BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?

No donation is too small. If every visitor before 31 December gives just £5, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!



BAILII [Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]

Statutory Rules of Northern Ireland


You are here: BAILII >> Databases >> Statutory Rules of Northern Ireland >> The Pension Protection Fund (Closed Schemes) Regulations (Northern Ireland) 2007 No. 186
URL: http://www.bailii.org/nie/legis/num_reg/2007/20070186.html

[New search] [Help]



STATUTORY RULES OF NORTHERN IRELAND


2007 No. 186

PENSIONS

The Pension Protection Fund (Closed Schemes) Regulations (Northern Ireland) 2007

  Made 20th March 2007 
  Coming into operation 6th April 2007 

The Department for Social Development makes the following Regulations in exercise of the powers conferred by Articles 137(4) and (7), 140(1), (2) and (6), 141(1) and (7) and 287(2) and (3) of the Pensions (Northern Ireland) Order 2005[1].

Citation, commencement and interpretation
     1. —(1) These Regulations may be cited as the Pension Protection Fund (Closed Schemes) Regulations (Northern Ireland) 2007 and shall come into operation on 6th April 2007.

    (2) In these Regulations—

    (3) In these Regulations, in the case of a scheme which is a segregated scheme, where these Regulations apply to a section of a scheme which is for the purposes of Part III[2] of the Order a closed section, for "closed scheme" and "scheme" substitute "closed section" and "section".

    (4) In these Regulations, any reference to a numbered Article is a reference to the Article of the Order bearing that number.

Applications and determination notices under Article 137
     2. —(1) An application to the Board for the purposes of Article 137(2) (closed schemes) shall be in writing and shall contain the following information—

    (2) An application to the Board for the purposes of Article 137 shall be accompanied by evidence in the following form—

    (3) A determination notice issued by the Board under Article 137(6) shall be in writing and shall contain the following information—

Obtaining of actuarial valuations of closed schemes
    
3. —(1) In this regulation—

    (2) The effective date of the first Article 140 valuation shall—

    (3) Any subsequent Article 140 valuation shall have an effective date which is not more than three years after the effective date of the previous Article 140 valuation.

    (4) The trustees or managers of a closed scheme shall obtain any Article 140 valuation of the scheme within the period of 15 months after its effective date.

Valuation of the assets and liabilities of closed schemes
    
4. For the purposes of Article 140—

shall be determined, calculated and verified in accordance with the provisions of the Schedule.

Prescribed qualifications for the purposes of Article 140
    
5. For the purposes of the definition of "the actuary" contained in Article 140(6), a person with prescribed qualifications is—

Applications and notifications where closed schemes have insufficient assets
     6. —(1) Where the trustees or managers of a closed scheme are required under Article 141(1) to make an application to the Board for it to assume responsibility for the scheme, they must do so within six months of the time when they become aware that the value of the assets of the scheme is less than the amount of the protected liabilities in relation to the scheme.

    (2) An application to the Board for the purposes of Article 141(1) shall be in writing and shall contain the following information—

    (3) Where the Regulator becomes aware that the value of the assets of a closed scheme is less than the amount of the protected liabilities in relation to that scheme, the notice which the Regulator must give to the Board under Article 141(3) shall be in writing and shall contain the following information—

    (4) Where the Board receives a notice from the Regulator to which paragraph (3) applies, the notice under Article 141(4) which the Board must give to the trustees or managers of the scheme in question shall be in writing and shall contain the following information—

Transitional provision for schemes with an assessment date before 1st April 2007
    
7. —(1) In this regulation, "assessment date" means the date on which the assessment period in relation to a scheme or closed scheme, or (where there has been more than one such assessment period) the last one, began.

    (2) In the case of a scheme or closed scheme with an assessment date before 1st April 2007, these Regulations shall have effect until 31st December 2007 as if for the definition of "relevant accounts" in paragraph 1 of the Schedule there were substituted—



Sealed with the Official Seal of the Department for Social Development on


20th March 2007

L.S.


John O'Neill
A senior officer of the Department for Social Development


SCHEDULE
Regulation 4


VALUATION OF THE ASSETS, THE FULL SCHEME LIABILITIES AND THE PROTECTED LIABILITIES IN RELATION TO A CLOSED SCHEME




PART 1

     1. In this Schedule—

     2. There shall be excluded from the value of the closed scheme's assets—

     3. Subject to paragraph 6(3) and (4), where the Regulator issues a contribution notice or a financial support direction or makes a restoration order in relation to a scheme prior to the effective date of the valuation, any amount due under such a notice, direction or order shall be regarded as an asset of the scheme.

     4. Subject to paragraphs 2 and 6, in determining the value of the assets of a closed scheme for the purposes of an Article 140 valuation, the appropriate person shall adopt the value given of the assets of the scheme stated in the relevant accounts and that value shall be taken to be the value of those assets at the effective date.

     5. —(1) Subject to paragraph 6, in the case of protected liabilities the amount of a protected liability shall be the estimated cost of securing scheme benefits calculated in accordance with Schedule 6 to the Order (pension compensation provisions) to the member by means of an annuity purchased at the market rate at the effective date.

    (2) Where paragraph 2(b) applies, the amount representing the value of a protected liability in respect of the benefits secured by a pre-6th April 1997 contract of insurance shall be excluded from the valuation of the scheme's protected liabilities.

     6. —(1) For the purposes of an Article 140 valuation, where for the purpose of giving effect to a pension sharing order or provision, arrangements are being made by the closed scheme for the transfer from it of any pension credit rights, until such time as the trustees or managers of the scheme to which the transfer is being made ("the receiving scheme") have received assets of the full amount agreed by them as consideration for the transfer, it shall be assumed—

    (2) For the purposes of an Article 140 valuation, in the case of a pre-6th April 1997 contract of insurance, the value shall be—

    (3) In the case of an asset to which paragraph 3 applies, the appropriate person shall adopt as the value of the asset the amount due to the closed scheme given in the notice, direction or order.

    (4) For the purposes of an Article 140 valuation—

    (5) The appropriate person shall not make an adjustment to the value of an interest in real property unless the adjustment reflects a more recent valuation given by a chartered surveyor in accordance with any relevant practice statements and guidance issued by the Royal Institution of Chartered Surveyors[7] current on the date the valuation is signed.

     7. An Article 140 valuation shall be verified by the Board if it is satisfied that the valuation was prepared in accordance with these Regulations and any guidance issued by the Board in accordance with Article 140(3).



PART 2

Contents of Accounts Audited by the Auditor of the Scheme

     1. An account of the financial additions to, withdrawals from, and changes to, the value of the fund during the accounting period.

     2. —(1) A statement, as at the end of the accounting period, of the assets at market value, or the trustees' or managers' estimate thereof where the market value is not readily ascertainable, and liabilities of the scheme, other than liabilities to pay pensions and benefits after the end of the accounting period—

    (2) Where the assets include insurance policies which are specifically allocated to the provision of benefits for, and which provide all the benefits payable under the scheme to, particular members or other persons in respect of particular members or both, those policies must be included in the statement and there must be a note of the existence of such policies but that entry need not include their market value or an estimate.

    (3) Where the assets—

a note that heads (a) and (b) apply must be included in the statement, but that entry need not include the market value or an estimate of value of those assets.

     3. Where any assets or liabilities are denominated in currencies other than sterling, a conversion of those assets into sterling and an explanation of the basis on which they have been converted.

     4. Particulars of any investment (other than in UK Government securities) in which more than 5 per cent. of the total value of the net assets of the scheme is invested, and if any such investment is an insurance policy, a statement of its main characteristics.

     5. Where the scheme has employer-related investments, within the meaning of Article 40(2)[
8] of the 1995 Order (restriction on employer-related investments), a statement—

     6. In respect of every other amount shown in the accounts other than the amounts referred to in paragraph 7, a statement of the corresponding amount for the scheme year previous to the accounting period, except in a case where regulation 2 of the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations (Northern Ireland) 1997[10] (requirement of trustees or managers to obtain documents) is complied with by the trustees or managers of a scheme for the first time.

     7. The total amount of the purchases and the total amount of the sales of investments during the accounting period.

     8. A statement whether the accounts have been prepared in accordance with the Statement of Recommended Practice, the guidelines "Financial Reports of Pension Schemes" published by the Pensions Research Accountants Group[11] or another organisation approved for this purpose by the Accounting Standards Board[12], current at the end of the accounting period and, if not, an indication of where there are any material departures from those guidelines.



EXPLANATORY NOTE

(This note is not part of the Regulations)


These Regulations make provision relating to various requirements under Articles 137, 140 and 141 of the Pensions (Northern Ireland) Order 2005 ("the Order") in relation to closed schemes.

Regulation 2 makes provision in respect of applications to the Board of the Pension Protection Fund ("the Board") under Article 137 of the Order for authority for a scheme to continue as a closed scheme in circumstances where the trustees or managers of the scheme are unable to obtain a full buy-out quotation. It also makes provision in respect of the form and content of determination notices issued by the Board under that Article.

Regulation 3 provides that the trustees or managers of closed schemes must obtain an initial actuarial valuation under Article 140 of the Order of the scheme's assets, full scheme liabilities and protected liabilities within a prescribed period. It also provides that such trustees or managers must obtain Article 140 actuarial valuations at least every three years after the initial such valuation.

Regulation 4 and the Schedule provide for how the assets, full scheme liabilities and the protected liabilities in relation to a closed scheme, and their amount or value, are to be determined, calculated and verified in accordance with Article 140 of the Order.

Regulation 5 prescribes the qualifications required of a person conducting an actuarial valuation under Article 140 of the Order.

Regulation 6 sets out the time limit for making applications to the Board under Article 141 of the Order in circumstances where a closed scheme has insufficient assets. It also makes provision in respect of the form and content of applications and notifications to the Board under that Article, and in respect of the form and content of notifications given by the Board under that Article.

Regulation 7 makes transitional provision in relation to the coming into operation of the definition of "relevant accounts".

As these Regulations are made before the end of the period of six months beginning with the coming into operation of the provisions of the Order by virtue of which they are made, the requirement to consult under Article 289(1) of the Order does not apply by virtue of paragraph (2)(c) of that Article.


Notes:

[1] S.I. 2005/255 (N.I. 1); see the definition of "determination notice" in Article 137(7) and paragraph (b)(i) of the definition of "the actuary" in Article 140(6)back

[2] Part III is modified in its application to multi-employer schemes by S.R. 2005 No. 91 as amended by S.R. 2005 Nos. 194 and 357back

[3] The Faculty of Actuaries can be contacted at Faculty of Actuaries, MacLaurin House, 18 Dublin Street, Edinburgh EH1 3PPback

[4] The Institute of Actuaries can be contacted at Institute of Actuaries, Staple Inn Hall, High Holborn, London WC1V 7QJback

[5] Article 75 was amended by Article 248 of the Pensions (Northern Ireland) Order 2005 and is modified in its application to multi-employer schemes by S.R. 2005 No. 168 as amended by S.R. 2005 No. 387back

[6] The definition of "pension credit rights" was inserted by paragraphs 50(3) of Schedule 9 to the Welfare Reform and Pensions (Northern Ireland) Order 1999 (S.I. 1999/3147 (N.I. 11))back

[7] The Royal Institution of Chartered Surveyors can be contacted at RICS Contact Centre, Surveyor Court, Westwood Way, Coventry CV4 8JEback

[8] Article 40 was amended by paragraph 45 of Schedule 10 to the Pensions (Northern Ireland) Order 2005, Article 152(2) of S.I. 2001/3649 and Article 26 of S.I. 2004/355back

[9] S.R. 2005 No. 569; regulation 13 was amended by regulation 7(3) of S.R. 2006 No. 141back

[10] S.R. 1997 No. 40; relevant amending Regulations are S.R. 2000 No. 107 and S.R. 2005 No. 421back

[11] Copies of this guidance can be obtained from Croner CCH Group Limited, 145 London Road, Kingston-upon-Thames, Surrey KT2 6SRback

[12] The Accounting Standards Board can be contacted at 5th floor, Aldwych House, 71-91 Aldwych, London WC2B 4HNback



ISBN 978 0 337 96947 8


 © Crown copyright 2007

Prepared 26 March 2007


BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII
URL: http://www.bailii.org/nie/legis/num_reg/2007/20070186.html