The Pension Protection Fund (Multi-employer Schemes) (Modification) Regulations (Northern Ireland) 2005

Explanatory Note

(This note is not part of the Regulations.)

These Regulations modify the provisions of Part III of the Pensions (Northern Ireland) Order 2005 (“the Order”) as they apply in relation to multi-employer schemes. Part III of the Order makes provision in respect of the functions of the Board of the Pension Protection Fund (“the Board”) which is established under section 107 of the Pensions Act 2004 (c. 35).

Part I of the Regulations provides for citation, commencement and general interpretation.

Part II of the Regulations modifies Part III of the Order as it applies in relation to a section of a segregated multi-employer scheme with only one employer in relation to that section so that Part III of the Order can apply in relation to such a section as if it were a separate scheme.

Part III of the Regulations modifies Part III of the Order as it applies in relation to a section of a segregated multi-employer scheme with at least two employers in relation to that section (“a multi-employer section”). It applies where the scheme rules relating to a multi-employer section do not contain any provision for the partial winding up of the section in specified circumstances. Part III of the Order is modified so that an assessment period is not triggered in relation to a multi-employer section of a segregated scheme unless an insolvency event has occurred in relation to all of the employers in relation to that section of the scheme or where all of the employers in relation to that section of the scheme are unlikely to continue as a going concern and meet prescribed requirements.

Part IV of the Regulations modifies Part III of the Order as it applies in relation to a non-segregated multi-employer section of a segregated multi-employer scheme. It applies where the scheme rules relating to that section contain a provision for the partial winding up of the section in certain specified circumstances. Part III of the Order is modified so that an assessment period is triggered in respect of a segregated part of such a multi-employer section which is created when an insolvency event has occurred in relation to an employer in relation to the section or where an employer in relation to the section is unlikely to continue as a going concern and meets prescribed requirements.

Part V of the Regulations modifies Part III of the Order as it applies in relation to a non-segregated multi-employer scheme the rules of which contain a provision for the partial winding up of the scheme in certain specified circumstances. Part III of the Order is modified so that an assessment period is not triggered in respect of a segregated part of such a scheme which is created when an insolvency event has occurred in relation to an employer in relation to the scheme or where an employer in relation to the scheme is unlikely to continue as a going concern and meets prescribed requirements.

Part VI of the Regulations modifies Part III of the Order as it applies in relation to a non-segregated multi-employer scheme the rules of which do not contain a provision for the partial winding up of the section in certain specified circumstances. Part III of the Order is modified so that an assessment period is not triggered in respect of such a scheme unless an insolvency event has occurred in relation to all of the employers in relation to the scheme or where all of the employers in relation to the scheme are unlikely to continue as a going concern and meet prescribed requirements.

Part VII of the Regulations modifies Part III of the Order as it applies in relation to a non-segregated scheme the rules of which contain an option for the trustees or managers of the scheme to segregate such part of the assets of the scheme as is attributable to the scheme’s liabilities to provide pensions or other benefits to or in respect of the pensionable service of members by reference to an employer in relation to the scheme in specified circumstances. The modifications of Part III of the Order which are provided for in Part V of the Regulations are to apply in respect of such a scheme unless the trustees or managers of the scheme decide not to exercise the option to segregate under the scheme rules so as to create a segregated part of the scheme.

Part VIII of the Regulations modifies Part III of the Order as it applies in relation to a multi-employer section of a segregated scheme the rules of which contain an option for the trustees or managers of the scheme to segregate such part of the assets of the section which are attributable to the liabilities of the section to provide pensions or other benefits to or in respect of the pensionable service of members by reference to an employer in relation to the section in specified circumstances. The modifications of Part III of the Order provided for in Part IV of the Regulations are to apply in respect of such a section of such a scheme unless the trustees or managers of the section decide not to exercise the option to segregate under the scheme rules so as to create a segregated part of the section.

Part IX of the Regulations modifies Articles 158 to 164 of the Order (pension protection levies) as they apply in respect of multi-employer schemes or sections of multi-employer schemes to which the Parts II to VIII of these Regulations apply.

The Pensions (2005 Order) (Commencement No. 1 and Consequential and Transitional Provisions) Order (Northern Ireland) 2005 (S.R. 2005 No. 48 (C. 5)) provides for the coming into operation of Article 2(5)(a) on 25th February 2005 for the purpose of authorising the making of regulations and on 6th April 2005 for all other purposes, Article 280(1)(b) on 25th February 2005 for the purpose of authorising the making of regulations and on 8th March 2005 for all other purposes and Article 280(2)(b) on 8th March 2005.

As these Regulations are made before the end of the period of six months beginning with the coming into operation of the provisions of the 2005 Order by virtue of which they are made, the requirement to consult under Article 289(1) of that Order does not apply by virtue of paragraph (2)(c) of that Article.