2001 No. 1218
The Occupational Pension Schemes (Pensions Compensation Provisions) Amendment Regulations 2001
Made
Laid before Parliament
Coming into force
The Secretary of State for Social Security, in exercise of the powers conferred on him by sections 56(3), 81(2A)(a) and (7), 83(2) and (3)(a), 84(2), 86, 119, 124(1), 125(2) and 174(2) and (3) of the Pensions Act 19951 and of all other powers enabling him in that behalf, having consulted such persons as he considered appropriate2, hereby makes the following Regulations:
Citation and commencement1
These Regulations may be cited as the Occupational Pension Schemes (Pensions Compensation Provisions) Amendment Regulations 2001 and shall come into force on 23rd April 2001.
Amendment of the Occupational Pension Schemes (Pensions Compensation Provisions) Regulations 19972
1
The Occupational Pension Schemes (Pensions Compensation Provisions) Regulations 19973 shall have effect with the following amendments.
2
After regulation 3 (relevant offences), there shall be inserted the following regulation:—
Protected liabilities—prescribed class of members3A
For the purposes of section 81(2A)(a) (protected liabilities to include liabilities in respect of members of prescribed class) the prescribed class of members shall comprise those members who fall within the “switch-over period”, as defined in regulation 7(10) of the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 19964.
3
In regulation 5 (amount of compensation)—
a
in paragraph (3), the words “90 per cent. of” shall be omitted;
b
in paragraph (5) for the words “90 per cent. of liabilities” there shall be substituted the words “the aggregate of the protected liabilities”; and
c
in paragraph (6) for sub-paragraph (a) there shall be substituted the following sub-paragraph:—
a
the prescribed rate of interest shall be the base rate plus 2 per cent.;
4
In paragraph (5) of regulation 6 (payments made in anticipation), for sub-paragraph (d) there shall be substituted the following sub-paragraph:—
d
so as not to exceed the aggregate of the protected liabilities.
5
In regulation 10 (modifications for money purchase schemes)—
a
in paragraph (1)(a)—
i
in head (i) the words “90 per cent. of” shall be omitted, and
ii
for head (ii) there shall be substituted the following head:—
ii
for paragraph (b) of section 83(3) there were substituted—
b
in the case of a money purchase scheme, must not exceed 90 per cent. of the difference between—
i
the value of the assets of the scheme immediately before the reduction falling within section 81(1)(c), and
ii
their value immediately after that reduction,
as reported by the auditor, where that difference is adjusted so as to take account of subsequent alterations in their value (if any) which occur prior to the settlement date, including any alterations which would have occurred if that reduction had not taken place.
b
in paragraph (1)(b)—
i
for the words from “these Regulations” to “substituted—” there shall be substituted the words
these Regulations shall have effect as if—
i
for paragraph (5) of regulation 5 there were substituted—
ii
for the words “90 per cent. of their pre-loss value” there shall be substituted the words “the aggregate of the protected liabilities”,
iii
for the formula “T × 90% − V” there shall be substituted the formula “(T − V) × 90%”, and
iv
after the words “purposes of T and V.”“, there shall be inserted the following head:—
ii
for paragraph (5)(d) of regulation 6 there were substituted—
d
so as not to exceed 90 per cent. of the shortfall at the application date.
c
in paragraph (2)(a)—
i
in head (i) the words “90 per cent. of” shall be omitted, and
ii
for head (iv) there shall be substituted the following head:—
iv
for paragraph (b) of section 83(3) there were substituted—
b
in the case of an ear-marked scheme, must not exceed 90 per cent. of the difference between—
i
the value of the assets of the scheme immediately before the reduction falling within section 81(1)(c), and
ii
their value immediately after that reduction,
as certified by the relevant insurer, where that difference is adjusted so as to take account of subsequent alterations in their value (if any) which occur prior to the settlement date, including any alterations which would have occurred if that reduction had not taken place.
d
in paragraph (2)(b)—
i
for the words “90 per cent of their pre-loss value” there shall be substituted the words “the aggregate of protected liabilities”, and
ii
for the formula “(T + S) × 90% − V” there shall substituted the formula “(T + S − V) × 90%”.
Signed by authority of the Secretary of State for Social Security.
(This note is not part of the Regulations)