PENSIONS Citation, commencement and interpretation 1 1 These Regulations may be cited as the Occupational and Personal Pension Schemes (Disclosure of Information) Amendment Regulations 2002 and shall come into force on 6th April 2003. 2 In these Regulations— “the 1987 Regulations ” means the Personal Pension Schemes (Disclosure of Information) Regulations 1987 ; “the 1996 Regulations ” means the Occupational Pension Schemes (Disclosure of Information) Regulations 1996 ; and “the 2000 Regulations ” means the Stakeholder Pension Schemes Regulations 2000 . Amendment of the 1987 Regulations 2 1 The 1987 Regulations shall be amended in accordance with the following paragraphs of this regulation. 2 In regulation 1(2) (interpretation)— a after the definition of “beneficiary” there shall be inserted the following definition— ‘contracted-out employment’ shall be construed in accordance with section 8 of the Act ; ; b after the definition of “excluded person” there shall be inserted the following definition— ‘illustration date’ means, in relation to any information provided, or to be provided, under paragraph 2A(1) of Schedule 2, the date specified by the trustees as the date by reference to which amounts are calculated for the purpose of providing the information; ; c after the definition of “member” there shall be inserted the following definitions— ‘non-contributing member’ means a member in respect of whom no further contributions to the scheme are due or expected after the illustration date; ‘pension credit’ means a credit under section 29(1)(b) of the Welfare Reform and Pensions Act 1999 ; ; and d after the definition of “pensionable age” there shall be inserted the following definitions— ‘the relevant guidance’ means the document entitled “Technical Memorandum TM1: Statutory Money Purchase Illustrations” which— is published, and from time to time revised, by the Faculty of Actuaries and the Institute of Actuaries ; and is for the time being approved by the Secretary of State; ‘retirement date’ means, in relation to a member— the date which he has specified to the trustees, and which is acceptable under the rules of the scheme, for the purpose of paragraph 2A(1) of Schedule 2; or where no acceptable date has been specified for that purpose, the date specified by the trustees as being the appropriate date for the purpose of paragraph 2A(1); . 3 In regulation 5 (information to be made available to individuals)— a in paragraph (2) after the words “Schedule 2” there shall be inserted the words “and, subject to paragraph (2A) below, the information mentioned in paragraph 2A of that Schedule”; b after paragraph (2) there shall be inserted the following paragraphs— 2A The requirement under paragraph (2) above to furnish the information mentioned in paragraph 2A of Schedule 2 shall not apply— a in respect of a person who is in receipt of pension benefits under the scheme; or b where the specified date referred to in paragraph 2(a) of Schedule 2 is not more than 2 years before the date which is the member’s retirement date for the purpose of paragraph 2A of Schedule 2; or c where, in relation to the member— i the value, determined by reference to the relevant guidance, of his accrued rights to money purchase benefits under the scheme was less than £5,000 on the illustration date in respect of which such information was last furnished to him; ii no contributions, including transfers of pension rights or pension credits, have been made to the scheme by him or on his behalf in respect of money purchase benefits since that date; and iii the trustees previously gave notice to the member that no further such information would be furnished to him unless further contributions to the scheme in respect of money purchase benefits had first been made by him or on his behalf; or d where, in relation to the member— i the value, determined by reference to the relevant guidance, of his accrued rights to money purchase benefits under the scheme is less than £5,000 on the first illustration date falling after 5th April 2003; ii no contributions, including transfers of pension rights or pension credits, have been made to the scheme by him or on his behalf after 5th April 2003; and iii no further contributions are, in the opinion of the trustees, likely to be made to the scheme by him or on his behalf after that illustration date; or e where the specified date referred to in paragraph 2(a) of Schedule 2 is before 6th April 2003. 2B Where paragraph (2A) applies but the trustees of the scheme nevertheless choose to furnish the information described in paragraph 2A(1) of Schedule 2 and the amount comprising that information is calculated in accordance with sub-paragraphs (2) to (5) of that paragraph, then that information shall be accompanied by the additional information specified in sub-paragraph (6)(a) and (c) to (k) of that paragraph as if the information had been provided under sub-paragraph (1) of that paragraph. . 4 In Schedule 2 (information to be made available to individuals), after paragraph 2 there shall be inserted the following paragraph— 2A 1 The information to be provided under this sub-paragraph is an illustration of the amount, calculated in accordance with sub-paragraphs (2) to (5), of the pension an entitlement to which would be likely to accrue to the member, or be capable of being secured by him, at his retirement date in respect of rights that may arise under the scheme. 2 The amount referred to in sub-paragraph (1) above shall be determined by reference to— a the relevant guidance; and b the assumptions about contributions specified in sub-paragraph (3) and about annuities specified in sub-paragraphs (4) and (5), and such other assumptions as may be specified for the purpose in the relevant guidance, having regard to the value of the member’s accrued rights to money purchase benefits under the scheme on the illustration date. 3 The assumptions about contributions referred to in sub-paragraph (2)(b) above are— a where the calculation relates to the rights of a non-contributing member, that no contributions will be made to the scheme by him or on his behalf after the illustration date; and b in any other case, that, until the member’s retirement date— i contributions to the scheme will be made by him or on his behalf; ii the treatment of the scheme under sections 639 to 646A of the Income and Corporation Taxes Act 1988 as for the time being in force will continue; and iii where a member is in contracted-out employment, sums will continue to be paid by the Commissioners of Inland Revenue in respect of him under section 43 of the Act (payment of minimum contributions to personal pension schemes) in the amounts to be determined by reference to the relevant guidance. 4 The assumptions about annuities referred to in sub-paragraph (2)(b) above are— a that the rate of pension is to be increased annually by the relevant percentage for the time being specified in the relevant guidance; and b that, subject to sub-paragraph (5) below, irrespective of whether or not the member is married at the time when the information referred to in sub-paragraph (1) above is furnished, the annuity will include provision for the payment, to a surviving spouse of the member, of a pension of an amount equal to one half of the pension which was payable to him immediately before his death. 5 Sub-paragraph (4)(b) above does not apply where— a the trustees decide to use a different assumption in substitution for that specified in sub-paragraph (4)(b) on the basis that the scheme records indicate that the member is not married; or b the trustees and the member agree to use a different assumption. 6 The additional information which is to accompany the information provided under sub-paragraph (1) above is— a a statement to the effect that the information provided under that sub-paragraph is provided only for the purposes of illustration, that it does not represent any promise or guarantee as to the amount of benefit which may be receivable by the member or a beneficiary under the scheme, and that it should not be regarded as the only consideration by reference to which the member should make decisions as to his pension arrangements; b a statement to the effect that the provision of the information mentioned in that sub-paragraph is required by law; c a statement specifying the means by which the person to whom the information relates may obtain from the trustees further information about the information provided under sub-paragraph (1) above; d a statement to the effect that the information has been prepared by reference to the assumptions required by this paragraph or specified in the relevant guidance; e a statement to the effect that certain general assumptions have been made about the nature of the investments made for the purposes of that person’s money purchase benefits and their likely performance, which may not correspond with the investments actually made for those purposes, or their actual performance; f a statement to the effect that the amount referred to in sub-paragraph (1) above is expressed in today’s prices; g a statement to the effect that the actual amount of any pension payable to that person or beneficiary under the scheme will depend on considerations, including the actual performance of investments and the cost of buying an annuity at the time the pension becomes payable, which may be different from the assumptions made for the purpose of providing the information under sub-paragraph (1) above; h a statement specifying any assumptions made in relation to future contributions to the scheme; i a statement of the assumptions made in accordance with sub-paragraphs (3)(b)(iii) and (4) above, or as mentioned in sub-paragraph (5) above; j a statement of the member’s retirement date for the purpose of sub-paragraph (1) above; and k a statement of the illustration date used for the purpose of calculating the amount referred to in sub-paragraph (1) above. . Amendment of the 1996 Regulations 3 1 The 1996 Regulations shall be amended in accordance with the following paragraphs of this regulation. 2 In regulation 1(2) (interpretation)— a after the definition of “beneficiary” there shall be inserted the following definition— ‘contracted-out employment’ shall be construed in accordance with section 8 of the 1993 Act; ; b after the definition of “funded” there shall be inserted the following definition— ‘illustration date’ means, in relation to any information provided, or to be provided, under paragraph 6ZA(1) of Schedule 2, the date specified by the trustees as the date by reference to which amounts are calculated for the purpose of providing the information; ; c after the definition of “relevant employment” there shall be inserted the following definition— ‘the relevant guidance’ means the document entitled “Technical Memorandum TM1: Statutory Money Purchase Illustrations” which— is published, and from time to time revised, by the Faculty of Actuaries and the Institute of Actuaries; and is for the time being approved by the Secretary of State; ; and d after the definition of “request” there shall be inserted the following definition— ‘retirement date’ means, in relation to a member— the date which he has specified to the trustees, and which is acceptable under the rules of the scheme, for the purpose of paragraph 6ZA(1) of Schedule 2; or where no acceptable date has been specified for that purpose, the date specified by the trustees as being the appropriate date for the purpose of paragraph 6ZA(1); . 3 In regulation 5 (information to be made available to individuals)— a in paragraph (5) — i after the words “regulation 2” there shall be inserted the words “and paragraph (5ZA) below”; and ii for the words “paragraphs 5, 6 and 6AA” there shall be substituted the words “paragraphs 5 to 6AA”; b after paragraph (5) there shall be inserted the following paragraphs— 5ZA The requirement under paragraph (5) above to furnish the information mentioned in paragraph 6ZA of Schedule 2 shall not apply— a in respect of a person who is in receipt of pension benefits under the scheme; or b where the specified date referred to in paragraph 6(a)(ii) of Schedule 2 is not more than 2 years before the date which is the member’s retirement date for the purpose of paragraph 6ZA of Schedule 2; or c where, in relation to the member— i the value, determined by reference to the relevant guidance, of his accrued rights to money purchase benefits under the scheme was less than £5,000 on the illustration date in respect of which such information was last furnished to him; ii no contributions, including transfers of pension rights or pension credits, have been made to the scheme by him or on his behalf in respect of money purchase benefits since that date; and iii the trustees previously gave notice to the member that no further such information would be furnished to him unless further contributions to the scheme in respect of money purchase benefits had first been made by him or on his behalf; or d where, in relation to the member— i the value, determined by reference to the relevant guidance, of his accrued rights to money purchase benefits under the scheme is less than £5,000 on the first illustration date falling after 5th April 2003; ii no contributions, including transfers of pension rights or pension credits, have been made to the scheme by him or on his behalf after 5th April 2003; and iii no further contributions are, in the opinion of the trustees, likely to be made to the scheme by him or on his behalf after that illustration date; or e where— i the member’s benefit is calculated by reference to the greater of the result of a money purchase and a defined benefit formula; and ii in the opinion of the trustees, the benefit calculated in accordance with a money purchase formula is not likely to affect the pension payable; or f where the specified date referred to in paragraph 6(a)(ii) of Schedule 2 is before 6th April 2003. 5ZB For the purposes of paragraph (5ZA) a scheme which provides additional money purchase benefits by virtue of the payment by the member of voluntary contributions shall be regarded as a separate scheme from any other part of that scheme. 5ZC Where paragraph (5ZA) applies but the trustees of the scheme nevertheless choose to furnish the information described in paragraph 6ZA(1) of Schedule 2 and the amount comprising that information is calculated in accordance with sub-paragraphs (2) to (5) of that paragraph, then that information shall be accompanied by the additional information specified in sub-paragraph (6)(a) and (c) to (k) of that paragraph as if the information had been provided under sub-paragraph (1) of that paragraph. . 4 In Schedule 2 (information to be made available to individuals), after paragraph 6 there shall be inserted the following paragraph— 6ZA 1 The information to be provided under this sub-paragraph is an illustration of the amount, calculated in accordance with sub-paragraphs (2) to (5), of the pension an entitlement to which would be likely to accrue to the member, or be capable of being secured by him, at his retirement date in respect of rights to money purchase benefits that may arise under the scheme. 2 The amount referred to in sub-paragraph (1) above shall be determined by reference to— a the relevant guidance; and b the assumptions about contributions specified in sub-paragraph (3) and about annuities specified in sub-paragraphs (4) and (5), and such other assumptions as may be specified for the purpose in the relevant guidance, having regard to the value of the member’s accrued rights to money purchase benefits under the scheme on the illustration date. 3 The assumptions about contributions referred to in sub-paragraph (2)(b) above are— a where the calculation relates to the rights of a deferred member, that no contributions will be made to the scheme by him or on his behalf after the illustration date; or b where the calculation relates to the rights of a member who is in pensionable service under the scheme, that, until the member’s retirement date— i contributions to the scheme will be made by him or on his behalf; ii the treatment of the scheme under sections 592 to 594 or, as the case may be, 639 to 646A of the Income and Corporation Taxes Act 1988 as for the time being in force will continue; and iii where a member is in contracted-out employment, sums will continue to be paid by the Commissioners of Inland Revenue in respect of him under section 42A(3) of the 1993 Act (rebates) in the amounts to be determined by reference to the relevant guidance. 4 The assumptions about annuities referred to in sub-paragraph (2)(b) above are— a that the rate of pension is to be increased annually by the relevant percentage for the time being specified in the relevant guidance; and b that, subject to sub-paragraph (5) below, irrespective of whether or not the member is married at the time when the information referred to in sub-paragraph (1) above is furnished, the annuity will include provision for the payment, to a surviving spouse of the member, of a pension of an amount equal to one half of the pension which was payable to him immediately before his death. 5 Sub-paragraph (4)(b) above does not apply where— a the trustees decide to use a different assumption in substitution for that specified in sub-paragraph (4)(b) on the basis that the scheme records indicate that the member is not married; or b the trustees and the member agree to use a different assumption. 6 The additional information which is to accompany the information provided under sub-paragraph (1) above is— a a statement to the effect that the information provided under that sub-paragraph is provided only for the purposes of illustration, that it does not represent any promise or guarantee as to the amount of benefit which may be receivable by the member or a beneficiary under the scheme, and that it should not be regarded as the only consideration by reference to which the member should make decisions as to his pension arrangements; b a statement to the effect that the provision of the information mentioned in that sub-paragraph is required by law; c a statement specifying the means by which the person to whom the information relates may obtain from the trustees further information about the information provided under sub-paragraph (1) above; d a statement to the effect that the information has been prepared by reference to the assumptions required by this paragraph or specified in the relevant guidance; e a statement to the effect that certain general assumptions have been made about the nature of the investments made for the purposes of that person’s money purchase benefits and their likely performance, which may not correspond with the investments actually made for those purposes, or their actual performance; f a statement to the effect that the amount referred to in sub-paragraph (1) above is expressed in today’s prices; g a statement to the effect that the actual amount of any pension payable to that person or beneficiary under the scheme will depend on considerations, including the actual performance of investments and the cost of buying an annuity at the time the pension becomes payable, which may be different from the assumptions made for the purpose of providing the information under sub-paragraph (1) above; h a statement specifying any assumptions made in relation to future contributions to the scheme; i a statement of the assumptions made in accordance with sub-paragraphs (3)(b)(iii) and (4) above, or as mentioned in sub-paragraph (5) above; j a statement of the member’s retirement date for the purpose of sub-paragraph (1) above; and k a statement of the illustration date used for the purpose of calculating the amount referred to in sub-paragraph (1) above. . Amendment of the 2000 Regulations 4 1 In regulation 1(3) (interpretation) of the 2000 Regulations— a after the definition of “beneficiary” there shall be inserted the following definition— ‘contracted-out employment’ shall be construed in accordance with section 8 of the 1993 Act; ; b after the definition of “dilution levy” there shall be inserted the following definition— ‘illustration date’ means, in relation to any information provided, or to be provided, under regulation 18(5B), the date specified by the trustees or manager as the date by reference to which amounts are calculated for the purpose of providing the information; ; c after the definition of “minimum payments” there shall be inserted the following definition— ‘non-contributing member’ means— in relation to an occupational pension scheme, a member who is neither in pensionable service under the scheme nor entitled to the present payment of benefits under the scheme; in relation to a personal pension scheme, a member in respect of whom no further contributions to the scheme are due or expected after the illustration date; ; d after the definition of “qualifying scheme” there shall be inserted the following definition— ‘the relevant guidance’ means the document entitled “Technical Memorandum TM1: Statutory Money Purchase Illustrations” which— is published, and from time to time revised, by the Faculty of Actuaries and the Institute of Actuaries; and is for the time being approved by the Secretary of State; ; and e after the definition of “reporting accountant” there shall be inserted the following definition— ‘retirement date’ means, in relation to a member— the date which he has specified to the trustees or manager, and which is acceptable under the rules of the scheme, for the purpose of regulation 18(5B); or where no acceptable date has been specified for that purpose, the date specified by the trustees or manager as being the appropriate date for the purpose of regulation 18(5B); . 2 Regulation 18 of the 2000 Regulations (disclosure of information to members) shall be amended in accordance with the following paragraphs of this regulation. 3 After paragraph (2) there shall be inserted the following paragraphs— 2A Subject to paragraph (2B), a statement provided under paragraph (2) shall contain also the information mentioned in paragraph (5B). 2B The requirement under paragraph (2A) above to furnish the information mentioned in paragraph (5B) shall not apply— a in respect of a person who is in receipt of pension benefits under the scheme; or b where the last day of the statement year referred to in paragraph (5)(b)(i) below is not more than 2 years before the date which is the member’s retirement date for the purpose of paragraph (5B); or c where, in relation to the member— i the value, determined by reference to the relevant guidance, of his accrued rights to money purchase benefits under the scheme was less than £5,000 on the illustration date in respect of which such information was last furnished to him; ii no contributions, including transfers of pension rights or pension credits, have been made to the scheme by him or on his behalf in respect of money purchase benefits since that date; and iii the trustees or manager previously gave notice to the member that no further such information would be furnished to him unless further contributions to the scheme in respect of money purchase benefits had first been made by him or on his behalf; or d where, in relation to the member— i the value, determined by reference to the relevant guidance, of his accrued rights to money purchase benefits under the scheme is less than £5,000 on the first illustration date falling after 5th April 2003; ii no contributions, including transfers of pension rights or pension credits, have been made to the scheme by him or on his behalf after 5th April 2003; and iii no further contributions are, in the opinion of the trustees or manager, likely to be made to the scheme by him or on his behalf after that illustration date; or e where the last day of the statement year referred to in paragraph (5)(b)(i) below is before 6th April 2003. 2C Where paragraph (2B) applies but the trustees or manager of the scheme nevertheless choose to furnish the information described in paragraph (5B) and the amount comprising that information is calculated in accordance with paragraphs (5C) to (5F), then that information shall be accompanied by the additional information specified in paragraph (5G)(a) and (c) to (k) as if the information had been provided under paragraph (5B). . 4 After paragraph (5A) there shall be inserted the following paragraphs— 5B The information referred to in paragraph (2A) is an illustration of the amount, calculated in accordance with paragraphs (5C) to (5F), of the pension an entitlement to which would be likely to accrue to the member, or be capable of being secured by him, at his retirement date in respect of rights that may arise under the scheme. 5C The amount referred to in paragraph (5B) above shall be determined by reference to— a the relevant guidance; and b the assumptions about contributions specified in paragraph (5D) and about annuities specified in paragraphs (5E) and (5F), and such other assumptions as may be specified for the purpose in the relevant guidance, having regard to the value of the member’s accrued rights to money purchase benefits under the scheme on the illustration date. 5D The assumptions about contributions referred to in paragraph (5C)(b) above are— a where the calculation relates to the rights of a non-contributing member, that no contributions will be made to the scheme by him or on his behalf after the illustration date; and b in any other case, that, until the member’s retirement date— i contributions to the scheme will be made by him or on his behalf; ii the treatment of the scheme under sections 639 to 646A of the Income and Corporation Taxes Act 1988 as for the time being in force will continue; and iii where a member is in contracted-out employment, sums will continue to be paid by the Commissioners of Inland Revenue in respect of him under section 42A(3) (rebates) or, as the case may be, section 43 of the 1993 Act (payment of minimum contributions to personal pension schemes) in the amounts to be determined by reference to the relevant guidance. 5E The assumptions about annuities referred to in paragraph (5C)(b) above are— a that the rate of pension is to be increased annually by the relevant percentage for the time being specified in the relevant guidance; and b that, subject to paragraph (5F) below, irrespective of whether or not the member is married at the time when the information referred to in paragraph (5B) above is furnished, the annuity will include provision for the payment, to a surviving spouse of the member, of a pension of an amount equal to one half of the pension which was payable to him immediately before his death. 5F Paragraph (5E)(b) above does not apply where— a the trustees or manager decide to use a different assumption in substitution for that specified in paragraph (5E)(b) on the basis that the scheme records indicate that the member is not married; or b the trustees or manager, and the member agree to use a different assumption. 5G The additional information which is to accompany the information provided under paragraph (5B) above is— a a statement to the effect that the information provided under that paragraph is provided only for the purposes of illustration, that it does not represent any promise or guarantee as to the amount of benefit which may be receivable by the member or a beneficiary under the scheme, and that it should not be regarded as the only consideration by reference to which the member should make decisions as to his pension arrangements; b a statement to the effect that the provision of the information mentioned in that paragraph is required by law; c a statement specifying the means by which the person to whom the information relates may obtain from the trustees or manager further information about the information provided under paragraph (5B) above; d a statement to the effect that the information has been prepared by reference to the assumptions required by paragraph (5C) or specified in the relevant guidance; e a statement to the effect that certain general assumptions have been made about the nature of the investments made for the purposes of that person’s money purchase benefits and their likely performance, which may not correspond with the investments actually made for those purposes, or their actual performance; f a statement to the effect that the amount referred to in paragraph (5B) above is expressed in today’s prices; g a statement to the effect that the actual amount of any pension payable to that person or beneficiary under the scheme will depend on considerations, including the actual performance of investments and the cost of buying an annuity at the time the pension becomes payable, which may be different from the assumptions made for the purpose of providing the information under paragraph (5B) above; h a statement specifying any assumptions made in relation to future contributions to the scheme; i a statement of the assumptions made in accordance with paragraphs (5D)(b)(iii) and (5E) above, or as mentioned in paragraph (5F) above; j a statement of the member’s retirement date for the purpose of paragraph (5B) above; and k a statement of the illustration date used for the purpose of calculating the amount referred to in paragraph (5B) above. . Signed by authority of the Secretary of State for Work and Pensions. P. Hollis Parliamentary Under-Secretary of State, Department for Work and Pensions 15th May 2002