The Occupational Pension Schemes (Pensions Compensation Provisions) Amendment Regulations 2001

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Occupational Pension Schemes (Pensions Compensation Provisions) Regulations 1997 (“the 1997 Regulations”) which make provision in relation to the payment, by the Pensions Compensation Board under sections 81 to 85 (“the compensation provisions”) of the Pensions Act 1995 (“the 1995 Act”), of compensation to occupational pension schemes whose assets have been reduced in value as a result of certain acts or omissions. These amendments are made in consequence of changes made to the compensation provisions by section 17 of the Welfare Reform and Pensions Act 1999 in connection with the criteria which must be met when an occupational pension scheme seeks compensation from the Board, and with the maximum amount of compensation payable.

In particular, the 1997 Regulations are amended to specify the class of members in respect of whom liabilities of the scheme are included among the liabilities by reference to which “the protection level” is calculated under section 81(2A) of the 1995 Act (regulation 2(2)), and to remove the 90 per cent. limit by reference to which the maximum amount of compensation, and the amount of interest and of payments made in anticipation, are calculated (regulation 2(3) and (4)). Equivalent amendments are also made in regulation 10 of the 1997 Regulations, which modifies sections 81 and 83 of the 1995 Act, and other provisions of those Regulations, in their application to money purchase schemes and “ear-marked schemes” (where money purchase benefits may be provided) (regulation 2(5)).

These Regulations do not impose any charge on business.