|
| |
|
105 | Admission of new members, payment of contributions etc |
| |
(1) | This section applies where there is an assessment period in relation to an |
| |
| |
(2) | No new members may be admitted to the scheme during the assessment |
| |
| 5 |
(3) | No further contributions (other than those due to be paid before the beginning |
| |
of the assessment period) may be paid towards the scheme during the |
| |
| |
(4) | Any obligation to pay contributions towards the scheme during the assessment |
| |
period (including any obligation under section 49(8) of the Pensions Act 1995 |
| 10 |
(c. 26) to pay amounts deducted corresponding to such contributions) is to be |
| |
read subject to subsection (3) and section 118 (obligation to pay contributions |
| |
when assessment period ends). |
| |
(5) | During the assessment period, except in prescribed circumstances and subject |
| |
to prescribed conditions, no transfers of, or transfer payments in respect of, any |
| 15 |
member’s rights under the scheme are to be made from the scheme. |
| |
(6) | No benefits may accrue under the scheme to, or in respect of, members of the |
| |
scheme during the assessment period. |
| |
(7) | Subsection (6) does not prevent any increase, in a benefit, which would |
| |
otherwise accrue in accordance with the scheme or any enactment. |
| 20 |
| This subsection is subject to section 110 (which limits the scheme benefits |
| |
payable during an assessment period). |
| |
(8) | Subsection (6) does not prevent the accrual of money purchase benefits to the |
| |
extent that they are derived from income or capital gains arising from the |
| |
investment of payments which— |
| 25 |
(a) | are made by, or in respect of, a member of the scheme, and |
| |
(b) | relate to periods of pensionable service (within the meaning of section |
| |
124(1) and (3) of the Pensions Act 1995) prior to the assessment period. |
| |
(9) | Any action taken in contravention of this section is void. |
| |
(10) | Disregarding subsection (9), section 10 of the Pensions Act 1995 (civil penalties) |
| 30 |
applies to any trustee or manager of a scheme who fails to take all reasonable |
| |
steps to secure compliance with this section. |
| |
| |
(1) | This section applies where there is an assessment period in relation to an |
| |
| 35 |
(2) | With a view to ensuring that the scheme’s protected liabilities do not exceed its |
| |
assets or, if they do exceed its assets, that the excess is kept to a minimum, the |
| |
Board may give a relevant person in relation to the scheme directions |
| |
regarding the exercise during that period of their powers in respect of— |
| |
(a) | the investment of the scheme’s assets, |
| 40 |
(b) | the incurring of expenditure, |
| |
(c) | the instigation or conduct of legal proceedings, and |
| |
(d) | such other matters as may be prescribed. |
| |
| |
|
| |
|
| |
|
(a) | “relevant person” in relation to a scheme means— |
| |
(i) | the trustees or managers of the scheme, |
| |
(ii) | the employer in relation to the scheme, or |
| |
(iii) | such other persons as may be prescribed, and |
| |
(b) | the reference to the assets of the scheme is a reference to those assets |
| 5 |
excluding any assets representing the value of any rights in respect of |
| |
money purchase benefits under the scheme. |
| |
(4) | The Board may revoke or vary any direction under this section. |
| |
(5) | Where a direction under this section given to the trustees or managers of a |
| |
scheme is not complied with section 10 of the Pensions Act 1995 (c. 26) (civil |
| 10 |
penalties) applies to any such trustee or manager who has failed to take all |
| |
reasonable steps to secure compliance with the direction. |
| |
(6) | That section also applies to any other person who, without reasonable excuse, |
| |
fails to comply with a direction given to him under this section. |
| |
107 | Restrictions on winding up of schemes |
| 15 |
(1) | This section applies where there is an assessment period in relation to an |
| |
| |
(2) | Subject to subsection (3), the winding up of the scheme must not begin during |
| |
| |
(3) | Subsection (2) does not apply to the winding up of the scheme in accordance |
| 20 |
with an order by the Regulator under section 11(3A) of the Pensions Act 1995 |
| |
(Regulator’s powers to wind up occupational pension schemes to protect |
| |
Pension Protection Fund) directing the scheme to be wound up (and section |
| |
177 makes provision for the backdating of the winding up). |
| |
(4) | Where the winding up of the scheme begins by virtue of subsection (3), or |
| 25 |
otherwise began before the assessment period, no steps may be taken during |
| |
that period to discharge any liability to or in respect of a member of the scheme |
| |
in respect of pensions or other benefits. |
| |
(5) | Any action taken in contravention of this section is void, except to the extent |
| |
that the Board validates the action (see section 108). |
| 30 |
(6) | Disregarding subsection (5), where there is a contravention of this section, |
| |
section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or |
| |
manager who has failed to take all reasonable steps to secure compliance with |
| |
| |
(7) | The Regulator may not make a freezing order (see section 20) in relation to the |
| 35 |
scheme during the assessment period. |
| |
(8) | Nothing in this section operates to prevent the winding up of a scheme, and the |
| |
discharge of any liability to or in respect of a member of the scheme, in |
| |
accordance with section 119 (requirement to wind up schemes with sufficient |
| |
assets to meet protected liabilities). |
| 40 |
108 | Power to validate contraventions of section 107 |
| |
(1) | The Board may validate an action for the purposes of section 107(5) only if it is |
| |
satisfied that to do so is consistent with the objective of ensuring that the |
| |
|
| |
|
| |
|
scheme’s protected liabilities do not exceed its assets or, if those liabilities do |
| |
exceed its assets, that the excess is kept to a minimum. |
| |
(2) | Where the Board determines to validate, or not to validate, any action of the |
| |
trustees or managers for those purposes, it must give a notice to that effect to— |
| |
| 5 |
(b) | the trustees or managers of the scheme, |
| |
(c) | any insolvency practitioner in relation to the employer or, if there is no |
| |
such insolvency practitioner, the employer, and |
| |
(d) | any other person who appears to the Board to be directly affected by the |
| |
| 10 |
(3) | A notice under subsection (2) must contain a statement of the Board’s reasons |
| |
| |
(4) | A determination to validate an action does not take effect— |
| |
(a) | until the period within which the determination may be reviewed by |
| |
virtue of Chapter 6 has expired, and |
| 15 |
(b) | if the determination is so reviewed, until— |
| |
(i) | the review and any reconsideration, |
| |
(ii) | any reference to the PPF Ombudsman in respect of the |
| |
| |
(iii) | any appeal against his determination or directions, |
| 20 |
| has been finally disposed of. |
| |
109 | Board to act as creditor of the employer |
| |
(1) | Subsection (2) applies where there is an assessment period in relation to an |
| |
| |
(2) | During the assessment period, the rights and powers of the trustees or |
| 25 |
managers of the scheme in relation to any debt (including any contingent debt) |
| |
owed to them by the employer, whether by virtue of section 75 of the Pensions |
| |
Act 1995 (c. 26) (deficiencies in the scheme assets) or otherwise, are exercisable |
| |
by the Board to the exclusion of the trustees or managers. |
| |
(3) | Where, by virtue of subsection (2), any amount is paid to the Board in respect |
| 30 |
of such a debt, the Board must pay that amount to the trustees or managers of |
| |
| |
(4) | Where an insolvency arrangement is made in respect of the employer, the |
| |
Board is not bound by the terms of that arrangement if, and to the extent that, |
| |
the arrangement relates to a debt which, at the time the arrangement was |
| 35 |
made, was a contingent debt of the employer in respect of the scheme under |
| |
section 75 of the Pensions Act 1995. |
| |
(5) | Subsection (4) does not apply where, before the arrangement was made, the |
| |
Board consented to be so bound. |
| |
(6) | In subsection (4) “insolvency arrangement” means— |
| 40 |
(a) | a voluntary arrangement under Part 1 or 8 of the Insolvency Act 1986 |
| |
| |
(b) | an arrangement which has effect under section 425 of the Companies |
| |
| |
|
| |
|
| |
|
(c) | a deed of arrangement registered in accordance with the Deeds of |
| |
Arrangement Act 1914 (c. 47); |
| |
(d) | a trust deed executed for the employer’s creditors or a composition |
| |
contract entered into by the employer. |
| |
110 | Payment of scheme benefits |
| 5 |
(1) | Subsection (2) applies where there is an assessment period in relation to an |
| |
| |
(2) | The benefits payable to or in respect of any member under the scheme during |
| |
the assessment period must be reduced to the extent necessary to ensure that |
| |
they do not exceed the compensation which would be payable to or in respect |
| 10 |
of the members for that period in accordance with this Chapter if— |
| |
(a) | the Board assumed responsibility for the scheme under this Chapter, |
| |
| |
(b) | the assessment date referred to in Schedule 7 were the date on which |
| |
the assessment period began. |
| 15 |
(3) | Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to a trustee |
| |
or manager of a scheme who fails to take all reasonable steps to secure |
| |
compliance with subsection (2). |
| |
(4) | Regulations may provide that, where there is an assessment period in relation |
| |
to an eligible scheme, the commencement of a member’s pension or other |
| 20 |
benefits is, in such circumstances and on such terms and conditions as may be |
| |
prescribed, to be postponed for the whole or any part of the assessment period |
| |
for which he continues in employment after attaining normal pension age. |
| |
(5) | Nothing in subsection (2) applies to money purchase benefits. |
| |
111 | Loans to pay scheme benefits |
| 25 |
(1) | This section applies where section 110(2) applies in relation to an eligible |
| |
| |
(2) | Where the Board is satisfied that the trustees or managers of the scheme are not |
| |
able to pay benefits under the scheme (reduced in accordance with section |
| |
110(2)) as they fall due, it may, on an application by the trustees or managers, |
| 30 |
lend to them such amounts as the Board considers appropriate for the purpose |
| |
of enabling them to pay those benefits. |
| |
(3) | Where an amount lent to the trustees or managers of a scheme under |
| |
subsection (2) is outstanding at— |
| |
(a) | the time the Board ceases to be involved with the scheme, or |
| 35 |
| |
(i) | the time during the assessment period when an order is made |
| |
under section 11(3A) of the Pensions Act 1995 directing the |
| |
winding up of the scheme, or |
| |
(ii) | where no such order is made during that period, the time when |
| 40 |
section 119 (requirement to wind up schemes with sufficient |
| |
assets to meet protected liabilities) first applies in relation to the |
| |
| |
| that amount, together with the appropriate interest on it, falls to be repaid by |
| |
the trustees or managers of the scheme to the Board at that time. |
| 45 |
|
| |
|
| |
|
(4) | No loan may be made under subsection (2) after the time mentioned in |
| |
| |
(5) | In subsection (2) the reference to “benefits” does not include money purchase |
| |
| |
(6) | In subsection (3) “the appropriate interest” on an amount lent under subsection |
| 5 |
(2) means interest at the prescribed rate from the time the amount was so lent |
| |
| |
(7) | Subject to this section, the Board may make a loan under subsection (2) on such |
| |
| |
Valuation of assets and liabilities |
| 10 |
112 | Board’s obligation to obtain valuation of assets and protected liabilities |
| |
(1) | This section applies in a case within subsection (1) of section 99 or 100. |
| |
(2) | For the purposes of determining whether the condition in subsection (2)(a) of |
| |
the section in question is satisfied, the Board must, as soon as reasonably |
| |
practicable, obtain an actuarial valuation of the scheme as at the relevant time. |
| 15 |
| |
| “actuarial valuation”, in relation to the scheme, means a written valuation, |
| |
prepared and signed by a person with prescribed qualifications, of the |
| |
assets and protected liabilities of the scheme; and |
| |
| 20 |
(a) | in a case within subsection (1) of section 99 has the meaning |
| |
given in subsection (3)(c) of that section, and |
| |
(b) | in a case within subsection (1) of section 100 has the meaning |
| |
given in subsection (3)(b) of that section. |
| |
(4) | For the purposes of this Chapter, regulations may prescribe how— |
| 25 |
(a) | the assets and the protected liabilities of eligible schemes, and |
| |
(b) | their amount or value, |
| |
| are to be determined, calculated and verified. |
| |
(5) | Subject to any provision made under subsection (4), those matters are to be |
| |
determined, calculated and verified in accordance with guidance issued by the |
| 30 |
| |
(6) | In calculating the amount of any liabilities for those purposes, a provision of |
| |
the scheme which limits the amount of its liabilities by reference to the value of |
| |
its assets is to be disregarded. |
| |
(7) | The duty imposed by subsection (2) ceases to apply if and when the Board |
| 35 |
ceases to be involved with the scheme. |
| |
(8) | In this section references to “assets” do not include assets representing the |
| |
value of any rights in respect of money purchase benefits under the scheme. |
| |
113 | Approval of valuation |
| |
(1) | This section applies where the Board obtains a valuation in respect of a scheme |
| 40 |
| |
|
| |
|
| |
|
(2) | Where the Board is satisfied that the valuation has been prepared in |
| |
accordance with that section, it must— |
| |
(a) | approve the valuation, and |
| |
(b) | give a copy of the valuation to— |
| |
| 5 |
(ii) | the trustees or managers of the scheme, and |
| |
(iii) | any insolvency practitioner in relation to the employer or, if |
| |
there is no such insolvency practitioner, the employer. |
| |
(3) | Where the Board is not so satisfied, it must obtain another valuation under that |
| |
| 10 |
| |
(1) | For the purposes of this Chapter a valuation obtained under section 112 is not |
| |
| |
(a) | it is approved under section 113, |
| |
(b) | the period within which the approval may be reviewed by virtue of |
| 15 |
Chapter 6 has expired, and |
| |
(c) | if the approval is so reviewed— |
| |
(i) | the review and any reconsideration, |
| |
(ii) | any reference to the PPF Ombudsman in respect of the |
| |
| 20 |
(iii) | any appeal against his determination or directions, |
| |
| has been finally disposed of. |
| |
(2) | For the purposes of determining whether or not the condition in section |
| |
99(2)(a) or, as the case may be, section 100(2)(a) (condition that scheme assets |
| |
are less than protected liabilities) is satisfied in relation to a scheme, a binding |
| 25 |
| |
| This subsection is subject to section 134(3) and (4) (treatment of fraud |
| |
| |
(3) | Where a valuation becomes binding under this section the Board must as soon |
| |
as practicable give a notice to that effect together with a copy of the binding |
| 30 |
| |
(a) | the trustees or managers of the scheme, |
| |
(b) | any insolvency practitioner in relation to the employer or, if there is no |
| |
such insolvency practitioner, the employer. |
| |
(4) | A notice under subsection (3) must be in the prescribed form and contain the |
| 35 |
| |
Refusal to assume responsibility |
| |
115 | Schemes which become eligible schemes |
| |
(1) | Regulations may provide that where the Board is satisfied that an eligible |
| |
scheme was not such a scheme throughout such period as may be prescribed, |
| 40 |
the Board must refuse to assume responsibility for the scheme under this |
| |
| |
|
| |
|
| |
|
(2) | Where, by virtue of subsection (1), the Board is required to refuse to assume |
| |
responsibility for a scheme, it— |
| |
(a) | must issue a withdrawal notice, and |
| |
(b) | give a copy of that notice to— |
| |
| 5 |
(ii) | the trustees or managers of the scheme, and |
| |
(iii) | any insolvency practitioner in relation to the employer or, if |
| |
there is no such insolvency practitioner, the employer. |
| |
(3) | In this section “withdrawal notice” means a notice in the prescribed form |
| |
| 10 |
(a) | states the time from which the Board ceases to be involved with the |
| |
scheme (see section 117), and |
| |
(b) | contains such other information as may be prescribed. |
| |
116 | New schemes created to replace existing schemes |
| |
(1) | The Board must refuse to assume responsibility for a scheme (“the new |
| 15 |
scheme”) under this Chapter where it is satisfied that— |
| |
(a) | the new scheme was established during such period as may be |
| |
| |
(b) | the employer in relation to the new scheme was, at the date of |
| |
establishment of that scheme, also the employer in relation to a scheme |
| 20 |
established before the new scheme (the “old scheme”), |
| |
(c) | a transfer or transfers of, or transfer payment or transfer payments in |
| |
respect of, any rights of members under the old scheme has or have |
| |
been made to the new scheme, and |
| |
(d) | the main purpose or one of the main purposes of establishing the new |
| 25 |
scheme and making the transfer or transfers, or transfer payment or |
| |
transfer payments, was to enable those members to receive |
| |
compensation under the pension compensation provisions in respect of |
| |
their rights under the new scheme in circumstances where, in the |
| |
absence of the transfer or transfers, regulations under section 115 |
| 30 |
would have operated to prevent such payments in respect of their |
| |
rights under the old scheme. |
| |
(2) | Where, under subsection (1), the Board is required to refuse to assume |
| |
responsibility for a scheme, it— |
| |
(a) | must issue a withdrawal notice, and |
| 35 |
(b) | give a copy of that notice to— |
| |
| |
(ii) | the trustees or managers of the scheme, and |
| |
(iii) | any insolvency practitioner in relation to the employer or, if |
| |
there is no such insolvency practitioner, the employer. |
| 40 |
(3) | In this section “withdrawal notice” means a notice in the prescribed form |
| |
| |
(a) | states the time from which the Board ceases to be involved with the |
| |
scheme (see section 117), and |
| |
(b) | contains such other information as may be prescribed. |
| 45 |
|
| |
|