Source: http://www.legislation.gov.uk/ukpga/2017/17/data.xht?view=snippet&wrap=true
Timestamp: 2018-08-15 21:44:15
Document Index: 708184792

Matched Legal Cases: ['art 1', 'art 1', 'art 1', 'art 2', 'art 1', 'art 6', 'art 1', 'art 5', 'art 4']

Part 1 E+W+SMaster Trusts
Authorisation: applications etcE+W+S
3Prohibition on operating a scheme unless authorisedE+W+S
(1)A person may not operate a Master Trust scheme unless the scheme is authorised.
(3)If the Pensions Regulator becomes aware that a Master Trust scheme is operating without authorisation, it must notify the trustees of the scheme that the scheme is not authorised.
(4)The notification must include an explanation that it is a triggering event for the purposes of sections 20 to 33 and of the trustees' duties under those sections.
(5)For the purposes of this Part, a person “operates” a Master Trust scheme if the person—
4Application for authorisationE+W+S
(1)The trustees of a Master Trust scheme may apply to the Pensions Regulator for authorisation.
(a)the scheme's latest accounts;
(b)the latest accounts of each scheme funder;
(c)the scheme's business plan (see section 9);
(d)the scheme's continuity strategy (see section 12).
(3)In considering an application, the Pensions Regulator may take into account any matters it considers appropriate, including—
(a)additional information provided by the applicant, and
(b)subsequent changes to the application or to any information provided by the applicant.
(4)The application must be made in the manner and form specified by the Pensions Regulator.
(5)The Secretary of State may make regulations setting out—
(a)other information to be included in an application, and
(b)the application fee payable to the Pensions Regulator.
5Decision on applicationE+W+S
(1)Where an application is made for authorisation of a Master Trust scheme under section 4, the Pensions Regulator must decide whether it is satisfied that the scheme meets the authorisation criteria.
(2)The Pensions Regulator must make that decision within the period of six months beginning with the day on which it received the application.
(3)The authorisation criteria are—
(a)that the persons involved in the scheme are fit and proper persons (see section 7),
(b)that the scheme is financially sustainable (see section 8),
(c)that each scheme funder meets the requirements set out in section 10,
(d)that the systems and processes used in running the scheme are sufficient to ensure that it is run effectively (see section 11), and
(e)that the scheme has an adequate continuity strategy (see section 12).
(4)If the Pensions Regulator is satisfied that the Master Trust scheme meets the authorisation criteria, it must—
(a)grant the authorisation,
(b)notify the applicant of its decision, and
(c)add the scheme to its list of authorised Master Trust schemes (see section 13).
(5)If the Pensions Regulator is not satisfied that the Master Trust scheme meets the authorisation criteria, it must—
(a)refuse to grant the authorisation, and
(b)notify the applicant of its decision.
(6)A notification under subsection (5) must also include—
(a)the reasons for the decision, and
(b)details of the right of referral to the First-tier Tribunal or Upper Tribunal (see section 6).
6Referral to Tribunal of refusal to grant authorisationE+W+S
(1)If the Pensions Regulator refuses to grant authorisation to a Master Trust scheme, the decision may be referred to the Tribunal by—
(a)the trustees, or
(b)any other person who appears to the Tribunal to be directly affected by the decision.
(2)In this section “the Tribunal”, in relation to a referral under subsection (1), means—
(b)the Upper Tribunal, in any other case.
Authorisation criteriaE+W+S
7Fit and proper persons requirementE+W+S
(1)This section applies for the purposes of enabling the Pensions Regulator to decide whether it is satisfied that the persons involved in a Master Trust scheme are fit and proper persons (see section 5(3)(a)).
(2)The Pensions Regulator must assess whether each of the following is a fit and proper person to act in relation to the scheme in the capacity mentioned—
(a)a person who establishes the scheme;
(b)a trustee;
(c)a person who (alone or with others) has power to appoint or remove a trustee;
(d)a person who (alone or with others) has power to vary the terms of the trust under which the scheme is established (where the scheme is established under a trust);
(e)a person who (alone or with others) has power to vary the scheme (where the scheme is not established under a trust);
(f)a scheme funder;
(g)a scheme strategist;
(h)a person acting in a capacity specified in regulations made by the Secretary of State.
(3)The Pensions Regulator may also assess whether each of the following is a fit and proper person to act in relation to the scheme in the capacity mentioned—
(a)a person who promotes or markets the scheme;
(b)a person acting in a capacity specified in regulations made by the Secretary of State.
(4)In assessing whether a person is a fit and proper person to act in a particular capacity, the Pensions Regulator—
(a)must take into account any matters specified in regulations made by the Secretary of State, and
(b)may take into account such other matters as it considers appropriate (including, in particular, matters relating to a person connected with that person).
(5)For the purposes of this section a person (“A”) is connected with another person (“B”) if—
(a)A is an associate of B;
(b)where B is a company, A is a director or shadow director of B or an associate of a director or shadow director of B;
(c)A is a trustee of an occupational pension scheme established under a trust and—
(i)the beneficiaries of the trust include B or an associate of B, or
(ii)the terms of the trust confer a power that may be exercised for the benefit of B or an associate of B.
“associate” has the meaning given by section 435 of the Insolvency Act 1986;
“director” and “shadow director” have the meanings given by section 251 of that Act.
(7)The first regulations that are made under subsection (4) are subject to affirmative resolution procedure.
(8)Any subsequent regulations under subsection (4), and regulations under subsections (2) and (3), are subject to negative resolution procedure.
8Financial sustainability requirementE+W+S
(1)This section applies for the purposes of enabling the Pensions Regulator to decide whether it is satisfied that a Master Trust scheme is financially sustainable (see section 5(3)(b)).
(2)In order to be satisfied that a Master Trust scheme is financially sustainable, the Regulator must be satisfied—
(a)that the business strategy relating to the scheme is sound, and
(b)that the scheme has sufficient financial resources to meet the costs mentioned in subsection (3).
(a)the costs of setting up and running the scheme, and
(b)in the event of a triggering event occurring—
(i)the costs of complying with the duties in sections 20 to 33, and
(ii)the costs of continuing to run the scheme for such period (which must be at least six months and no more than two years) as the Regulator thinks appropriate for the scheme.
(4)In deciding whether it is satisfied about the matters mentioned in subsection (2)(a) and (b), the Pensions Regulator must take into account any matters specified in regulations made by the Secretary of State.
(5)The regulations may include provision specifying—
(a)the information that the Regulator must take into account, such as—
(i)the scheme's business plan and supporting documents and information (see section 9);
(ii)the scheme's accounts and the accounts of a scheme funder;
(b)requirements to be met by the scheme or by a scheme funder relating to its financing, such as requirements relating to assets, capital or liquidity.
(6)The first regulations that are made under this section are subject to affirmative resolution procedure.
(7)Any subsequent regulations under this section are subject to negative resolution procedure.
11Systems and processes requirementsE+W+S
(1)This section applies for the purposes of enabling the Pensions Regulator to decide whether it is satisfied that the systems and processes used in running the scheme are sufficient to ensure that it is run effectively (see section 5(3)(d)).
(2)In deciding whether it is satisfied that the systems and processes used in running the scheme are sufficient for those purposes, the Pensions Regulator must take into account any matters specified in regulations made by the Secretary of State.
(3)Regulations about the systems used in running a scheme may include provision about—
(a)the features and functionality required of the IT systems used in running the scheme;
(b)standards that those IT systems must meet (for example, in relation to quality and security of data);
(c)the maintenance of those IT systems.
(4)Regulations about the processes used in running a scheme may include provision about—
(a)records management;
(b)risk management;
(c)resource planning;
(d)processes relating to transactions and investment decisions;
(e)processes relating to the appointment and removal of trustees, and their professional development;
(f)processes relating to the roles and responsibilities of a scheme strategist and a scheme funder;
(g)processes relating to the appointment, removal, roles and responsibilities of—
(i)persons (other than those mentioned in paragraphs (e) and (f)) involved in running the scheme, and
(ii)persons providing services in relation to the scheme.
(5)The first regulations that are made under this section are subject to affirmative resolution procedure.
(6)Any subsequent regulations under this section are subject to negative resolution procedure.
12Continuity strategy requirementE+W+S
(1)This section applies for the purposes of enabling the Pensions Regulator to decide whether it is satisfied that a Master Trust scheme has an adequate continuity strategy (see section 5(3)(e)).
(2)A continuity strategy is a document addressing how the interests of members of the scheme are to be protected if a triggering event occurs in relation to the scheme (see section 21).
(3)A continuity strategy must be prepared by a scheme strategist.
(4)A continuity strategy must include a section setting out the levels of administration charges that apply in relation to members of the scheme.
(5)The strategy must set out those levels of charges in the manner specified in regulations made by the Secretary of State.
(6)A continuity strategy must—
(7)A scheme strategist must keep the continuity strategy under review and revise it if appropriate.
(8)The continuity strategy, and any revisions to it, must be approved by each scheme funder, any other scheme strategist and the trustees.
(9)A scheme strategist or the trustees must provide the continuity strategy to the Pensions Regulator—
(a)on application for authorisation (see section 4),
(b)within three months of the strategy being revised, and
(10)The first regulations that are made under this section are subject to affirmative resolution procedure.
(11)Any subsequent regulations under this section are subject to negative resolution procedure.
Ongoing supervision of Master Trust schemesE+W+S
13List of authorised schemesE+W+S
(1)The Pensions Regulator must maintain and publish a list of authorised Master Trust schemes.
(a)must identify each authorised Master Trust scheme by name, and
(b)may include any other information that the Pensions Regulator considers appropriate.
14Requirement to submit annual accountsE+W+S
(1)The trustees of an authorised Master Trust scheme must send the scheme's accounts to the Pensions Regulator.
(2)The accounts must be sent to the Regulator no later than two months after they are obtained by the trustees.
(3)A scheme funder of a Master Trust scheme must send its accounts to the Pensions Regulator.
(4)The scheme funder's accounts must be sent to the Regulator—
(a)no later than nine months after the end of the financial year to which they relate, or
(b)within such other period as may be specified in regulations made by the Secretary of State.
15Requirement to submit supervisory returnE+W+S
(1)The Pensions Regulator may by notice in writing require the trustees of an authorised Master Trust scheme to submit a supervisory return.
(2)The Secretary of State may make regulations setting out the information that the Regulator may require in a supervisory return.
(a)the information required to be included in the return,
(b)the manner and form in which the return must be submitted, and
(c)the time period (of at least 28 days) within which the return must be submitted.
(4)The trustees of an authorised Master Trust scheme may not be required to submit a supervisory return more than once in any 12 month period.
(5)Section 10 of the Pensions Act 1995 (civil penalties) applies to a trustee who fails to submit a supervisory return when required to do so.
I3S. 17 in force at Royal Assent for specified purposes, see s. 44(1)(a)(ii)
18Escalating penalty notice for failure to comply with request for informationE+W+S
(1)The Pensions Regulator may issue an escalating penalty notice to a person if it considers that the person has failed to comply with a notice issued under section 72 of the Pensions Act 2004 (provision of information to Regulator on request), so far as relevant to the exercise of any of the Regulator's functions under or by virtue of this Part (a “section 72 notice”).
(2)But the Regulator may not issue an escalating penalty notice to a person if—
(a)the person has exercised the right of referral to a tribunal under section 44 of the Pensions Act 2008 (as applied by section 17(5)) in respect of a fixed penalty notice issued under section 17 in relation to the section 72 notice, and
(b)the reference has not been determined.
(3)An escalating penalty notice is a notice requiring the person to whom it is issued to pay an escalating penalty if the person fails to comply with a section 72 notice.
(4)An escalating penalty is a penalty which is calculated by reference to a daily rate.
(5)The daily rate—
(a)specify the failure to which the penalty relates;
(b)state that, if the person fails to comply with the section 72 notice before a specified date, the person will be liable to pay an escalating penalty;
(d)state the date from which the escalating penalty will be payable, which must not be earlier than the date specified in the fixed penalty notice under section 17(4)(b);
(e)state that the escalating penalty will continue to be payable at the daily rate until the date on which the person complies with the section 72 notice or such earlier date as the Regulator may determine;
(f)notify the person to whom the notice is issued of the review process under section 43 of the Pensions Act 2008 and the right of referral to a tribunal under section 44 of that Act (as applied by subsection (7)).
(7)The following sections of the Pensions Act 2008 apply to an escalating penalty notice under this section as they apply to an escalating penalty notice under section 41 of that Act—
I4S. 18 in force at Royal Assent for specified purposes, see s. 44(1)(a)(ii)
19Withdrawal of authorisationE+W+S
(1)If the Pensions Regulator stops being satisfied that an authorised Master Trust scheme meets the authorisation criteria, it may decide to withdraw the scheme's authorisation.
(2)A warning notice under the standard procedure or a determination notice under the special procedure given in relation to a decision under subsection (1) must—
(a)explain that the issue of the notice is a triggering event for the purposes of sections 20 to 33, and
(b)include an explanation of the trustees' duties under those sections.
(3)On withdrawal of a scheme's authorisation, the Pensions Regulator must—
(a)notify the trustees that the scheme is no longer authorised, and
(b)remove the scheme from the list of authorised Master Trust schemes.
I5S. 20 in force at Royal Assent for specified purposes, see s. 44(1)(a)(iii)
I6S. 21 in force at Royal Assent for specified purposes, see s. 44(1)(a)(iii)
I7S. 22 in force at Royal Assent for specified purposes, see s. 44(1)(a)(iii)
I8S. 25 in force at Royal Assent for specified purposes, see s. 44(1)(a)(iii)
I9S. 33 in force at Royal Assent for specified purposes, see s. 44(1)(a)(iii)
Decisions on withdrawal of authorisation: timingE+W+S
34When it becomes clear that authorisation not to be withdrawnE+W+S
(1)Where a triggering event within item 1 or 2 of the table in section 21(6) occurs in relation to a Master Trust scheme, this section applies for determining the date on which it becomes clear that authorisation is not to be withdrawn (see section 21(5)(c)).
(2)That date is the date given in relation to the event by the third column of the table in subsection (3), in the circumstances set out in relation to the event in the second column of that table.
Item 1 (issue of warning notice under the standard procedure)
1The Pensions Regulator makes a determination not to withdraw the scheme's authorisation, and
2there is no referral of the determination to the Tribunal within the time period allowed for doing so.
The date of the Regulator's determination.
Item 2 (issue of determination notice under the special procedure)
1The Pensions Regulator, on a review under section 99 of the Pensions Act 2004, makes a determination that the scheme's authorisation should not be withdrawn, and
2there is no referral of the Regulator's determination to the Tribunal within the time period allowed for doing so.
Item 1 or 2
1There is a referral of the Regulator's determination to the Tribunal, and
2the Tribunal makes a determination the effect of which is that the scheme's authorisation should not be withdrawn, and
3either—
(a)no appeal is brought against the Tribunal's determination within the time period allowed for doing so, or
(b)an appeal is brought within that time period but is later withdrawn.
The date of the Tribunal's determination.
1There is an appeal against the Tribunal's determination, and
2the effect of the appeal is that the scheme's authorisation should not be withdrawn.
The date on which the appeal is finally disposed of.
(4)In this section “the Tribunal” has the meaning given by—
(a)section 96(7) of the Pensions Act 2004, in a case where the standard procedure applies;
(b)section 99(13) of that Act, in a case where the special procedure applies.
35When a decision to withdraw authorisation becomes finalE+W+S
(1)Where a triggering event within item 1 or 2 of the table in section 21(6) occurs in relation to a Master Trust scheme, this section applies for the purposes of determining the date on which a decision to withdraw authorisation becomes final (see sections 23(2)(a) and 26(2)).
1The Pensions Regulator makes a determination to withdraw the scheme's authorisation, and
1The Pensions Regulator, on a review under section 99 of the Pensions Act 2004, makes a determination the effect of which is that the scheme's authorisation should be withdrawn, and
1There is a referral to the Tribunal, and
2the Tribunal makes a determination the effect of which is that the scheme's authorisation should be withdrawn, and
2the effect of the appeal is that the scheme's authorisation should be withdrawn.
37Master trusts in operation on commencement: transitional provisionE+W+S
Schedule 2 makes provision about the application of this Part in relation to Master Trust schemes that are in operation before the date on which section 3 comes into force.
I10S. 37 in force at Royal Assent for specified purposes, see s. 44(1)(b)
I11S. 38 in force at Royal Assent for specified purposes, see s. 44(1)(a)(iv)(c)
39Interpretation of Part 1E+W+S
the “accounts” of a Master Trust scheme means the accounts audited by the auditor of the scheme (and see subsection (2));
the “accounts” of a scheme funder means—
in a case where regulations under section 10(6) apply to the scheme funder, its accounts prepared in accordance with those regulations;
in any other case, its accounts prepared in accordance with the requirements of the Companies Act 2006;
“accrued rights” has the meaning given by section 100D of the Pension Schemes Act 1993;
“administration charge” has the meaning given by paragraph 1 of Schedule 18 to the Pensions Act 2014;
“authorisation” means authorisation under section 5;
“authorisation criteria” has the meaning given in section 5(3);
“continuity option 1” and “continuity option 2” have the meanings given in section 23;
“employer” has the meaning given in section 1;
“implementation strategy” has the meaning given in section 27;
“insolvency event” has the meaning given by section 121 of the Pensions Act 2004;
“Master Trust scheme” has the meaning given in section 1;
“Master Trust scheme contract” means a contract between the trustees of the scheme and a person providing services in relation to the scheme;
“member” has the meaning given by section 124 of the Pensions Act 1995 (read with regulations made under section 125(4) of that Act);
“operate”, in relation to a Master Trust scheme, has the meaning given in section 3;
“pause order” means an order under section 31;
“scheme funder”, in relation to a Master Trust scheme, means a person who—
is liable to provide funds to or in respect of the scheme in circumstances where administration charges received from or in respect of members are not sufficient to cover the costs of establishing or running the scheme, or
is entitled to receive the profits of the scheme in circumstances where those charges exceed those costs;
“scheme rules” has the meaning given by section 318(2) and (3) of the Pensions Act 2004;
“scheme strategist”, in relation to a Master Trust scheme, means a person who is responsible for making business decisions relating to the commercial activities of the scheme;
“triggering event” has the meaning given in section 21;
“triggering event period” has the meaning given in section 21(4);
“trustee”, in relation to a Master Trust scheme which is not a scheme established under a trust, means a manager of the scheme.
(2)In relation to a Master Trust scheme which provides money purchase benefits in conjunction with other benefits, references in this Part to the scheme's accounts are to be read as references to the accounts of the scheme as a whole.
(3)The reference in section 10(3) to activities that relate directly to Master Trust schemes is, in its application to a Master Trust scheme which provides money purchase benefits in conjunction with other benefits, to be read as a reference to activities that relate directly to the scheme as a whole.
(4)This Part applies to a Master Trust scheme—
(a)which provides money purchase benefits in conjunction with other benefits, and
(b)for which there is no power to wind up the scheme to the extent only that it provides money purchase benefits,
as if references to winding up the scheme, or to the scheme being wound up, were to ceasing to operate the scheme, or the scheme ceasing to operate, to the extent that it provides money purchase benefits.
(5)The Secretary of State may make regulations providing—
(a)that other descriptions of person may be treated as scheme funders for the purposes of this Part;
(b)that a person who would otherwise be a scheme funder may be treated as not being one, either generally or in circumstances specified in the regulations.
I12S. 39 in force at Royal Assent for specified purposes, see s. 44(1)(a)(v)
40Regulations modifying application of Part 1E+W+S
(a)applying some or all of the provisions of this Part to pension schemes (other than Master Trust schemes) that have the characteristics set out in the regulations, or
(b)disapplying some or all of those provisions from Master Trust schemes that have the characteristics set out in the regulations.
(2)The Secretary of State may make regulations which provide for two or more pension schemes to be treated as a single Master Trust scheme for the purposes of this Part, in the circumstances set out in the regulations.
(3)Those circumstances may include—
(a)the schemes being under common control;
(b)the schemes being subject to common rules;
(c)the schemes being provided by the same service provider.
Part 2 E+W+SAdministration charges
41Power to override contract termsE+W+S
(1)Paragraph 6 of Schedule 18 to the Pensions Act 2014 (power to restrict charges or impose requirements in relation to schemes: overriding provision) is amended as follows.
“(1A)The Secretary of State may by regulations provide that specified provisions override any term of a relevant contract to the extent that it conflicts with them.”
(3)In sub-paragraph (2), at the end insert “ or (1A) ”.
“(3)“Relevant contract” means a contract between the trustees or managers of a relevant scheme and a person providing services in relation to the scheme.”
SCHEDULE 1E+W+SPause orders
Consequences of a pause orderE+W+S
1(1)If a pause order is made in relation to a Master Trust scheme, any action taken in contravention of the order is void, except to the extent that the action is validated by an order under paragraph 3.E+W+S
(2)A pause order in relation to a Master Trust scheme does not prevent the scheme being wound up in pursuance of an order under section 11 of the Pensions Act 1995 (power to wind up occupational pension schemes).
(3)If a pause order contains a direction under section 31(5)(b) that no further contributions (or no further specified contributions) are to be paid towards a scheme during the period for which the order has effect—
(4)If a pause order contains a direction under section 31(5)(e) (no transfers etc of members' rights) it does not prevent—
(a)a pension sharing order or provision having effect, or
(b)a pension earmarking order having effect in a case where—
(ii)a direction under section 31(5)(d) does not prevent the payment becoming due.
“pension sharing order or provision” means an order or provision falling within section 28(1) of the Welfare Reform and Pensions Act 1999 (activation of pension sharing);
an order under section 23 of the Matrimonial Causes Act 1973 (financial provision orders in connection with divorce etc) so far as it includes provision made by virtue of section 25B or 25C of that Act (powers to include provision about pensions),
an order under Part 1 of Schedule 5 to the Civil Partnership Act 2004 (financial provision in connection with dissolution, nullity or separation) so far as it includes provision made by virtue of paragraphs 25 and 26 of Part 6 of that Schedule (powers to include provision about pensions),
an order under section 12A(2) or (3) of the Family Law (Scotland) Act 1985 (powers in relation to pension lump sums when making a capital sum order),
an order under Article 25 of the Matrimonial Causes (Northern Ireland) Order 1978 (S.I. 1978/1045 (N.I. 15)) so far as it includes provision made by virtue of Article 27B or 27C of that Order (Northern Ireland powers corresponding to those mentioned in paragraph (a)), or
an order under Part 1 of Schedule 15 to the Civil Partnership Act 2004 (financial provision in connection with dissolution, nullity or separation) so far as it includes provision made by virtue of paragraphs 20 and 21 of Part 5 of that Schedule (powers to include provision about pensions).
(6)The Secretary of State may make regulations modifying any provision of—
(a)Chapter 1 of Part 4ZA of the Pension Schemes Act 1993 (transfer rights: general), or
(b)Chapter 2 of that Part (early leavers: cash transfer sums and contribution refunds),
in their application to a Master Trust scheme in relation to which a pause order has effect containing a direction under section 31(5)(e) (no transfers etc of members' rights).
(7)Regulations under sub-paragraph (6) override any provision of the Master Trust scheme, to the extent that there is a conflict.
(8)Disregarding sub-paragraph (1), if a pause order made in relation to a scheme is not complied with, section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee of the Master Trust scheme who has failed to take all reasonable steps to secure compliance.
(9)Sub-paragraph (8) does not apply in the case of non-compliance with a direction under section 31(5)(c) (direction that certain deducted contributions are to be repaid by employer).
(11)Regulations under this paragraph are subject to negative resolution procedure.
Period of effect etc of pause orderE+W+S
2(1)A pause order must specify the period for which it has effect, which must not exceed three months.E+W+S
(2)The Pensions Regulator may on one or more occasions by order extend the period for which the pause order has effect for a further three months.
(3)A pause order that is in effect at the end of the triggering event period ceases to have effect at the end of that period.
Notification of trustees, scheme funders, scheme strategists, employers and membersE+W+S
I13Sch. 3 para. 5 in force at Royal Assent for specified purposes, see s. 44(1)(a)(iv)
I14Sch. 3 para. 8 in force at Royal Assent for specified purposes, see s. 44(1)(a)(iv)
I15Sch. 3 para. 9 in force at 1.2.2018 by S.I. 2018/62, reg. 2