Stakeholder Pension Schemes Regulations 2000

JurisdictionUK Non-devolved
CitationSI 2000/1403

2000 No. 1403

PENSIONS

The Stakeholder Pension Schemes Regulations 2000

Made 24th May 2000

Laid before Parliament 25th May 2000

The Secretary of State for Social Security, in exercise of the powers conferred upon him by the provisions set out in Schedule 1 and of all other powers enabling him in that behalf, after consultation with such persons as he considers appropriate1, hereby makes the following Regulations:—

1 GENERAL

PART I

GENERAL

S-1 Citation, commencement and interpretation

Citation, commencement and interpretation

1.—(1) These Regulations may be cited as the Stakeholder Pension Schemes Regulations 2000.

(2) Parts I to III and V of these Regulations shall come into force on 1st October 2000 and Part IV shall come into force on 8th October 2001.

(3) In these Regulations—

the Act” means the Welfare Reform and Pensions Act 19992;

the 1993 Act” means the Pension Schemes Act 1993;

“the 1995 Act” means the Pensions Act 1995;

“beneficiary”, in relation to a stakeholder pension scheme, means any person who has rights under the scheme which have arisen as a result of the death of a member of the scheme;

“the Income and Corporation Taxes Act” means the Income and Corporation Taxes Act 19883;

“insurance company” means a company which is authorised under sections 3 or 4 of the Insurance Companies Act 19824;

“investment trust” means a company which is approved for the purposes of section 842 of the Income and Corporation Taxes Act5;

“minimum contributions” means amounts paid by the Inland Revenue in accordance with section 43 of the 1993 Act (payment of minimum contributions to personal pension schemes)6;

“minimum payments” means payments made to an occupational pension scheme in respect of a person’s employment by virtue of which (subject to there being in force a contracting-out certificate issued by the Inland Revenue in accordance with Chapter I of Part III of the 1993 Act) that employment is contracted-out employment by reference to the scheme under section 8(1) of the 1993 Act (meaning of “contracted-out employment” and “minimum payment”)7;

“pension arrangement” means—

(a) an annuity contract;

(b) an insurance policy; or

(c) a scheme or arrangement which is administered wholly or primarily outside the United Kingdom,

which has effect, or is capable of having effect, so as to provide benefits on termination of employment or on death or retirement, to or in respect of earners;

“property” includes land;

“qualifying scheme” shall, in respect of an employer, include any stakeholder pension scheme which has at any time been designated by the employer under section 3(2);

“reporting accountant” has the meaning given to it by regulation 11(3);

“securities” means investments falling within paragraphs 1 to 5 of Schedule 1 to the Financial Services Act 1986 (investments and investment business)8but does not include shares in an investment trust;

“tax relief” means amounts which may be deducted from contributions, retained by members and recovered from the Inland Revenue by a scheme administrator under section 639 of the Income and Corporation Taxes Act;

“transfer payment” means a payment in respect of a person’s accrued rights under a pension scheme or pension arrangement made with a view to acquiring rights under another pension scheme or pension arrangement for that person; and

“with-profits fund” means a fund, maintained by an insurance company in respect of a particular part of its long-term business for which—

(a) separate accounting records are maintained by the insurance company in respect of all income and expenditure relating to that part of its business; and

(b) the benefits payable in respect of policies allocated to that fund are determined partly by reference to a discretion exercisable by any person.

(4) In these Regulations references to notice in writing include using electronic communications for sending a notice to an address notified by the member for that purpose.

(5) Sections 249 and 435 of the Insolvency Act 1986 (connected and associated persons)9and section 74 of the Bankruptcy (Scotland) Act 1985 (associated persons), apply for the purposes of regulations 4(3) and 11(4) as they apply for the purposes of those Acts respectively.

(6) For the purposes of these Regulations and section 1(8) and (9) (which provide that stakeholder pension schemes must have tax-exemption or tax-approval and must not refuse to accept transfer payments except in so far as necessary to ensure that the scheme has such exemption or approval) “tax-exemption” and “tax-approval” mean tax-exemption and tax-approval under Chapter IV of Part XIV of the Income and Corporation Taxes Act.

(7) In these Regulations, unless the context otherwise requires, references to a section are to a section of the Act.

2 CONDITIONS APPLYING TO STAKEHOLDER PENSION SCHEMES

PART II

CONDITIONS APPLYING TO STAKEHOLDER PENSION SCHEMES

S-2 Manner of establishment

Manner of establishment

2.—(1) A stakeholder pension scheme may (where not established under a trust) be established by means of one or more instruments in writing which provide for one or more contracts to be entered into between the manager of the scheme and each member of the scheme, or a person acting on his behalf.

(2) The manager of the scheme must be a person who is mentioned in section 632(1) of the Income and Corporation Taxes Act (establishment of schemes approved as personal pension schemes under Chapter IV of Part XIV of that Act)10.

S-3 Requirements applying to all stakeholder pension schemes as regards instruments establishing such schemes

Requirements applying to all stakeholder pension schemes as regards instruments establishing such schemes

3.—(1) Subject to paragraph (2), the instruments establishing a stakeholder pension scheme (the “scheme instruments”) must prohibit the acceptance of contributions, transfer payments and pension credits to the scheme before 6th April 2001.

(2) Paragraph (1) shall not apply to a scheme in respect of which an application for registration under section 2 (registration of stakeholder pension schemes) is first made on or after 6th April 2001.

(3) The scheme instruments must require that no member is required to make any choice as regards the investment under the scheme of any payment made to it by him or on his behalf, any amount credited to the member’s account in respect of a credit within the meaning of section 29 (pension sharing: creation of pension debits and credits), or any income or capital gain arising from the investment of such a payment or credit.

(4) The scheme instruments must, except to the extent permitted under regulations 13 or 14, prohibit the use of—

(a)

(a) any payment made to the scheme by or on behalf of a member;

(b)

(b) any amount credited to a member’s account in respect of a credit within the meaning of section 29 (pension sharing: creation of pension debits and credits);

(c)

(c) any income or capital gain arising from the investment of such a payment or credit; or

(d)

(d) the value of his rights under the scheme,

in any way which does not result in the provision of benefits for or in respect of the member.

(5) The scheme instruments must require that—

(a)

(a) if the scheme ceases to be registered under section 2 the winding-up of the scheme be commenced on the date on which it is notified in writing by the Occupational Pensions Regulatory Authority that it is no longer so registered;

(b)

(b) if the trustees or manager fix a time for winding-up a scheme for any reason other than because the scheme ceases to be registered under section 2, the winding-up of the scheme be commenced at the earliest time fixed by the trustees or manager as the time from which steps for the purposes of winding-up are to be taken;

(c)

(c) within 2 weeks of the date of commencement of any winding-up, the trustees or manager notify in writing any employers whom they know to have designated the scheme for the purposes of section 3 (duty of employers to facilitate access to stakeholder pension schemes) of the fact of, and the reason for, the winding-up including, where the scheme has ceased to be registered under section 2, the reason for the cessation of registration;

(d)

(d) any contributions made to a scheme after the date of commencement of any winding-up must be repaid—

(i) to the member, to the extent of his contributions; and

(ii) as to any remainder, to his employer;

(e)

(e) subject to paragraphs (8) and (9) below, on any winding-up all rights under the scheme shall be discharged by the trustees or managers of the scheme within 12 months of the commencement of winding-up, or as soon thereafter as is practicable, by the making of transfer payments—

(i) to other stakeholder pension schemes, or schemes registered under Article 4 of the Welfare Reform and Pensions (Northern Ireland) Order 199911; or

(ii) in accordance with requests by one or more members or beneficiaries in respect of their rights, to the trustees or managers of pension schemes or pension arrangements which are not schemes mentioned in head (i) above,

in accordance with paragraphs (6) and (7) below and regulation 6 or, where regulation 7 applies, with regulation 7; and

(f)

(f) if the scheme fails to complete winding-up within 12 months of commencing winding-up proceedings, the trustees or manager notify the Occupational Pensions Regulatory Authority of that fact within one month of so failing to complete the winding-up.

(6) A transfer payment referred to in paragraph (5)(e) must be of an amount not less than the cash equivalent of the member’s rights under the scheme, as calculated and verified in a manner consistent with regulations made under section 97 of the 1993 Act (calculation of cash equivalents)12on the date on which the payment is made.

(7) Where the member’s rights include any protected rights within the meaning of section 10 of the 1993 Act (protected rights and money purchase benefits)13, the scheme...

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