Preliminary

Citation, commencement and application

1.—(1) These Regulations may be cited as the Occupational Pension Schemes (Employer Debt) Regulations (Northern Ireland) 2005 and shall come into operation on 6th April 2005.

(2) These Regulations shall not apply to–

(a)any scheme other than a money purchase scheme if a debt to the trustees or managers of the scheme has been treated as arising under Article 75(1) (deficiencies in the assets) before that date;

(b)any scheme which immediately before that date was regarded by virtue of regulation 2 of the Winding Up Regulations as having begun to be wound up before that date for the purposes of those Regulations, or

(c)any scheme which according to the rules in Article 121(4) to (8)(3) (interpretation of Part II) began to wind up before that date.

Interpretation

2.—(1) In these Regulations –

“the 2005 Order” means the Pensions (Northern Ireland) Order 2005(4);

“the actuary” means the actuary appointed for the scheme in pursuance of Article 47(1)(b) (professional advisers) or, in the case of a scheme to which that provision does not apply by virtue of regulations made under Article 47(5), an actuary otherwise authorised by the trustees or managers to provide such valuations or certifications as may be required under these Regulations;

“the applicable time” means the time as at which the value of the assets of a scheme and the amount of its liabilities are to be determined, calculated and verified for the purposes of Article 75;

“the Deficiency on Winding Up Regulations” means the Occupational Pension Schemes (Deficiency on Winding Up, etc.) Regulations (Northern Ireland) 1996(5);

“employer” has the same meaning as in Article 75 (but see paragraph (2) and regulations 9 and 13);

“employment-cessation event” has the meaning given in regulation 6(4);

“the MFR Regulations” means the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations (Northern Ireland) 1996(6);

“money purchase scheme” means an occupational pension scheme under which all the benefits that may be provided other than death benefits are money purchase benefits;

“multi-employer scheme” means a scheme in relation to which there is more than one employer (including, except in regulation 8, any section of a scheme treated under that regulation as a scheme if there is more than one employer in relation to that section);

“the tax condition”, in relation to a scheme, means –

“the Winding Up Regulations” means the Occupational Pension Schemes (Winding Up) Regulations (Northern Ireland) 1996(8).

(2) In these Regulations “scheme” must be read in appropriate cases in accordance with the modifications of Article 75 made by regulation 8, 14 or 15, as the case may be; and “employer” and “member” must be read accordingly.

(3) References in these Regulations to the guidance in GN 19 are to the guidelines on winding up and scheme asset deficiency (GN 19), prepared and published by the Institute of Actuaries and the Faculty of Actuaries(9) and approved for the purposes of these Regulations by the Department, with such revisions as have been so approved at the applicable time.

(4) References in these Regulations to the guidance in GN 27 are to the guidelines on minimum funding requirement (GN 27), prepared and published by the Institute of Actuaries and the Faculty of Actuaries and approved for the purposes of the MFR Regulations by the Department, with such revisions as have been so approved at the applicable time.

(5) In these Regulations any reference to a numbered Article is a reference to the Article of the Pensions (Northern Ireland) Order 1995 bearing that number.

Disapplication of the Deficiency on Winding Up Regulations

3.  The Deficiency on Winding Up Regulations shall not apply in any case where these Regulations apply (and accordingly they shall only apply to a scheme as respects which regulation 1(2)(a), (b) or (c) applies).

Schemes to which Article 75 does not apply

4.—(1) Article 75 shall not apply to any scheme which is –

(a)a public service pension scheme under the provisions of which there is no requirement for assets related to the intended rate or amount of benefit under the scheme to be set aside in advance (disregarding requirements relating to voluntary contributions);

(b)a scheme which is made under Article 9 of the Superannuation (Northern Ireland) Order 1972(10) (superannuation of persons employed in local government service, etc.) and provides pensions to persons mentioned in paragraph (1)(a) of that Article;

(c)a scheme which is established under section 48 of the Northern Ireland Act 1998(11) (pensions of members), or which was established under Part II of the Ministerial Salaries and Member’s Pensions Act (Northern Ireland) 1965(12) or Article 3 of the Assembly Pensions (Northern Ireland) Order 1976(13);

(d)a scheme in respect of which a relevant public authority, as defined in Article 280(4) of the 2005 Order, has given a guarantee or made any other arrangements for the purposes of securing that the assets of the scheme are sufficient to meet its liabilities;

(e)a scheme which does not meet the tax condition;

(f)a scheme which –

(i)has been categorised by the Commissioners of Inland Revenue for the purposes of its approval as a centralised scheme for non-associated employers;

(ii)which is not contracted-out, and

(iii)under the provisions of which the only benefits that may be provided on or after retirement (other than money purchase benefits derived from the payment of voluntary contributions by any person) are lump sum benefits which are not calculated by reference to a member’s salary;

(g)a scheme with such a superannuation fund as is mentioned in section 615(6) of the Taxes Act 1988 (fund established to provide superannuation benefits in respect of persons' employment in a trade or undertaking wholly outside the United Kingdom);

(h)a scheme with fewer than 2 members;

(i)a scheme with fewer than 12 members where all the members are trustees of the scheme and either –

(i)the rules of the scheme provide that all decisions are made only by the trustees who are members of the scheme by unanimous agreement, or

(ii)the scheme has a trustee who is independent in relation to the scheme for the purposes of Article 23(14) (power to appoint independent trustees) (see Article 23(3)) and is registered in the register maintained by the Authority in accordance with regulations made under Article 23(4);

(j)a scheme with fewer than 12 members where all the members are directors of a company which is the sole trustee of the scheme and either –

(i)the rules of the scheme provide that all decisions are made only by the members of the scheme by unanimous agreement, or

(ii)one of the directors of the company is independent in relation to the scheme for the purposes of Article 23 and is registered in the register maintained by the Authority in accordance with regulations made under Article 23(4), or

(k)the scheme established by the Salvation Army Act 1963(15).

(2) Before 6th April 2006 –

(a)paragraph (1)(e) shall apply with the addition at the end of the words “and is not a relevant statutory scheme providing relevant benefits”, and

(b)for the purposes of that paragraph “relevant statutory scheme” and “relevant benefits” have the same meaning as in Chapter I of Part XIV of the Taxes Act 1988 (see sections 611A(16) and 612(1) of that Act).

Valuations

Calculation of the value of scheme liabilities and assets: defined benefit schemes

5.—(1) The liabilities and assets of a scheme which are to be taken into account for the purposes of Article 75(2) and (4) and their amount or value must be determined, calculated and verified by the actuary as at the applicable time –

(a)in the case of liabilities in respect of pensions or other benefits, on the assumption that the liabilities will be discharged by the purchase of annuities of the kind described in Article 74(3)(c)(17) (discharge of liabilities: annuity purchase);

(b)subject to sub-paragraph (a), on the general assumptions specified in regulation 3(2)(a) to (c) and (3) of the MFR Regulations (determination, valuation and verification of assets and liabilities: general);

(c)subject to sub-paragraph (a) and paragraphs (2), (3), (5) and (6), in accordance with regulations 4 to 8 of the MFR Regulations (determination and valuation of assets and liabilities);

(d) subject to sub-paragraph (e), so far as the guidance given in GN 27 applies as respects regulations 3(2)(a) to (c) and (3) and 4 to 8 of the MFR Regulations or as respects sub-paragraph (a) and paragraphs (2) and (3) of this regulation, in accordance with that guidance, and

(e)in accordance with the guidance given in GN 19 so far as that guidance applies for the purposes of these Regulations.

(2) For the purposes of paragraph (1)(a) the actuary must estimate the cost of purchasing the annuities.

(3) The liabilities of a scheme which are to be taken into account under paragraph (1) include all expenses (except the cost of the annuities referred to in paragraph (1)(a)) which, in the opinion of the trustees or mangers of the scheme, are likely to be incurred in connection with the winding up of the scheme.

(4) Where in these Regulations (or in the MFR Regulations as applied by this regulation) there is a reference to the value of any asset or the amount of any liability being calculated or verified in accordance with the opinion of the actuary or as he thinks appropriate, he must comply with any relevant provision in the guidance given in GN 27 or, as the case may be, GN 19 in making that calculation or verification.

(5) The value of the assets and the amount of the liabilities of a scheme which are to be taken into account for the purposes of Article 75(2) and (4) must be certified by the actuary in the form set out in Schedule 1, but if the scheme is being wound up on the date as at which the valuation is made, the actuary must modify the note at the end of the certificate by omitting the words from “if the scheme” to the end.

(6) For the purposes of this regulation –

(a)references in regulations 3(2), 4, 5, 7 and 8 of the MFR Regulations to the relevant date shall be taken as references to the applicable time;

(b)regulations 4(1), 7(1) and 8(2) of the MFR Regulations shall have effect with the substitution for “the minimum funding requirement is met” of “the value of the assets of the scheme is less than the amount of the liabilities of the scheme”;

(c)regulation 6(1)(b) of the MFR Regulations shall have effect with the addition at the end of the words “(and any amount treated as a debt due to the trustees or managers of the scheme under Article 75(2) or (4) by virtue of the valuation in question)”.

(7) In its application for the purposes of this regulation in a case where the applicable time falls after the scheme has begun to be wound up, regulation 6(1) of the MFR Regulations shall have effect with the addition after sub-paragraph (c) of the words –

• “, and for the purposes of sub-paragraph (a), regulation 5(1)(a) of the Occupational Pension Schemes (Investment) Regulations (Northern Ireland) 1996(18) (exclusion of employer-related investments over 5 per cent. of current market value) shall be disregarded.”.

(8) This regulation has effect subject to regulation 7.

Multi-employer schemes

Multi-employer schemes: general

6.—(1) In its application to a multi-employer scheme, Article 75 shall have effect in relation to each employer as if –

(a)the reference in Article 75(2)(a)(ii) to a time which falls before any relevant event in relation to the employer which occurs while the scheme is being wound up were a reference to a time which falls before relevant events have occurred in relation to all the employers;

(b)the reference in Article 75(2) to an amount equal to the difference being treated as a debt due from the employer were a reference to an amount equal to that employer’s share of the difference being treated as a debt due from that employer;

(c)the references in Article 75(3)(a)(i) and (b) to no relevant event of the kind there mentioned occurring in relation to the employer were references to no event of that kind occurring in relation to all the employers;

(d)the reference in Article 75(4)(a) to a relevant event (“the current event”) occurring in relation to the employer were a reference to a relevant event or an employment-cessation event occurring only in relation to that employer;

(e)the reference in Article 75(4) to an amount equal to the difference being treated as a debt due from the employer were –

(i)in a case where the difference is ascertained immediately before a relevant event occurs in relation to the employer, a reference to an amount equal to the employer’s share of the difference being treated as a debt due from the employer, and

(ii)in a case where the difference is ascertained immediately before an employment cessation event occurs in relation to the employer, a reference to an amount equal to the sum of the cessation expenses attributable to the employer and the employer’s share of the difference being treated as a debt due from the employer, and

(f)Article 75(4)(d) and (e) were omitted.

(2) For the purposes of paragraph (1), an employer’s share of the difference is –

(a)such proportion of the total difference as, in the opinion of the actuary after consultation with the trustees or managers, the amount of the scheme’s liabilities attributable to employment with that employer bears to the total amount of the scheme’s liabilities attributable to employment with the employers, or

(b)if the scheme provides for the total amount of that debt to be otherwise apportioned amongst the employers, the amount due from that employer under that provision.

(3) For the purposes of paragraph (2) –

(a)the total amount of the scheme’s liabilities which are attributable to employment with the employers, and

(b)the amount of the liabilities attributable to employment with any one employer,

are such amounts as are determined, calculated and verified by the actuary in accordance with the guidance given in GN 19; and a determination under this paragraph must be certified by the actuary as being in accordance with that guidance.

(4) For the purposes of these Regulations, an employment-cessation event occurs in relation to an employer if he ceases to be an employer employing persons in the description of employment to which the scheme relates at a time when at least one other person continues to employ such persons.

(5) For the purposes of paragraph (1), the cessation expenses attributable to an employer are all expenses which, in the opinion of the trustees or managers of the scheme, are likely to be incurred in connection with the employment-cessation event occurring in relation to the employer.

Multi-employer schemes: valuations for employment-cessation events

7.—(1) This regulation shall apply where –

(a)Article 75 applies with the modifications referred to in regulation 6, and

(b)the amount of the liabilities of a scheme immediately before an employment-cessation event is being determined in order to determine whether a debt is to be treated as due from the employer under Article 75(4).

(2) Regulation 5 shall apply –

(a)with the omission of paragraphs (1)(a) and (2) and the references to those provisions in paragraph (1)(b), (c) and (d) (by virtue of which liabilities for pensions and other benefits are to be valued on the assumption that they will be discharged by the purchase of annuities), and

(b)with the omission of paragraph (3).

Multi-employer schemes: sectionalised schemes

8.—(1) In its application to a multi-employer scheme –

(a)which is divided into 2 or more sections, and

(b)the provisions of which are such that the sections meet conditions A and B,

Article 75 and the provisions of these Regulations (apart from this regulation) shall apply as if each section of the scheme were a separate scheme.

(2) 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 that employer, to the section which is appropriate in respect of the employment in question).

(3) 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.

(4) In their application to a scheme –

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

(b)which is divided into 2 or more sections, one or more 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 2 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,

Article 75 and the provisions of these Regulations (apart from this paragraph) shall apply as if any section in relation to which those conditions have ceased to be met were a separate scheme.

(5) For the purposes of paragraphs (1) to (4), 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.

(6) But if paragraph (1) or (4) applies and, by virtue of any provisions of the scheme, contributions or transfers of assets to make such provision 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.

(7) For the purpose of this regulation, any provisions of the 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.

Former employers

Former employers

9.—(1) In the application of Article 75 and these Regulations to a scheme which has no active members, references to employers include every person who employed persons in the description of employment to which the scheme relates immediately before the occurrence of the event after which the scheme ceased to have any active members.

(2) In the application of Article 75 and these Regulations to a scheme, references to employers include –

(a)any pre-April 1997 participator (see paragraph (7)), and

(b)any person who has ceased on or after 6th April 1997 and before the applicable time to be a person employing persons in the description of employment to which the scheme relates, unless –

(i)when he so ceased the scheme was not being wound up and continued to have active members, and

(ii)condition A, B, C or D is met.

(3) Condition A is that no debt was treated as becoming due from him under Article 75(2) or (4) (or, if he so ceased before 6th April 2005, under Article 75(1) (as then in operation)) by virtue of his so ceasing.

(4) Condition B is that such a debt was treated as becoming due from him and has been paid before the applicable time.

(5) Condition C is that such a debt was treated as becoming due from him and has not been so paid solely because he was not notified of the debt, and of the amount of it, sufficiently in advance of the applicable time for it to be paid before that time.

(6) Condition D is that such a debt was treated as becoming due from him but at the applicable time it is excluded from the value of the assets of the scheme because it is unlikely to be recovered without disproportionate cost or within a reasonable time.

(7) In this regulation “pre-April 1997 participator” means a person who immediately before 6th April 2005 was regarded as an employer for the purposes of the Deficiency on Winding Up Regulations by virtue of regulation 6 of those Regulations (ceasing to participate: transitional provision).

Money purchase schemes

Money purchase schemes: fraud and levy deficiencies etc.

10.—(1) Notwithstanding paragraph (1)(a) of Article 75, that Article shall apply to money purchase schemes as if –

(a)paragraph (2) –

(i)provided that if the levy-deficit condition is met, the levy deficit is to be treated as a debt due from the employer to the trustees or managers of the scheme, and

(ii)were not subject to paragraph (3) of that Article;

(b)paragraph (4) provided that where the criminal-reduction conditions are met the criminal deficit is to be treated as a debt due from the employer to the trustees or managers of the scheme, and

(c)paragraphs (4A) to (4C) and (6) were omitted.

(2) The levy-deficit condition is that an amount payable by way of general levy in respect of any money purchase scheme exceeds the value of the unallocated assets of the scheme either –

(a)at the time when the amount first becomes payable to the Department, or

(b)at a later time designated by the trustees or managers of the scheme for the purposes of this paragraph.

(3) The criminal-reduction conditions are that –

(a)a reduction in the aggregate value of the allocated assets of the scheme occurs;

(b)the reduction is attributable to an act or omission which –

(i)constitutes an offence prescribed for the purposes of Article 79(1)(c) (cases where compensation provisions apply), or

(ii)in the case of an act or omission which occurred outside Northern Ireland, would constitute such an offence if it occurred in Northern Ireland, and

(c)immediately after the act or omission or, if that time cannot be determined, at the earliest time when the auditor of the scheme knows that the reduction has occurred, the amount of that reduction exceeds the value of the unallocated assets of the scheme.

(4) In this regulation –

“allocated assets”, in relation to a scheme, means assets which have been specifically allocated for the provision of benefits to or in respect of members (whether generally or individually) or for the payment of the scheme’s expenses (and “unallocated” is to be read accordingly);

“the criminal deficit” means the amount of the excess mentioned in paragraph (3)(c);

“the general levy” means the levy imposed under section 170 of the Pension Schemes Act(19) by regulation 2 of the Occupational and Personal Pension Schemes (General Levy) Regulations (Northern Ireland) 2005(20);

“the levy deficit” means the amount of the excess mentioned in paragraph (2).

Money purchase schemes: valuations etc.

11.—(1) For the purposes of Article 75 as applied by regulation 10, this regulation shall apply instead of regulations 5 and 7.

(2) In the case of a scheme other than an ear-marked scheme –

(a)the value at any time of the unallocated assets of the scheme is to be taken to be the value of those assets as certified in a statement by the scheme’s auditor, and

(b)the amount of the criminal reduction in the aggregate value of the allocated assets of the scheme at any time is to be calculated by subtracting the actual aggregate value of those assets at that time from the notional aggregate value of those assets.

(3) The notional aggregate value mentioned in paragraph (2)(b) is to be taken to be the sum of the values of the assets –

(a)as stated in the audited accounts which most immediately precede the relevant act or omission, or

(b)if there are none, as certified in a statement by the scheme’s auditor,

adjusted appropriately to take account of any alteration in their values (other than any alteration attributable to that act or omission) between the date as at which those accounts are prepared or, as the case may be, as at which that statement is given and the time in question.

(4) The actual aggregate value mentioned in paragraph (2)(b) is to be calculated in the same manner as it was calculated for the purposes of the accounts mentioned in paragraph (3)(a) or, as the case may be, the statement mentioned in paragraph (3)(b).

(5) In the case of an ear-marked scheme –

(a)the value at any time of the unallocated assets of the scheme, and

(b)the amount of the criminal reduction in the aggregate value of the allocated assets of the scheme,

are the amounts certified in a statement by the relevant insurer.

(6) In this regulation –

“ear-marked scheme” means a scheme under which all the benefits are secured by one or more policies of insurance or annuity contracts, being policies or contracts specifically allocated to the provision of benefits for individual members or any other person who has a right to benefits under the scheme, and

“the relevant insurer”, in relation to such a scheme, is the insurer with whom the insurance contract or annuity contract is made.

Multi-employer money purchase schemes

12.—(1) In its application to a money purchase scheme that is a multi-employer scheme regulation 10 shall apply with the substitution for paragraph (1) of the following paragraphs –

“(1) Notwithstanding paragraph (1)(a) of Article 75, that Article shall apply to money purchase schemes as if –

(a)paragraph (2) –

(i)provided that if the levy-deficit condition is met each employer’s share of the levy deficit is to be treated as a debt due from that employer to the trustees or managers of the scheme, and

(ii)were not subject to paragraph (3) of that Article;

(b)paragraph (4) provided that where the criminal-reduction conditions are met each employer’s share of the criminal deficit is to be treated as a debt due from the employer to the trustees or managers of the scheme, and

(c)paragraphs (4A) to (4C) and (6) were omitted.

(1A) For the purposes of paragraph (1), an employer’s share of the levy deficit or the criminal deficit is –

(a)such proportion of that total deficit as, in the opinion of the actuary, the amount of the scheme’s liabilities attributable to employment with that employer bears to the total amount of the scheme’s liabilities attributable to employment with the employers, or

(b)if the scheme provides for the total amount of that debt to be otherwise apportioned amongst the employers, the amount due from that employer under that provision.

(1B) For the purposes of paragraph (1A) –

(a)the total amount of the scheme’s liabilities which are attributable to employment with the employers, and

(b)the amount of the liabilities attributable to employment with any one employer,

are such amounts as are determined, calculated and verified by the actuary in accordance with the guidance given in GN 19; and a determination under this paragraph must be certified by the actuary as being in accordance with that guidance.”.

(2) Regulation 6 shall not apply to a money purchase scheme that is a multi-employer scheme.

Money purchase schemes: former employers

13.  Regulation 9 shall not apply to a money purchase scheme, but in the application of Article 75 and these Regulations to such a scheme which has no active members references to employers include every person who employed persons in the description of employment to which the scheme relates immediately before the occurrence of the event after which the scheme ceased to have any active members.

Other schemes treated as more than one scheme

Schemes covering United Kingdom and foreign employment

14.—(1) Paragraph (2) shall apply where a scheme which applies to members in employment in the United Kingdom and members in employment outside the United Kingdom is divided into 2 or more sections and the provisions of the scheme are such that –

(a)different sections of the scheme apply to members in employment in the United Kingdom (“the United Kingdom section”) and to members in employment outside the United Kingdom (“the foreign section”);

(b)contributions payable to the scheme in respect of a member are allocated to the section applying to that member’s employment;

(c)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, and

(d)the United Kingdom section meets the tax condition and the foreign section does not do so.

(2) If this paragraph applies –

(a)Article 75 and these Regulations (apart from this regulation) shall apply as if each section of the scheme were a separate scheme, and

(b)the reference to the scheme in the form set out in Schedule 1 may be modified appropriately.

(3) Paragraph (4) shall apply where –

(a)a scheme applies to members in employment in the United Kingdom and members in employment outside the United Kingdom;

(b)paragraph (2) shall not apply to the scheme, and

(c)part of the scheme meets paragraph (b) of the tax condition by virtue of that part having been treated as a separate scheme under section 611(3) of the Taxes Act 1988 that is treated as becoming a registered pension scheme under paragraph 1(1) of Schedule 36 to the Finance Act 2004 by virtue of paragraph 1(2) of that Schedule.

(4) If this paragraph applies –

(a)Article 75 and these Regulations (apart from this regulation) shall apply as if the approved and unapproved parts of the scheme were separate schemes, and

(b)the reference to the scheme in the form set out in Schedule 1 may be modified appropriately.

(5) Paragraph (6) shall apply where –

(a)a scheme has been such a scheme as is mentioned in paragraph (1) or (3);

(b)the scheme is divided into 2 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 the scheme have not been amended so as to prevent the conditions in paragraph (1) or, as the case may be, paragraph (3) being met in relation to 2 or more sections, and

(d)in relation to one or more sections of the scheme 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, in the case of paragraph (1), no contributions which are to be allocated to it.

(6) If this paragraph applies –

(a)Article 75 and these Regulations (apart from this regulation) shall apply as if any section in relation to which those conditions have ceased to be met were a separate scheme, and

(b)the reference to the scheme in the form set out in Schedule 1 may be modified appropriately.

(7) Before 6th April 2006 paragraph (3) shall apply with the substitution for sub-paragraph (c) of the following paragraph –

“(c)part of the scheme meets paragraph (a) of the tax condition by virtue of section 611(3) of the Taxes Act 1988.”.

Schemes with partial government guarantee

15.—(1) This regulation shall apply if a relevant public authority has –

(a)given a guarantee in relation to any part of a scheme, any benefits payable under the scheme or any member of the scheme, or

(b)made any other arrangements for the purposes of securing that the assets of the scheme are sufficient to meet any part of its liabilities.

(2) Where this regulation applies –

(a)Article 75 and these Regulations (apart from this regulation) shall apply as if the guaranteed part of the scheme and the other part of the scheme were separate schemes, and

(b)the reference to the scheme in the form set out in Schedule 1 may be modified appropriately.

(3) In this regulation –

“the guaranteed part of the scheme” means the part of the scheme –

“relevant public authority” has the meaning given in Article 280(4) of the 2005 Order.

Supplementary

Modification of schemes: apportionment of Article 75 debts

16.—(1) This regulation shall apply for the purposes of Article 68(2)(e) (power of trustees to modify schemes by resolution for prescribed purposes).

(2) In the case of a trust scheme (whether or not a money purchase scheme) which apart from this regulation could not be modified for the purpose of making provision for the total amount of a debt due under Article 75(2) or (4) to be apportioned amongst the employers in different proportions from those which would otherwise apply by virtue of regulation 6(2)(a) or, as the case may be, regulation 10(1A) (as it has effect by virtue of regulation 12), for the purposes of Article 68(2)(e), such a modification of the scheme is a modification for a prescribed purpose.

Disregard of staying of voluntary winding up of employer for purposes of Article 75

17.—(1) This regulation shall apply for the purposes of Article 75(6D)(i) (by virtue of which where a members' voluntary winding up of an employer is stayed, Article 75 has effect as if the resolution for the winding up had never been passed and any debt which arose under that Article by virtue of the passing of the resolution had never arisen, except where the winding up is stayed in prescribed circumstances).

(2) The circumstances that are prescribed are where the stay is granted for a limited period.

Consequential amendments

18.  The Regulations specified in Schedule 2 are amended as specified in that Schedule.

Regulation 5

SCHEDULE 1Form of Actuary’s Certificate

Regulation 18

SCHEDULE 2Consequential Amendments

The MFR Regulations

1.—(1) The MFR Regulations shall be amended in accordance with sub-paragraphs (2) to (5).

(2) In regulation 2(4) (interpretation) –

(a)for “relevant insolvency event” there shall be substituted “relevant event”, and

(b)for “same meaning as in Article 75” there shall be substituted “meaning given in Article 75(6A)”.

(3) In regulation 13 (duty to obtain minimum funding valuations: Article 75 debts in multi-employer schemes) –

(a)in paragraph (1) for “Article 75(1)” there shall be substituted “Article 75(2) or (4)”, and

(b)in paragraph (3) for “has the same meaning as in Article 75(3)” there shall be substituted “means the time as at which the value of the assets of a scheme and the amount of its liabilities are to be determined, calculated and verified for the purposes of Article 75”.

(4) In regulation 19(3)(c) (records) for “Article 75(1)” there shall be substituted “Article 75(2) or (4)”.

(5) In Schedule 4 (methods of securing shortfall in cases of serious underprovision) –

(a)in paragraph 1(1) for the definition of “Article 75(1) shortfall” there shall be substituted the following definition –

““Article 75 shortfall”, in relation to a scheme, means so much of the amount treated by Article 75(2) or (4) as a debt due from the employer to the trustees or managers at the applicable time (as defined in regulation 2(1) of the Occupational Pension Schemes (Employer Debt) Regulations (Northern Ireland) 2005), as is attributable to the value of the scheme assets falling short of the amount of the scheme liabilities by more than 10 per cent.;”;

(b)for “Article 75(1) shortfall”, wherever else it occurs, there shall be substituted “Article 75 shortfall”;

(c)in paragraphs 1(2), 2(2)(a), 3(3)(a) and 4(2)(b) and (4) for “relevant insolvency event” there shall be substituted “relevant event”.

The Occupational Pension Schemes (Investment) Regulations

2.  In regulation 6(7)(c) of the Occupational Pension Schemes (Investment) Regulations (Northern Ireland) 1996(21) (investments to which restrictions do not apply) for “Article 75(1)” there shall be substituted “Article 75(2) or (4)”.

The Winding Up Regulations

3.  In regulation 10(2) of the Winding Up Regulations –

(a)for “relevant insolvency event” there shall be substituted “relevant event”, and

(b)in sub-paragraph (a) for “Article 75(4) (definition of relevant insolvency events)” there shall be substituted “Article 75(6A) (definition of relevant events)”.

Explanatory Note

(This note is not part of the Regulations.)

These Regulations are made as a consequence of provisions in the Pensions (Northern Ireland) Order 2005 (“the 2005 Order”) and replace the Occupational Pension Schemes (Deficiency on Winding Up, etc.) Regulations (Northern Ireland) 1996 (“the Deficiency on Winding Up Regulations”) where debts arise under Article 75 of the Pensions (Northern Ireland) Order 1995 (“the 1995 Order”) in respect of certain occupational pension schemes which begin to wind up after 6th April 2005.

Regulation 1 provides that these Regulations come into operation on 6th April 2005, but do not apply in the case of schemes that have begun to wind up before that date or, unless the scheme is a money purchase scheme, if a debt arose under Article 75 of the 1995 Order before that date.

Regulation 2 provides for interpretation and identifies the Actuarial Guidance Notes GN 19 and GN 27 that will be used in connection with the calculation of any debt.

Regulation 3 provides that the Deficiency on Winding Up Regulations do not apply in any case where these Regulations apply.

Regulation 4 makes provision about the schemes that are excluded from Article 75 of the 1995 Order and hence from these Regulations. They largely correspond with the schemes that are excluded from being eligible schemes for the purposes of Part III of the 2005 Order.

Regulation 5 makes provision about how the assets and liabilities of schemes are to be valued for the purposes of Article 75 of the 1995 Order. It provides for all liabilities in respect of pensions or other benefits to be valued on the basis that the trustees or managers will provide for them by buying annuities, but, apart from that, for similar principles to apply as apply for the purpose of minimum funding valuations and for the valuation certificate set out in Schedule 1 to be used. The costs of winding up the scheme are to be included amongst its liabilities.

Regulations 6 to 8 deal with how Article 75 of the 1995 Order and these Regulations apply to multi-employer schemes.

Regulation 6 provides that a debt only arises under Article 75(2) of the 1995 Order while a multi-employer scheme is being wound up if a deficit in the scheme assets occurs before a relevant event has occurred in relation to all the employers, and all the employers are then responsible for a share of the debt. But whether a debt arises under Article 75(4) of the 1995 Order is judged by reference to each of the employers separately and debts under that Article are also taken to arise as respects an employer if he ceases to have any employees in pensionable service to which the scheme applies. The debt on each employer under Article 75(4) of the 1995 Order is his share of the deficit in the assets.

Regulation 7 modifies the rules in regulation 5 where a debt arises because of an employer in a multi-employer scheme ceasing to have any employees in pensionable service. The provisions about buying annuities and including winding up costs are disapplied.

Regulation 8 provides that Article 75 of the 1995 Order and these Regulations apply as if sections of multi-employer schemes were separate schemes.

Regulation 9 ensures that in the case of a scheme which has no active members Article 75 of the 1995 Order and these Regulations apply as if anyone who was an employer immediately before the scheme ceased to have any active members is treated as an employer and so may be liable for a debt.

Regulations 10 to 13 deal with how Article 75 of the 1995 Order and these Regulations apply to money purchase schemes.

Regulation 10 modifies Article 75 of the 1995 Order so that it only applies to money purchase schemes in two cases, which differ from those where it applies for defined benefit schemes. The first is where general levy has not been paid and the second is where there has been a reduction in the scheme’s assets because of a crime. Regulation 11 provides special valuation rules for these cases.

Regulation 12 modifies how regulation 10 applies where the money purchase scheme is a multi-employer scheme, apportioning the deficit among the employers in a similar way to regulation 6.

Regulation 13 makes similar provision to regulation 9 for former employers in relation to money purchase schemes.

Regulation 14 provides that sectionalised schemes covering United Kingdom and foreign employment are to be treated as separate schemes.

Regulation 15 provides that where a scheme is partly the subject of a government guarantee, the part that is so subject and the other part are treated as separate schemes.

Regulation 16 enables trustees to modify schemes by resolution for the purpose of apportioning debts under Article 75 of the 1995 Order amongst employers in different proportions from those that would otherwise apply.

Regulation 17 prescribes the circumstances in which the staying of the voluntary winding up of an employer is disregarded for the purposes of Article 75 of the 1995 Order. Stays for a limited period are prescribed so that the resolution for the winding up and any debt which arose under that section by virtue of the passing of the resolution are not affected by the temporary staying of the winding up.

Regulation 18 introduces Schedule 2 which contains amendments of the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations (Northern Ireland) 1996, the Occupational Pension Schemes (Investment) Regulations (Northern Ireland) 1996 and the Occupational Pension Schemes (Winding Up) Regulations (Northern Ireland) 1996 that are consequential on the changes made to Article 75 of the 1995 Order by the 2005 Order.

As these Regulations make, in so far as they are made under Part II of the 1995 Order, in relation to Northern Ireland only provision corresponding to provision contained in regulations made by the Secretary of State for Work and Pensions in relation to Great Britain, the requirement for consultation under Article 117(1) of the 1995 Order does not apply by virtue of paragraph (2)(e) of that Article.

Articles 75, 75A and 87(2) of the 1995 Order, some of the enabling provisions under which these Regulations are made, are amended by Articles 248 and 249 of, and paragraph 60(b) of Schedule 10 to, the 2005 Order. The Pensions (2005 Order) (Commencement No. 1 and Consequential and Transitional Provisions) Order (Northern Ireland) 2005 (S.R. 2005 No. 48 (C. 5)) provides for the coming into operation of Article 248 of the 2005 Order, for the purpose of authorising the making of regulations, on 25th February 2005 and for all other purposes, on 6th April 2005. The Pensions (2005 Order) (Commencement No. 2 and Transitional Provisions) Order (Northern Ireland) 2005 (S.R. 2005 No. 166 (C. 12)) provides for the coming into operation of –

• Article 249 of the Order on 25th March 2005;

• paragraph 60(b) of Schedule 10 to the 2005 Order, for the purpose of authorising the making of regulations, on 25th March 2005 and fully on 6th April 2005.