Part 2

The Board of the Pension Protection Fund
Chapter 3

Pension protection

Reconsideration

Application for reconsideration
151
1
Where subsection (2) or (3) applies in relation to an eligible scheme, the trustees or managers of the scheme may make an application to the Board under this section for it to assume responsibility for the scheme in accordance with this Chapter.
2
This subsection applies where—
a
a scheme failure notice has been issued under section 122(2)(a) in relation to the scheme, that notice has become binding and the trustees or managers have received a copy of the binding notice under section 125(3),
b
the valuation obtained by the Board under section 143 in respect of the scheme has become binding, and
c
the Board would have been required to assume responsibility for the scheme under section 127 but for the fact that the condition in subsection (2)(a) of that section was not satisfied.
3
This subsection applies where—
a
the Board has issued a scheme failure notice under subsection (2) of section 130 in relation to the scheme, that notice has become binding and the trustees or managers have received a copy of the binding notice under subsection (7) of that section,
b
the valuation obtained by the Board under section 143 in respect of the scheme has become binding, and
c
the Board would have been required to assume responsibility for the scheme under section 128 but for the fact that the condition in subsection (2)(a) of that section was not satisfied.
4
An application under this section must be in the prescribed form, contain the prescribed information and be accompanied by—
a
a protected benefits quotation in the prescribed form, and
b
audited scheme accounts for a period which—
i
begins with such date as may be determined in accordance with regulations, and
ii
ends with a date which falls within the prescribed period ending with the day on which the application is made.
5
An application under this section must be made within the authorised period.
6
In this section “the authorised period” means the prescribed period which begins—
a
where subsection (2) applies, with the later of—
i
the day on which the trustees or managers received the copy of the binding notice mentioned in paragraph (a) of that subsection, and
ii
the day on which they received a copy of the binding valuation mentioned in paragraph (b) of that section, and
b
where subsection (3) applies, with the later of—
i
the day on which the trustees or managers received the copy of the binding notice mentioned in paragraph (a) of that subsection, and
ii
the day on which they received a copy of the binding valuation mentioned in paragraph (b) of that subsection.
7
Where the Board receives an application under subsection (1), it must give a copy of the application to the Regulator.
8
For the purposes of this section—
- “audited scheme accounts”, in relation to a scheme, means—
  1. accounts obtained by the trustees or managers of the scheme (“the scheme accounts”) which are prepared in accordance with subsections (9) to (11) and audited by the auditor in relation to the scheme, and
  2. a report by the auditor, in the prescribed form, as to whether or not such requirements as may be prescribed are satisfied in relation to the scheme accounts;
- “auditor”, in relation to a scheme, has the meaning given by section 47 of the Pensions Act 1995 (c. 26);
- “protected benefits quotation”, in relation to a scheme, means a quotation for one or more annuities from one or more insurers, being companies willing to accept payment in respect of the members from the trustees or managers of the scheme, which would provide in respect of each member of the scheme from the reconsideration time—
  1. benefits for or in respect of the member corresponding to the compensation which would be payable to or in respect of the member in accordance with the pension compensation provisions if the Board assumed responsibility for the scheme by virtue of this section, or
  2. benefits in accordance with the member’s entitlement or accrued rights (including pension credit rights within the meaning of section 124(1) of the Pensions Act 1995 (c. 26)) under the scheme rules (other than his entitlement or rights in respect of money purchase benefits),
whichever benefits can, in the case of that member, be secured at the lower cost;
- “the reconsideration time”, in relation to an application under this section, means the time immediately before the end of the period to which the audited scheme accounts mentioned in subsection (4)(b) relate.
9
The scheme accounts are prepared in accordance with this subsection if, subject to subsections (10) and (11), they—
a
include a statement of the assets of the scheme (excluding any assets representing the value of any rights in respect of money purchase benefits under the scheme rules) as at the reconsideration time, and
b
are prepared in accordance with such other requirements as may be prescribed.
10
Subject to subsection (11), regulations under subsection (4) of section 143 (other than regulations made by virtue of subsection (5) of that section), and guidance under subsection (6) of that section, apply to the scheme accounts as they apply for the purposes of a valuation under that section.
11
Regulations may provide that, where an asset of a prescribed description has been acquired during the assessment period, the value assigned to the asset as at the reconsideration time is to be determined, for the purposes of the scheme accounts, in the prescribed manner.
12
For the purposes of this section—
a
regulations may prescribe how the cost of securing the benefits mentioned in paragraph (a) of the definition of “protected benefits quotation” in subsection (8) is to be determined, calculated and verified, and
b
subject to any provision made under paragraph (a), that cost is to be determined, calculated and verified in accordance with guidance issued by the Board.
13
Where the scheme is being wound up, for the purposes of determining the benefits which fall within paragraph (b) of the definition of “protected benefits quotation” in subsection (8) no account is to be taken of the winding up of the scheme.