Multi-employer Pension Schemes Bill (HC Bill 156)

A

BILL

TO

Make provision about multi-employer pension schemes, including provision
for the protection of unincorporated businesses, such as plumbing businesses,
from certain multi-employer pension scheme liabilities; and for connected
purposes.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

1 Calculation of scheme liabilities for multi-employer pension schemes

(1) The Employer Debt Regulations are amended as follows.

(2) In paragraph (19) of regulation 5 (Calculation of the amount of scheme
liabilities and value of scheme assets), after “subject to”, insert “regulation 5A
5(Calculation of scheme liabilities: multi-employer pension schemes),”.

(3) After regulation 5 (Calculation of the amount of scheme liabilities and value of
scheme assets), insert the following—

5A Calculation of scheme liabilities: multi-employer pension schemes

(1) Regulation 5 does not apply to multi-employer schemes.

(2) 10The value of scheme liabilities for multi-employer schemes for the
purposes of section 75 of the 1995 Act shall be determined by reference
to the scheme’s technical provisions (within the meaning given in
section 222(2) of the 2004 Act).

(3) The trustees must arrange for the scheme liabilities to be calculated in
15accordance with paragraphs (4) and (5).

(4) Where the trustees consider that the methodology for the last actuarial
valuation of the scheme remains appropriate, they must instruct the
actuary to provide a best estimate of the scheme liabilities.

(5) Where the trustees consider that the methodology for the last actuarial
20valuation is no longer appropriate, they must obtain an actuarial
valuation in accordance with Part 3 of the 2004 Act.

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(6) The trustees must make a determination on whether the scheme
liabilities will be calculated by reference to paragraph (4) or (5) within
12 months of an employer cessation event occurring.

(7) Where the trustees have failed to make a determination in accordance
5with paragraph (6), the Regulator must direct the trustees as to whether
the scheme liabilities are to be calculated by reference to paragraph (4)
or (5).

(8) In this regulation, “Regulator” has the same meaning as in the 2004
Act.”

(4) 10In paragraph (7) of regulation 6 (Multi-employer pension schemes: general)
leave out “calculating the relevant transfer liabilities and the corresponding
assets in accordance with regulation 5” and insert “reference to regulation 5A.”

2 Responsibility for multi-employer scheme liabilities

(1) Regulation 6 (Multi-employer schemes: general) of the Employer Debt
15Regulations is amended as follows.

(2) Leave out sub-paragraph (4(c)) and paragraph (5) and insert—

(5) An employer (“Employer A”) participating in a multi-employer scheme
shall not be responsible for liabilities which—

(a) arise in relation to members of the scheme who are not and were
20never in pensionable service with Employer A; and

(b) cannot be attributed to any other employers in the multi-
employer pension scheme in accordance with paragraph 4.”

3 Transfer of economic entity to a limited liability company

(1) Regulation 6ZA (Employment-cessation events: general) of the Employer Debt
25Regulations is amended as follows.

(5A) Notwithstanding the other provisions of this regulation, an
employment-cessation event does not occur where—

(a) an economic entity which is—

(i) 30an employer within a multi-employer pension scheme;
and

(ii) not a limited company,

is transferred to a limited company;

(b) the limited company to which the economic entity is transferred
35becomes the employer in the multi-employer pension scheme in
place of the economic entity; and

(c) the limited company to which the economic entity is transferred
has been incorporated for the principal purpose of the transfer
of that economic entity.

(5B) 40In this regulation—

(a) the following have the same meaning as in regulation 3 of the
Transfer of Undertakings (Protection of Employment)
Regulations (S.I. 2006/246S.I. 2006/246)—

  • “economic entity”;

  • Multi-employer Pension Schemes BillPage 3

  • “transfer”; and

(b) “limited company” has the same meaning as in section 3 of the
Companies Act 2006.”

4 Responsibility for liabilities that cannot be attributed to an employer

(1) 5The Pensions Act 2004 is amended as follows.

(2) After section 130 (Board‘s duty where application or notification received
under section 129), insert—

130A Duty to assume responsibility for liabilities that cannot be attributed
to an employer

(“1) 10The Board must assume responsibility in accordance with this Chapter for
multi-employer scheme liabilities if—

(a) those liabilities cannot be attributed to a particular employer under the
scheme using criteria specified in regulations made under this Act;
and

(b) 15the value of the assets of the scheme at the relevant time is less than the
amount of the protected liabilities at that time.

(2) Where the trustees of a scheme become aware that conditions set out in
subsection (1) are satisfied, they must make an application to the Board
for it to assume responsibility for the liabilities under the scheme which
20cannot be attributed to a particular employer.

(3) Where the Board receives an application under subsection (2), it must
provide a notice to the trustees of the scheme, and employers
participating in the scheme, setting out—

(a) whether it considers that the conditions set out in subsection (1)
25are met;

(b) the reasons for its decision under paragraph (a).

(4) Where the Board issues a notice under subsection (3) that the
conditions in subsection (1) have been met, it must assume
responsibility in relation to the liabilities which cannot be attributed to
30a particular employer.

(5) The Secretary of State may by regulations require applications under
subsection (2) and notices under subsection (3) to be made in a
prescribed format and within a prescribed timescale.

(6) In this section “multi-employer scheme” means a scheme in relation to
35which there is more than one employer.

5 Interpretation

In this Act, “Employer Debt Regulations” means the Occupational Pension
Schemes (Employer Debt) Regulations 2005 (SI 2005/678SI 2005/678).

6 Extent, commencement and short title

(1) 40This Act extends to England and Wales, and Scotland.

(2) This Act comes into force three months after the day on which it is passed.

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(3) This Act may be cited as the Multi-employer Pension Schemes Act 2018.