The Occupational Pension Schemes(Winding Up) Regulations 1996

Winding up of sectionalised schemes etc.E+W+S

12.—[F1(1) If—

(a)a scheme in relation to which there is more than one employer is divided into two or more sections; and

(b)the provisions of the scheme are such that they meet conditions A and B,

sections 73 to 74 apply as if each section of the scheme were a separate scheme.

(1A) Condition A is that contributions payable to the scheme by an employer, or by a member in employment under that employer, are allocated to that employer’s section (or, if more than one section applies to the employer, to the section which is appropriate in respect of the employment in question).

(1B) Condition B is that a specified part or proportion of the assets of the scheme is attributable to each section and cannot be used for the purposes of any other section.

(1C) In their application to a scheme—

(a)which has been such a scheme as is mentioned in paragraph (1);

(b)which is divided into two or more sections, some or all of which apply only to members who are not in pensionable service under the section;

(c)the provisions of which have not been amended so as to prevent conditions A and B being met in relation to two or more sections; and

(d)in relation to one or more sections of which those conditions have ceased to be met at any time by reason only of there being no members in pensionable service under the section and no contributions which are to be allocated to it,

sections 73 to 74 apply as if the section in relation to which those conditions have ceased to be met were a separate scheme.

(1D) For the purposes of paragraphs (1) to (1C), any provisions of the scheme by virtue of which contributions or transfers of assets may be made to make provision for death benefits are disregarded.

(1E) But if paragraph (1) or (1C) applies and, by virtue of any provisions of the scheme, contributions or transfers of assets to make provision for death benefits are made to a section (“the death benefits section”) the assets of which may only be applied for the provision of death benefits, the death benefits section is also to be treated as a separate scheme.

(1F) For the purpose of this regulation, any provisions of a scheme by virtue of which assets attributable to one section may on the winding up of the scheme or a section be used for the purposes of another section are disregarded.]

(3) Where by virtue of paragraph 1 of [F2Schedule 2 to the Occupational Pension Schemes (Scheme Funding) Regulations 2005] (sectionalised multi-employer schemes) [F3Part 3 of the Pensions Act 2004] applies to a trust scheme as if different parts of the scheme were separate schemes, section 38 and regulation 10 (except paragraph (1)(e) of that regulation) shall also so apply.

(4) Where any provision of this regulation applies in relation to a scheme, then references to the scheme and its members in the provisions of other regulations shall be construed accordingly.