Pensions Act 2004

Reconsideration E+W+S

151 Application for reconsideration E+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) [F1 the determination made by the Board or valuation obtained by the Board in respect of the scheme under section 143(2)] 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) [F2 the determination made by the Board or valuation obtained by the Board in respect of the scheme under section 143(2)] 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, [F3 or evidence in the prescribed form which shows that the trustees or managers of the scheme have taken all reasonable steps to obtain a protected benefits quotation but were unable to do so,] 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 [F4 determination or] valuation mentioned in paragraph (b) of that [F5 subsection], 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 [F6 determination or] 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 [F7 under section 143(2)(b)].

(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.

Textual Amendments

F1 Words in s. 151(2)(b) substituted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 9(2); S.I. 2012/1681, art. 3(b)(ii)

F2 Words in s. 151(3)(b) substituted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 9(2); S.I. 2012/1681, art. 3(b)(ii)

F3 Words in s. 151(4)(a) inserted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 14; S.I. 2012/1681, art. 3(b)(iii)

F4 Words in s. 151(6)(a)(ii) inserted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 9(3)(a); S.I. 2012/1681, art. 3(b)(ii)

F5 Word in s. 151(6)(a)(ii) substituted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 9(3)(b); S.I. 2012/1681, art. 3(b)(ii)

F6 Words in s. 151(6)(b)(ii) inserted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 9(3)(a); S.I. 2012/1681, art. 3(b)(ii)

F7 Words in s. 151(10) substituted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 9(4); S.I. 2012/1681, art. 3(b)(ii)

Modifications etc. (not altering text)

C1 Pt. 2 modified (8.3.2005 for specified purposes, 6.4.2005 in so far as not already in force) by The Pension Protection Fund (Partially Guaranteed Schemes) (Modification) Regulations 2005 (S.I. 2005/277), regs. 1(1), 2-11

C2 Pt. 2 modified in part (9.3.2005 for specified purposes, 1.4.2005 for specified purposes, 6.4.2005 in so far as not already in force (except ch. 4)) by The Pension Protection Fund (Multi-employer Schemes) (Modification) Regulations 2005 (S.I. 2005/441), regs. 1, 2-60, 71, 72

Commencement Information

I1 S. 151(1)-(3)(5)(7)(9)(a)(10)(11)(12)(b)(13) in force in so far as not already in force except paragraph (a) in the definition of “audited scheme accounts” [which is in s. 151(8)] and (12)(a) at 6.4.2005 by S.I. 2005/275, art. 2(7), Sch. Pt. 7

I2 S. 151(4)(6)(9)(b) in force for the purpose only of conferring power to make regulations, orders or rules, as the case may be, 10.2.2005; and for all other purposes at 6.4.2005 in so far as not already in force by S.I. 2005/275, art. 2(3), Sch. Pt. 3

I3 S. 151(8) in force in so far as it relates to paragraph (b) of the definition of "audited scheme accounts" for the purpose only of conferring power to make regulations, orders or rules, as the case may be, 10.2.2005; and for all other purposes in relation to that paragraph of that definition at 6.4.2005 for specified purposes by S.I. 2005/275, art. 2(3), Sch. Pt. 3

I4 S. 151(8) in force in so far as not already in force except paragraph (a) in the definition of “audited scheme accounts” [which is in s. 151(8)] and (12)(a) at 6.4.2005 for specified purposes by S.I. 2005/275, art. 2(7), Sch. Pt. 7

I5 S. 151(8) in force at 1.4.2006 in so far as not already in force by S.I. 2006/560, art. 2(2), Sch. Pt. 2

152 Duty to assume responsibility following reconsideration E+W+S

(1) This section applies where an application is made in respect of a scheme in accordance with section 151.

[F8 (1A) Subsection (2) applies where the application is accompanied by a protected benefits quotation.]

(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.

[F9 (2A) Subsection (2B) applies where—

(a) the application is accompanied by evidence in the prescribed form which shows that the trustees or managers of the scheme have taken all reasonable steps to obtain a protected benefits quotation but were unable to do so, and

(b) the Board is satisfied that that is the case.

(2B) 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 amount of the protected liabilities at that time.]

(3) Where the Board makes a determination for the purposes of subsection (2) [F10 or (2B)], it must issue [F11 a notice to that effect (a “determination notice”)] and give a copy of that notice to—

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

(b) the Regulator.

F12 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) But where the Board is satisfied of the matters mentioned in subsection (2) [F13 or (2B)], it is not required to assume responsibility for the scheme [F14 under that subsection] 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.

F15 (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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) [F16 Where subsection (2) applies, 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).

[F17 (10A) The Board may, for the purposes of subsection (2B), obtain its own valuation of the assets of the scheme and the protected liabilities of the scheme as at the reconsideration time (within the meaning of section 151).

(10B) A valuation under subsection (10A) must be prepared in accordance with such requirements as may be prescribed.

(10C) Section 143(3) to (6) applies in relation to a determination under subsection (2B) and a valuation under subsection (10A) as it applies in relation to a determination under section 143(2)(a) and an actuarial valuation obtained under section 143(2)(b).

(10D) In the application of section 143 by virtue of subsection (10C)—

(a) references to the relevant time are to be read as references to the reconsideration time (within the meaning of section 151), and

(b) references to the pre-approval period are to be read as references to the period which begins immediately after the reconsideration time, and ends immediately before the Board first issues a determination notice under this section.]

(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).

Textual Amendments

F8 S. 152(1A) inserted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 15(2); S.I. 2012/1681, art. 3(b)(iii)

F9 S. 152(2A)(2B) inserted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 15(3); S.I. 2012/1681, art. 3(b)(iii)

F10 Words in s. 152(3) inserted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 15(4)(a); S.I. 2012/1681, art. 3(b)(iii)

F11 Words in s. 152(3) substituted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 15(4)(b); S.I. 2012/1681, art. 3(b)(iii)

F12 S. 152(4) omitted (23.7.2012) by virtue of Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 15(5); S.I. 2012/1681, art. 3(b)(iii)

F13 Words in s. 152(5) inserted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 15(6)(a); S.I. 2012/1681, art. 3(b)(iii)

F14 Words in s. 152(5) substituted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 15(6)(b); S.I. 2012/1681, art. 3(b)(iii)

F15 S. 152(8) omitted (23.7.2012) by virtue of Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 15(7); S.I. 2012/1681, art. 3(b)(iii)

F16 Words in s. 152(10) substituted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 15(8); S.I. 2012/1681, art. 3(b)(iii)

F17 S. 152(10A)-(10D) inserted (23.7.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 15(9); S.I. 2012/1681, art. 3(b)(iii)

Commencement Information

I6 S. 152(1)-(3)(5)-(7)(9)-(12) in force at 6.4.2005 by S.I. 2005/275, art. 2(7), Sch. Pt. 7