the purposes of determining whether or not the condition in section 127(2)(a) or, as the case may be, section 128(2)(a) (condition that scheme assets are less than protected liabilities) is satisfied in relation to a scheme, a binding valuation is conclusive.

This subsection is subject to section 172(3) and (4) (treatment of fraud compensation payments).

(3)Where a valuation becomes binding under this section the Board must as soon as reasonably practicable give a notice to that effect together with a copy of the binding valuation to—

(a)the Regulator,

(b)the trustees or managers of the scheme, and

(c)any insolvency practitioner in relation to the employer or, if there is no such insolvency practitioner, the employer.

(4)A notice under subsection (3) must be in the prescribed form and contain the prescribed information.

Refusal to assume responsibilityE+W+S

146Schemes which become eligible schemesE+W+S

(1)Regulations may provide that where the Board is satisfied that an eligible scheme was not such a scheme throughout such period as may be prescribed, the Board must refuse to assume responsibility for the scheme under this Chapter.

(2)Where, by virtue of subsection (1), the Board is required to refuse to assume responsibility for a scheme, it—

(a)must issue a notice to that effect (a “withdrawal notice”), and

(b)give a copy of that notice to—

(i)the Regulator,

(ii)the trustees or managers of the scheme, and

(iii)any insolvency practitioner in relation to the employer or, if there is no such insolvency practitioner, the employer.

(3)For the purposes of this Part a withdrawal notice issued by virtue of this section is not binding until—

(a)the period within which the issue of the notice may be reviewed by virtue of Chapter 6 has expired, and

(b)if the issue of the notice is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of and the notice has not been revoked, varied or substituted.

(4)Where a withdrawal notice issued by virtue of this section becomes binding, the Board must as soon as reasonably practicable give a notice to that effect together with a copy of the binding notice to—

(a)the Regulator,

(b)the trustees or managers of the scheme, and

(c)any insolvency practitioner in relation to the employer or, if there is no such insolvency practitioner, the employer.

(5)Notices under this section must be in the prescribed form and contain such information as may be prescribed.

(6)A notice given under subsection (4) must state the time from which the Board ceases to be involved with the scheme (see section 149).

147New schemes created to replace existing schemesE+W+S

(1)The Board must refuse to assume responsibility for a scheme (“the new scheme”) under this Chapter where it is satisfied that—

(a)the new scheme was established during such period as may be prescribed,

(b)the employer in relation to the new scheme was, at the date of establishment of that scheme, also the employer in relation to a scheme established before the new scheme (the “old scheme”),

(c)a transfer or transfers of, or a transfer payment or transfer payments in respect of, any rights of members under the old scheme has or have been made to the new scheme, and

(d)the main purpose or one of the main purposes of establishing the new scheme and making the transfer or transfers, or transfer payment or transfer payments, was to enable those members to receive compensation under the pension compensation provisions in respect of their rights under the new scheme in circumstances where, in the absence of the transfer or transfers, regulations under section 146 would have operated to prevent such payments in respect of their rights under the old scheme.

(2)Where, under subsection (1), the Board is required to refuse to assume responsibility for a scheme, it—

(a)must issue a notice to that effect (a “withdrawal notice”), and

(b)give a copy of that notice to—

(i)the Regulator,

(ii)the trustees or managers of the scheme, and

(iii)any insolvency practitioner in relation to the employer or, if there is no such insolvency practitioner, the employer.

(3)For the purposes of this Part a withdrawal notice issued under this section is not binding until—

(a)the period within which the issue of the notice may be reviewed by virtue of Chapter 6 has expired, and

(b)if the issue of the notice is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of and the notice has not been revoked, varied or substituted.

(4)Where a withdrawal notice issued under this section becomes binding, the Board must as soon as reasonably practicable give a notice to that effect together with a copy of the binding notice to—

(a)the Regulator,

(b)the trustees or managers of the scheme, and

(c)any insolvency practitioner in relation to the employer or, if there is no such insolvency practitioner, the employer.

(5)Notices under this section must be in the prescribed form and contain such information as may be prescribed.

(6)A notice given under subsection (4) must state the time from which the Board ceases to be involved with the scheme (see section 149).

148Withdrawal following issue of section 122(4) noticeE+W+S

(1)This section applies where—

(a)a notice under section 122(4) (inability to confirm status of scheme) is issued in relation to an eligible scheme and becomes binding, and

(b)a withdrawal event has not occurred in relation to the scheme in respect of a withdrawal notice which has been issued during the period—

(i)beginning with the occurrence of the last insolvency event in relation to the employer, and

(ii)ending immediately before the notice under section 122(4) becomes binding,

and the occurrence of such a withdrawal event in respect of a withdrawal notice issued during that period is not a possibility (see section 149).

(2)The Board must determine whether any insolvency event—

(a)has occurred in relation to the employer since the issue of the notice under section 122(4), or

(b)is likely to so occur before the end of the period of six months beginning with the date on which this section applies.

(3)If the Board determines under subsection (2) that no insolvency event has occurred or is likely to occur as mentioned in that subsection, it must issue a notice to that effect (a “withdrawal notice”).

(4)Where—

(a)no withdrawal notice is issued under subsection (3) before the end of the period mentioned in subsection (2)(b), and

(b)no further insolvency event occurs in relation to the employer during that period,

the Board must issue a notice to that effect (a “withdrawal notice”).

(5)Where the Board is required to issue a withdrawal notice under this section, it must give a copy of the notice to—

(a)the Regulator,

(b)the trustees or managers of the scheme, and

(c)the employer.

(6)For the purposes of this Part, a withdrawal notice issued under this section is not binding until—

(a)the period within which the issue of the notice may be reviewed by virtue of Chapter 6 has expired, and

(b)if the issue of the notice is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of and the notice has not been revoked, varied or substituted.

(7)Where a withdrawal notice issued under this section becomes binding, the Board must as soon as reasonably practicable give a notice to that effect together with a copy of the binding notice to—

(a)the Regulator,

(b)the trustees or managers of the scheme, and

(c)the employer.

(8)Notices under this section must be in the prescribed form and contain such information as may be prescribed.

(9)A notice given under subsection (7) must state the time from which the Board ceases to be involved with the scheme (see section 149).

Cessation of involvement with a schemeE+W+S

149Circumstances in which Board ceases to be involved with an eligible schemeE+W+S

(1)Where an assessment period begins in relation to an eligible scheme, the Board ceases to be involved with the scheme, for the purposes of this Part, on the occurrence of the first withdrawal event after the beginning of that period.

(2)For this purpose the following are withdrawal events in relation to a scheme—

(a)a withdrawal notice issued under section 122(2)(b) (scheme rescue has occurred) becoming binding;

(b)a withdrawal notice issued under section 130(3) (scheme rescue has occurred) becoming binding;

(c)a withdrawal notice issued under or by virtue of section 146 or 147 (refusal to assume responsibility) becoming binding;

(d)a withdrawal notice issued under section 148 (no insolvency event has occurred or is likely to occur) becoming binding;

and references in this Chapter to a “withdrawal event” are to be construed accordingly.

(3)Subsection (4) applies where a withdrawal notice mentioned in subsection (2) is issued in relation to a scheme and becomes binding and—

(a)an insolvency event in relation to the employer occurs during the interim period and, if subsection (4) did not apply, the event would not be a qualifying insolvency event within the meaning given by subsection (3) of section 127 solely because the condition in sub-paragraph (ii) of paragraph (b) of that subsection would not be satisfied, or

(b)an application under section 129(1) is made, or a notification under section 129(5)(a) is given, in relation to the scheme during the interim period and, if subsection (4) did not apply, the application or notification would be disregarded for the purposes of—

(i)subsection (1) of section 128 by virtue of subsection (4) of that section, and

(ii)subsection (4) of section 132 by virtue of subsection (5) of that section.

(4)In such a case, the withdrawal notice is to be treated for the purposes of subsections (1) and (2), as if the time when it became binding was the time immediately before—

(a)in a case falling within subsection (3)(a), the occurrence of the insolvency event, and

(b)in a case falling within subsection (3)(b), the making of the application under section 129(1) or, as the case may be, the giving of the notification under section 129(5)(a).

(5)For the purposes of subsection (3), the “interim period” in relation to a scheme means the period beginning with the issuing of the withdrawal notice in relation to the scheme and ending with that notice becoming binding.

(6)For the purposes of this Chapter—

(a)the occurrence of a withdrawal event in relation to a scheme in respect of a withdrawal notice issued during a particular period (“the specified period”) is a possibility until each of the following are no longer reviewable—

(i)any withdrawal notice which has been issued in relation to the scheme during the specified period,

(ii)any failure to issue such a withdrawal notice during the specified period,

(iii)any notice which has been issued by the Board under Chapter 2 or this Chapter which is relevant to the issue of a withdrawal notice in relation to the scheme during the specified period or to such a withdrawal notice which has been issued during that period becoming binding,

(iv)any failure to issue such a notice as is mentioned in sub-paragraph (iii), and

(b)the issue of, or failure to issue, a notice is to be regarded as reviewable—

(i)during the period within which it may be reviewed by virtue of Chapter 6, and

(ii)if the matter is so reviewed, until—

(a)the review and any reconsideration,

(b)any reference to the PPF Ombudsman in respect of the matter, and

(c)any appeal against his determination or directions,

has been finally disposed of.

150Consequences of the Board ceasing to be involved with a schemeE+W+S

(1)Where—

(a)an assessment period comes to an end by virtue of the Board ceasing to be involved with an eligible scheme, and

(b)during the assessment period any amount of any benefit payable to a member, or to a person in respect of a member, under the scheme rules was not paid by reason of section 138 (requirement to pay benefits in accordance with the pension compensation provisions),

that amount falls due to the member, or as the case may be, person at the end of that period.

(2)Where the winding up of the scheme began before the end of the assessment period (whether by virtue of section 219 (backdating the winding up of eligible schemes) or otherwise), the reference in subsection (1)(b) to the amount of any benefit payable to a member, or to a person in respect of a member, under the scheme rules is a reference to the amount so payable taking account of any reduction required by virtue of sections 73 to 73B of the Pensions Act 1995 (c. 26) (provisions relating to the winding up of certain schemes).

(3)Where—

(a)an assessment period comes to an end by virtue of the Board ceasing to be involved with an eligible scheme, and

(b)during the assessment period the amount of benefit paid to a member, or to a person in respect of a member, under the scheme rules exceeded the amount that would have been payable in the absence of section 138(6) (requirement to disregard winding up when paying benefits during assessment period),

the trustees or managers of the scheme must, at the end of that period, take such steps as they consider appropriate (including steps to adjust future payments under the scheme rules) to recover an amount equal to the excess from the person to whom it was paid.

(4)Subsections (1) to (3) are without prejudice to section 73A(2)(b) of the Pensions Act 1995 (c. 26) (requirement to adjust benefits paid to reflect liabilities which can be met on winding up).

(5)Regulations may provide that, in cases within paragraph (a) of subsection (1), benefits are to accrue under the scheme rules, in such circumstances as may be prescribed, to or in respect of members of the scheme in respect of any specified period of service being service in employment which, but for section 133(5), would have qualified the member in question for those benefits under the scheme rules.

(6)Regulations under subsection (5) may in particular make provision—

(a)for benefits not to accrue to, or in respect of, a member unless contributions are paid by or on behalf of the member towards the scheme within a prescribed period;

(b)for contributions towards the scheme which, but for section 133, would have been payable by or on behalf of the employer (otherwise than on behalf of an employee) during the assessment period, to fall due;

(c)requiring that such contributions as are mentioned in paragraph (a) or (b) are accepted for the assessment period or any part of that period;

(d)modifying section 31 of the Welfare Reform and Pensions Act 1999 (c. 30) (reduction of benefit where a person’s shareable rights are subject to a pension debit), in its application in relation to cases where benefits accrue under the scheme by virtue of regulations under subsection (5).

(7)In this section “contributions” means, in relation to an eligible scheme, contributions payable towards the scheme by or on behalf of the employer or the active members of the scheme in accordance with the schedule of contributions maintained under section 227 in respect of the scheme.

ReconsiderationE+W+S

151Application for reconsiderationE+W+S

(1)Where subsection (2) or (3) applies in relation to an eligible scheme, the trustees or managers of the scheme may make an application to the Board under this section for it to assume responsibility for the scheme in accordance with this Chapter.

(2)This subsection applies where—

(a)a scheme failure notice has been issued under section 122(2)(a) in relation to the scheme, that notice has become binding and the trustees or managers have received a copy of the binding notice under section 125(3),

(b)the valuation obtained by the Board under section 143 in respect of the scheme has become binding, and

(c)the Board would have been required to assume responsibility for the scheme under section 127 but for the fact that the condition in subsection (2)(a) of that section was not satisfied.

(3)This subsection applies where—

(a)the Board has issued a scheme failure notice under subsection (2) of section 130 in relation to the scheme, that notice has become binding and the trustees or managers have received a copy of the binding notice under subsection (7) of that section,

(b)the valuation obtained by the Board under section 143 in respect of the scheme has become binding, and

(c)the Board would have been required to assume responsibility for the scheme under section 128 but for the fact that the condition in subsection (2)(a) of that section was not satisfied.

(4)An application under this section must be in the prescribed form, contain the prescribed information and be accompanied by—

(a)a protected benefits quotation in the prescribed form, and

(b)audited scheme accounts for a period which—

(i)begins with such date as may be determined in accordance with regulations, and

(ii)ends with a date which falls within the prescribed period ending with the day on which the application is made.

(5)An application under this section must be made within the authorised period.

(6)In this section “the authorised period” means the prescribed period which begins—

(a)where subsection (2) applies, with the later of—

(i)the day on which the trustees or managers received the copy of the binding notice mentioned in paragraph (a) of that subsection, and

(ii)the day on which they received a copy of the binding valuation mentioned in paragraph (b) of that section, and

(b)where subsection (3) applies, with the later of—

(i)the day on which the trustees or managers received the copy of the binding notice mentioned in paragraph (a) of that subsection, and

(ii)the day on which they received a copy of the binding valuation mentioned in paragraph (b) of that subsection.

(7)Where the Board receives an application under subsection (1), it must give a copy of the application to the Regulator.

(8)For the purposes of this section—

  • audited scheme accounts”, in relation to a scheme, means—

    (a)

    accounts obtained by the trustees or managers of the scheme (“the scheme accounts”) which are prepared in accordance with subsections (9) to (11) and audited by the auditor in relation to the scheme, and

    (b)

    a report by the auditor, in the prescribed form, as to whether or not such requirements as may be prescribed are satisfied in relation to the scheme accounts;

  • auditor”, in relation to a scheme, has the meaning given by section 47 of the Pensions Act 1995 (c. 26);

  • protected benefits quotation”, in relation to a scheme, means a quotation for one or more annuities from one or more insurers, being companies willing to accept payment in respect of the members from the trustees or managers of the scheme, which would provide in respect of each member of the scheme from the reconsideration time—

    (a)

    benefits for or in respect of the member corresponding to the compensation which would be payable to or in respect of the member in accordance with the pension compensation provisions if the Board assumed responsibility for the scheme by virtue of this section, or

    (b)

    benefits in accordance with the member’s entitlement or accrued rights (including pension credit rights within the meaning of section 124(1) of the Pensions Act 1995 (c. 26)) under the scheme rules (other than his entitlement or rights in respect of money purchase benefits),

    whichever benefits can, in the case of that member, be secured at the lower cost;

  • the reconsideration time”, in relation to an application under this section, means the time immediately before the end of the period to which the audited scheme accounts mentioned in subsection (4)(b) relate.

(9)The scheme accounts are prepared in accordance with this subsection if, subject to subsections (10) and (11), they—

(a)include a statement of the assets of the scheme (excluding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules) as at the reconsideration time, and

(b)are prepared in accordance with such other requirements as may be prescribed.

(10)Subject to subsection (11), regulations under subsection (4) of section 143 (other than regulations made by virtue of subsection (5) of that section), and guidance under subsection (6) of that section, apply to the scheme accounts as they apply for the purposes of a valuation under that section.

(11)Regulations may provide that, where an asset of a prescribed description has been acquired during the assessment period, the value assigned to the asset as at the reconsideration time is to be determined, for the purposes of the scheme accounts, in the prescribed manner.

(12)For the purposes of this section—

(a)regulations may prescribe how the cost of securing the benefits mentioned in paragraph (a) of the definition of “protected benefits quotation” in subsection (8) is to be determined, calculated and verified, and

(b)subject to any provision made under paragraph (a), that cost is to be determined, calculated and verified in accordance with guidance issued by the Board.

(13)Where the scheme is being wound up, for the purposes of determining the benefits which fall within paragraph (b) of the definition of “protected benefits quotation” in subsection (8) no account is to be taken of the winding up of the scheme.

152Duty to assume responsibility following reconsiderationE+W+S

(1)This section applies where an application is made in respect of a scheme in accordance with section 151.

(2)The Board must assume responsibility for the scheme in accordance with this Chapter if it is satisfied that the value of the assets of the scheme at the reconsideration time is less than the aggregate of—

(a)the amount quoted in the protected benefits quotation accompanying the application,

(b)the amount at that time of the liabilities of the scheme which are not liabilities to, or in respect of, members of the scheme, and

(c)the estimated costs of winding up the scheme at that time.

(3)Where the Board makes a determination for the purposes of subsection (2), it must issue a determination notice and give a copy of that notice to—

(a)the trustees or managers of the scheme, and

(b)the Regulator.

(4)In subsection (3) “determination notice” means a notice which is in the prescribed form and contains such information about the determination as may be prescribed.

(5)But where the Board is satisfied of the matters mentioned in subsection (2), it is not required to assume responsibility for the scheme under subsection (2) until the determination notice issued under subsection (3) becomes binding.

(6)For the purposes of subsection (5) a determination notice is not binding until—

(a)the period within which the issue of the notice may be reviewed by virtue of Chapter 6 has expired, and

(b)if the issue of the notice is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of and the notice has not been revoked, varied or substituted.

(7)Where a determination notice issued under subsection (3) becomes binding, the Board must as soon as reasonably practicable give a notice to that effect together with a copy of the binding notice to—

(a)the trustees or managers of the scheme, and

(b)the Regulator.

(8)A notice under subsection (7) must be in the prescribed form and contain such information as may be prescribed.

(9)The Board may—

(a)for the purposes of subsection (2), obtain its own valuation of the assets of the scheme as at the reconsideration time (within the meaning of section 151), and

(b)for the purposes of subsection (2)(b), obtain its own valuation of the liabilities of the scheme as at that time;

and where it does so, subsections (9)(b), (10) and (11) of section 151 apply in relation to the valuation as they apply in relation to the scheme accounts (within the meaning of that section).

(10)Regulations under subsection (4) of section 143, and guidance under subsection (6) of that section, apply for the purposes of this section in relation to the estimated costs within subsection (2)(c) as they apply for the purposes of section 143 in relation to protected liabilities within section 131(1)(c).

(11)In this section references to the assets of the scheme do not include assets representing the value of any rights in respect of money purchase benefits under the scheme rules.

(12)This section is subject to sections 146 and 147 (refusal to assume responsibility for a scheme).

Closed schemesE+W+S

153Closed schemesE+W+S

(1)This section applies where section 151(2) or (3) (scheme rescue not possible but scheme has sufficient assets to meet the protected liabilities) applies in relation to an eligible scheme.

(2)If the trustees or managers of the scheme are unable to obtain a full buy-out quotation, they must, within the authorised period, apply to the Board for authority to continue as a closed scheme.

(3)For the purposes of determining whether they must make an application under subsection (2), the trustees or managers of the scheme must take all reasonable steps to obtain a full buy-out quotation in respect of the scheme.

(4)An application under subsection (2) must—

(a)be in the prescribed form and contain the prescribed information, and

(b)be accompanied by evidence in the prescribed form which shows that the trustees or managers of the scheme have complied with the obligation under subsection (3) but were unable to obtain a full buy-out quotation.

(5)Where the Board receives an application under subsection (2), if it is satisfied that the trustees or managers have complied with the obligation under subsection (3) but were unable to obtain a full buy-out quotation, it must authorise the scheme to continue as a closed scheme.

(6)Where the Board determines an application in respect of a scheme under this section, it must issue a determination notice and give a copy of that notice to—

(a)the trustees or managers of the scheme, and

(b)the Regulator.

(7)In this section—

  • authorised period” has the same meaning as in section 151;

  • determination notice” means a notice which is in the prescribed form and contains such information about the determination as may be prescribed;

  • full buy-out quotation”, in relation to a scheme, means a quotation for one or more annuities from one or more insurers (being companies willing to accept payment in respect of the members from the trustees or managers of the scheme) which would provide in respect of each member of the scheme, from a relevant date, benefits in accordance with the member’s entitlement or accrued rights, including pension credit rights, under the scheme rules (other than his entitlement or rights in respect of money purchase benefits);

  • pension credit rights” has the meaning given by section 124(1) of the Pensions Act 1995 (c. 26);

  • relevant date” means a date within the authorised period.

(8)If the trustees or managers of the scheme fail to comply with subsection (2) or (3), section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

Winding upE+W+S

154Requirement to wind up schemes with sufficient assets to meet protected liabilitiesE+W+S

(1)Where, in relation to an eligible scheme, an assessment period within section 132(2) or (4) comes to an end because the conditions in subsection (2) of this section are satisfied, the trustees or managers of the scheme must—

(a)wind up the scheme, or

(b)where the winding up of the scheme began before the assessment period (whether by virtue of section 219 or otherwise), continue the winding up of the scheme.

(2)The conditions are—

(a)that subsection (2) or (3) of section 151 (scheme rescue not possible but scheme has sufficient assets to meet the protected liabilities) applies in relation to the scheme,

(b)that—

(i)the trustees or managers did not make an application under that section or section 153(2) within the authorised period (within the meaning of section 151(6)) (or any such application has been withdrawn), or

(ii)if such an application was made, it has been finally determined, and

(c)that, if an application was made under section 151, the Board is not required to assume responsibility for the scheme by virtue of section 152(2).

(3)For the purposes of subsection (2)(b)(ii) an application is not finally determined until—

(a)the Board has issued a determination notice in respect of the application under section 152 or, as the case may be, section 153,

(b)the period within which the issue of the notice may be reviewed by virtue of Chapter 6 has expired, and

(c)if the issue of the notice is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of.

(4)Where, in relation to an eligible scheme, an assessment period within section 159(3) comes to an end because the conditions in subsection (5) of this section are satisfied, the trustees or managers of the scheme must continue the winding up of the scheme begun (whether in accordance with this section or otherwise) before that assessment period.

(5)The conditions are—

(a)that an application is made by, or notice is given to, the trustees or managers of the scheme under section 157 (applications and notifications where closed schemes have insufficient assets),

(b)that the valuation obtained by the Board in respect of the scheme under section 158(3) has become binding, and

(c)that the Board is not required to assume responsibility for the scheme by virtue of section 158(1) (duty to assume responsibility for closed scheme).

(6)Where a scheme is wound up in accordance with subsection (1)(a), the winding up is to be taken as beginning immediately before the assessment period.

(7)Without prejudice to the power to give directions under section 134, but subject to any order made under subsection (8), the Board may give the trustees or managers of the scheme directions relating to the manner of the winding up of the scheme under this section (and may vary or revoke any such direction given by it).

(8)The Regulator may by order direct any person specified in the order—

(a)to take such steps as are so specified as it considers are necessary as a result of—

(i)the winding up of the scheme beginning, by virtue of subsection (6), immediately before the assessment period, or

(ii)the winding up of the scheme being continued under subsection (1)(b), and

(b)to take those steps within a period specified in the order.

(9)If the trustees or managers of a scheme fail to comply with a direction to them under subsection (7), or contained in an order under subsection (8), section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

(10)That section also applies to any other person who, without reasonable excuse, fails to comply with a direction to him contained in an order under subsection (8).

(11)The winding up of a scheme under this section is as effective in law as if it had been made under powers conferred by or under the scheme.

(12)This section must be complied with in relation to a scheme—

(a)in spite of any enactment or rule of law, or any rule of the scheme, which would otherwise operate to prevent the winding up, and

(b)without regard to any such enactment, rule of law or rule of the scheme as would otherwise require or might otherwise be taken to require the implementation of any procedure or the obtaining of any consent with a view to the winding up.

(13)Where an assessment period in relation to an eligible scheme comes to an end by virtue of the conditions in subsection (2) or (5) being satisfied, subsections (1) to (4) of section 150 apply as they apply where an assessment period comes to an end by virtue of the Board ceasing to be involved with the scheme, except that in subsection (2) of that section the reference to section 219 is to be read as a reference to subsection (6) of this section.

(14)Where a public service pension scheme is required to be wound up under this section, the appropriate authority may by order make provision modifying any enactment in which the scheme is contained or under which it is made.

(15)In subsection (14) “the appropriate authority”, in relation to a scheme, means such Minister of the Crown or government department as may be designated by the Treasury as having responsibility for the particular scheme.

Provisions applying to closed schemesE+W+S

155Treatment of closed schemesE+W+S

(1)In this section “closed scheme” means an eligible scheme which is authorised under section 153 to continue as a closed scheme.

(2)The provisions mentioned in subsection (3) apply in relation to a closed scheme at any time when the trustees or managers of the scheme are required to wind up or continue winding up the scheme under section 154 as if that time fell within an assessment period in relation to the scheme.

(3)The provisions are—

(a)section 40(5) and (6) (Board to act as creditor for debt due by virtue of a contribution notice under section 38);

(b)section 49(5) and (6) (Board to act as creditor for debt due by virtue of a contribution notice under section 47);

(c)section 54(5) and (6) (Board to act as creditor for debt due by virtue of a restoration order under section 52);

(d)section 56(5) and (6) (Board to act as creditor for debt due by virtue of a contribution notice under section 55);

(e)section 133 (admission of new members, payment of contributions etc);

(f)section 134 (directions);

(g)section 137 (Board to act as creditor of the employer).

(4)Regulations may require the trustees or managers of a closed scheme in relation to which the provisions mentioned in subsection (3) apply to comply with such requirements as may be prescribed when providing for the discharge of any liability to, or in respect of, a member of the scheme for pensions or other benefits.

156Valuations of closed schemesE+W+S

(1)Regulations may make provision requiring the trustees or managers of closed schemes to obtain actuarial valuations of the scheme at such intervals as may be prescribed for the purposes of enabling them to determine—

(a)the benefits payable under the scheme rules;

(b)whether to make an application under section 157.

(2)Regulations under this section may prescribe how—

(a)the assets, the full scheme liabilities and the protected liabilities in relation to closed schemes, and

(b)their amount or value,

are to be determined, calculated and verified.

(3)Subject to any provision made under subsection (2), those matters are to be determined, calculated and verified in accordance with guidance issued by the Board.

(4)In calculating the amount of any liabilities for the purposes of a valuation required by virtue of this section, a provision of the scheme rules which limits the amount of the scheme’s liabilities by reference to the value of its assets is to be disregarded.

(5)Nothing in regulations under this section may require the trustees or managers of a closed scheme to obtain an actuarial valuation of the scheme until—

(a)the period within which the issue of the determination notice, under section 153(6), in respect of the Board’s determination to authorise the scheme to continue as a closed scheme, may be reviewed by virtue of Chapter 6 has expired, and

(b)if the issue of the notice is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of and the notice has not been revoked, varied or substituted.

(6)In this section, in relation to a scheme—

  • actuarial valuation” means a written valuation of—

    (a)

    the scheme’s assets,

    (b)

    the full scheme liabilities, and

    (c)

    the protected liabilities in relation to the scheme,

    prepared and signed by the actuary;

  • the actuary” means—

    (a)

    the actuary appointed under section 47(1)(b) of the Pensions Act 1995 (c. 26) (professional advisers) in relation to the scheme, or

    (b)

    if no such actuary has been appointed—

    (i)

    a person with prescribed qualifications or experience, or

    (ii)

    a person approved by the Secretary of State;

“assets” do not include assets representing the value of any rights in respect of money purchase benefits under the scheme rules;

  • closed scheme” has the same meaning as in section 155;

  • full scheme liabilities” means—

    (a)

    the liabilities under the scheme rules to or in respect of members of the scheme,

    (b)

    other liabilities of the scheme, and

    (c)

    the estimated cost of winding up the scheme;

  • liabilities” does not include liabilities in respect of money purchase benefits under the scheme rules.

Reconsideration of closed schemesE+W+S

157Applications and notifications where closed schemes have insufficient assetsE+W+S

(1)If at any time the trustees or managers of a closed scheme become aware that the value of the assets of the scheme is less than the amount of the protected liabilities in relation to the scheme, they must, before the end of the prescribed period beginning with that time, make an application to the Board for it to assume responsibility for the scheme.

(2)Where the Board receives an application under subsection (1), it must give a copy of the application to the Regulator.

(3)If at any time the Regulator becomes aware that the value of the assets of the scheme is less than the amount of the protected liabilities in relation to the scheme, it must give the Board a notice to that effect.

(4)Where the Board receives a notice under subsection (3), it must give the trustees or managers of the scheme a notice to that effect.

(5)The duty imposed by subsection (1) does not apply where the trustees or managers of a closed scheme become aware as mentioned in that subsection by reason of a notice given to them under subsection (4).

(6)The duty imposed by subsection (3) does not apply where the Regulator becomes aware as mentioned in that subsection by reason of a copy of an application made by the trustees or managers of the closed scheme being given to it under subsection (2).

(7)Regulations may require notices and applications under this section to be in the prescribed form and contain the prescribed information.

(8)If the trustees or managers of a closed scheme fail to comply with subsection (1), section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

(9)In this section—

  • assets”, in relation to a scheme, do not include assets representing the value of any rights in respect of money purchase benefits under the scheme rules;

  • closed scheme” has the same meaning as in section 155.

158Duty to assume responsibility for closed schemesE+W+S

(1)Where the trustees or managers of a closed scheme—

(a)make an application under subsection (1) of section 157, or

(b)receive a notice from the Board under subsection (4) of that section,

the Board must assume responsibility for the scheme in accordance with this Chapter if the value of the assets of the scheme at the relevant time was less than the amount of the protected liabilities at that time.

(2)In subsection (1) the reference to the assets of the scheme is a reference to those assets excluding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules.

(3)For the purposes of determining whether the condition in subsection (1) is satisfied, the Board must, as soon as reasonably practicable, obtain an actuarial valuation (within the meaning of section 143) of the scheme as at the relevant time.

(4)Subject to subsection (6), subsection (3) of section 143 applies for those purposes as it applies for the purposes mentioned in subsection (2) of that section (and the definitions contained in paragraphs (b) and (d) of subsection (11) of that section apply accordingly).

(5)Subject to subsection (6), the following provisions apply in relation to a valuation obtained under subsection (3) as they apply in relation to a valuation obtained under section 143—

(a)subsections (4) to (7) and (11)(b) and (d) of that section;

(b)section 144 (approval of valuation), other than subsection (2)(b)(iii) (duty to give copy of approved valuation to employer’s insolvency practitioner);

(c)section 145 (binding valuations), other than subsection (3)(c) (duty to give copy of binding valuation to employer’s insolvency practitioner).

(6)In the application of sections 143 and 145 by virtue of subsection (4) or (5)—

(a)subsections (3), (5) and (11)(b) and (d) of section 143 apply as if the references to “the relevant time” were references to that term as defined in subsection (8) below, and

(b)subsection (2) of section 145 applies as if the reference to section 128(2)(a) included a reference to subsection (1) of this section.

(7)An application under subsection (1) of section 157, or notification under subsection (4) of that section, is to be disregarded for the purposes of subsection (1) if it is made or given during an assessment period (see sections 132 and 159) in relation to the scheme which began before the application was made or notification was given.

(8)In this section—

  • closed scheme” has the same meaning as in section 155;

  • the relevant time” means the time immediately before the application mentioned in subsection (1)(a) was made, or (as the case may be) the notice mentioned in subsection (1)(b) was received, by the trustees or managers of the scheme.

159Closed schemes: further assessment periodsE+W+S

(1)Subsection (3) applies where—

(a)an application is made under subsection (1) of section 157 in relation to a closed scheme, or

(b)the trustees or managers of the scheme receive a notice under subsection (4) of that section.

(2)For the purposes of subsection (1) an application under subsection (1) of section 157, or notification under subsection (4) of that section, is to be disregarded if it is made or given during an assessment period (see section 132 and this section) in relation to the scheme which began before the application was made or notification was given.

(3)An assessment period—

(a)begins when the application is made or the notice is received by the trustees or managers of the scheme, and

(b)ends when—

(i)the trustees or managers receive a transfer notice under section 160, or

(ii)the conditions in section 154(5) (closed scheme with sufficient assets to meet protected liabilities etc) are satisfied in relation to the scheme,

whichever first occurs.

(4)In this section “closed scheme” has the same meaning as in section 155.

Assumption of responsibility for a schemeE+W+S+N.I.

160Transfer noticeE+W+S

(1)This section applies where the Board is required to assume responsibility for a scheme under section 127, 128, 152 or 158.

(2)The Board must give the trustees or managers a notice (a “transfer notice”).

(3)In a case to which section 127 or 128 applies, a transfer notice may not be given until the valuation obtained under section 143 is binding.

(4)In a case to which section 158 applies, a transfer notice may not be given until the valuation obtained under subsection (3) of that section is binding.

(5)A transfer notice may not be given in relation to a scheme during any period when the issue of, or failure to issue, a withdrawal notice under or by virtue of section 146 or 147 (refusal to assume responsibility) is reviewable (see section 149(6)(b)).

(6)The Board must give a copy of any notice given under subsection (2) to—

(a)the Regulator, and

(b)any insolvency practitioner in relation to the employer or, if there is no such insolvency practitioner, the employer.

(7)This section is subject to section 172(1) and (2) (no transfer notice within first 12 months of assessment period or when fraud compensation application is pending).

161Effect of Board assuming responsibility for a schemeE+W+S+N.I.

(1)Where a transfer notice is given to the trustees or managers of an eligible scheme, the Board assumes responsibility for the scheme in accordance with this Chapter.

(2)The effect of the Board assuming responsibility for a scheme is that—

(a)the property, rights and liabilities of the scheme are transferred to the Board, without further assurance, with effect from the time the trustees or managers receive the transfer notice,

(b)the trustees or managers of the scheme are discharged from their pension obligations from that time, and

(c)from that time the Board is responsible for securing that compensation is (and has been) paid in accordance with the pension compensation provisions,

and, accordingly, the scheme is to be treated as having been wound up immediately after that time.

(3)In subsection (2)(a) the reference to liabilities of the scheme does not include any liability to, or in respect of, any member of the scheme, other than—

(a)liabilities in respect of money purchase benefits, and

(b)such other liabilities as may be prescribed.

(4)In subsection (2)(b) “pension obligations” in relation to the trustees or managers of the scheme means—

(a)their obligations to provide pensions or other benefits to or in respect of persons (including any obligation to provide guaranteed minimum pensions within the meaning of the Pension Schemes Act 1993 (c. 48)), and

(b)their obligations to administer the scheme in accordance with the scheme rules and this or any other enactment.

(5)Schedule 6 makes provision in respect of the transfer of the property, rights and liabilities of a scheme under subsection (2)(a).

(6)Regulations may make further provision regarding such transfers.

(7)Without prejudice to the generality of subsection (6), regulations may authorise the Board to modify a term of a relevant contract of insurance if—

(a)any rights or liabilities under the contract are transferred to the Board by virtue of subsection (2)(a), and

(b)as a result of the transfer, the Board is required, by reason of that term, to pay a specified amount or specified amounts to a specified person who, immediately before the time mentioned in subsection (2)(a), was a member of the scheme or a person entitled to benefits in respect of such a member.

(8)In subsection (7)—

  • relevant contract of insurance” means a contract of insurance which—

    (a)

    is entered with a view to securing the whole or part of the scheme’s liability for—

    (i)

    any pension or other benefit payable to or in respect of one particular person whose entitlement to payment of a pension or other benefit has arisen, and

    (ii)

    any benefit which will be payable in respect of that person on his death, and

    (b)

    is a contract—

    (i)

    which may not be surrendered, or

    (ii)

    in respect of which the amount payable on surrender does not exceed the liability secured;

  • specified” means specified in, or determined in accordance with, the contract of insurance.

162The pension compensation provisionsE+W+S

(1)Schedule 7 makes provision for compensation to be paid in relation to a scheme for which the Board assumes responsibility in accordance with this Chapter, including provision for—

(a)periodic compensation to be paid to or in respect of members,

(b)lump sum compensation to be paid to members,

(c)a cap to be imposed on the periodic compensation and lump sum compensation payable, and

(d)annual increases to be made to periodic compensation.

(2)In this Part references to the pension compensation provisions are to the provisions of, and the provisions made by virtue of, this section, sections 140 to 142, 161(2)(c), 164 and 168 and Schedule 7.

(Those references do not include any provision of, or made by virtue of, section 170 (discharge of liabilities in respect of money purchase benefits).)

163Adjustments to be made where the Board assumes responsibility for a schemeE+W+S

(1)This section applies where the Board assumes responsibility for an eligible scheme in accordance with this Chapter.

(2)Any benefits (other than money purchase benefits) which—

(a)were payable under the scheme rules to any member, or to any person in respect of any member, during the period beginning with the assessment date and ending with the receipt by the trustees or managers of the transfer notice, and

(b)have been paid before the trustees or managers receive the transfer notice,

are to be regarded as going towards discharging any liability of the Board to pay compensation to the member or, as the case may be, person in accordance with the pension compensation provisions.

(3)Regulations may provide that, in prescribed circumstances, where—

(a)a member of the scheme died before the commencement of the assessment period, and

(b)during the period mentioned in subsection (2)(a), a person became entitled under the scheme rules to a benefit of a prescribed description in respect of the member,

the benefit, or any part of it, is, for the purposes of subsection (2), to be treated as having become payable before the assessment date.

(4)The Board must—

(a)if any amount paid, during the period mentioned in subsection (2)(a), by the trustees or managers of the scheme to a member, or to a person in respect of a member, exceeded the entitlement of that member or person under the pension compensation provisions, take such steps as it considers appropriate (including adjusting future compensation payments made in accordance with those provisions) to recover an amount equal to the aggregate of—

(i)the amount of the excess, and

(ii)interest on that amount, at the prescribed rate, for the period which begins when the excess was paid by the trustees or managers and ends with the recovery of the excess, and

(b)if any amount so paid was less than that entitlement (or no amount was paid in respect of that entitlement), pay an amount to the member or person concerned equal to the aggregate of—

(i)the amount of the shortfall, and

(ii)interest on that amount, at the prescribed rate, for the period which begins when the shortfall ought to have been paid by the trustees or managers and ends with the payment of the shortfall by the Board.

(5)In subsection (4) references to an amount paid do not include—

(a)an amount paid in respect of any money purchase benefit, or

(b)any other amount of a prescribed description.

(6)Nothing in subsection (4) requires the Board—

(a)to recover any amount from a person in such circumstances as may be prescribed, or

(b)to recover from any person any amount which it considers to be trivial.

(7)In this section “assessment date” is to be construed in accordance with Schedule 7.

164Postponement of compensation entitlement for the assessment periodE+W+S

(1)Regulations may provide that, where the Board assumes responsibility for an eligible scheme, the entitlement of any member of the scheme to compensation under this Chapter is, in such circumstances as may be prescribed, postponed for the whole or any part of the assessment period for which he continued in employment after attaining normal pension age.

(2)Regulations under subsection (1) may provide that the postponement is on such terms and conditions (including those relating to increments) as may be prescribed.

(3)In subsection (1) the reference to “normal pension age” is to normal pension age, within the meaning of paragraph 34 of Schedule 7, in relation to the pension or lump sum in respect of which the entitlement to compensation arises.

165Guaranteed minimum pensionsE+W+S

(1)The Board must notify the Commissioners of Inland Revenue where, by reason of it assuming responsibility for an eligible scheme in accordance with this Chapter, the trustees or managers of the scheme are discharged from their liability to provide a guaranteed minimum pension (within the meaning of the Pension Schemes Act 1993 (c. 48)) to or in respect of a member of the scheme.

(2)Notification under subsection (1) must be given as soon as reasonably practicable.

(3)In section 47 of the Pension Schemes Act 1993 (further provision concerning entitlement to a guaranteed minimum pension for the purposes of section 46), after subsection (7) insert—

(8)For the purposes of section 46, a person shall be treated as entitled to a guaranteed minimum pension to which he would have been entitled but for the fact that the trustees or managers were discharged from their liability to provide that pension on the Board of the Pension Protection Fund assuming responsibility for the scheme.

166Duty to pay scheme benefits unpaid at assessment date etcE+W+S

(1)This section applies where the Board assumes responsibility for a scheme in accordance with this Chapter.

(2)Subject to subsection (4), the Board must pay any amount by way of pensions or other benefits which a person had become entitled to payment of under the scheme rules before the assessment date but which remained unpaid at the time the transfer notice was received by the trustees or managers of the scheme.

(3)If, immediately before the assessment date, the person is entitled to the amount but has postponed payment of it, subsection (2) does not apply.

(4)Subsection (2) does not apply in relation to the amount of—

(a)any transfer payment, or

(b)any payment in respect of a refund of contributions.

(5)Regulations may provide that, in prescribed circumstances, where—

(a)a member of the scheme died before the commencement of the assessment period, and

(b)during the period beginning with the assessment date and ending with the receipt by the trustees or managers of the transfer notice, a person became entitled under the scheme rules to a benefit of a prescribed description in respect of the member,

that person’s entitlement to the benefit, or to any part of it, is, for the purposes of subsection (2), to be treated as having arisen before the assessment date.

(6)Regulations may make provision requiring the Board, in such circumstances as may be prescribed, to take such steps (including making payments) as may be prescribed in respect of rights of prescribed descriptions to which members of the scheme were entitled immediately before the commencement of the assessment period.

(7)For the purposes of regulations made under subsection (6)—

(a)this Chapter (other than this subsection), and

(b)the scheme rules (including any relevant legislative provision within the meaning of section 318(3)),

are to have effect subject to such modifications as may be prescribed.

(8)In this section “assessment date” is to be construed in accordance with Schedule 7.

167Modification of Chapter where liabilities discharged during assessment periodE+W+S

(1)Regulations may modify any of the provisions of this Chapter as it applies to cases—

(a)where any liability to provide pensions or other benefits to or in respect of any member or members under a scheme is discharged during an assessment period in relation to the scheme by virtue of—

(i)regulations under section 135(4), or

(ii)the Board validating any action mentioned in section 135(9), or

(b)where, in prescribed circumstances, any such liability of a prescribed description is discharged on the assessment date but before the commencement of the assessment period.

(2)In this section “assessment date” is to be construed in accordance with Schedule 7.

168Administration of compensationE+W+S

(1)Regulations may make further provision regarding the operation and administration of this Chapter.

(2)Regulations under subsection (1) may, in particular, make provision—

(a)prescribing the manner in which and time when compensation is to be paid (including provision requiring periodic compensation to be paid by instalments);

(b)for calculating the amounts of compensation according to a prescribed scale or otherwise adjusting them to avoid fractional amounts or facilitate computation;

(c)prescribing the circumstances and manner in which compensation to which a person (“the beneficiary”) is entitled may be made to another person on behalf of the beneficiary for any purpose (including the discharge in whole or in part of an obligation of the beneficiary or any other person);

(d)for the payment or distribution of compensation to or among persons claiming to be entitled on the death of any person and for dispensing with strict proof of their title;

(e)for the recovery of amounts of compensation paid by the Board in excess of entitlement (together with interest on such amounts for the period from payment until recovery);

(f)specifying the circumstances in which payment of compensation can be suspended.

(3)In this section “compensation” means compensation payable under Schedule 7 or under section 141(2).

Discharge of Board’s liabilitiesE+W+S

169Discharge of liabilities in respect of compensationE+W+S

(1)This section applies where the Board assumes responsibility for an eligible scheme in accordance with this Chapter.

(2)The Board may provide for the discharge of any liability imposed by this Chapter to provide compensation—

(a)by the taking out of a policy of insurance or a number of such policies;

(b)by the entry into an annuity contract or a number of such contracts;

(c)by the transfer of the benefit of such a policy or policies or such a contract or contracts;

(d)in prescribed circumstances, by the payment of a cash sum calculated in the prescribed manner.

170Discharge of liabilities in respect of money purchase benefitsE+W+S

(1)This subsection applies where—

(a)the Board assumes responsibility for an eligible scheme in accordance with this Chapter, and

(b)one or more members are entitled, or have accrued rights, under the scheme rules to money purchase benefits.

(2)Regulations must make provision in respect of cases to which subsection (1) applies requiring the Board to secure that liabilities in respect of such benefits transferred to the Board under section 161 are discharged by it in the prescribed manner.

(3)The provision made under subsection (2) must include provision prescribing the manner in which protected rights are to be given effect to.

(4)In this section—

“accrued rights”, under the scheme rules of a scheme, include pension credit rights within the meaning of section 124(1) of the Pensions Act 1995 (c. 26);

  • protected rights” has the meaning given by section 10 of the Pension Schemes Act 1993 (c. 48) (protected rights and money purchase benefits).

Equal treatmentE+W+S

171Equal treatmentE+W+S

(1)This section applies where—

(a)a woman has been employed on like work with a man in the same employment,

(b)a woman has been employed on work rated as equivalent with that of a man in the same employment, or

(c)a woman has been employed on work which, not being work in relation to which paragraph (a) or (b) applies, was, in terms of the demands made on her (for instance under such headings as effort, skill and decision), of equal value to that of a man in the same employment,

and service in that employment was pensionable service under an occupational pension scheme.

(2)If, apart from this subsection, any of the payment functions so far as it relates (directly or indirectly) to that pensionable service—

(a)is or becomes less favourable to the woman than it is to the man, or

(b)is or becomes less favourable to the man than it is to the woman,

that function has effect with such modifications as are necessary to ensure that the provision is not less favourable.

(3)Subsection (2) does not operate in relation to any difference as between a woman and a man in the operation of any of the payment functions if the Board proves that the difference is genuinely due to a material factor which—

(a)is not the difference of sex, but

(b)is a material difference between the woman’s case and the man’s case.

(4)Subsection (2) does not apply in such circumstances as may be prescribed.

(5)This section has effect in relation to the exercise of any payment function in so far as it relates (directly or indirectly) to any pensionable service on or after 17th May 1990.

(6)In this section—

  • payment function” means any function conferred on the Board by or by virtue of this Chapter which relates to a person’s entitlement to or the payment of any amount under or by virtue of—

    (a)

    the pension compensation provisions,

    (b)

    section 166 (duty to pay scheme benefits unpaid at assessment date etc),

    (c)

    section 169 (discharge of liabilities in respect of compensation), or

    (d)

    section 170 (discharge of liabilities in respect of money purchase benefits);

  • pensionable service” has the meaning given by section 124(1) of the Pensions Act 1995 (c. 26).

Relationship with fraud compensation regimeE+W+S

172Relationship with fraud compensation regimeE+W+S

(1)No transfer notice may be given in respect of a scheme within the first 12 months of an assessment period in relation to the scheme.

(2)Where an application has been made under section 182 (application for fraud compensation payment), no transfer notice may be given until—

(a)the Board has determined the application,

(b)the period within which the Board’s determination may be reviewed by virtue of Chapter 6 has expired, and

(c)if the determination is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the determination, and

(iii)any appeal against his determination or directions,

has been finally disposed of.

(3)Subsection (4) applies where during an assessment period in relation to a scheme the Board determines to make one or more fraud compensation payments (“the fraud compensation”) to the trustees or managers of the scheme under Chapter 4 of this Part.

(4)For the purposes of determining whether the condition in section 127(2)(a), 128(2)(a), 152(2) or 158(1) is satisfied, any fraud compensation payment which becomes payable after the relevant time is, to the extent that it relates to a loss incurred by the scheme before that time, to be regarded as an asset of the scheme at that time.

(5)For the purposes of subsection (4) “the relevant time”—

(a)in the case of section 127(2)(a), has the same meaning as in that provision,

(b)in the case of section 128(2)(a), has the same meaning as in that provision,

(c)in the case of section 152(2) means the reconsideration time (within the meaning of section 151), and

(d)in the case of section 158(1), has the same meaning as in that provision.

(6)Subsection (4) does not apply to the extent that the fraud compensation is payable in respect of a reduction in the value of money purchase assets of the scheme.

For this purpose “money purchase assets” means assets representing the value of any rights in respect of money purchase benefits under the scheme rules.

The fundE+W+S+N.I.

173Pension Protection FundE+W+S+N.I.

(1)The Pension Protection Fund shall consist of—

(a)property and rights transferred to the Board under section 161(2)(a),

(b)contributions levied under section 174 or 175 (initial and pension protection levies),

(c)money borrowed by the Board under section 115 for the purposes of this Chapter,

(d)any income or capital gain credited under subsection (2),

(e)any amount paid to the Board by virtue of section 139 (repayment of loans to trustees or managers and payment of interest),

(f)amounts recovered under section 163(4)(a) or by virtue of section 168(2)(e) (overpayments),

(g)any amount paid to the Board in respect of a debt due to the Board under section 40(7) by virtue of a contribution notice under section 38,

(h)any property transferred or amounts paid to the Board as required by a restoration order under section 52,

(i)any amount paid to the Board in respect of a debt due to the Board under section 56(7) by virtue of a contribution notice under section 55,

(j)amounts transferred from the Fraud Compensation Fund under section 187 (fraud compensation transfer payments), and

(k)amounts of a prescribed description (other than amounts paid, directly or indirectly, to the Board by the Crown).

(2)The Board must credit to the Pension Protection Fund any income or capital gain arising from the assets in the Fund.

(3)The following are to be paid or transferred out of the Pension Protection Fund—

(a)any sums required to meet liabilities transferred to the Board under section 161(2)(a),

(b)any sums required to make payments in accordance with the pension compensation provisions,

(c)any sums required for the repayment of, and the payment of interest on, money within subsection (1)(c),

(d)any sums required to make loans under section 139 (loans to trustees or managers),

(e)any sums required to make payments under section 163(4)(b) (underpayments during the assessment period),

(f)any sums required to make payments under section 166 (payment of unpaid scheme benefits etc),

(g)any sums required to discharge liabilities under section 169 or 170 (discharge of liabilities in respect of compensation or money purchase benefits),

(h)any sums required to meet any liabilities arising from obligations imposed on the Board by a restoration order under section 52,

(i)any property (other than sums) required to meet any liabilities—

(i)transferred to the Board as mentioned in paragraph (a) and arising from obligations imposed by a restoration order under section 52, or

(ii)arising from obligations imposed on the Board by such an order,

(j)any sums required to meet expenditure incurred by virtue of section 161(5) and paragraph 7 of Schedule 6 (expenditure associated with transfer of property, rights and liabilities to the Board), and

(k)sums required for prescribed purposes.

(4)No other amounts are to be paid or transferred out of the Pension Protection Fund.

(5)In subsection (1) (other than paragraph (d)) and subsection (3) (other than paragraph (c)) any reference to a provision of this Act is to be read as including a reference to any provision in force in Northern Ireland corresponding to that provision.

The leviesE+W+S

174Initial levyE+W+S

(1)Regulations must make provision for imposing a levy (“the initial levy”) in respect of eligible schemes for the period (“the initial period”) which—

(a)begins with the day appointed for this purpose by the regulations, and

(b)ends on the following 31st March or, if the regulations so provide, 12 months after the day referred to in paragraph (a).

(2)The regulations must prescribe—

(a)the factors by reference to which the initial levy is to be assessed,

(b)the rate of the levy, and

(c)the time or times during the initial period when the levy, or any instalment of the levy, becomes payable.

(3)Regulations under this section may only be made with the approval of the Treasury.

175Pension protection leviesE+W+S

(1)For each financial year falling after the initial period, the Board must impose both of the following—

(a)a risk-based pension protection levy in respect of all eligible schemes;

(b)a scheme-based pension protection levy in respect of eligible schemes.

In this Chapter “pension protection levy” means a levy imposed in accordance with this section.

(2)For the purposes of this section—

(a)a risk-based pension protection levy is a levy assessed by reference to—

(i)the difference between the value of a scheme’s assets (disregarding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules) and the amount of its protected liabilities,

(ii)except in relation to any prescribed scheme or scheme of a prescribed description, the likelihood of an insolvency event occurring in relation to the employer in relation to a scheme, and

(iii)if the Board considers it appropriate, one or more other risk factors mentioned in subsection (3), and

(b)a scheme-based pension protection levy is a levy assessed by reference to—

(i)the amount of a scheme’s liabilities to or in respect of members (other than liabilities in respect of money purchase benefits), and

(ii)if the Board considers it appropriate, one or more other scheme factors mentioned in subsection (4).

(3)The other risk factors referred to in subsection (2)(a)(iii) are factors which the Board considers indicate one or more of the following—

(a)the risks associated with the nature of a scheme’s investments when compared with the nature of its liabilities;

(b)such other matters as may be prescribed.

(4)The other scheme factors referred to in subsection (2)(b)(ii) are—

(a)the number of persons who are members, or fall within any description of member, of a scheme;

(b)the total annual amount of pensionable earnings of active members of a scheme;

(c)such other factors as may be prescribed.

(5)The Board must, before the beginning of each financial year, determine in respect of that year—

(a)the factors by reference to which the pension protection levies are to be assessed,

(b)the time or times by reference to which those factors are to be assessed,

(c)the rate of the levies, and

(d)the time or times during the year when the levies, or any instalment of levy, becomes payable.

(6)Different risk factors, scheme factors or rates may be determined in respect of different descriptions of scheme.

(7)The rate determined in respect of a description of scheme may be nil.

(8)In this section—

  • initial period” is to be construed in accordance with section 174;

  • pensionable earnings”, in relation to an active member under a scheme, means the earnings by reference to which a member’s entitlement to benefits would be calculated under the scheme rules if he ceased to be an active member at the time by reference to which the factor within subsection (4)(b) is to be assessed.

(9)In this section and sections 176 to 181 “financial year” means a period of 12 months ending with 31st March.

(10)The Board’s duty to impose pension protection levies in respect of any financial year is subject to—

(a)section 177 (amounts to be raised by the pension protection levies), and

(b)section 180 (transitional provision).

176Supplementary provisions about pension protection leviesE+W+S

(1)The Board must consult such persons as it considers appropriate in the prescribed manner before making a determination under section 175(5) in respect of a financial year if—

(a)that year is the first financial year for which the Board is required to impose levies under section 175,

(b)any of the proposed levy factors or levy rates is different, or applies to a different description of scheme, from the levy factors and levy rates in respect of the pension protection levies imposed in the previous financial year, or

(c)no consultation has been required under this subsection in relation to the pension protection levies imposed for either of the previous two financial years.

(2)The Board must publish details of any determination under section 175(5) in the prescribed manner.

177Amounts to be raised by the pension protection leviesE+W+S

(1)Before determining the pension protection levies to be imposed for a financial year, the Board must estimate the amount which will be raised by the levies it proposes to impose.

(2)The Board must impose levies for a financial year in a form which it estimates will raise an amount not exceeding the levy ceiling for the financial year.

(3)The pension protection levies imposed for a financial year must be in a form which the Board estimates will result in at least 80% of the amount raised by the levies for that year being raised by the risk-based pension protection levy.

(4)For the first financial year after the transitional period, regulations may modify subsection (2) so as to provide that the reference to the levy ceiling for the financial year is to be read as a reference to such lower amount as is prescribed.

(5)For the second financial year after the transitional period and for any subsequent financial year, the Board must impose pension protection levies in a form which it estimates will raise an amount which does not exceed by more than 25% the amount estimated under subsection (1) in respect of the pension protection levies imposed for the previous financial year.

(6)The Secretary of State may by order substitute a different percentage for the percentage for the time being specified in subsection (5).

(7)Before making an order under subsection (6), the Secretary of State must consult such persons as he considers appropriate.

(8)Regulations under subsection (4), or an order under subsection (6), may be made only with the approval of the Treasury.

(9)In this section—

(a)“risk-based pension protection levy” and “scheme-based pension protection levy” are to be construed in accordance with section 175, and

(b)transitional period” has the meaning given by section 180(3).

178The levy ceilingE+W+S

(1)The Secretary of State must, before the beginning of each financial year for which levies are required to be imposed under section 175, specify by order the amount which is to be the levy ceiling for that year for the purposes of section 177.

(2)An order under subsection (1) in respect of the first financial year for which levies are imposed under section 175 may be made only with the approval of the Treasury.

(3)Subject to subsection (8), the amount specified under subsection (1) for a financial year (“the current year”) after the first year for which levies are imposed under section 175 must be—

(a)where it appears to the Secretary of State that the level of earnings in the review period has increased, the amount specified under subsection (1) for the previous financial year increased by the earnings percentage for that review period specified under subsection (6), and

(b)in any other case, the amount specified under subsection (1) for the previous financial year.

(4)In subsection (3)—

  • level of earnings” means the general level of earnings obtaining in Great Britain;

  • review period” in relation to the current year means the period of 12 months ending with the prescribed date in the previous financial year.

(5)For the purposes of subsection (3), the Secretary of State must, in respect of each review period, review the general level of earnings obtaining in Great Britain and any changes in that level; and for the purposes of such a review the Secretary of State may estimate the general level of earnings in such manner as he thinks appropriate.

(6)Where it appears to the Secretary of State that the general level of earnings has increased during the review period, he must by order specify the percentage by which that level has so increased (“the earnings percentage”).

(7)The Secretary of State must discharge the duties imposed by subsections (5) and (6) in respect of a review period before the beginning of the prescribed period which ends at the time the first financial year after the review period begins.

(8)The Secretary of State may, on the recommendation of the Board and with the approval of the Treasury, make an order under subsection (1) in respect of a financial year which specifies an amount exceeding the amount required to be specified under subsection (3).

(9)Before making a recommendation for the purposes of subsection (8), the Board must consult such persons as it considers appropriate in the prescribed manner.

179Valuations to determine scheme underfundingE+W+S

(1)For the purposes of enabling risk-based pension protection levies (within the meaning of section 175) to be calculated in respect of eligible schemes, regulations may make provision requiring the trustees or managers of each such scheme to provide the Board or the Regulator on the Board’s behalf—

(a)with an actuarial valuation of the scheme at such intervals as may be prescribed, and

(b)with such other information as the Board may require in respect of the assets and protected liabilities of the scheme at such times as may be prescribed.

(2)For the purposes of this section, in relation to a scheme—

  • an actuarial valuation” means a written valuation of the scheme’s assets and protected liabilities prepared and signed by the actuary;

  • the actuary” means—

    (a)

    the actuary appointed under section 47(1)(b) of the Pensions Act 1995 (c. 26) (professional advisers) in relation to the scheme, or

    (b)

    if no such actuary has been appointed—

    (i)

    a person with prescribed qualifications or experience, or

    (ii)

    a person approved by the Secretary of State.

(3)Regulations under this section may prescribe how—

(a)the assets and the protected liabilities of schemes, and

(b)their amount or value,

are to be determined, calculated and verified.

(4)Subject to any provision made under subsection (3), those matters are to be determined, calculated and verified in accordance with guidance issued by the Board.

(5)In calculating the amount of any liabilities for the purposes of a valuation required by virtue of this section, a provision of the scheme rules which limits the amount of the scheme’s liabilities by reference to the value of its assets is to be disregarded.

(6)In this section references to “assets” do not include assets representing the value of any rights in respect of money purchase benefits under the scheme rules.

180Pension protection levies during the transitional periodE+W+S

(1)Regulations may provide that in respect of any financial year during the transitional period—

(a)sections 175 and 177(3) are to apply with such modifications as may be prescribed;

(b)section 177(2) is to apply as if the reference to the levy ceiling for the financial year were a reference to such lower amount as is specified in the regulations.

(2)Regulations which contain provision made by virtue of subsection (1)(b) may only be made with the approval of the Treasury.

(3)For the purposes of this section “the transitional period” means the prescribed period beginning immediately after the initial period (within the meaning of section 174).

(4)If the transitional period begins with a date other than 1st April, regulations may provide that any provision of this section or of sections 175 to 179 applies, with such modifications as may be prescribed, in relation to—

(a)the period beginning at the same time as the transitional period and ending with the following 31st March, and

(b)the financial year which begins immediately after that period.

181Calculation, collection and recovery of leviesE+W+S

(1)This section applies in relation to—

(a)the initial levy imposed under section 174 in respect of a scheme, and

(b)any pension protection levy imposed under section 175 in respect of a scheme.

(2)The levy is payable to the Board by or on behalf of—

(a)the trustees or managers of the scheme, or

(b)any other prescribed person.

(3)The Board must in respect of the levy—

(a)determine the schemes in respect of which it is imposed,

(b)calculate the amount of the levy in respect of each of those schemes, and

(c)notify any person liable to pay the levy in respect of the scheme of the amount of the levy in respect of the scheme and the date or dates on which it becomes payable.

(4)The Board may require the Regulator to discharge, on the Board’s behalf, its functions under subsection (3) in respect of the levy.

(5)Where a scheme is an eligible scheme for only part of the period for which the levy is imposed, except in prescribed circumstances, the amount of the levy payable in respect of the scheme for that period is such proportion of the full amount as that part bears to that period.

(6)An amount payable by a person on account of the levy is a debt due from him to the Board.

(7)An amount so payable may be recovered—

(a)by the Board, or

(b)if the Board so determines, by the Regulator on its behalf.

(8)Regulations may make provision relating to—

(a)the collection and recovery of amounts payable by way of any levy in relation to which this section applies;

(b)the circumstances in which any such amount may be waived.

Chapter 4E+W+S+N.I.Fraud compensation

Entitlement to fraud compensationE+W+S

182Cases where fraud compensation payments can be madeE+W+S

(1)The Board shall, in accordance with this section, make one or more payments (in this Part referred to as “fraud compensation payments”) in respect of an occupational pension scheme if—

(a)the scheme is not a prescribed scheme or a scheme of a prescribed description,

(b)the value of the assets of the scheme has been reduced since the relevant date and the Board considers that there are reasonable grounds for believing that the reduction was attributable to an act or omission constituting a prescribed offence,

(c)subsection (2), (3) or (4) applies,

(d)an application is made which meets the requirements of subsection (5), and

(e)the application is made within the authorised period.

(2)This subsection applies where—

(a)a qualifying insolvency event has occurred in relation to the employer in relation to the scheme,

(b)after that event, a scheme failure notice has been issued under section 122(2)(a) in relation to the scheme and that notice has become binding, and

(c)a cessation event has not occurred in relation to the scheme in respect of a cessation notice which has been issued during the period—

(i)beginning with the occurrence of the insolvency event, and

(ii)ending immediately before the issuing of the scheme failure notice under section 122(2)(a),

and the occurrence of such a cessation event in respect of a cessation notice issued during that period is not a possibility.

(3)This subsection applies where—

(a)in relation to the scheme, an application has been made under subsection (1), or a notification has been given under subsection (5)(a), of section 129, and

(b)in response to that application, or the notice given by the Regulator under subsection (4) of that section, the Board has issued a scheme failure notice under section 130(2) in relation to the scheme and that notice has become binding.

(4)This subsection applies where—

(a)the scheme is not an eligible scheme,

(b)the employer in relation to the scheme is unlikely to continue as a going concern,

(c)the prescribed requirements are met in relation to the employer,

(d)the application under this section states that the case is one in relation to which paragraphs (b) and (c) apply, and

(e)in response to that application the Board has issued a notice under section 183(2) confirming that a scheme rescue is not possible in relation to the scheme and that notice has become binding.

(5)An application meets the requirements of this subsection if—

(a)it is made by a prescribed person, and

(b)it is made in the prescribed manner and contains the prescribed information.

(6)Subject to subsection (7), an application is made within the authorised period if it is made within the period of 12 months beginning with the later of—

(a)the time of the relevant event, or

(b)the time when the auditor or actuary of the scheme, or the trustees or managers, knew or ought reasonably to have known that a reduction of value falling within subsection (1)(b) had occurred,

or within such longer period as the Board may determine in any case.

(7)No application for fraud compensation may be made under this section in respect of a scheme once a transfer notice is given in relation to the scheme under section 160.

(8)For the purposes of this section, an insolvency event (“the current event”) in relation to the employer is a qualifying insolvency event if—

(a)it occurs on or after the day appointed under section 126(2), and

(b)either—

(i)it is the first insolvency event to occur in relation to the employer on or after that day, or

(ii)a cessation event has occurred in relation to the scheme in respect of a cessation notice issued during the period—

(a)beginning with the occurrence of the last insolvency event which occurred before the current event, and

(b)ending with the occurrence of the current event.

(9)For the purposes of this section—

(a)a cessation event in relation to a scheme occurs when a cessation notice in relation to the scheme becomes binding,

(b)a “cessation notice” means—

(i)a withdrawal notice issued in relation to the scheme under section 122(2)(b) (scheme rescue has occurred),

(ii)a withdrawal notice issued in relation to the scheme under section 130(3) (scheme rescue has occurred),

(iii)a withdrawal notice issued in relation to the scheme under section 148 (no insolvency event has occurred or is likely to occur),

(iv)a notice issued in relation to the scheme under section 183(2)(b) (scheme rescue has occurred), or

(v)a notice issued under section 122(4) (inability to confirm status of scheme) in a case where the notice has become binding and section 148 does not apply,

(c)the occurrence of a cessation event in relation to a scheme in respect of a cessation notice issued during a particular period (“the specified period”) is a possibility until each of the following are no longer reviewable—

(i)any cessation notice which has been issued in relation to the scheme during the specified period,

(ii)any failure to issue such a cessation notice during the specified period,

(iii)any notice which has been issued by the Board under Chapter 2 or 3 which is relevant to the issue of a cessation notice in relation to the scheme during the specified period or to such a cessation notice which has been issued during that period becoming binding,

(iv)any failure to issue such a notice as is mentioned in sub-paragraph (iii), and

(d)the issue of, or failure to issue, a notice is to be regarded as reviewable—

(i)during the period within which it may be reviewed by virtue of Chapter 6, and

(ii)if the matter is so reviewed, until—

(a)the review and any reconsideration,

(b)any reference to the PPF Ombudsman in respect of the matter, and

(c)any appeal against his determination or directions,

has been finally disposed of.

(10)In this section—

  • “auditor” and “actuary”, in relation to an occupational pension scheme, have the meaning given by section 47 of the Pensions Act 1995 (c. 26);

  • the relevant event” means—

    (a)

    in a case where subsection (2) applies in relation to an eligible scheme, the event within paragraph (a) of that subsection,

    (b)

    in any other case where subsection (2) applies, the issue of the scheme failure notice under section 122(2)(a) mentioned in paragraph (b) of that subsection,

    (c)

    in a case where subsection (3) applies, the event within paragraph (a) of that subsection, and

    (d)

    in a case where subsection (4) applies, the trustees or managers becoming aware that paragraphs (b) and (c) of that subsection apply in relation to the scheme;

  • the relevant date” means—

    (a)

    in the case of an occupational pension scheme established under a trust, 6th April 1997, and

    (b)

    in any other case, the day appointed by the Secretary of State by order for the purposes of this section.

(11)This section is subject to section 184(2) (no fraud compensation payments to be made until settlement date determined).

183Board’s duties in respect of certain applications under section 182E+W+S

(1)This section applies where, in a case to which paragraphs (a) to (c) of subsection (4) of section 182 apply (employer not likely to continue as going concern etc), the Board receives an application within paragraph (d) of that subsection.

(2)If the Board is able to confirm—

(a)that a scheme rescue is not possible, or

(b)that a scheme rescue has occurred,

it must, as soon as reasonably practicable, issue a notice to that effect.

(3)Where the Board issues a notice under subsection (2), it must, as soon as reasonably practicable, give a copy of the notice to—

(a)the Regulator,

(b)the trustees or managers of the scheme,

(c)if the trustees or managers did not make the application mentioned in subsection (1), the person who made that application, and

(d)any insolvency practitioner in relation to the employer or, if there is no such insolvency practitioner, the employer.

(4)For the purposes of this Chapter a notice issued under subsection (2) is not binding until—

(a)the period within which the issue of the notice may be reviewed by virtue of Chapter 6 has expired, and

(b)if the issue of the notice is so reviewed—

(i)the review and any reconsideration,

(ii)any reference to the PPF Ombudsman in respect of the issue of the notice, and

(iii)any appeal against his determination or directions,

has been finally disposed of and the notice has not been revoked, varied or substituted.

(5)Where a notice issued under subsection (2) becomes binding, the Board must as soon as reasonably practicable give a notice to that effect together with a copy of the binding notice to the persons to whom it is required to give a copy notice under subsection (3).

(6)A notice under subsection (5) must be in the prescribed form and contain such information as may be prescribed.

(7)Section 130(5) (circumstances in which scheme rescue can or cannot be confirmed) applies for the purposes of this section.

184Recovery of valueE+W+S

(1)Where an application for a fraud compensation payment is made, the trustees or managers must obtain any recoveries of value, to the extent that they may do so without disproportionate cost and within a reasonable time.

(2)No fraud compensation payment may be made until the date (“the settlement date”) determined by the Board, after consulting the trustees or managers of the scheme in question, as the date after which further recoveries of value are unlikely to be obtained without disproportionate cost or within a reasonable time.

(3)In this section “recovery of value” means any increase in the value of the assets of the scheme, being an increase attributable to any payment received (otherwise than from the Board) by the trustees or managers of the scheme in respect of any act or omission—

(a)which there are reasonable grounds for believing constituted an offence prescribed for the purposes of paragraph (b) of section 182(1), and

(b)to which any reduction in value falling within that paragraph was attributable.

(4)It is for the Board to determine whether anything received by the trustees or managers of the scheme is to be treated as a payment received in respect of any such act or omission.

For this purpose “payment” includes any money or money’s worth.

185Fraud compensation paymentsE+W+S

(1)Where the Board determines to make one or more fraud compensation payments, it must make the payment or payments to the trustees or managers of the scheme in accordance with this section.

(2)A fraud compensation payment may be made on such terms (including terms requiring repayment in whole or in part) and on such conditions as the Board considers appropriate.

(3)The amount of the payment (or, if there is more than one, the aggregate) must not exceed the difference between—

(a)the amount of the reduction (or, if more than one, the aggregate amount of the reductions) within section 182(1)(b), and

(b)the amount of any recoveries of value obtained before the settlement date (within the meaning of section 184(2)).

(4)Subject to subsection (3), the Board—

(a)must determine the amount of any fraud compensation payment in accordance with regulations made for the purposes of this subsection, and

(b)must take account of any interim payment already made under section 186.

(5)The Board must give written notice of its determination under subsection (4) to—

(a)the Regulator,

(b)the trustees or managers of the scheme,

(c)if the trustees or managers did not make the application under section 182 (fraud compensation payments), the person who made that application, and

(d)any insolvency practitioner in relation to the employer or, if there is no such insolvency practitioner, the employer.

186Interim paymentsE+W+S

(1)The Board may, on an application under section 182, make a payment or payments to the trustees or managers of an occupational pension scheme if—

(a)it is of the opinion that—

(i)the case is one to which subsection (1) of that section applies or may apply, and