PENSIONS Citation, commencement and interpretation 1 1 These Regulations may be cited as the Occupational Pension Schemes (Deficiency on Winding Up etc.) Regulations 1994. 2 These Regulations come into force on 19th April 1994. 3 These Regulations apply to every occupational pension scheme which is not a money purchase scheme. 4 In these Regulations— “ the Act ” means the Pension Schemes Act 1993; “actuary” means— a Fellow of the Institute of Actuaries, a Fellow of the Faculty of Actuaries, or a person with other actuarial qualifications who is approved by the Secretary of State as being a proper person to act for the purposes of section 144 of the Act. Calculation of the value of scheme liabilities and assets 2 1 For the purposes of section 144(1) of the Act, the value of a scheme’s liabilities and assets are, subject to paragraphs (2) and (3), to be determined by being calculated and verified in accordance with the Guidance Note “Retirement Benefits Schemes — Deficiency on Winding Up (GN19)” jointly published on 1st April 1993, and revised with effect from 1st October 1993, by the Institute of Actuaries and the Faculty of Actuaries . 2 In calculating the value of the scheme’s liabilities, any provision of the scheme which limits the amount of its liabilities by reference to the amount of its assets is to be disregarded. 3 A determination under paragraph (1) must be certified by an actuary appointed by the trustees of the scheme in question as being in accordance with the guidance referred to in that paragraph. Scheme which applies to more than one employer 3 In the application of section 144 of the Act to a scheme which applies to earners in employments under different employers and in respect of which there are members in pensionable service under the scheme— a that section is modified by adding, after subsection (1), the following subsections 1A The amount of the debt due from each employer shall be such amount as, in the opinion of the actuary referred to in regulation 2(3) of the Occupational Pension Schemes (Deficiency on Winding Up etc.) Regulations 1994 , bears the same proportion to the deficiency under the scheme as the amount of the scheme’s liabilities attributable to employment with that employer (including liabilities in respect of any transfer credits allowed under the scheme in connection with employment with that employer) bears to the total amount of the scheme’s liabilities. 1B Where a scheme which applies to earners in employments under different employers is divided into two or more sections and the provisions of the scheme are such that— a different sections of the scheme apply to different employers, b contributions payable to the scheme by an employer, or by an earner in employment under that employer, are allocated to that employer’s section, and c a specified part or proportion of the assets of the scheme is attributable to each section and cannot be used for the purposes of any other such section, each section of the scheme shall be treated as a separate scheme for the purposes of this section. ; and b section 144(3) is modified— i by substituting the following definition for the definition of “the applicable time”— “the applicable time” means— in relation to a scheme which is being wound up, any time— after the commencement of the winding up, or, where on the 1st July 1992 a scheme was being wound up, on or after that date, and before a relevant insolvency event occurs in relation to all of the employers to whom the scheme relates; and in relation to a scheme which is not being wound up, each of the times on or after 1st July 1992 at which a relevant insolvency event occurs in relation to any of the employers to whom the scheme relates; ; and ii by substituting the following definition for the definition of “the employer”— “the employer” means every employer of persons in the description or category of employment to which the scheme relates and includes any person who was an employer of such persons immediately before the scheme— commenced winding up, or if earlier, ceased to admit new members; . Scheme in respect of which there are no members in pensionable service 4 In the application of section 144 of the Act to a scheme in respect of which there are no members who are in pensionable service under the scheme— a that section is modified in the manner provided by regulation 3(b)(ii) above; b that section is further modified by inserting at the beginning of subsection (1) the words “Subject to the following provisions of this section,” and by adding immediately before subsection (2), the following subsections— 1C Where by virtue of subsection (1) a debt (“the debt”) is due from the employer to the trustees of a scheme (“the original scheme”) and— a arrangements have been made by the employer and the trustees of the original scheme under which the employer will make contributions to another occupational pension scheme so as to enable that other scheme to pay benefits (“the replacement benefits”) to persons who have accrued rights under the original scheme in place of the benefits that would be payable under the original scheme, b contributions are made by the employer in accordance with those arrangements, and c the replacement benefits are broadly equivalent to the benefits payable under the original scheme which they replace, then the debt shall not be recoverable. 1D Where the arrangements referred to in subsection (1C) relate to part of the deficiency under the scheme then a corresponding part of the debt (“the relevant part”) shall not be recoverable. 1E If the employer fails or ceases, in whole or in part, duly to make contributions in accordance with the arrangements referred to in subsection (1C), or a relevant insolvency event occurs in relation to that employer, the debt or, as the case may be, the relevant part of it, shall again be recoverable. 1F Any amounts paid by the employer under arrangements to fund the provision of replacement benefits in accordance with subsection (1C) shall be offset against the debt or, as the case may be, the relevant part of the debt. 1G Where arrangements have been made to which subsection (1C) relates, the trustees of the original scheme may assign all such rights and powers as they possess in relation to the debt, or, as the case may be, the relevant part of the debt, to the trustees or managers of the scheme providing the replacement benefits. ; and c where there is more than one employer within the meaning of that term as modified by paragraph (a) above, that section is further modified in the manner provided by regulation 3(a) and (b)(i) above. Revocations 5 The Occupational Pension Schemes (Deficiency on Winding Up etc.) Regulations 1992 are revoked. Signed by authority of the Secretary of State for Social Security. William Hague Parliamentary Under-Secretary of State, Department of Social Security 23rd March 1994