Section 2: Relevant public service pension schemes
These sections define in legislation a type of occupational pension scheme, known as a “Master Trust scheme”.
Section 1 sets out the criteria that must be met by an occupational pension scheme for it to constitute a Master Trust scheme. The scheme must provide money purchase benefits (whether alone or in conjunction with other benefits), as defined in the Pension Schemes (Northern Ireland) Act 1993. Money purchase benefits are generally derived from a pot of contributions, together with any investment returns on those contributions.
Under subsection (1)(b) the scheme must be used by, or be intended to be used by, two or more employers. Employer for these purposes is defined in subsection (4) as a person who employs or engages persons who are, or are entitled to become, members of the scheme.
Subsection (1)(c) excludes from the definition of Master Trust scheme any scheme which is used, or intended to be used, only by employers that are connected to each other. Subsection (3) sets out the circumstances in which an employer is connected to another employer. An employer will be connected to another employer if they are, or have been, “group undertakings” in relation to each other within the meaning of section 1161(5) of the Companies Act 2006. Two employers will also be connected if they are connected in a way specified in regulations made by the Department. Subsection (1)(d) excludes public service pension schemes from the Master Trust scheme definition.
Subsection (2) sets out that where a Master Trust scheme provides money purchase benefits and other benefits, it is only insofar as the scheme relates to money purchase benefits that it falls under the provisions in the Act. This is subject to a few exceptions as set out in section 39(2) to (4). Section 39(2) provides that references to scheme accounts are to the accounts of the scheme as a whole. Section 39(3) provides that in section 10 “activities that relate directly to a Master Trust scheme” means activities relating to the scheme as a whole and not just the money purchase part of the scheme, ensuring that the scheme funder is able to engage in activities in relation to any part of the scheme. Section 39(4) makes provision so that where a scheme provides money purchase benefits and other benefits and has no power to wind up the part of the scheme that relates to money purchase benefits only, references to winding up the scheme are to be read as references to that part of the scheme ceasing to operate.
Subsection (5) provides that any regulations made under this section are subject to the confirmatory procedure.
Section 2 defines public service pension schemes by reference to existing legislation in the Pension Schemes (Northern Ireland) Act 1993, the Pensions (Northern Ireland) Order 2005 and the Public Service Pensions Act (Northern Ireland) 2014.
