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The Occupational Pension Schemes (Administration and Disclosure) (Amendment) Regulations 2018

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Statutory Instruments

2018 No. 233

Pensions

The Occupational Pension Schemes (Administration and Disclosure) (Amendment) Regulations 2018

Made

22nd February 2018

Laid before Parliament

26th February 2018

Coming into force in accordance with regulation 1

The Secretary of State for Work and Pensions makes the following Regulations in exercise of the powers conferred by sections 113(1), (2A), (3) and (5) to (7), 181(1), 182(2) and (3) and 183(1) of the Pension Schemes Act 1993(1).

In accordance with section 113(9) of the Pension Schemes Act 1993(2), the Secretary of State has consulted the Financial Conduct Authority and the Treasury and, in accordance with section 185(1) of that Act, has consulted such persons as the Secretary of State considers appropriate(3).

Citation, commencement and interpretation

1.—(1) These Regulations may be cited as the Occupational Pension Schemes (Administration and Disclosure) (Amendment) Regulations 2018 and, except as provided for below, come into force on 6th April 2018.

(2) The amendments made by regulation 3(3), (7) and (8), in so far as this inserts paragraph 5A in Schedule 6 to the Disclosure Regulations 2013, come into force on 6th April 2019.

(3) Where the most recent scheme year for a relevant scheme ends before 6th April 2018, the amendments made by regulations 2, 3(2), 3(4) to (6) and (8), in so far as they insert paragraph 5B in Schedule 6 to the Disclosure Regulations 2013, come into force for such a scheme on the last day of the first scheme year for that scheme to end on or after 6th April 2018.

(4) For the purposes of this regulation, “relevant scheme” and “scheme year” have t6e same meaning as in regulation 1 (interpretation) of the Scheme Administration Regulations 1996.

(5) In these Regulations—

“the Disclosure Regulations 2013” means the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013(4); and

“the Scheme Administration Regulations 1996” means the Occupational Pension Schemes (Scheme Administration) Regulations 1996(5).

Amendment of the Scheme Administration Regulations 1996

2.—(1) Regulation 23 (annual statement regarding governance)(6) of the Scheme Administration Regulations 1996 is amended as follows.

(2) For sub-paragraph (1)(c)(i), substitute—

(i)state the level of charges and transaction costs applicable to each default arrangement during the scheme year;.

(3) For sub-paragraph (1)(c)(ii), substitute—

(ii)state the levels of charges and transaction costs applicable to each fund which members are able to select and in which assets relating to members are invested during the scheme year;.

(4) After sub-paragraph (1)(c), insert—

(ca)include, in relation to the charges and transaction costs which trustees or managers are required to calculate in accordance with regulation 25(1)(a) of these Regulations, an illustrative example of the cumulative effect over time of the application of those charges and costs on the value of a member’s accrued rights to money purchase benefits;.

(5) After paragraph (1), insert—

(1A) In complying with the requirements imposed by paragraph (1)(c)(i), (ii) and (ca), the trustees or managers must have regard to guidance prepared from time to time by the Secretary of State..

Amendment of the Disclosure Regulations 2013

3.—(1) The Disclosure Regulations 2013 are amended as follows.

(2) In regulation 4(1) (application of these Regulations)(7), for “and 25” substitute “, 25 and, where the scheme is a relevant scheme within the meaning of the Occupational Pension Schemes (Scheme Administration) Regulations 1996, regulation 29A.(8)”.

(3) After regulation 12 (annual report), insert—

Additional information available on request: pooled funds

12A.(1) Where the scheme is a relevant scheme within the meaning of the Occupational Pension Schemes (Scheme Administration) Regulations 1996, a statement containing the information listed in paragraph 35 of Schedule 3(9) must be given on request to a member, or to a recognised trade union on behalf of the member, in accordance with this regulation.

(2) The statement must be given within two months of the date the request is made and it must be given in accordance with regulation 26 (giving information and documents).

(3) A statement is not required to be given where the request is made—

(a)less than 6 months after the last occasion on which information was given to or in respect of the member under this regulation; or

(b)by a recognised trade union unless it is relevant to the rights of a member who is in that recognised trade union..

(4) In regulation 26 (giving information and documents), after paragraph (4), insert—

(4A) The provisions of paragraph (4) do not apply where regulation 29A applies to the information..

(5) In regulation 27(1) (provision of information on a website), at the beginning insert “Except where regulation 29A provides otherwise,”.

(6) After regulation 29 (giving information and documents in certain cases), insert—

Publishing charges and transaction costs

29A.(1) Where the scheme is a relevant scheme within the meaning of the Occupational Pension Schemes (Scheme Administration) Regulations 1996, the information specified in paragraph (2) must be made publicly available free of charge on a website in accordance with this regulation.

(2) The specified information is the information which must be included in the most recent statement prepared under regulation 23 (annual statement regarding governance) of those Regulations in accordance with the following paragraphs of that regulation—

(a)paragraph (1)(a);

(b)paragraph (1)(c); and

(c)paragraph (1)(ca)(10).

(3) Where this regulation applies—

(a)a notification need not be given under regulation 27 in relation to the information on the website where information is given to the person in accordance with paragraph 5B(a) of Schedule 6 (statements of benefits: money purchase and cash balance benefits)(11); and

(b)the trustees or managers of the scheme must have regard to guidance prepared from time to time by the Secretary of State concerning the publication of the information.

(4) Where a person requests the trustees or managers of the scheme to provide the information referred to in paragraph (2) in hard copy form, the trustees or managers of the scheme must give that information to the person in hard copy form only where the trustees or managers are satisfied that it would be unreasonable for that person to obtain it from the website on which it is published.

(5) Where information is required to be given in hard copy form in accordance with paragraph (4), it must be given within two months of the date the request is made..

(7) After Part 5 (information that applies to the scheme)(12) of Schedule 3 (information to be given on request), insert—

PART 6INFORMATION TO BE GIVEN ABOUT POOLED FUNDS

35.(1) A statement identifying in relation to the provision of money purchase benefits to the member—

(a)the international securities identification number (“the ISIN”) allocated in accordance with ISO 6166 (1st edition) published by the International Organisation for Standardisation on 31st August 2013(13) in relation to each collective investment scheme in which assets are directly invested on behalf of that member on the relevant date;

(b)in the case of each unit-linked contract entered into by or on behalf of the trustees or managers which is in force on the relevant date in relation to that member, the ISIN (where present) relating to each collective investment scheme directly attributable to that contract; and

(c)the name given by the manager of the collective investment scheme to the scheme to which an ISIN provided in accordance with sub-paragraph (a) or (b) relates.

(2) In this paragraph—

(a)“collective investment scheme” has the meaning given in regulation 1(2) (interpretation) of the Occupational Pension Schemes (Investment) Regulations 2005(14); and

(b)“the relevant date” means—

(i)the date the request is made under regulation 12A; or

(ii)such earlier date as the trustees or managers of the scheme may specify which meets the following conditions—

(aa)the date must be no more than 6 months before the date of the request; and

(bb)the trustees or managers of the scheme must be satisfied that the investment options in which the assets of the member were invested on the date specified are the same as those in which the member is invested on the date of the request..

(8) After paragraph 5 of Schedule 6 (statements of benefits: money purchase benefits and cash balance benefits)(15), insert—

5A.  Where the scheme is a relevant scheme within the meaning of the Occupational Pension Schemes (Scheme Administration) Regulations 1996, details of how the member may obtain on request the information specified in paragraph 35 of Schedule 3 (information to be given about pooled funds).

5B.  In relation to the information that must be published on a website in accordance with regulation 29A(2) (publishing charges and transaction costs)—

(a)the information specified in sub-paragraphs (a) to (d) of regulation 27(2) (provision of information on a website); and

(b)a statement explaining the circumstances in which the information will be provided on request in hard copy form..

Signed by authority of the Secretary of State for Work and Pensions.

Guy Opperman

Parliamentary Under-Secretary of State,

Department for Work and Pensions

22nd February 2018

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations impose obligations on trustees or managers of certain occupational pension schemes in relation to the disclosure of information about transaction costs and charges imposed on members by those schemes. These Regulations implement the duty on the Secretary of State imposed by section 113 of the Pension Schemes Act 1993 (c. 48), as amended by section 44 of the Pensions Act 2014 (c.19), to make regulations requiring the giving and publication of information about administration charges and transaction costs. In addition, they impose obligations concerning the disclosure of information about the pooled funds in which assets are invested by the scheme on behalf of members.

Regulation 1 of these Regulations deals with the coming into force of these Regulations. In particular, it provides for these Regulations to come into force from a later date in certain cases where the scheme year ends before 6th April 2018.

Regulation 2 amends regulation 23 of the Occupational Pension Schemes (Scheme Administration) Regulations 1996 (S.I.1996/1715) (“the Scheme Administration Regulations 1996”) which relates to the annual statement regarding governance. The effect of the amendments is to require the trustees or managers of a relevant pension scheme to provide information, in so far as the information relates to the provision of money purchase benefits, about the level of costs and transaction charges applicable to each default arrangement and each fund which members are able to select and in which assets relating to members are invested during the scheme year. A relevant pension scheme is defined in regulation 2 (interpretation) of the Scheme Administration Regulations 1996 and (with certain exceptions) means an occupational pension scheme which provides money purchase benefits. The trustees or managers of the scheme are also required to provide an illustrative example of the compounding effect of such charges and transaction costs. In complying with these requirements, the trustees or managers must have regard to guidance published from time to time by the Secretary of State.

Regulation 3 amends the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 (S.I.2013/2734) (“the Disclosure Regulations 2013”). The principal effect of these amendments is to require the trustees or managers of a relevant pension scheme to publish the information which must be included in the annual statement relating to the default arrangement and charges and transaction costs free of charge on a publicly available website (regulation 3(6)). This includes information about the extent to which the trustees or managers consider the charges and transaction costs represent good value for money. The information must be published in accordance with guidance published from time to time by the Secretary of State. It must, however, be given in hard copy form if the trustees or managers are satisfied that it would be unreasonable to require the person to obtain it via the website chosen by the trustees or managers of the scheme.

Regulation 3(3) of these Regulations introduces a new regulation 12A into the Disclosure Regulations 2013 and regulation 3(7) amends Schedule 3 (information to be given on request) to those Regulations to add to the information that trustees or managers of a relevant pension scheme are required to provide on request. In the case of a relevant scheme, it requires the international securities identification numbers (“the ISINs”) to be provided to members and recognised trade unions in relation to certain securities in which funds are invested by the scheme on behalf of the member to provide money purchase benefits.

Regulation 3(8) of these Regulations adds to the information that trustees or managers of a relevant scheme are required to include in an annual statement of money purchase benefits (see regulation 17 of, and Part 1 of Schedule 6 to, the Disclosure Regulations 2013). It requires the trustees or managers to give the member certain information about where the additional information required to be disclosed as a result of these Regulations can be obtained.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen. The Department for Work and Pensions has nonetheless undertaken an assessment of the impact of this instrument, a copy of which is available from the Better Regulation Unit of Department for Work and Pensions, Caxton House, Tothill Street, London SW1H 9NA and is published with the Explanatory Memorandum alongside this instrument at www.legislation.gov.uk.

(1)

1993 c.48. Section 113(1) was amended by section 52(1) of the Child Support, Pensions and Social Security Act 2000 (c.19) and is amended by section 38(1) and (2) of the Pension Schemes Act 2015 (c.8) (“the 2015 Act”) from a date to be appointed; section 113(2A) was inserted by section 38(1) and (4) of the 2015 Act; section 113(5) to (7) was inserted by section 44(1) of the Pensions Act 2014 (c.19) (“the 2014 Act”); section 181(1) is cited for the meaning given to “prescribe” and “regulations”; section 183(1) was amended by Parts 3 and 4 of Schedule 7 to the Pensions Act 1995 (c.26) (“the 1995 Act”).

(2)

Section 113(9) was inserted by section 44(1) of the 2014 Act.

(3)

Section 185(1) was amended by section 122 of, and paragraph 46 of Schedule 3 to, the 1995 Act and by paragraph 80(a) of Schedule 5 to that Act.

(5)

S.I. 1996/1715. The definition of “relevant scheme” was inserted by S.I.2015/879.

(6)

Regulation 23 was inserted by S.I. 2015/879 and was amended by S.I. 2016/427.

(7)

Regulation 4 was amended by S.I. 2015/482.

(8)

Regulation 29A is inserted by regulation 3(6) of these Regulations.

(9)

Paragraph 35 of Schedule 3 is inserted by regulation 3(7) of these Regulations.

(10)

Sub-paragraph (ca) is inserted by regulation 2(4) of these Regulations.

(11)

Paragraph 5B of Schedule 6 is inserted by regulation 3(8) of these Regulations.

(12)

Part 5 was amended by S.I.s 2015/482 and 2015/879.

(13)

ISBN 978 0 580 62836 8. Copies may be obtained from BSI Customer Services, 389 Chiswick High Road, London, W4 4AL or from https://shop.bsigroup.com.

(14)

S.I. 2005/3378, to which there are amendments not relevant to these Regulations.

(15)

The heading to Schedule 6 was amended by S.I. 2014/1711.

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