Occupational Pension Schemes (Scheme Administration) Regulations 1996
1996 No. 1715
PENSIONS
The Occupational Pension Schemes (Scheme Administration) Regulations 1996
Made 2nd July 1996
Laid before Parliament 5th July 1996
Coming into force 6th April 1997
The Secretary of State for Social Security in exercise of powers conferred on him by sections 27(3) and (5), 32(2) and (3), 47(3), (5), (6) and (9), 49(1), (2), (4), (5) and (8), 87(1), (2) and (3), 88(1), 124(1) and 174(2) and (3) of the Pensions Act 19951, and of all other powers enabling him in that behalf, by this instrument, which is made before the end of the period of six months beginning with the coming into force of the provisions of Part I of that Act by virtue of which they are made2, hereby makes the following regulations:
PART I
INTRODUCTION
Citation, commencement and interpretation
1.—(1) These Regulations may be cited as the Occupational Pension Schemes (Scheme Administration) Regulations 1996 and shall come into force on 6th April 1997.
(2) In these Regulations—
“the 1995 Act” means the Pensions Act 1995;
“the Taxes Act” means the Income and Corporation Taxes Act 19883;
“approved scheme” means a scheme which is approved or was formerly approved under section 590 or 591 of the Taxes Act or in respect of which an application for such approval has been duly made which has not been determined;
“business days” means any day other than a Saturday, a Sunday, Christmas Day, Good Friday, or a bank holiday within the meaning of the Banking and Financial Dealings Act 19714;
“money purchase scheme” has the same meaning as in section 181(1) of the Pension Schemes Act 19935;
“pensioneer trustee” has the same meaning as in regulation 2(1) of the Retirement Benefits Schemes (Restriction on Discretion to Approve) (Small Self-administered Schemes) Regulations 19916;
“public service pension scheme” has the same meaning as in section 1 of the Pension Schemes Act 1993;
“relevant benefits” has the same meaning as in section 612(1) of the Taxes Act;
“relevant statutory scheme” has the same meaning as in section 611A of the Taxes Act7;
“scheme year” means—
(a) a year specified for the purposes of the scheme in any document comprising the scheme or, if none, a period of 12 months commencing on 1st April or on such date as the trustees or managers select; or
(b) such other period (if any) exceeding 6 months but not exceeding 18 months as is selected by the trustees or managers in connection with—
(i) the commencement or termination of the scheme, or
(ii) a variation of the date on which the year or period referred to in paragraph (a) is to commence;
“small self-administered scheme” has the same meaning as in regulation 2(1) of the Retirement Benefits Schemes (Restriction on Discretion to Approve) (Small Self-administered Schemes) Regulations 1991;
“unfunded occupational pension scheme” means an occupational pension scheme under which there is no requirement to set aside in advance resources related to the intended rate or amount of benefits; and
“wholly insured scheme” means an occupational pension scheme under which all the benefits provided are secured by a policy or policies of insurance or an annuity contract or contracts.
(3) In these Regulations, unless the context otherwise requires, a reference—
(a)
(a) to a numbered regulation is to the regulation bearing that number in these Regulations;
(b)
(b) in a regulation to a numbered paragraph is to the paragraph bearing that number in that regulation.
PART II
ADVISERS
Appointment of professional advisers by trustees or managers
2. For the purposes of section 47(3) of the 1995 Act (legal advisers, fund managers, and persons exercising prescribed functions in relation to the scheme to be appointed by the trustees or managers) the prescribed functions are—
(a) the examination of, and the expression of an opinion on, the financial statements and accounts of the scheme and any other matter relating to the audit of the scheme;
(b) the provision of advice on financial questions relating to the funding of, and assets of, the scheme and on questions in respect of probabilities relating to mortality and other contingencies, and any other matter relating to the actuarial affairs of the scheme;
(c) the custody of cash, securities and any other documents of title to scheme assets.
Exemptions from the professional advisers requirements
3.—(1) Section 47(1)(a) of the 1995 Act (for every occupational pension scheme there shall be an individual, or a firm, appointed by the trustees or managers as auditor) does not apply to—
(a)
(a) any occupational pension scheme in respect of which any Minister of the Crown has given a guarantee or made any other arrangements for the purpose of securing that the assets of the scheme are sufficient to meet its liabilities;
(b)
(b) the scheme established by the Salvation Army Act 19638;
(c)
(c) occupational pension schemes which provide relevant benefits but are neither approved schemes nor relevant statutory schemes;
(d)
(d) public service pension schemes—
(i) under the provisions of which there is no requirement for assets related to the intended rate or amount of benefit under the scheme to be set aside in advance (disregarding requirements relating to additional voluntary contributions); or
(ii) which are made under section 7 of the Superannuation Act 1972 (superannuation of persons employed in local government service etc.)9or section 2 of the Parliamentary and other Pensions Act 1987 (power to provide for pensions for Members of the House of Commons etc.)10;
(e)
(e) unfunded occupational pension schemes;
(f)
(f) occupational pension schemes with less than 2 members;
(g)
(g) occupational schemes in which—
(i) the only benefits provided are death benefits, and
(ii) under the provisions of which no member has accrued rights;
(h)
(h) occupational money purchase small self-administered schemes in which—
(i) all members of the scheme are trustees, and
(ii) all decisions are made only by the trustees who are members of the scheme by unanimous agreement and for the purpose of this head the participation of a pensioneer trustee in the making of a decision may be disregarded;
(i)
(i) occupational pension schemes with a superannuation fund such as is mentioned in section 615(6) of the Taxes Act;
(j)
(j) the Devonport Royal Dockyard Pension Scheme;
(k)
(k) the Rosyth Royal Dockyard Pension Scheme;
(l)
(l) the Rosyth Royal Dockyard Superannuation Scheme for Senior Executives;
(m)
(m) the Atomic Weapons Establishment Scheme; and
(n)
(n) the BR Shared Cost Section of the Railways Pension Scheme made under section 134 of, and Schedule 11 to, the Railways Act 199311.
(2) Section 47(1)(b) of the 1995 Act (for every occupational pension scheme there shall be an individual appointed by the trustees or managers as actuary) does not apply to—
(a)
(a) money purchase schemes;
(b)
(b) approved schemes—
(i) which have been categorised by the Commissioners of Inland Revenue for the purpose of their approval as centralised schemes for non-associated employers;
(ii) which are not contracted-out; and
(iii) under the provisions of which the only benefits which may be provided on or after retirement (other than money purchase benefits derived from the payment of additional contributions by any person) are lump sum benefits (not including benefits paid by way of commuted retirement pension) which are not calculated by reference to any member’s salary;
(c)
(c) schemes mentioned in paragraph (1)(a) to (g) and (i) to (n).
(3) Section 47(2) of the 1995 Act (for every occupational pension scheme the assets of which consist of or include investments (within the meaning of the Financial Services Act 1986) there shall be an individual or a firm appointed by or on behalf of the trustees or managers as fund manager) does not apply to—
(a)
(a) relevant schemes of a kind described in article 3(2) of the Financial Services Act 1986 (Occupational Pension Schemes) (No. 2) Order 198812;
(b)
(b) wholly insured schemes; and
(c)
(c) schemes mentioned in paragraph (1)(a) to (g), (i) and (n).
(4) Section 47(3) of the 1995 Act (legal advisers, fund managers, and persons exercising prescribed functions in relation to the scheme to be appointed by the trustees or managers) does not apply to schemes mentioned in paragraph (1)(a) to (g), (i) and (n).
Qualifications and experience or approval required for appointment as the auditor or actuary
4.—(1) For the purposes of section 47(5)(b) of the 1995 Act the qualifications and experience or approval required for appointment as—
(a)
(a) the auditor, subject to paragraph (2), are—
(i) those specified in section 25 of the Companies Act 198913; or
(ii) approval by the Secretary of State;
(b)
(b) the actuary are—
(i) Fellowship of the Institute of Actuaries;
(ii) Fellowship of the Faculty of Actuaries; or
(iii) approval by the Secretary of State.
(2) A person shall not be appointed as the auditor where—
(a)
(a) he is a member of the scheme14;
(b)
(b) he is employed under a contract of service by the trustees or managers of the scheme;
(c)
(c) he is an employer in relation to the scheme; or
(d)
(d) he is, by virtue of section 27 of the Companies Act 1989, ineligible to audit the accounts of a company which is an employer in relation to the scheme.
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