The Occupational Pension Schemes (Employer Debt and Miscellaneous Amendments) Regulations (Northern Ireland) 2008

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Occupational Pension Schemes (Employer Debt) Regulations (Northern Ireland) 2005 (“the Employer Debt Regulations”) which make provision where debts arise under Article 75 of the Pensions (Northern Ireland) Order 1995 (“the 1995 Order”) in respect of occupational pension schemes.

Regulation 1 provides for citation and interpretation.

Under regulation 2, the Regulations come into operation on 6th April 2008, subject to transitional provisions under which certain provisions of the existing Employer Debt Regulations are to remain applicable in specified circumstances after that date.

Regulations 3 and 4 amend the application and interpretation provisions of the Employer Debt Regulations.

Regulation 5 substitutes new provisions for regulation 5 of the Employer Debt Regulations. These provide for the determination and valuation of the assets and liabilities of a scheme for the purposes of Article 75 of the 1995 Order. Liabilities in respect of pensions and other benefits continue to be valued on the basis that the trustees or managers will provide for them by buying annuities. Liabilities are to be certified by the scheme’s actuary in accordance with Schedule 1 to the Employer Debt Regulations, which is also amended.

Regulations 6 to 9 deal with multi-employer schemes.

Regulation 6 amends regulation 6 of the Employer Debt Regulations, which makes general provision in respect of multi-employer schemes.

Regulation 7 inserts regulations 6A, 6B, 6C and 6D into the Employer Debt Regulations. Regulation 6A provides for a period of grace of up to 12 months where a cessation event would otherwise have occurred because an employer ceases to employ a person who is an active member of a scheme. Regulation 6B enables the trustees or managers of a scheme to enter into a scheme apportionment arrangement, under which an employer may pay an amount lower than his liability under Article 75 of the 1995 Order provided that a funding test is met. Regulation 6C sets out the conditions under which trustees or managers may enter into a withdrawal arrangement with a cessation employer. These include a funding test being met and the trustees being satisfied that guarantors are likely to be able to pay an amount calculated in accordance with Schedule 1A to the Employer Debt Regulations, which is also amended. Regulation 6D provides for the notification of certain events to the Pensions Regulator.

Regulation 8 replaces regulations 7, 7A and 7B of the Employer Debt Regulations with regulations 7 and 7A. Regulation 7 provides for approved withdrawal arrangements and sets out the circumstances for the Pensions Regulator to give its approval. Regulation 7A provides for regulated apportionment arrangements to be approved by the Pensions Regulator with the concurrence of the Board of the Pension Protection Fund.

Regulation 9 substitutes regulation 8 of the Employer Debt Regulations, providing for separate sections of a multi-employer scheme to be treated as separate schemes.

Regulation 10 substitutes regulation 9 of the Employer Debt Regulations, which reproduces the effect of the old regulation 9, but with necessary changes to deal with the new arrangements introduced by these Regulations.

Regulation 11 amends regulations 11 and 12 of the Employer Debt Regulations, making provision in connection with multi-employer money purchase schemes.

Regulation 12 substitutes regulation 16 of the Employer Debt Regulations, containing provisions for trustees to modify schemes to introduce rules providing for apportionment of debts under Article 75 of the 1995 Order.

Regulations 13, 14 and 15 introduce Schedules 1, 2 and 3, which substitute amended provisions for Schedules 1, 1A and 1B to the Employer Debt Regulations including amended actuarial certificates.

Regulation 16 specifies regulatory functions for the Pensions Regulator for the purposes of Part II of the Pensions (Northern Ireland) Order 2005.

Regulations 17, 18, 19 and 20 amend respectively the Pension Protection Fund (Multi-employer Schemes) (Modification) Regulations (Northern Ireland) 2005, the Pension Protection Fund (Entry Rules) Regulations (Northern Ireland) 2005, the Pensions Regulator (Financial Support Directions, etc.) Regulations (Northern Ireland) 2005 and the Occupational Pension Schemes (Scheme Funding) Regulations (Northern Ireland) 2005.

Regulation 21 contains consequential revocations.

As these Regulations make 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, the requirement to consult under Article 117(1) of the 1995 Order and Article 289(1) of the Pensions (Northern Ireland) Order 2005 does not apply by virtue of paragraph (2)(e) of each of those Articles.

An assessment of the cost to business of these Regulations is detailed in a Regulatory Impact Assessment, copies of which have been laid in the Business Office and the Library of the Northern Ireland Assembly. Copies of the Assessment are available from the Department for Social Development, Social Security Policy and Legislation Division, Level 1, James House, 2-4 Cromac Avenue, Gasworks Business Park, Ormeau Road, Belfast, BT7 2JA.