Explanatory Memorandum

Pension Schemes Act (Northern Ireland) 2021

2021 CHAPTER 6

9 August 2021

Commentary on Sections

Part 2: Adminstration Charges

Section 41: Power to override contract terms

Schedule 18 to the Pensions Act (Northern Ireland) 2015 allows the Department to make regulations that restrict charges or impose requirements on certain pension schemes.

This section provides that regulations may be made to allow certain provisions within the regulations made under Schedule 18 to override terms of a ‘relevant contract’. A “relevant contract” is a contract between the trustees or managers of a pension scheme and a person providing services in relation to that scheme (section 41(4)). For example, if a contract between those persons currently provides for a type or level of charge (such as member-borne commission, or an exit charge) which is prohibited under regulations made under paragraph 1 of Schedule 18. Schedule 18 already allows regulations to provide that a provision of a scheme will be overridden in the event of any conflict.