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Reconsideration of closed schemes |
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140 | Applications and notifications where closed schemes have insufficient assets |
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(1) | If at any time the trustees or managers of a closed scheme become aware that |
| |
the value of the assets of the scheme is less than the amount of the protected |
| |
liabilities in relation to the scheme, they must, before the end of the prescribed |
| 5 |
period beginning with that time, make an application to the Board for it to |
| |
assume responsibility for the scheme. |
| |
(2) | Where the Board receives an application under subsection (1), it must give a |
| |
copy of the application to the Regulator. |
| |
(3) | If at any time the Regulator becomes aware that the value of the assets of the |
| 10 |
scheme is less than the amount of the protected liabilities in relation to the |
| |
scheme, it must give the Board a notice to that effect. |
| |
(4) | Where the Board receives a notice under subsection (3), it must give the |
| |
trustees or managers of the scheme a notice to that effect. |
| |
(5) | The duty imposed by subsection (1) does not apply where the trustees or |
| 15 |
managers of an eligible scheme become aware as mentioned in that subsection |
| |
by reason of a notice given to them under subsection (4). |
| |
(6) | The duty imposed by subsection (3) does not apply where the Regulator |
| |
becomes aware as mentioned in that subsection by reason of a copy of an |
| |
application made by the trustees or managers of the eligible scheme being |
| 20 |
given to it under subsection (2). |
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(7) | Regulations may require notices and applications under this section to be in the |
| |
prescribed form and contain the prescribed information. |
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(8) | If the trustees or managers of an eligible scheme fail to comply with subsection |
| |
(1), section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to any |
| 25 |
trustee or manager who has failed to take all reasonable steps to secure |
| |
| |
(9) | In this section closed scheme has the same meaning as in section 138. |
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141 | Duty to assume responsibility for closed schemes |
| |
(1) | Where the trustees or managers of a closed scheme— |
| 30 |
(a) | make an application under subsection (1) of section 140, or |
| |
(b) | receive a notice from the Board under subsection (4) of that section, |
| |
| the Board must assume responsibility for the scheme in accordance with this |
| |
Chapter if the value of the assets of the scheme at the relevant time was less |
| |
than the amount of the protected liabilities at that time. |
| 35 |
(2) | In subsection (1) the reference to the assets of the scheme is a reference to those |
| |
assets excluding any assets representing the value of any rights in respect of |
| |
money purchase benefits under the scheme. |
| |
(3) | For the purposes of determining whether the condition in subsection (1) is |
| |
satisfied, the Board must, as soon as reasonably practicable, obtain an actuarial |
| 40 |
valuation (within the meaning of section 127(3)) of the scheme as at the |
| |
| |
|
| |
|
| |
|
(4) | Subject to subsection (5), the following provisions apply in relation to a |
| |
valuation obtained under subsection (3) as they apply in relation to a valuation |
| |
obtained under section 127— |
| |
(a) | subsections (4) to (6) and (8) of that section; |
| |
(b) | section 128 (approval of valuation), other than subsection (2)(b)(iii) |
| 5 |
(duty to give copy of approved valuation to employer’s insolvency |
| |
| |
(c) | section 129 (binding valuations), other than subsection (3)(b) (duty to |
| |
give copy of binding valuation to employer’s insolvency practitioner). |
| |
(5) | In the application of section 129 by virtue of subsection (4), subsection (2) of |
| 10 |
that section applies as if the reference to section 115(2)(a) included a reference |
| |
to subsection (1) of this section. |
| |
| |
| “closed scheme” has the same meaning as in section 138; |
| |
| “the relevant time” means the time immediately before the application |
| 15 |
mentioned in subsection (1)(a) was made, or (as the case may be) the |
| |
notice mentioned in subsection (1)(b) was received, by the trustees or |
| |
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142 | Closed schemes: further assessment periods |
| |
(1) | This section applies where— |
| 20 |
(a) | an application is made under subsection (1) of section 140 in relation to |
| |
| |
(b) | the trustees or managers of the scheme receive a notice under |
| |
subsection (4) of that section. |
| |
(2) | An assessment period — |
| 25 |
(a) | begins when the application is made or the notice is received by the |
| |
trustees or managers of the scheme, and |
| |
| |
(i) | the trustees or managers receive a transfer notice under section |
| |
| 30 |
(ii) | the conditions in section 137(5) (closed scheme with sufficient |
| |
assets to meet protected liabilities etc) are satisfied in relation to |
| |
| |
| |
(3) | In this section “closed scheme” has the same meaning as in section 138. |
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Assumption of responsibility for a scheme |
| |
| |
(1) | This section applies where the Board is required to assume responsibility for a |
| |
| |
(2) | The Board must give the trustees or managers a notice (a “transfer notice”). |
| 40 |
(3) | In a case to which section 114 or 115 applies, a transfer notice may not be given |
| |
until the valuation obtained under section 127 is binding. |
| |
|
| |
|
| |
|
(4) | In a case to which section 141 applies, a transfer notice may not be given until |
| |
the valuation obtained under subsection (3) of that section is binding |
| |
(5) | The Board must give a copy of any notice given under subsection (2) to— |
| |
| |
(b) | any insolvency practitioner in relation to the employer or, if there is no |
| 5 |
such insolvency practitioner, the employer. |
| |
(6) | This section is subject to section 155(1) and (2) (no transfer notice within first 12 |
| |
months of assessment period or when fraud compensation application is |
| |
| |
144 | Effect of Board assuming responsibility for a scheme |
| 10 |
(1) | Where a transfer notice is given to the trustees or managers of an eligible |
| |
scheme, the Board assumes responsibility for the scheme in accordance with |
| |
| |
(2) | The effect of the Board assuming responsibility for a scheme is that— |
| |
(a) | the property, rights and liabilities of the scheme are transferred to the |
| 15 |
Board, without further assurance, with effect from the time the trustees |
| |
or managers receive the transfer notice, |
| |
(b) | the trustees or managers of the scheme are discharged from their |
| |
pension obligations from that time, and |
| |
(c) | from that time the Board is responsible for securing that compensation |
| 20 |
is paid in accordance with the pension compensation provisions, |
| |
| and, accordingly, the scheme is to be treated as having been wound up |
| |
immediately after that time. |
| |
(3) | In subsection (2)(a) the reference to liabilities of the scheme does not include |
| |
any liability to, or in respect of, any member of the scheme, other than liabilities |
| 25 |
in respect of money purchase benefits. |
| |
(4) | In subsection (2)(b) “pension obligations” in relation to the trustees or |
| |
managers of the scheme means— |
| |
(a) | their obligations to provide pensions or other benefits to or in respect |
| |
of persons (including any obligation to provide guaranteed minimum |
| 30 |
pensions within the meaning of the Pension Schemes Act 1993 (c. 48)), |
| |
| |
(b) | their obligations to administer the scheme in accordance with the |
| |
scheme rules and this or any other enactment. |
| |
(5) | Schedule 6 makes provision in respect of the transfer of the property, rights |
| 35 |
and liabilities of a scheme under subsection (2)(a). |
| |
(6) | Regulations may make further provision regarding such transfers. |
| |
145 | The pension compensation provisions |
| |
(1) | Schedule 7 makes provision for pension compensation to be paid in relation to |
| |
a scheme for which the Board assumes responsibility under this Chapter, |
| 40 |
| |
(a) | periodic compensation to be paid to or in respect of members, |
| |
(b) | lump sum compensation to be paid to members, |
| |
|
| |
|
| |
|
(c) | a cap to be imposed on the periodic compensation and lump sum |
| |
compensation payable, and |
| |
(d) | annual increases to be made to periodic compensation. |
| |
(2) | In this Part references to the pension compensation provisions are to the |
| |
provisions of this section and section 144(2)(c), Schedule 7 and any regulations |
| 5 |
| |
| (Those references do not include section 153 (discharge of liabilities in respect |
| |
of money purchase benefits).) |
| |
146 | Adjustments to be made where the Board assumes responsibility for a scheme |
| |
(1) | This section applies where the Board assumes responsibility for an eligible |
| 10 |
scheme under this Chapter. |
| |
(2) | Any benefits (other than money purchase benefits) which— |
| |
(a) | were payable under the scheme to any member, or to any person in |
| |
respect of any member, during the assessment period, and |
| |
(b) | have been paid before the transfer notice is given, |
| 15 |
| are to be regarded as going towards discharging any liability of the Board to |
| |
pay compensation to the member or, as the case may be, person in accordance |
| |
with the pension compensation provisions. |
| |
| |
(a) | if any amount paid, during the assessment period, by the trustees or |
| 20 |
managers of the scheme to a member, or to a person in respect of a |
| |
member, exceeded the entitlement of that member or person under the |
| |
pension compensation provisions, take such steps as it considers |
| |
appropriate (including adjusting future compensation payments made |
| |
in accordance with those provisions) to recover an amount equal to the |
| 25 |
| |
(i) | the amount of the excess, and |
| |
(ii) | interest on that amount, at the prescribed rate, for the period |
| |
which begins when the excess was paid by the trustees or |
| |
managers and ends with the recovery of the excess, and |
| 30 |
(b) | if any amount so paid was less than that entitlement (or no amount was |
| |
paid in respect of that entitlement), pay an amount to the member or |
| |
person concerned equal to the aggregate of— |
| |
(i) | the amount of the shortfall, and |
| |
(ii) | interest on that amount, at the prescribed rate, for the period |
| 35 |
which begins when the shortfall ought to have been paid by the |
| |
trustees or managers and ends with the payment of the shortfall |
| |
| |
(4) | In subsection (3) references to an amount paid do not include an amount paid |
| |
in respect of any money purchase benefit. |
| 40 |
(5) | Nothing in subsection (3) requires the Board to recover from any person any |
| |
amount which it considers to be trivial. |
| |
147 | Postponement of compensation entitlement for the assessment period |
| |
(1) | Regulations may provide that, where the Board assumes responsibility for an |
| |
eligible scheme, the entitlement of any member of the scheme to compensation |
| 45 |
under this Chapter is, in such circumstances as may be prescribed, postponed |
| |
|
| |
|
| |
|
for the whole or any part of the assessment period for which he continued in |
| |
employment after attaining normal pension age. |
| |
(2) | Regulations under subsection (1) may provide that the postponement is on |
| |
such terms and conditions (including those relating to increments) as may be |
| |
| 5 |
(3) | In subsection (1) the reference to “normal pension age” is to normal pension |
| |
age, within the meaning of paragraph 30 of Schedule 7, in relation to the |
| |
pension or lump sum in respect of which the entitlement to compensation |
| |
| |
148 | Guaranteed minimum pensions |
| 10 |
(1) | The Board must notify the Commissioners of Inland Revenue where, by reason |
| |
of it assuming responsibility for an eligible scheme under this Chapter, the |
| |
trustees or managers of the scheme are discharged from their liability to |
| |
provide a guaranteed minimum pension (within the meaning of the Pension |
| |
Schemes Act 1993 (c. 48)) to or in respect of a member of the scheme. |
| 15 |
(2) | Notification under subsection (1) must be given as soon as reasonably |
| |
| |
(3) | In section 47 of the Pension Schemes Act 1993 (further provision concerning |
| |
entitlement to a guaranteed minimum pension for the purposes of section 46), |
| |
after subsection (7) insert— |
| 20 |
“(8) | For the purposes of section 46, a person shall be treated as entitled to a |
| |
guaranteed minimum pension to which he would have been entitled |
| |
but for the fact that the trustees or managers were discharged from |
| |
their liability to provide that pension on the Board of the Pension |
| |
Protection Fund assuming responsibility for the scheme.” |
| 25 |
149 | Duty to pay scheme benefits unpaid at assessment date |
| |
(1) | Where the Board assumes responsibility for a scheme under this Chapter it |
| |
must pay any amount by way of pensions or other benefits under the scheme |
| |
to which a person had become entitled under the scheme rules before the |
| |
assessment date but which remained unpaid at the time the transfer notice was |
| 30 |
received by the trustees or managers of the scheme. |
| |
(2) | If, immediately before the assessment date, the person is entitled to the amount |
| |
but has postponed payment of it, subsection (1) does not apply. |
| |
(3) | In this section “assessment date” and “scheme rules” are to be construed in |
| |
accordance with Schedule 7. |
| 35 |
150 | Modification of Chapter where liabilities discharged during assessment |
| |
| |
Regulations may modify any of the provisions of this Chapter as it applies to |
| |
cases where any liability to provide pensions or other benefits to or in respect |
| |
of any member or members under a scheme is discharged during an |
| 40 |
assessment period in relation to the scheme by virtue of— |
| |
(a) | regulations under section 122(4), or |
| |
(b) | the Board validating any action mentioned in section 122(5). |
| |
|
| |
|