The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010

[F1Alternative requirements for a personal pension schemeE+W+S

This section has no associated Explanatory Memorandum

32F.—(1) In relation to a personal pension scheme to which section 26 of the Act applies or which is referred to in regulation 32J(1), the prescribed alternative requirement is the first, second or third set of requirements below.

(2) The first set of requirements is that —

(a)all of the benefits that may be provided to the relevant jobholder under the scheme are money purchase benefits;

(b)there is, in relation to the relevant jobholder, an agreement between the provider of the scheme and the employer under which—

(i)the employer must pay contributions in respect of the jobholder;

(ii)the employer’s contribution must be equal to or more than 4% of the amount of the jobholder’s pensionable earnings in the certification period; and

(iii)the pensionable earnings of the jobholder must be equal to or more than the basic pay of that jobholder;

(c)if there is a shortfall, there is an agreement between the provider of the scheme and the relevant jobholder which provides that the jobholder must pay contributions which are equal to or more than the shortfall; and

(d)there are direct payment arrangements between the relevant jobholder and the employer within the meaning of section 111A of the Pension Schemes Act 1993.

(3) In paragraph (2)(c), “shortfall” means the difference (if any) between—

(a)the employer’s contributions in respect of the relevant jobholder under the agreement referred to in paragraph (2)(b); and

(b)9% of the amount of the relevant jobholder’s pensionable earnings in the certification period, being earnings which are equal to or more than the basic pay of that jobholder.

(4) The second set of requirements is that—

(a)all of the benefits that may be provided to the relevant jobholder under the scheme are money purchase benefits;

(b)there is, in relation to the relevant jobholder, an agreement between the provider of the scheme and the employer under which—

(i)the employer must pay contributions in respect of the jobholder;

(ii)the employer’s contribution must be equal to or more than 3% of the amount of the jobholder’s pensionable earnings in the certification period; and

(iii)the pensionable earnings of the jobholder must be equal to or more than the basic pay of that jobholder;

(c)if there is a shortfall, there is an agreement between the provider of the scheme and the relevant jobholder which provides that the jobholder must pay contributions which are equal to or more than the shortfall;

(d)taking all of the relevant jobholders together, the pensionable earnings of the jobholders constitute at least 85% of the earnings of the jobholders in the certification period; and

(e)there are direct payment arrangements between the relevant jobholder and the employer within the meaning of section 111A of the Pension Schemes Act 1993.

(5) In paragraph (4)(c), “shortfall” means the difference (if any) between—

(a)the employer’s contributions in respect of the relevant jobholder under the agreement referred to in paragraph (4)(b); and

(b)8% of the amount of the relevant jobholder’s pensionable earnings in the certification period, being earnings which are equal to or more than the basic pay of that jobholder.

(6) The third set of requirements is that—

(a)all of the benefits that may be provided to the relevant jobholder under the scheme are money purchase benefits;

(b)there is, in relation to the relevant jobholder, an agreement between the provider of the scheme and the employer under which—

(i)the employer must pay contributions in respect of the jobholder; and

(ii)the employer’s contribution must be equal to or more than 3% of the amount of the jobholder’s earnings in the certification period;

(c)if there is a shortfall, there is an agreement between the provider of the scheme and the relevant jobholder which provides that the jobholder must pay contributions which are equal to or more than the shortfall; and

(d)there are direct payment arrangements between the relevant jobholder and the employer within the meaning of section 111A of the Pension Schemes Act 1993.

(7) In paragraph (6)(c), “shortfall” means the difference (if any) between—

(a)the employer’s contributions in respect of the relevant jobholder under the agreement referred to in paragraph (6)(b); and

(b)7% of the amount of the relevant jobholder’s earnings in the certification period.

(8) Subject to the proviso in paragraph (9), for the purposes of paragraphs (1) to (7), a scheme as referred to in paragraph (1) may satisfy the first, second or third set of requirements even though under the agreements referred to above there is an upper limit (however expressed) to the amount of contributions that may be paid by the employer or the relevant jobholder or both of those persons.

(9) The proviso referred to is that the upper limit must not result in the payment of contributions by the employer, or by the employer and the relevant jobholder, that are less than those required by the relevant quality requirement.

(10) For the purposes of paragraphs (2) to (9), a reference to “the relevant jobholder” is a reference to each of the relevant jobholders.]

Textual Amendments