The Occupational and Personal Pension Schemes (Disclosure of Information) (Amendment) Regulations (Northern Ireland) 2002

Amendment of the Occupational Pension Schemes (Disclosure of Information) Regulations

3.—(1) The Occupational Pension Schemes (Disclosure of Information) Regulations (Northern Ireland) 1997(1) shall be amended in accordance with paragraphs (2) to (4).

(2) In regulation 1(2) (interpretation)–

(a) after the definition of “beneficiary” there shall be inserted the following definition–

• ““contracted-out employment” shall be construed in accordance with section 4;”;

(b) after the definition of “funded” there shall be inserted the following definition–

• ““illustration date” means, in relation to any information provided, or to be provided, under paragraph 6ZA(1) of Schedule 2, the date specified by the trustees as the date by reference to which amounts are calculated for the purpose of providing the information;”;

(c) after the definition of “relevant employment” there shall be inserted the following definition–

• ““relevant guidance” means the document entitled “Technical Memorandum TM1: Statutory Money Purchase Illustrations” which–

  (a)

  is published, and from time to time revised, by the Faculty of Actuaries and the Institute of Actuaries; and

  (b)

  is for the time being approved by the Department;”;

(d) after the definition of “request” there shall be inserted the following definition –

• ““retirement date” means, in relation to a member(2)–

  (a)

  the date which he has specified to the trustees, and which is acceptable under the rules of the scheme, for the purpose of paragraph 6ZA(1) of Schedule 2; or

  (b)

  where no acceptable date has been specified for that purpose, the date specified by the trustees as being the appropriate date for the purpose of paragraph 6ZA(1) of Schedule 2;”.

(3) In regulation 5 (information to be made available to individuals)–

(a) in paragraph (5)(3)–

(i) after “regulation 2(3A)” there shall be inserted “and paragraph (5ZA)”;

(ii) for “, paragraphs 5, 6 and 6AA” there shall be substituted “paragraphs 5 to 6AA(4)”;

(b) after paragraph (5) there shall be inserted the following paragraphs–

“(5ZA) The requirement under paragraph (5) to furnish the information mentioned in paragraph 6ZA of Schedule 2 shall not apply–

(a) in respect of a person who is in receipt of pension benefits under the scheme;

(b) where the specified date referred to in paragraph 6(1)(b) of Schedule 2 is not more than 2 years before the member’s retirement date;

(c) where, in relation to the member–

(i) the value, determined by reference to the relevant guidance, of his accrued rights to money purchase benefits under the scheme was less than £5,000 on the illustration date in respect of which such information was last furnished to him;

(ii) no contributions, including transfers of pension rights or pension credits(5), have been made to the scheme by him or on his behalf in respect of money purchase benefits since that date; and

(iii) the trustees previously gave notice to the member that no further such information would be furnished to him unless further contributions to the scheme in respect of money purchase benefits had first been made by him or on his behalf;

(d) where, in relation to the member–

(i) the value, determined by reference to the relevant guidance, of his accrued rights to money purchase benefits under the scheme is less than £5,000 on the first illustration date falling after 5th April 2003;

(ii) no contributions, including transfers of pension rights or pension credits, have been made to the scheme by him or on his behalf after 5th April 2003; and

(iii) no further contributions are, in the opinion of the trustees, likely to be made to the scheme by him or on his behalf after that illustration date;

(e) where–

(i) the member’s benefit is calculated by reference to the greater of the result of a money purchase and a defined benefit formula; and

(ii) in the opinion of the trustees, the benefit calculated in accordance with a money purchase formula is not likely to affect the pension payable; or

(f) where the specified date referred to in paragraph 6(1)(b) of Schedule 2 is before 6th April 2003.

(5ZB) For the purposes of paragraph (5ZA), a scheme which provides additional money purchase benefits by virtue of the payment by the member of voluntary contributions shall be regarded as a separate scheme from any other part of that scheme.

(5ZC) Where paragraph (5ZA) applies but the trustees of the scheme nevertheless choose to furnish the information described in paragraph 6ZA(1) of Schedule 2 and the amount comprising that information is calculated in accordance with sub-paragraphs (2) to (5) of that paragraph, that information shall be accompanied by the additional information specified in sub-paragraph (6)(a) and (c) to (k) of that paragraph as if the information had been provided under sub-paragraph (1) of that paragraph.”.

(4) In Schedule 2 (information to be made available to individuals) after paragraph 6 there shall be inserted the following paragraph–

“6ZA.— (1) An illustration of the amount, calculated in accordance with sub-paragraphs (2) to (5), of the pension an entitlement to which would be likely to accrue to the member, or be capable of being secured by him, at his retirement date in respect of rights to money purchase benefits that may arise under the scheme.

(2) The amount referred to in sub-paragraph (1) shall be determined by reference to–

(a) the relevant guidance; and

(b) the assumptions about contributions specified in sub-paragraph (3) and about annuities specified in sub-paragraphs (4) and (5), and such other assumptions as may be specified for the purpose in the relevant guidance,

having regard to the value of the member’s accrued rights to money purchase benefits under the scheme on the illustration date.

(3) The assumptions about contributions referred to in sub-paragraph (2)(b) are–

(a) where the calculation relates to the rights of a deferred member, that no contributions will be made to the scheme by him or on his behalf after the illustration date; or

(b) where the calculation relates to the rights of a member who is in pensionable service under the scheme, that, until the member’s retirement date–

(i) contributions to the scheme will be made by him or on his behalf;

(ii) the treatment of the scheme under sections 592 to 594(6) or, as the case may be, 639 to 646A of the Income and Corporation Taxes Act 1988 (tax reliefs) as for the time being in force will continue; and

(iii) where a member is in contracted-out employment, sums will continue to be paid by the Commissioners of Inland Revenue in respect of him under section 38A(3)(7) (which deals with age-related payments made to the scheme) in the amounts to be determined by reference to the relevant guidance.

(4) The assumptions about annuities referred to in sub-paragraph (2)(b) are–

(a) that the rate of pension is to be increased annually by the relevant percentage specified in the relevant guidance; and

(b) that, subject to sub-paragraph (5), irrespective of whether or not the member is married at the time when the information referred to in sub-paragraph (1) is furnished, the annuity will include provision for the payment, to a surviving spouse of the member, of a pension of an amount equal to one half of the pension which was payable to him immediately before his death.

(5) Sub-paragraph (4)(b) does not apply where–

(a) the trustees decide to use a different assumption in substitution for that specified in sub-paragraph (4)(b) on the basis that the scheme records indicate that the member is not married; or

(b) the trustees and the member agree to use a different assumption.

(6) The additional information which is to accompany the information provided under sub-paragraph (1) is–

(a) a statement to the effect that the information provided under sub-paragraph (1)–

(i) is provided only for the purposes of illustration;

(ii) does not represent any promise or guarantee as to the amount of benefit which may be receivable by the member or a beneficiary under the scheme; and

(iii) should not be regarded as the only consideration by reference to which the member should make decisions as to his pension arrangements;

(b) a statement to the effect that the provision of the information mentioned in sub-paragraph (1) is required by law;

(c) a statement specifying the means by which the person to whom the information relates may obtain from the trustees further information about the information provided under sub-paragraph (1);

(d) a statement to the effect that the information has been prepared by reference to the assumptions required by this paragraph or specified in the relevant guidance;

(e) a statement to the effect that certain general assumptions have been made about the nature of the investments made for the purposes of that person’s money purchase benefits and their likely performance, which may not correspond with the investments actually made for those purposes, or their actual performance;

(f) a statement to the effect that the amount referred to in sub-paragraph (1) is expressed in today’s prices;

(g) a statement to the effect that the actual amount of any pension payable to that person or beneficiary under the scheme will depend on considerations, including the actual performance of investments and the cost of buying an annuity at the time the pension becomes payable, which may be different from the assumptions made for the purpose of providing the information under sub-paragraph (1);

(h) a statement specifying any assumptions made in relation to future contributions to the scheme;

(i) a statement of the assumptions made in accordance with sub-paragraphs (3)(b)(iii) and (4), or as mentioned in sub-paragraph (5);

(j) a statement of the member’s retirement date for the purpose of sub-paragraph (1); and

(k) a statement of the illustration date used for the purpose of calculating the amount referred to in sub-paragraph (1).”.

(1)

S.R. 1997 No. 98; relevant amending regulations are S.R. 1999 No. 486 and S.R. 2000 Nos. 262 and 335

(2)

Definition of “member” in Article 121(1) of the Pensions (Northern Ireland) Order 1995 was amended by paragraph 50(2) of Schedule 9 to the Welfare Reform and Pensions (Northern Ireland) Order 1999 (see also paragraph 50(3) of that Schedule and paragraph 5(3) of Schedule 5 to the Child Support, Pensions and Social Security Act (Northern Ireland) 2000)

(3)

Paragraph (5) was amended by regulation 13(2) of S.R. 1999 No. 486, regulation 31(4)(a) of S.R. 2000 No. 262 and regulation 5(3)(b) of S.R. 2000 No. 335

(4)

Paragraph 6AA was inserted by regulation 5(4)(b) of S.R. 2000 No. 335

(5)

Definition of “pension credit” was inserted into regulation 1(2) by regulation 5(2)(c) of S.R. 2000 No. 335

(6)

Sections 592 to 594 were amended by paragraphs 5 and 6 of Schedule 6 to the Finance Act 1989 (see also paragraph 18(1) and (4) of that Schedule) and sections 107(6) and 112(1) and (6) of the Finance Act 1993 (see also sections 107(8) and 112(2) to (5) of that Act)

(7)

Section 38A was inserted by Article 134(4) of the Pensions (Northern Ireland) Order 1995 and subsection (3) was amended by paragraph 52(2) of Schedule 1 to the Social Security Contributions (Transfer of Functions, etc.) (Northern Ireland) Order 1999