Part IIICertification of Pension Schemes and Effects on Members' State Scheme Rights and Duties
Chapter IIITermination of contracted-out or appropriate scheme status: state scheme premiums
Approval of arrangements for schemes ceasing to be certified
50Powers of Board to approve arrangements for scheme ceasing to be certified
1
In the case of an occupational pension scheme or a personal pension scheme which is or has been certified as a contracted-out or, as the case may be, an appropriate scheme, the Board may, for the event of, or in connection with, its ceasing to be such a scheme, approve any arrangements made or to be made in relation to the scheme, or for its purposes, for the preservation or transfer—
a
in the case of an occupational pension scheme other than a money purchase contracted-out scheme—
i
of earners' accrued rights to guaranteed minimum pensions under the scheme;
ii
of the liability for the payment of guaranteed minimum pensions under the scheme in respect of persons who have then become entitled to receive them;
b
in the case of a money purchase contracted-out scheme or a personal pension scheme, of protected rights under the scheme.
2
If the scheme ceases to be a contracted-out scheme or an appropriate scheme (whether by being wound up or otherwise) and the Board either—
a
have withdrawn their approval of previously approved arrangements relating to it; or
b
have declined to approve arrangements relating to it,
the Board may issue a certificate to that effect.
3
A certificate issued under subsection (2)(a) or (b) shall be cancelled by the Board if they subsequently approve the arrangements.
4
Regulations may provide that where the Board have approved arrangements under subsection (1) in respect of an occupational pension scheme (other than a money purchase scheme) any provision of this Part (other than sections 18, 19, 26 to 33 and 43 to 45) or Chapter III of Part IV or Chapter II of Part V shall have effect subject to such modifications as may be specified in the regulations.
5
Any such regulations shall have effect in relation to arrangements whenever approved, unless they provide that they are only to have effect in relation to arrangements approved after they come into force.
6
It is hereby declared that an approval of arrangements relating to an occupational pension scheme which is not a money purchase contracted-out scheme may be withdrawn at any time, notwithstanding that the scheme has been wound up.
7
For the purposes of this Chapter an earner’s accrued rights or, as the case may be, a person’s guaranteed minimum pension rights or protected rights are subject to approved arrangements if—
a
the Board have approved arrangements under subsection (1) (either before or after the scheme ceased to be certified as contracted-out or, as the case may be, as an appropriate scheme) which operate as respects him and the rights in question, and
b
they have not since withdrawn their approval of those arrangements.
51Calculation of guaranteed minimum pensions preserved under approved arrangements
1
This section applies where—
a
an earner’s guaranteed minimum pension rights or accrued rights to guaranteed minimum pensions under a scheme are subject to approved arrangements, and
b
one or more of the five tax years ending with the tax year in which the scheme ceases to be contracted-out is a relevant year in relation to the earner.
2
Where this section applies then, except in such circumstances as may be prescribed, section 16(1) shall have effect, subject to the following provisions, that is to say—
a
any earnings factor shall be taken to be that factor as increased by the last order under section 21 of the [1975 c. 60.] Social Security Pensions Act 1975 or section 148 of the [1992 c. 5.] Social Security Administration Act 1992 to come into force before those five tax years; and
b
any relevant earnings factors derived from contributions or earnings in respect of any year (“the relevant contributions year”) shall be treated as increased by 12 per cent. compound for each of those five tax years, other than any of those years which—
i
constitutes or begins before the relevant contributions year, or
ii
begins after the final relevant year in relation to the earner.
3
Subsection (2) shall not apply in any case where its application would result in the amount of the guaranteed minimum being greater than it would have been apart from that subsection.
4
Regulations may provide that subsections (1) to (3) shall have effect with prescribed modifications in relation to a scheme which, immediately before it ceased to be contracted-out, contained provisions authorised by section 16(2).
5
In this section “relevant year” and “final relevant year” have the same meanings as in section 16.
Supervision of formerly certified schemes
52Supervision of schemes which have ceased to be certified
1
Section 53 shall apply for the purpose of making provision for securing the continued supervision of occupational pension schemes as respects which subsection (2) applies and section 54 shall apply for the purpose of making corresponding provision in relation to personal pension schemes as respects which subsection (3) applies.
2
This subsection applies as respects any occupational pension scheme, other than a public service pension scheme, where—
a
the scheme has ceased to be a contracted-out scheme otherwise than by being wound up; and
b
there has not been a payment of a premium under section 55(1) in respect—
i
of each person entitled to receive, or having accrued rights to, guaranteed minimum pensions under the scheme; or
ii
of each person who has protected rights under it or is entitled to any benefit giving effect to protected rights under it.
3
This subsection applies as respects any personal pension scheme where—
a
the scheme has ceased to be an appropriate scheme otherwise than by being wound up; and
b
there has not been a payment of a premium under section 55(1) in respect of each person who has protected rights under it or is entitled to any benefit giving effect to protected rights under it.
4
Section 53 shall continue to apply so long as there is any such person as is mentioned in paragraph (b)(i) or (ii) of subsection (2), (but, where by virtue of section 19 a scheme has ceased to be liable to provide guaranteed minimum pensions for a member and the member’s widow or widower, the duties imposed on the Board by section 53 shall cease to subsist in relation to those pensions), and section 54 shall continue to apply so long as there is any such person as is mentioned in paragraph (b) of subsection (3).
5
For the purposes of subsections (2) and (4) a person in respect of whom a premium is not payable by virtue of regulation 18(2A) of the [S.I. 1984/380.] Occupational Pension Schemes (Contracting-out) Regulations 1984 shall not be treated as such a person as is mentioned in paragraph (b)(ii) of subsection (2).
6
For the purposes of subsections (3) and (4) a person in respect of whom a premium is not payable by virtue of regulation 3 of the [S.I. 1987/1111.] Personal Pension Schemes (Personal Pension Protected Rights Premiums) Regulations 1987 shall not be treated as such a person as is mentioned in paragraph (b) of subsection (3).
53Supervision: former contracted-out schemes
1
The Board shall be under a duty to satisfy themselves as to—
a
the matters in respect of which they are required to be satisfied for contracting-out purposes under sections 23(1) and 24(1) or, as the case may be, under section 30(1); and
b
the soundness and adequacy of any investments held for the purposes of the scheme (so far as relevant to the considerations of section 24(1)).
2
Where the scheme was contracted-out subject to such conditions as are referred to in section 25(1) and (2) those conditions shall continue to be binding, notwithstanding that there is no contracting-out certificate in force.
3
Subsection (1) does not apply in the case of any scheme as to which the Board have issued a certificate under subsection (2) of section 50 which has not been cancelled under subsection (3) of that section.
4
If it appears to the Board that there has been, or is likely to be, a breach of any rule of the scheme relating to the matters dealt with in sections 9(2) and 13 to 25 or, as the case may be, sections 9(3) and 26 to 32, the Board may take such steps as they think expedient with a view to remedying or preventing the breach.
5
For that purpose they may themselves take any proceedings for enforcement of the rules which would be open to a person—
a
as an actual or prospective beneficiary under the scheme, or
b
as one of its trustees or managers, or
c
as being otherwise concerned with the scheme or its benefits,
and may assume the conduct of proceedings for enforcement brought by any such person.
54Supervision: former appropriate personal pension schemes
1
The Board shall be under a duty to satisfy themselves as to the matters in respect of which they are required to be satisfied under section 30(1) for the purposes of determining whether a personal pension scheme should be or continue to be an appropriate scheme.
2
Subsection (1) does not apply in the case of any scheme as to which the Board have issued a certificate under subsection (2) of section 50 which has not been cancelled under subsection (3) of that section.
3
If it appears to the Board that there has been, or is likely to be, a breach of any rule of the scheme relating to the matters dealt with in sections 9(5) and 26 to 32, the Board may take such steps as they think expedient with a view to remedying or preventing the breach, and section 53(5) applies for that purpose as it applies for the purpose there mentioned.