The Occupational Pension Schemes (Transfer Values and Miscellaneous Amendments) Regulations (Northern Ireland) 2003

Explanatory Note

(This note is not part of the Regulations.)

These Regulations amend the Occupational Pension Schemes (Transfer Values) Regulations (Northern Ireland) 1996 (“the principal Regulations”). They also make various consequential amendments to the Pensions on Divorce etc. (Provision of Information) Regulations (Northern Ireland) 2000 (“the Provision of Information Regulations”), the Pension Sharing (Valuation) Regulations (Northern Ireland) 2000 (“the Valuation Regulations”), the Pension Sharing (Implementation and Discharge of Liability) Regulations (Northern Ireland) 2000 (“the Implementation and Discharge of Liability Regulations”) and the Pension Sharing (Pension Credit Benefit) Regulations (Northern Ireland) 2000 (“the Pension Credit Benefit Regulations”).

Regulation 1 provides for citation, commencement and interpretation.

Regulation 2 amends regulations 1 and 8 of the principal Regulations. Regulation 2(2) inserts a definition of “effective date” into regulation 1(2) of the principal Regulations so as to make further provision for the interpretation of the Regulations. Regulation 2(3) substitutes regulation 8(4) of the principal Regulations with paragraphs (4), (4A) and (4B).

The new regulation 8(4) of the principal Regulations applies to occupational pension schemes to which the minimum funding requirement in Article 56 of the Pensions (Northern Ireland) Order 1995 (“the Order”) applies. Where such a scheme is not sufficiently funded to meet the full amount of the cash equivalent in respect of all of its members, as determined by the actuary for the purposes of the last report to the trustees or managers of the scheme before the guarantee date under the actuarial guidance note entitled “Retirement Benefit Schemes – Transfer Values (GN 11)”, regulation 8(4) enables the trustees or managers to reduce the amount of a cash equivalent. The amount of the reduction must be no greater than the amount by which the actuary’s report shows the scheme assets as being insufficient to pay the minimum amount of the cash equivalent in respect of all scheme members. Regulation 8(4B) of the principal Regulations provides that the amount of the cash equivalent after the reduction must not be less than the minimum amount which is required under regulation 7 of the principal Regulations to satisfy the liabilities referred to in Article 73(3) of the Order. Regulation 8(4A) of the principal Regulations enables the trustees or managers of occupational pension schemes to which the minimum funding requirement applies to reduce the minimum amount of the cash equivalent by a percentage which is no greater than the percentage by which the scheme was not, by reference to its last minimum funding valuation under Article 57 of the Order, able to pay the minimum amount of the cash equivalent that is required under regulation 7 of the principal Regulations in respect of the preferential liabilities on winding up.

Regulation 3 amends regulation 4(2)(c) of the Provision of Information Regulations so that it also refers to regulation 8(4A) and (4B) of the principal Regulations.

Regulations 4, 5 and 6 amend the Valuation Regulations, the Implementation and Discharge of Liability Regulations and the Pension Credit Benefit Regulations respectively so as to make similar provision to that made by regulation 2 of these Regulations.

As these Regulations make, in so far as they are made under Part V of the Welfare Reform and Pensions (Northern Ireland) Order 1999, in relation to Northern Ireland only provision corresponding to provision contained in regulations made by the Secretary of State for Work and Pensions in relation to Great Britain, there is no requirement for consultation under Article 73(9) of that Order.