Source: http://www.legislation.gov.uk/uksi/2015/879/2018-01-03
Timestamp: 2019-09-15 17:05:28
Document Index: 133969415

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

Changes over time for: The Occupational Pension Schemes (Charges and Governance) Regulations 2015
The Secretary of State for Work and Pensions, in exercise of the powers conferred by sections 113(1), 181(1) and 182(2) and (3) of the Pension Schemes Act 1993 F1, sections 35(1), (3) and (4), 36(1), (1A)(a) and (9), 68(2)(e), 124(1) and 174(2) and (3) of the Pensions Act 1995 F2, sections 1(5), 8(1) and 83(4)(a) of the Welfare Reform and Pensions Act 1999 F3, sections 60(2)(h), 259(1), 315 and 318(1) of the Pensions Act 2004 F4 and sections 43 and 54(5) and (6) of, and paragraphs 1(1), (2)(a), (3) and (5), 2(1) to (3) and (5), 6 and 7 of Schedule 18 to, the Pensions Act 2014 F5, makes the following Regulations.
In accordance with section 185(1) of the Pension Schemes Act 1993 F6, section 120(1) of the Pensions Act 1995, section 317(1) of the Pensions Act 2004 and paragraph 8 of Schedule 18 to the Pensions Act 2014, the Secretary of State has consulted such persons as the Secretary of State considers appropriate.
F11993 c. 48. Section 113(1) was amended by the Child Support, Pensions and Social Security Act 2000 (c. 19), section 52(1). Section 181(1) is cited for the meaning it gives to “regulations”.
F21995 c. 26 (“the 1995 Act”). Subsections (1) and (1A) of section 36 were substituted by the Pensions Act 2004 (c. 35) (“the 2004 Act”), section 245(2). Section 124(1) is cited for the meaning it gives to “prescribed” and “regulations”.
F31999 c. 30. Section 1(5) was amended by the 2004 Act, section 285(3). Section 8(1) is cited for the meaning it gives to “prescribed”.
F42004 c. 35. Section 318(1) is cited for the meaning it gives to “prescribed” and “regulations”.
F52014 c. 19.
F6Section 185(1) was amended by the 1995 Act, sections 122, 151 and 177 and Schedule 3, paragraph 46, Schedule 5, paragraph 80(a), (d) and (f) and Schedule 7, Part 1.
“the 2008 Act” means the Pensions Act 2008 F7;
“the Administration Regulations” means the Occupational Pension Schemes (Scheme Administration) Regulations 1996 F8;
[F9“adviser” is a person described in regulation 11A(3); ]
“charges” means administration charges F10 other than—
charges permitted by regulations made under section 24 or 41 (charges in respect of pension sharing costs) of the Welfare Reform and Pensions Act 1999 F11;
if no such decision is made, 1stApril;
“employer” has the meaning given in section 99 of the 2008 Act F12;
[F9“qualifying scheme employer” means an employer in relation to whom a scheme is a qualifying scheme in relation to at least one of its jobholders;]
the scheme has a trustee who is independent in relation to the scheme for the purposes of section 23 of the 1995 Act F13 (power to appoint independent trustees), and is registered in the register maintained by the Authority (as defined in that Act) F14 in accordance with regulations made under subsection (4) of that section; or
[F9“service provider” means a person who provides an administration service directly to the trustees or managers of a [F15relevant] scheme;]
[F9“specified scheme” means a relevant scheme in which at least one qualifying scheme employer participates;]
“writing” includes electronic communication and ‘electronic communication’ has the meaning given in section 15(1) of the Electronic Communications Act 2000 F16.
(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.
F72008 c. 30.
F8S.I. 1996/1715.
F9Words in reg. 2(1) inserted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 3
F10“Administration charge” is defined in paragraph 1(5) of Schedule 18 to the Pensions Act 2014 (c. 19).
F11Section 24 was amended by the Family Law Act 1996 (c. 27), section 66 and Schedule 8, paragraph 43A (subject to savings as to which see section 66(2) and Schedule 9, paragraph 5 of that Act) and the Civil Partnership Act 2004 (c. 33), section 261(1) and (4), Schedule 27, paragraph 158(1) to (2) and Schedule 30.
F12There are amendments to section 99 which are not relevant to these Regulations.
F13Section 23 was substituted by the 2004 Act, section 36(3).
F14See section 124(1) of the 1995 Act, substituted by the 2004 Act, section 7(2)(b).
F15Word in reg. 2(1) substituted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 3
F162000 c. 7. Section 15(1) was amended by the Communications Act 2003 (c. 21), section 406(1) and Schedule 17, paragraph 158.
Default arrangementU.K.
(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—
[F17(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.]
“relevant date” means the date referred to in regulation 1(2) or, if later, the employer's staging date;
“staging date” means the date on which sections 2 to 9 of the 2008 Act F18 first apply to the employer; and
F17Reg. 3(6) substituted (6.4.2015) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2015 (S.I. 2015/889), regs. 1, 2
F18Section 2 was amended by the Pensions Act 2011 (c. 19) (“the 2011 Act”), section 4. Section 3 was amended by the 2011 Act, sections 5 and 6, and S.I. 2012/1506, S.I. 2013/667 and S.I. 2014/623. Section 4 was substituted by the 2011 Act, section 6(2). Section 5 was amended by the 2011 Act, sections 4, 5 and 6, the Pensions Act 2014, sections 37 and 38 and S.I. 2012/1506, S.I. 2013/667 and S.I. 2014/623. Section 6 was amended by the 2011 Act, sections 4, 6 and 7. Section 7 was amended by the 2011 Act, section 6.
PART 2U.K.RESTRICTIONS ON CHARGES
[F19CHAPTER 1U.K.DEFAULT ARRANGEMENTS, NON-CONTRIBUTING MEMBERS AND PAYMENTS TO ADVISERS
F19Ch. 1: reg. 4-13 renumbered as Ch. 1 (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 4
Restrictions on chargesU.K.
4.—(1) Subject to regulations 9 and 10, the trustees or managers of a relevant scheme must not impose or permit to be imposed on a member of that scheme to whom [F20this Chapter] applies charges which—
(a)exceed the limits specified in [F20this Chapter] ; or
(b)are of a description prohibited by [F20this Chapter] [F21, with the exception of regulation 11A].
[F22(1A) Subject to regulation 11C, a service provider must not impose or permit to be imposed on a member to whom regulation 11A applies charges which are of a description prohibited by that regulation.]
(2) With the exception of [F23regulations 11 and 11A], [F24this Chapter] applies—
(a)to a member of a relevant scheme to the extent of the value of that member's rights under a default arrangement; and
F20Words in reg. 4(1) substituted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 5(2)
F21Words in reg. 4(1)(b) inserted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 4(2)
F22Reg. 4(1A) inserted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 4(3)
F23Words in reg. 4(2) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 4(4)
F24Words in reg. 4(2) substituted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 5(3)
Prohibited charge structuresU.K.
Limits on chargesU.K.
6.—(1) [F25Subject to regulation 13C(6)] the limits on charges for the purposes of regulation 4(1)(a) are the limits specified in this regulation and the trustees or managers must choose whether to assess them in accordance with regulation 7 or 8 (but see regulation 8(6)).
(2) The limit in relation to a single charge structure is 0.75% annually of the value of the member's rights under the default arrangement.
(b)in relation to the existing rights charge, the percentage annually of the value of the member's rights under the default arrangement which is the figure in Column 2 of the following table which corresponds to the contribution percentage charge rate in Column 1 of that table which is imposed on the member.
Column 1Contribution percentage charge rate (%)
Column 2Existing rights charge rate
(b)in relation to the existing rights charge, the percentage annually of the value of the member's rights under the default arrangement which is the figure in Column 2 of the following table which corresponds to the annual flat fee charge in Column 1 of that table which is imposed on the member.
Column 1Flat fee charge (£)
Column 2Existing rights charge rate (%)
F25Words in reg. 6(1) inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 6
Assessment of chargesU.K.
(2) Trustees or managers must calculate the value of the member's rights under the default arrangement at reference points set at equal intervals during the charges year of no more than 3 months (but see paragraphs (3), (6) and(7)).
(7) Where a member has no rights in the default arrangement at a reference point referred to in paragraph (2), paragraph (4) is to be read as if the words “average of the reference point values” read “value of that member's rights in the default arrangement on the final day of the charges year or, where the member has no such rights on that day, on the final day on which the member has such rights,”.
Alternative assessment of chargesU.K.
is not exceeded, if on the first day of the charges year, the charges regime to be applied to the member's rights meets the requirement in paragraph (2) and that charges regime is applied to the member's rights throughout that charges year.
(a)the value of the member's rights under the default arrangement will not increase or decrease during the charges year when compared to the value on the first day of the charges year, other than as a result of charges imposed on the member; and
(a)the charges to be imposed, and any rebates of charges to be applied, as a percentage of the value of the member's rights in the default arrangement;
(b)when they are to be deducted from, or added to, the member's rights throughout the charges year;
(c)how the value of the member's rights will be calculated for the purposes of imposing or rebating charges.
Member agreement for servicesU.K.
9.—(1) Subject to paragraph (3), the restrictions in regulation 4 do not apply in relation to [F26advice or] a service for which the member has entered into an agreement with a person for the provision of that [F27advice or] service, provided the conditions in paragraph (2) are satisfied.
(ii)is not a condition of the member's contributions being allocated under a default arrangement; and
(3) This regulation does not apply to [F28advice or] a service which—
F26Words in reg. 9(1) inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 7(2)(a)
F27Words in reg. 9(1) inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 7(2)(b)
F28Words in reg. 9(3) inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 7(3)
Charge limits adjustmentU.K.
(8) Where the trustees or managers have given to the members the option referred to in paragraph (7), the trustees or managers [F29must] inform the members described in paragraph (4)(b) of that option, and any such agreement by the member must be in writing and include an acknowledgement by the member that charges under the default arrangement may be higher than would otherwise be permitted under these Regulations.
F29Word in reg. 10(8) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 5
Non-contributing membersU.K.
“relevant scheme” is a scheme satisfying the definition in regulation 2(2) which is a qualifying scheme for at least one jobholder of the member's employer.
[F30Payments to advisersU.K.
11A.—(1) This regulation applies to a member of a specified scheme if the member is, or was, a worker of a qualifying scheme employer who participates, or has participated F31..., in that scheme.
(2) Subject to paragraphs (4) and (6) and regulations 11B(2)[F32, 11B(2B)] and 11C, it is prohibited for the purposes of regulation 4(1A) to impose or permit to be imposed on a member to whom this regulation applies a charge that is used—
(a)directly or indirectly, to pay an adviser; or
for advice or a service referred to in sub-paragraph (a) or (b) of paragraph (3).
(a)advice or a service to the member’s employer or former employer who is participating in the specified scheme; or
(4) [F33The prohibition in paragraph (2)] does not apply to the following services provided by an adviser—
(a)a service relating to the administration of employee remuneration including tax deductions; and
[F34(6) The prohibition in paragraph (2) does not apply to a charge imposed to reimburse a service provider for any payment made to an adviser for advice or a service referred to in paragraph (3)(a) or (b) where—
(a)the charge is imposed under a relevant contract which—
(i)was entered into before 6th April 2016; and
(ii)has not been varied or renewed on or after that date; and
(b)the payment was made before 1st October 2017.]]
[F35(7) Where the prohibition in paragraph (2) applies it overrides any term of a relevant contract to the extent that the term conflicts with it.]
F30Regs. 11A-11C inserted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 6
F31Words in reg. 11A(1) omitted (1.10.2017) by virtue of The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 8(2)
F32Words in reg. 11A(2) inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 8(3)
F33Words in reg. 11A(4) substituted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 8(4)
F34Reg. 11A(6) substituted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 8(5)
F35Reg. 11A(7) inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 8(6)
[F30Relevant informationU.K.
11B.—(1) The trustees or managers of a specified scheme must notify the service provider in writing that the scheme is a specified scheme within 3 months beginning with whichever is the later of—
(b)the date on which the scheme becomes a specified scheme; or
(c)the date on which the service provider becomes a service provider in relation to the specified scheme.
(2) Subject to [F36paragraphs (2B) and (5)], regulation 11A does not apply until the expiry of the period of 1 month beginning with the date on which the service provider receives the notification in paragraph (1).
[F37(2A) This paragraph applies where the relevant contract—
(a)was entered into before 6th April 2016; and
(b)has not been varied or renewed on or after that date.
(2B) Subject to paragraph (5), where paragraph (2A) applies regulation 11A does not apply until the expiry of the period of 6 months beginning with 1st October 2017.]
(3) [F38Except in a case to which paragraph (2A) applies,] the service provider must confirm in writing to the trustees or managers who provided the notification in paragraph (1) that it is compliant with the prohibition in regulation 11A(2) in relation to all members to whom that regulation applies within 1 month beginning with the date on which that regulation first applies.
[F39(3A) In a case to which paragraph (2A) applies, subject to paragraph (5), the service provider must confirm in writing to the trustees or managers of the specified scheme within 1 month beginning with 1st April 2018 that it is complying with the prohibition in regulation 11A(2) in relation to all members to whom paragraph (2A) applies.]
(a)in [F40paragraphs (2) or (2B)] in respect of those members about whom a request has been made and to whom regulation 11A applies; or
(b)[F41paragraphs (3) or (3A)],
(6) The service provider must inform the trustees or managers of the specified scheme in writing if the confirmation that it has given in compliance with paragraph (3) [F42or (3A)] is no longer accurate as soon as practicable, and in any event within 1 month, beginning with the date on which it is no longer accurate.
(7) Where a request is made under paragraph (4), the trustees or managers must provide the information requested within 1 month beginning with the date of receipt of the request.]
F36Words in reg. 11B(2) substituted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 9(2)
F37Regs. 11B(2A)-(2B) inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 9(3)
F38Words in reg. 11B(3) inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 9(4)
F39Reg. 11B(3A) inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 9(5)
F40Words in reg. 11B(5) substituted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 9(6)(a)
F41Words in reg. 11B(5) substituted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 9(6)(b)
F42Words in reg. 11B(6) inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 9(7)
[F30Member agreement for payments to advisersU.K.
(a)the service provider; and
(b)include a description of the advice or service that will be provided to the member;
(d)state that by entering into the agreement the member will incur charges of an amount specified in the agreement which will be imposed over a period specified in the agreement and that such charges would otherwise not be permitted under regulation 11A(2)(a); and
(3) Where the charge limits apply to a member and the trustees or managers are of the opinion that charges imposed under an agreement under this regulation would be likely to place the trustees or managers in breach of those limits in relation to that member, they may inform—
(b)the adviser; and
within 1 month beginning with the date on which they receive a copy of the agreement under this regulation, that they require that a member agreement for [F43advice or] services under regulation 9 is entered into by the member before the agreement under this regulation can take effect.
(4) Where the trustees or managers are of the opinion that the value of the member’s rights in the scheme is not, or will not be, sufficient to pay the amount specified in an agreement under this regulation, the agreement does not take effect if the trustees or managers inform—
of their opinion within 1 month beginning with the date on which they receive a copy of the agreement.
(5) In this regulation, “charge limits” has the meaning given in regulation 10(10).]
F43Words in reg. 11C(3) inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 10
Amendment of the Stakeholder Pension Schemes Regulations 2000U.K.
12.—(1) The Stakeholder Pension Schemes Regulations 2000 F44 are amended as follows.
(2) In regulation 13 F45 (expenses, commission etc - principles), after paragraph (4) insert—
“(5) This regulation and regulations 14 to 14C F46 do not apply in the circumstances set out in regulation 14D.”.
(b)the member's workplace contributions are allocated under a default arrangement.
(4) In this regulation, “default arrangement” and “workplace pension contributions” have the meanings given in the FCA Handbook F47.”.
F44S.I. 2000/1403.
F45Regulation 13 was amended by S.I. 2001/577 and S.I. 2011/246.
F46Regulations 14, 14A, 14B and 14C were substituted by S.I. 2005/577. Regulation 14, as substituted, was amended by S.I. 2007/814 and S.I. 2013/459.
F47The definition of “the FCA Handbook was substituted for the definition of “the FSA Handbook” by S.I. 2013/472. The definition of “the FSA Handbook” was inserted by S.I. 2005/577.
Amendments of other regulationsU.K.
13.—(1) In regulation 10(1) of the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 F48 (listed changes: exclusions), after sub-paragraph (a) insert—
(2) After regulation 7A of the Occupational Pension Schemes (Modification of Schemes) Regulations 2006 F49 (modification of schemes: abolition of protected rights) insert—
7B. The trustees of a trust scheme scheme may by resolution amend the scheme for the purposes of implementing an adjustment measure within regulation 10 of the Occupational Pension Schemes (Charges and Governance) Regulations 2015.”.]
F48S.I. 2006/349.
F49S.I. 2006/759.
[F50CHAPTER 2U.K.RESTRICTIONS ON EARLY EXIT CHARGES
F50Ch. 2 inserted (1.10.2017) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2017 (S.I. 2017/774), regs. 1, 11
Early exit chargesU.K.
13A.—(1) For the purposes of this Chapter an early exit charge in relation to a member of a relevant scheme is a charge which—
(a)is imposed under the scheme or a relevant contract when a member who has reached normal minimum pension age takes the action mentioned in subsection (2); but
(b)is only imposed, or only imposed to that extent, if the member takes that action before the member’s normal pension age.
(2) The action is the member taking benefits under the scheme, converting benefits under the scheme into different benefits or transferring benefits to another pension scheme.
“normal minimum pension age” has the meaning given in section 279(1) of the Finance Act 2004;
“normal pension age” means the earliest age at which, or the earliest occasion on which, the member is entitled to receive the benefit without adjustment for taking it early or late (disregarding any special provision as to early payment on the grounds of ill-health or otherwise and any administration charges); and
a reference to “benefits” includes any part or all of those benefits.
Prohibition of early exit chargesU.K.
13B.—(1) This regulation applies to a member of a relevant scheme who joined that scheme on or after 1st October 2017.
(2) Service providers and trustees and managers of a relevant scheme must not impose an early exit charge, or permit such a charge to be imposed, on a member of the scheme to whom this regulation applies.
Limits on early exit chargesU.K.
13C.—(1) This regulation applies to a member of a relevant scheme who joined that scheme before 1st October 2017.
(2) Service providers and trustees and managers of a relevant scheme must not impose, or permit to be imposed, on a member of the scheme to whom this regulation applies an early exit charge that exceeds the lower of—
(a)1% of the value of the member’s benefits being taken, converted or transferred; or
(b)such amount as was provided for under the scheme rules or a relevant contract as at 1st October 2017.
(3) Where no provision for an early exit charge was made under the scheme rules or a relevant contract as at 1st October 2017, service providers and trustees and managers of a relevant scheme must not impose an early exit charge, or permit such a charge to be imposed, on a member of the scheme to whom this regulation applies.
(4) Trustees and managers of a relevant scheme must not—
(a)include provision in a relevant scheme for an early exit charge, where such provision did not exist on 1st October 2017; or
(b)vary provision for an early exit charge in such a scheme to increase or potentially increase the charge.
(5) Nothing in this regulation permits an early exit charge to be imposed—
(a)that is higher than the limits prescribed by regulation 6 (limits on charges) where that regulation applies; or
(b)where section 33 of the Pension Schemes Act 2017 (prohibition on increasing charges etc during triggering event period) applies.
(6) Nothing in regulation 6 permits—
(a)an early exit charge which is lower than 0.75% of the value of the member’s benefits being taken, converted or transferred, to be increased; or
(b)an early exit charge to be imposed where one did not exist.
(7) The value of a member’s benefits in paragraphs (2)(a) and (6)(a)—
(a)means the value calculated at the point when the trustee or manager of the scheme receives confirmation from the member of the instruction to take the action giving rise to the early exit charge; and
(b)is to be calculated in accordance with guidance issued from time to time by the Secretary of State.
Conflicting contract termsU.K.
13D. Regulations 13B and 13C override any term of a relevant contract to the extent that the term conflicts with those regulations.
Relevant informationU.K.
13E.—(1) A service provider must confirm in writing to the trustees or managers of a relevant scheme that it is complying with the restrictions in regulations 13B and 13C within 1 month beginning with whichever is the later of—
(a)1st October 2017; or
(b)the date on which the service provider becomes a service provider in relation to the relevant scheme.
(2) The service provider must inform the trustees or managers of the relevant scheme in writing if the confirmation that it has given in compliance with paragraph (1) is no longer accurate as soon as practicable, and in any event within 1 month, beginning with the date on which that confirmation is no longer accurate.]
CHAPTER 1U.K.GOVERNANCE OF RELEVANT SCHEMES
Definition of “relevant scheme”U.K.
(a)in regulation 1(2) (interpretation) F51, after the definition of “relevant benefits”, insert—
““relevant scheme” means an occupational pension scheme which provides money purchase benefits F52 other than—
a scheme that does not fall within paragraph 1 of Schedule 1 (description of schemes) to the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 F53;
a public service pension scheme F54 which—
does not fall within regulation 4(2) of those Regulations but is a public service pension scheme within the meaning of the 2004 Act F55; or
(b)after regulation 1(2ZA) F56 insert—
F51Regulation 1(2) was amended by S.I. 1997/786, regulation 3, Schedule 1, paragraph 11(2), 2005/2426, regulations 4(1) and (2), 2005/3377, regulation 20(1) and Schedule 3, paragraph 4(1) and (2) and 2006/778, regulation 4(1) and (2)(a) to (d).
F52See S.I. 1996/1715, regulation 1(2), substituted by S.I. 1997/786, and section 181(1) of the Pension Schemes Act 1993 (“the 1993 Act”) for definition of “money purchase benefits”. The definition of “money purchase benefits' in section 181(1) of the 1993 Act was amended by the 2011 Act, section 29 and S.I. 2005/2053.
F53S.I. 2013/2734.
F54See S.I. 1996/1715, regulation 1(2), and section 1 of the 1993 Act, for definition of “public service pension scheme”. The definition of ‘public service scheme” in the 1993 Act was amended by S.I. 1999/1820.
F55See section 318 of the 2004 Act. The definition of “public service pension scheme” was inserted by the Public Service Pensions Act 2013 (c.25), Schedule 4, paragraph 22(2).
F56Inserted by regulation 21 of these Regulations.
Appointment of service providersU.K.
(a)for the heading to Part 2 substitute “ Advisers and Service Providers ”;
(3) In relation to a relevant scheme which is not a money purchase scheme F57, this regulation applies only in relation to services which are provided in connection with the provision of money purchase benefits.”.
F57See S.I. 1996/1715, regulation 1(2), substituted by S.I. 1997/786, for definition of “money purchase scheme”.
Appointment of chair of trustees or managersU.K.
in the case of a scheme established under section 67 of the Pensions Act 2008 F58 (duty to establish a pension scheme), the person appointed as chair of the trustee corporation established under section 75 of that Act (trustee corporation);”;
“PART VU.K.GOVERNANCE OF RELEVANT SCHEMES
CHAPTER 1U.K.GENERAL
(2) In the Register of Occupational and Personal Pension Schemes Regulations 2005 F59, in regulation 3(1) (registrable information) after sub-paragraph (d) insert—
F58Section 67 was amended by the Finance (No. 3) Act 2010 (c. 33), section 30(2).
F59S.I. 2005/597. Regulation 3(1) was amended by S.I. 2006/1733.
Annual statement regarding governanceU.K.
17.—(1) In the Administration Regulations after regulation 22 F60 insert—
(i)include the latest statement prepared in accordance with regulation 2A F61 (default investment strategy) of the Occupational Pension Schemes (Investment) Regulations 2005 (“the Investment Regulations”);
(iv)explain the trustees' or managers' assessment, in accordance with regulation 25(1)(b), of the extent to which the charges and transaction costs represent good value for members;
F60Inserted by regulation 16 of these Regulations.
F61Inserted by regulation 20 of these Regulations.
Requirements for processing financial transactionsU.K.
18. In the Administration Regulations, after regulation 23 F62 insert—
F62Inserted by regulation 17 of these Regulations.
Assessment of charges and costsU.K.
19. In the Administration Regulations, after regulation 24 F63 insert—
(ii)in so far as they are able to do so, the transaction costs, borne by members of the scheme; and
F63Inserted by regulation 18 of these Regulations.
Requirements relating to default arrangementU.K.
20. In the Occupational Pension Schemes (Investment) Regulations 2005 F64—
in paragraph (1)(a) omit “qualifying”, and for “relevant jobholders” substitute “ workers ”;
4A. Where regulation 4(2) does not apply F65 to a relevant scheme, the assets allocated to the scheme's default arrangement must be invested—
F64S.I. 2005/3378.
F65See regulation 7 of S.I. 2005/3378.
CHAPTER 2U.K.ADDITIONAL GOVERNANCE REQUIREMENTS FOR RELEVANT MULTI-EMPLOYER SCHEMES
Definition of “relevant multi-employer scheme”U.K.
part of a group of companies consisting of a holding company and one or more subsidiaries within the meaning of section 1159(1) of the Companies Act 2006 F66 (meaning of “subsidiary” etc); or
F662006 c.46.
Additional requirements for relevant multi-employer schemesU.K.
22. In the Administration Regulations after regulation 25 F67 insert—
“CHAPTER 3U.K.RELEVANT MULTI-EMPLOYER SCHEMES
(b)in the case of a trustee who was non-affiliated, ceases to be non-affiliated, the requirements of paragraphs (1) and (2) must be met before the end of the period of three months starting with the date on which the former trustee ceases to be a trustee or, as the case may be, the trustee ceases to be non-affiliated.
(ii)has been such a director, manager, partner or employee during the period of five years ending with the date of the person's appointment as a trustee;
(ii)a payment in respect of the person's role as trustee of the relevant multi-employer scheme;
(c)whether or not, in the person's relationship with a service provider, the person's obligations to the service provider conflict with their obligations as a trustee of the relevant multi-employer scheme and whether their obligations as a trustee will take priority in the case of a conflict.
F67Inserted by regulation 19 of these Regulations.
Administration Regulations: further amendmentU.K.
23. In regulation 1(2) (interpretation) of the Administration Regulations, in the definition of “relevant multi-employer scheme”F68—
F68Inserted by regulation 21 of these Regulations.
PART 4U.K.COMPLIANCE
Amendment of the Register of Occupational and Personal Pension Schemes Regulations 2005U.K.
24.—(1) Regulation 3(1) of the Register of Occupational and Personal Pension Schemes Regulations 2005 F69 is amended as follows.
(3) After sub-paragraph (g) F70 insert—
F69S.I. 2005/597.
F70Sub-paragraph (g) was inserted by S.I. 2006/1733, regulation 4(1) and (2)(a).
Amendment of section 13 of the Pensions Act 2004U.K.
25. In section 13(7) of the Pensions Act 2004 F71 (improvement notices)—
F712004 c.35. Subsection (7) was amended by the Public Service Pensions Act 2013 (c.25), section 17(1) and Schedule 4, paragraphs 1, 3(1) and (3)(a) and (b). The Pension Schemes Act 2015 (currently the Pension Schemes Bill before Parliament) will, when enacted, insert an additional paragraph into subsection 7 which, depending upon when that Bill receives Royal Assent, may either precede or follow the paragraph (f) inserted by this regulation 25(b).
Compliance noticesU.K.
26.—(1) The Regulator may issue a compliance notice to [F72a person] in any of the circumstances of non-compliance in paragraph (2).
(a)receipt of an indication pursuant to regulation 3(1)(i) F73 of the Register of Occupational and Personal Pension Schemes Regulations 2005 that the [F74person has] not complied with Part 2 of these Regulations; or
(b)if the Regulator is of the opinion that the [F75person is not complying with, or has not complied with,] Part 2 of these Regulations.
(3) A compliance notice is a notice directing the [F76person] to whom it is issued to take, or refrain from taking, the steps specified in the notice.
(b)require the [F77person] to provide within a specified period specified information relating to the non-compliance;
(c)require the [F78person] to inform the Regulator, within a specified period, how the person has complied with or is complying with the notice;
(d)state that if the Regulator is of the opinion that the [F79person has] failed to comply with the requirements of the notice, the Regulator may issue a penalty notice under sub-paragraph (b)(i) of paragraph (1) of regulation 28;
(e)give the [F80person] a choice between different ways of remedying, or preventing the recurrence of, the non-compliance.
F72Words in reg. 26(1) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(2)
F73Inserted by regulation 24(3) of these Regulations.
F74Words in reg. 26(2)(a) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(3)(a)
F75Words in reg. 26(2)(b) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(3)(b)
F76Word in reg. 26(3) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(4)
F77Word in reg. 26(6)(b) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(4)
F78Word in reg. 26(6)(c) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(4)
F79Words in reg. 26(6)(d) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(5)
F80Word in reg. 26(6)(e) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(4)
Third party compliance noticesU.K.
(a)the Regulator is of the opinion that the non-compliance is or was, wholly or partly, a result of a failure of [F81another person] (“the third party”), and
(b)that failure is not in itself a contravention of F82... Part 2 of these Regulations, the Regulator may issue to the third party a third party compliance notice.
(a)receipt of an indication pursuant to regulation 3(1)(i) of the Register of Occupational and Personal Pension Schemes Regulations 2005 that the [F83person has] not complied with Part 2 of these Regulations;
(b)receipt of an indication that the [F84person is] unable to confirm whether they are complying or will be able to comply with that Part; or
(c)if the Regulator is of the opinion that the [F85person is not complying with, or has not complied with,] that Part.
(ii)the evidence on which the Regulator's belief is based.
F81Words in reg. 27(1)(a) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 8(2)(a)
F82Word in reg. 27(1)(b) omitted (6.4.2016) by virtue of The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 8(2)(b)
F83Words in reg. 27(2)(a) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 8(3)(a)
F84Words in reg. 27(2)(b) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 8(3)(b)
F85Words in reg. 27(2)(c) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 8(3)(c)
(b)[F86a person where it is of the opinion that the person has] failed to comply with—
(a)the Regulator is in receipt of an indication pursuant to regulation 3(1)(h) F87 of the Register of Occupational and Personal Pension Schemes Regulations 2005 that the trustees or managers have failed to prepare the statement that they are required to prepare by regulation 23 F88 of the Administration Regulations; or
F90(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F91(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F86Words in reg. 28(1)(b) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 9(2)
F87Inserted by regulation 24(3) of these Regulations.
F88Inserted by regulation 17 of these Regulations.
F89Reg. 28(5)(b) omitted (6.4.2016) by virtue of The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 9(3)
F90Reg. 28(5)(c) omitted (6.4.2016) by virtue of The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 9(3)
F91Reg. 28(6) omitted (6.4.2016) by virtue of The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 9(3)
Penalty notices: recoveryU.K.
(2) In England and Wales, any such penalty is, if the county court so orders, recoverable under section 85 of the County Courts Act 1984 F92 or otherwise as if it were payable under an order of that court.
F921984 c. 28.
[F93Penalty notices: recovery from bodies corporate and Scottish partnershipsU.K.
(a)a penalty under regulation 28 is recoverable from a body corporate or Scottish partnership by reason of any act or omission of the body or partnership; and
(b)the act or omission was done with the consent or connivance of, or is attributable to any neglect on the part of any persons mentioned in paragraph (2),
the Regulator may issue the notice to each of those persons who consented to or connived in the act or omission or to whose neglect the act or omission was attributable.
(ii)where the affairs of a body corporate are managed by its members, any member who has management functions; and
(b)in relation to a Scottish partnership, the partners of that partnership.
(a)may not also require the body corporate, or Scottish partnership, in question to pay a penalty in respect of the same act or omission; and
(b)must issue the penalty notice to the person who is required to pay, but may also notify the relevant body corporate or Scottish partnership.]
F93Reg. 30 substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 10
Review of penalty noticesU.K.
(6) The Regulator's powers on a review are to—
References to First-Tier Tribunal or Upper TribunalU.K.
[F94(4) For the purposes of paragraph (3)(c), a reference is completed when—
(a)the reference has been determined; and
(b)the Tribunal has remitted the matter to the Regulator.]
(i)the Tribunal Procedure (First-Tier Tribunal) (General Regulatory Chamber) Rules 2009 F95 in relation to the First-Tier Tribunal; and
(ii)the Tribunal Procedure (Upper Tribunal) Rules 2008 F96 in relation to the Upper Tribunal.
F94Reg. 32(4) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 11
F95S.I. 2009/1976.
F96S.I. 2008/2698.
[F97Service of noticesU.K.
33. Sections 303 to 305 of the Pensions Act 2004 (service of documents and electronic working) are treated as applying to notices issued under Part 4 of these Regulations.]
F97Reg. 33 inserted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 12