The Occupational Pension Schemes (Charges and Governance) Regulations (Northern Ireland) 2015

PART 1 N.I.INTRODUCTION

Citation and commencementN.I.

1.—(1) These Regulations may be cited as the Occupational Pension Schemes (Charges and Governance) Regulations (Northern Ireland) 2015.

(2) Subject to paragraph (3), these Regulations shall come into operation on 17th July 2015.

(3) The following provisions shall come into operation on 6th April 2016—

(a)in regulation 4(2) the words “With the exception of regulation 11,”;

(b)regulation 11, and

(c)regulation 23.

InterpretationN.I.

2.—(1) In these Regulations—

“the Administration Regulations” means the Occupational Pension Schemes (Scheme Administration) Regulations (Northern Ireland) 1997 M1;

“annually” means per charges year;

“arrangement” means an allocation of contributions to—

“charges” means administration charges other than—

“charges year” means a period of 12 months specified for the purposes of the scheme in any scheme document or, if no such year is specified, a period of 12 months commencing on—

“combination charge structure” has the meaning given in regulation 5(3);

“contributing member” is a member of a relevant scheme in relation to whom a contribution is being made to that scheme for the purposes of accruing money purchase benefits;

“contribution”, in relation to a member, means a payment made by, or on behalf or in respect of, that member;

“contribution percentage charge” has the meaning given in regulation 5(3);

“default arrangement” has the meaning given in regulation 3;

“employer” has the meaning given in section 78 of the Pensions (No. 2) Act;

“executive pension scheme” means a scheme—

“existing rights charge” has the meaning given in regulation 5(3);

“flat fee charge” has the meaning given in regulation 5(3);

“jobholder” has the meaning given in section 78 of the Pensions (No. 2) Act;

“qualifying scheme” has the meaning given in section 78 of the Pensions (No. 2) Act;

“relevant small scheme” means a scheme with fewer than 12 members, where—

“single charge structure” has the meaning given in regulation 5(2);

“transaction costs” means the costs incurred as a result of the buying, selling, lending or borrowing of investments;

“winding-up costs” means the costs of winding up the pension scheme including (but not limited to) the cost of—

“worker” has the meaning given in section 78 of the Pensions (No. 2) Act;

“writing”' includes by electronic communication and “electronic communication” has the meaning given in section 4(1) of the Electronic Communications Act (Northern Ireland) 2001 M4.

(2) For the purposes of paragraph 1(5) of Schedule 18 to the Pensions Act (Northern Ireland) 2015, “relevant scheme” means—

(a)an occupational pension scheme under which all the benefits which may be provided are money purchase benefits, or

(b)where some but not all the benefits which may be provided under an occupational pension scheme are money purchase benefits, that scheme in so far as it relates to those benefits,

other than a scheme with only one member, an executive pension scheme or a relevant small scheme.

(3) Where, in these Regulations, the circumstances require one or more of the calculations listed in paragraph (4) to be made in relation to a period of less than a charges year, that calculation shall be done on a pro rata basis.

(4) The calculations referred to in paragraph (3) are—

(a)a charge under a single charge structure;

(b)a flat fee charge;

(c)an existing rights charge.

(5) The Interpretation Act (Northern Ireland) 1954 M5 shall apply to these Regulations as it applies to an Act of the Assembly.

Default arrangementN.I.

3.—(1) Subject to paragraph (6), a “default arrangement”, in relation to an employer, means an arrangement which—

(a)on or after the relevant date is used by a qualifying scheme (which is a relevant scheme) in relation to one or more relevant jobholders, and

(b)satisfies one or more of the descriptions in paragraph (2).

(2) The descriptions referred to in paragraph (1) are—

(a)an arrangement under which the contributions of one or more workers are allocated to a fund or funds where those workers have not expressed a choice as to where those contributions are allocated;

(b)subject to paragraph (3), an arrangement which, on the relevant date, was an arrangement under which the contributions of 80% or more of the workers who were contributing members of the scheme on that date were allocated where those workers were required to make a choice as to where their contributions were allocated;

(c)an arrangement which first received contributions from workers after the relevant date, and under which, at any point after the relevant date, the contributions of 80% or more of workers who are contributing members of the scheme are allocated where those workers were required to make a choice as to where their contributions are allocated.

(3) An arrangement does not satisfy the description in paragraph (2)(b) if, at any time before the relevant date—

(a)each worker whose contributions were allocated under the arrangement (“the original arrangement”) at that time was informed that contributions payable on or after the relevant date would be allocated under a default arrangement satisfying the description in paragraph (2)(a) (“the new arrangement”) unless the worker agreed that allocation of the worker's contributions under the original arrangement should continue, and

(b)in the event that a worker did not agree that allocation of that worker's contributions to the original arrangement should continue, that worker's contributions payable on or after the relevant date were allocated to the new arrangement.

(4) A worker's agreement, referred to in paragraph (3)(a), must—

(a)be in writing, and

(b)include a statement that the worker acknowledges that charges under the original arrangement may be higher than would otherwise be permitted under these Regulations.

(5) Where an arrangement is a default arrangement in relation to an employer by virtue of paragraph (1), it continues to be such an arrangement regardless of whether it continues to satisfy that paragraph.

(6) An arrangement is not a default arrangement if—

(a)at any time before a benefit under that arrangement comes into payment, it provides for a pensions promise to be obtained from a third party in relation to any such benefit, or

(b)it provides no benefits other than benefits which are attributable to additional voluntary contributions.

(7) For the purposes of paragraph (6)—

(a)a “pensions promise” is a promise about the level of the benefit;

(b)an arrangement provides for a promise to be obtained from a third party if it—

(i)requires the promise to be obtained from a third party, or

(ii)provides for the worker to be given the option of requiring a promise to be obtained from a third party (whether or not the option is subject to conditions).

(8) For the purposes of paragraph (7)(a), a promise about the level of the benefit includes a promise about factors that will be used to calculate the level of the benefit, but does not include a promise if, or to the extent that, it consists merely of a promise that the level of benefit will be calculated by reference to an amount available for its provision.

(9) In this regulation—

“contributing member” does not include a member whose contributions are solely additional voluntary contributions;

“relevant date” means the date referred to in regulation 1(2) or, if later, the employer's staging date;

“relevant jobholder” means a jobholder of the employer referred to in paragraph (1);

“staging date” means the date on which sections 2 M6 to 9 of the Pensions (No. 2) Act (employers' duties) first apply to the employer;

“worker” means a worker of the employer referred to in paragraph (1).