The Pension Protection Fund and Occupational and Personal Pension Schemes (Miscellaneous Amendments) Regulations (Northern Ireland) 2013

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Personal and Occupational Pension Schemes (Pensions Ombudsman) Regulations (Northern Ireland) 1997 (“the Pensions Ombudsman Regulations”), the Pension Protection Fund (Partially Guaranteed Schemes) (Modification) Regulations (Northern Ireland) 2005 (“the Partially Guaranteed Schemes Regulations”), the Pension Protection Fund (Provision of Information) Regulations (Northern Ireland) 2005 (“the Provision of Information Regulations”), the Pension Protection Fund (Valuation) Regulations (Northern Ireland) 2005 (“the Valuation Regulations”), the Pension Protection Fund (Review and Reconsideration of Reviewable Matters) Regulations (Northern Ireland) 2005 (“the Review and Reconsideration Regulations”), the Pension Protection Fund (Compensation) Regulations (Northern Ireland) 2005 (“the Compensation Regulations”), the Occupational Pension Schemes (Employer Debt) Regulations (Northern Ireland) 2005 (“the Employer Debt Regulations”), the Pension Protection Fund (General and Miscellaneous Amendments) Regulations (Northern Ireland) 2006 (“the General Regulations”) and the Pension Protection Fund (Pension Compensation Sharing and Attachment on Divorce etc.) Regulations (Northern Ireland) 2011 (“the Pension Compensation Sharing Regulations”).

Regulation 1(3) provides for a transitional period for regulation 7(6), which amends the Compensation Regulations, to allow surviving dependants aged 18 and above who are receiving periodic compensation for attending a qualifying course, to continue to receive it until they cease attending the course.

Regulation 2 amends the Pensions Ombudsman Regulations to update the statutory references to matters which are excluded from the Ombudsman’s jurisdiction.

Regulation 3 amends the Partially Guaranteed Schemes Regulations to provide that the Board of the Pension Protection Fund (“the Board”) is not able to make a determination in respect of partially guaranteed schemes under the Pensions (Northern Ireland) Order 2005 (“the 2005 Order”) (as amended by the Pensions Act (Northern Ireland) 2012 (c. 3 (N.I.))).

Regulation 4 amends the Provision of Information Regulations so that the Board is required to provide members with information on postponement of compensation.

Regulation 5 amends the Valuation Regulations. The reference to the market rate in calculating the value of protected liabilities is amended so that the best value rate available in the market is applicable. Regulation 7A of the Valuation Regulations (which specifies the regulations applicable to applications for reconsideration, and by closed schemes) is extended to apply to all valuations under Articles 136 and 142 of the 2005 Order. Provision is made so that the valuations of scheme assets which are contribution notices and orders reflect the actual payments received under these.

Regulation 6 amends the Review and Reconsideration Regulations to change the time within which an eligible person may make an application for an internal review of a decision by the Board from two months to 28 days.

Regulation 7 makes various amendments to the Compensation Regulations, including giving members the ability to postpone the payment of compensation, and allowing pension credit members to apply for early payment of compensation. A surviving dependant aged 18 to 23 is only eligible for periodic compensation if they are attending a qualifying course. The commutation limit is changed to reflect the limit for registered pension schemes as set out in paragraph 7(4) of Schedule 29 to the Finance Act 2004 (c. 12).

Regulation 8 amends the Employer Debt Regulations to exclude, for employer debt purposes, determinations under Article 127 of the 2005 Order.

Regulation 9 amends the General Regulations to provide that the Board may discharge all of its liabilities in respect of money purchase benefits to a member by making a small lump sum payment, provided that the value of such benefits does not exceed £2,000. The payment must be made within a reasonable time from the date the Board notifies the member of their entitlement under regulation 8(1) of the General Regulations, which gives the member 3 months from the date of being notified by the Board, to inform the Board of how they wish the liability to be discharged. If no such notice is received within this time, the Board must discharge the lump sum as it sees fit in accordance with the General Regulations.

Regulation 10 amends the Pension Compensation Sharing Regulations to make provision for the postponement of compensation by pension compensation credit members. It also makes some minor corrections.

Regulation 11 makes a consequential revocation.

The Pensions (2012 Act) (Commencement No. 3) Order (Northern Ireland) 2013 (S.R. 2013 No. 83 (C. 5)) provides for the coming into operation of paragraphs 22, 25 and 30 of Schedule 4 to the Pensions Act (Northern Ireland) 2012, which substitute paragraph 25A of Schedule 6 to the 2005 Order, amend paragraph 24(1) of Schedule 6 to the 2005 Order and insert paragraph 16A of Schedule 4 to the Pensions (No. 2) Act (Northern Ireland) 2008 respectively, some of the enabling provisions under which these Regulations are made, on 27th March 2013.

As these Regulations, in so far as they are made under Part II of the Pensions (Northern Ireland) Order 1995 (“the 1995 Order”) and the 2005 Order, 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 for consultation does not apply by virtue of Article 117(2)(e) of the 1995 Order and Article 289(2)(e) of the 2005 Order.

An assessment of the impact of the postponement of pension compensation is included in the Regulatory Impact Assessment which accompanied the Pensions Act (Northern Ireland) 2012, a copy of which has been laid in the Business Office and the Library of the Northern Ireland Assembly. Copies of that 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 or from the website: http://www.dsdni.gov.uk/index/ssa/ssani-publications/ssani-pensions-publications.htm .