Pension Schemes Act (Northern Ireland) 2016 PART 1 CATEGORIES OF PENSION SCHEME Introduction 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Defined benefits scheme 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shared risk scheme (sometimes known as “defined ambition”) 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Defined contributions scheme 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meaning of “pensions promise” etc 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treatment of a scheme as two or more separate schemes 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Part 1 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 2 COLLECTIVE BENEFITS Introduction and nature of collective benefits Introduction and definition 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Duty to set targets for collective benefits 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Policy about factors used to determine each benefit 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to impose requirements about factors used to determine each benefit 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions Payment schedule 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overdue contributions and other payments 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment Statement of investment strategy 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment performance reports 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment powers 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restriction on borrowing by trustees or managers 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investment powers: duty of care 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Valuation Valuation reports 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Valuation process 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dealing with deficits and surpluses Policy for dealing with a deficit or surplus 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to impose requirements about dealing with a deficit or surplus 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deficits attributable to an offence or the imposition of a levy 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment of amounts out of collective benefit funds 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash equivalents Policy for calculating cash equivalent of benefits 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Winding up Winding up 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Requirement to wind up scheme in specified circumstances 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Policies about winding up 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Identifying assets Working out which assets are available for the provision of which benefits 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regulations under Part 2: general Requirement to obtain actuarial advice 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sub-delegation 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Publication of documents etc 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enforcement 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overriding requirements 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation of Part 2 Interpretation of Part 2 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART 3 GENERAL CHANGES TO LEGISLATION ABOUT PENSION SCHEMES Administration and governance Pensions promise obtained from third party 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Duty to act in the best interests of members 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disclosure of information about schemes 38 1 Section 109 of the Pension Schemes Act (disclosure of information about schemes to members etc) is amended as follows. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Before subsection (3) insert— 2A In complying with requirements specified in the regulations, a person must have regard to any guidance prepared from time to time by the Department. . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Early leavers Extension of preservation of benefit under occupational pension schemes 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revaluation of accrued benefits 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indexation Collective benefits exempt from indexation 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regulatory own fund schemes exempt from indexation 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Power to create other exemptions from indexation 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Independent trustees Removal of requirement to maintain register of independent trustees 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rules about modification of schemes Rules about modification of schemes 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension sharing Pension sharing and normal benefit age 46 1 The Pension Schemes Act is amended as follows. 2 In section 97B (interpretation) for the definition of “normal benefit age” substitute— “ normal benefit age ”, in relation to a pension credit benefit for a member of a scheme, is the earliest age at 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); “ normal pension age ”, in relation to a benefit for a member of a scheme, means the earliest age at 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); . 3 In section 97C (basic principle as to pension credit benefit), for subsection (1) substitute— 1 The normal benefit age in relation to a pension credit benefit for a member of a scheme— a must not be lower than 60, and b must not be higher than the permitted maximum. 1A The “permitted maximum” is 65 or, if higher, the highest normal pension age for any benefit that is payable under the scheme to or in respect of any of the members by virtue of rights which are not attributable (directly or indirectly) to a pension credit. . Other amendments Other amendments to do with Parts 1 and 2 47 Schedule 2— a contains amendments to do with Parts 1 and 2, and b replaces references to “money purchase scheme” so as to limit the number of different ways of categorising pension schemes. PART 4 GENERAL Power to make consequential amendments 48 1 The Department may by regulations make provision that is consequential on any provision made by this Act. 2 Regulations under this section may amend, repeal, revoke or otherwise modify any statutory provision (whenever passed or made). Regulations 49 1 A power to make regulations under this Act is exercisable by the Department. 2 Subject to the following provisions of this section, any regulations made under this Act are subject to negative resolution. 3 The first regulations under section 8(3)(b), 9, 10, 11 or 21, or regulations under section 48 that amend, repeal or otherwise modify any relevant statutory provision (whether alone or with other provisions),— a must be laid before the Assembly after being made; and b take effect on such date as may be specified in the regulations, but (without prejudice to the validity of anything done thereunder or to the making of new regulations) cease to have effect upon the expiration of a period of six months from that date unless at some time before the expiration of that period the regulations are approved by a resolution of the Assembly. 4 In this section “ relevant statutory provision ” means a statutory provision contained in— a an Act of the Parliament of Northern Ireland; b an Order in Council under Schedule 1 to the Northern Ireland Act 1974 or the Schedule to the Northern Ireland Act 2000; c an Act of the Assembly; or d an Act of the Parliament of the United Kingdom. 5 Regulations under this Act may include incidental, supplementary, consequential, transitional, transitory or saving provision. Crown application 50 1 In this section “ the relevant provisions ” means— a Part 2, b section 36, and c section 37. 2 The relevant provisions apply to a pension scheme managed by or on behalf of the Crown as they apply to other pension schemes. 3 Accordingly, references in those provisions to a person in the person's capacity as a trustee or manager of a pension scheme include the Crown, or a person acting on behalf of the Crown, in that capacity. 4 References in the relevant provisions to a person in the person's capacity as an employer include the Crown, or a person acting on behalf of the Crown, in that capacity. 5 Nothing in the relevant provisions applies to Her Majesty in Her private capacity (within the meaning of the Crown Proceedings Act 1947). Interpretation 51 In this Act— “ the 1995 Order ” means the Pensions (Northern Ireland) Order 1995; “ the 2005 Order ” means the Pensions (Northern Ireland) Order 2005; “ the Department ” means the Department for Social Development; “ the Pension Schemes Act ” means the Pension Schemes (Northern Ireland) Act 1993; “ statutory provision ” has the meaning given by section 1(f) of the Interpretation Act (Northern Ireland) 1954. Commencement 52 1 The following provisions come into operation on the day after this Act receives Royal Assent— a section 46; b this Part; c paragraphs 22, 28, 31 and 33 of Schedule 2 (and section 47 so far as relating to those provisions). 2 The other provisions of this Act come into operation on such day or days as the Department may by order appoint. 3 The Department may by order make incidental, supplementary, consequential, transitional, transitory or saving provision in connection with the coming into operation of any provision of this Act. Short title 53 This Act may be cited as the Pension Schemes Act (Northern Ireland) 2016.