121.This section substitutes a new section 3 of the Pensions Act 1995 (prohibition orders). The new section enables the Regulator to prevent a person from acting as a trustee, either in relation to a particular scheme or a particular description of trust schemes or trust schemes in general, wherever it considers that the person is not a “fit and proper” person to act as such. It is expected that the Regulator will have regard to certain considerations when deciding whether a trustee is fit and proper to act as such, including (but not limited to):
the trustees’ probity, competence and soundness of judgement;
the diligence with which he is fulfilling his responsibilities as trustee;
whether the interests of members of the scheme or schemes in question are in the opinion of the Regulator being prejudiced by his acting as trustee;
whether he has contravened any provision of the pensions legislation relating to the provision or management of pensions in a country or territory outside Great Britain.
122.The Regulator will issue guidance on how it will interpret the term “fit and proper”.
123.By virtue of subsection (2) of this substitute section, where a prohibition order is made under subsection (1) against a person in respect of one or more schemes of which he is a trustee, the order will have the effect of removing him as a trustee from all schemes to which the order relates.
124.This section amends section 4 of the Pensions Act 1995 (suspension orders) in relation to suspension orders. The current provision is extended so that a trustee can be suspended where consideration is being given to proceedings against a trustee, rather than just when proceedings have started.
125.Subsection (1) makes amendments to section 7 of the Pensions Act 1995 (appointment of trustees) omitting subsection (4) of that section which allowed regulations to prescribe additional circumstances when Opra (referred to as “the authority”) could appoint a trustee of a trust scheme. It also inserts a new subsection 5A in the Pensions Act 1995 which will allow applications to be made to the Regulator for the appointment of trustees to trust schemes, under the powers in section 7(3)(a) or (c) of that Act. Such an application can be made by the trustees, the employer, or any member of the scheme.
126.Subsection 2 amends section 8 of the Pensions Act 1995 (consequences of appointment of trustees under section 7) so that the fees and expenses of any trustee appointed by the Regulator may be required to be paid by the employer or out of the scheme, or by both (at the discretion of the Regulator).
127.Subsection (2) amends section 22 of the Pensions Act 1995 (circumstances in which provisions relating to independent trustees apply) so that section 23 of that Act (power to appoint independent trustees) will also apply where an interim receiver of the employer’s property is appointed at any time during an assessment period (within the meaning of section 132 of this Act); and at any time when the scheme is authorised to continue as a closed scheme (see section 153 of this Act).
128.New subsection (2B) and (2C) are intended to ensure that the Regulator, the Board of the Pension Protection Fund and the trustees or managers of the scheme are notified of certain events which are relevant to determining whether section 22 of the Pensions Act 1995 applies.
129.Subsection (3) substitutes sections 23 and 24 of the Pensions Act 1995, with a new section 23 (power to appoint independent trustees). Subsection (1) of new section 23 gives the Regulator power to appoint an independent trustee where section 22 of the Pensions Act 1995 applies and where that person has been registered in accordance with subsection (4). By virtue of subsection (2) of new section 23 no more than one independent trustee may be appointed under section 23(1) at any one time. Subsection (3) of new section 23 sets out the criteria that must be met so that a person can be considered as an independent person in order to be appointed as an independent trustee under section 23. The Regulator must maintain a register of independent trustees and subsection (4) of new section 23 allows for regulations whereby the Regulator can compile and maintain the register of persons who satisfy the prescribed conditions for registration as an independent trustee. These regulations may provide for copies of the register, or extracts from it, to be provided to prescribed persons in prescribed circumstances. They may also provide for the inspection of the register by prescribed persons in prescribed circumstances. It will also be possible to charge a reasonable fee for providing copies or permitting inspection.
130.Subsection (4) amends section 25 of the Pensions Act 1995 (appointment and powers of independent trustees; further provisions). Where an independent trustee has been appointed and he ceases to be an independent person (see section 23(3) of the Pensions Act 1995 – as substituted by subsection (3) of this section) he must, as soon as reasonably practical, notify the Regulator in writing. Section 10 of the Pensions Act 1995 (civil penalties) will apply where there is a failure to give such notice.
131.An order appointing an independent trustee may provide for any fees or expenses of the trustees to be paid by the employer or out of the resources of the scheme, or by a combination of both. Where the fees of the appointed trustee are to be met from the resources of the scheme, the independent trustee’s fee will take priority over all other claims to be met by the resources of the scheme.
132.By virtue of this section, which amends section 30(1) of the Pensions Act 1995 (consequences of disqualification under section 29), disqualification will automatically remove a trustee. This aligns disqualification under section 29 of that Act with the effect of a prohibition order under section 3 of that Act.
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