Pensions Act 2004 Explanatory Notes

Summary

866.This Part outlines a number of measures which will apply to occupational and personal pension schemes. These largely fall into three groups of provisions. The first group of measures provides simplification or easements for the administration of pension schemes. Requirements for member-nominated trustees, payments by employers, amendments to the Pensions Compensation Board (before its functions are subsumed into the Pension Protection Fund), internal dispute resolution, contracting out and the new subsisting rights provisions fall into this category. Additionally, changes to the mandatory annual increase in the rate of certain pensions will provide scope for financial easements to companies running such schemes.

867.Other provisions in this Part will extend the obligations of employers and schemes. For example, sections 247 – 249 impose an obligation on trustees to have a certain level of knowledge and understanding in order to carry out their functions as trustees. Trustees will also be required to draw up a Statement of Investment Principles and review this at least every three years. Sections 257 and 258 provide pension protection for employees who are subject to a transfer of employment.

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