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You are here: BAILII >> Databases >> United Kingdom Statutory Instruments >> The Occupational Pension Schemes (Scheme Funding) Regulations 2005 No. 3377 URL: http://www.bailii.org/uk/legis/num_reg/2005/20053377.html

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"the 1993 Act" means the Pension Schemes Act 1993[6];

"the 1995 Act" means the Pensions Act 1995;

"the 2004 Act" means the Pensions Act 2004;

"the actuary", in relation to a scheme, means the actuary appointed under section 47(1)(b) of the 1995 Act (professional advisers) in relation to that scheme;

"the commencement date" means 30th December 2005;

"insurance policy" means an insurance policy which is a contract on human life or a contract of annuity on human life, but excluding a contract which is linked to investment funds;

"pension credit rights" has the meaning given by section 124(1) of the 1995 Act[7];

"the relevant accounts", for the purposes of identifying and valuing the assets of a scheme, are audited accounts for the scheme—

(a) which comply with the requirements imposed under section 41 of the 1995 Act[8] (provision of documents for members), and

(b) which are prepared in respect of a period ending with the effective date of the valuation.

    (2) In these Regulations "scheme" must be read in appropriate cases in accordance with the modifications of Part 3 of the 2004 Act made by paragraphs 1, 4, 5 and 7 of Schedule 2 (multi-employer sectionalised schemes, partly foreign schemes and schemes with a partial public authority guarantee), and "employer" and "member" must be construed accordingly.

Determination of assets and liabilities
     3. —(1) The assets of a scheme to be taken into account for the purposes of Part 3 of the 2004 Act are the assets attributed to the scheme in the relevant accounts, excluding—

(a) any resources invested (or treated as invested by or under section 40 of the 1995 Act) in contravention of section 40(1) of the 1995 Act (employer-related investments);

(b) any amounts treated as a debt due to the trustees or managers under section 75(2) or (4) of the 1995 Act[9] (deficiencies in the assets) or section 228(3) of the 2004 Act (amounts due in accordance with a schedule of contributions) which are unlikely to be recovered without disproportionate cost or within a reasonable time, and

(c) where it appears to the actuary that the circumstances are such that it is appropriate to exclude them, any rights under an insurance policy.

    (2) The liabilities of a scheme to be taken into account for the purposes of Part 3 of the 2004 Act are any liabilities—

(a) in relation to a member of the scheme by virtue of—


(i) any right that has accrued to or in respect of him to future benefits under the scheme rules, or

(ii) any entitlement to the present payment of a pension or other benefit which he has under the scheme rules, and



(b) in relation to the survivor of a member of the scheme, by virtue of any entitlement to benefits, or right to future benefits which he has under the scheme rules in respect of the member.

    (3) For the purposes of paragraph (2)—

"right" includes a pension credit right, and

"the survivor" of a member is a person who—

(a) is the widow, widower or surviving civil partner of the member, or

(b) has survived the member and has any entitlement to benefit, or right to future benefits, under the scheme in respect of the member.

    (4) Where rights under an insurance policy are excluded under paragraph (1)(c), the liabilities secured by the policy shall be disregarded for the purposes of paragraph (2).

    (5) Where arrangements are being made by the scheme for the transfer to or from it of accrued rights and 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—

(a) that the rights have not been transferred, and

(b) that any assets transferred in respect of the transfer of those rights are assets of the scheme making the transfer and not of the receiving scheme.

Valuation of assets and determination of the amount of liabilities
     4. —(1) Subject to paragraph (2), the value to be given to the assets of a scheme for the purposes of Part 3 of the 2004 Act is the value given to those assets in the relevant accounts, less the amount of the external liabilities.

    (2) The value to be given to any rights under an insurance policy taken into account under regulation 3(1) is the value the actuary considers appropriate in the circumstances of the case.

    (3) In paragraph (1), "the external liabilities" of a scheme are such liabilities of the scheme (other than liabilities within regulation 3(2)) as are shown in the net assets statement in the relevant accounts, and their amount shall be taken to be the amount shown in that statement in respect of them.

    (4) The assets of the scheme shall be valued, and the amount of the liabilities determined, by reference to the same date.

Calculation of technical provisions
     5. —(1) Subject to paragraphs (2) and (3), it is for the trustees or managers of a scheme to determine which method and assumptions are to be used in calculating the scheme's technical provisions.

    (2) The method used in calculating a scheme's technical provisions must be an accrued benefits funding method.

    (3) In determining which accrued benefits funding method and which assumptions are to be used, the trustees or managers must—

(a) follow the principles set out in paragraph (4), and

(b) in the case of a scheme under which the rates of contributions payable by the employer are determined—


(i) by or in accordance with the advice of a person other than the trustees or managers, and

(ii) without the employer's agreement,



take account of the recommendations of that person.

    (4) The principles to be followed under paragraph (3) are—

(a) the economic and actuarial assumptions must be chosen prudently, taking account, if applicable, of an appropriate margin for adverse deviation;

(b) the rates of interest used to discount future payments of benefits must be chosen prudently, taking into account either or both—


(i) the yield on assets held by the scheme to fund future benefits and the anticipated future investment returns, and

(ii) the market redemption yields on government or other high-quality bonds;



(c) the mortality tables used and the demographic assumptions made must be based on prudent principles, having regard to the main characteristics of the members as a group and expected changes in the risks to the scheme, and

(d) any change from the method or assumptions used on the last occasion on which the scheme's technical provisions were calculated must be justified by a change of legal, demographic or economic circumstances.

Statement of funding principles
     6. —(1) A statement under section 223 of the 2004 Act must include the following matters, in addition to those specified in that section—

(a) any funding objectives provided for in the rules of the scheme, or which the trustees or managers have adopted, in addition to the statutory funding objective;

(b) whether there are arrangements for a person other than the employer or a member of the scheme to contribute to the funds held by the scheme, and, if there are such arrangements, the circumstances in which they apply;

(c) whether there is a power to make payments to the employer out of funds held for the purposes of the scheme and, if there is such a power, the circumstances in which it may be exercised;

(d) whether there are discretionary powers to provide or increase benefits for, or in respect of, all or any of the members and, if there are such powers, the extent to which they are taken into account in the funding of the scheme;

(e) the policy of the trustees or managers regarding the reduction of the cash equivalent of benefits which have accrued to or in respect of members on account of the state of the funding of the scheme, and

(f) the intervals at which the trustees or managers will obtain actuarial valuations in accordance with section 224(1)(a) of the 2004 Act, and the circumstances in which and occasions on which they will, or will consider whether to, obtain actuarial valuations in addition to those obtained at such intervals.

    (2) The first statement under section 223 of the 2004 Act in respect of a scheme must be prepared by the trustees or managers within 15 months after the effective date of the first actuarial valuation obtained by them under section 224 of that Act.

    (3) A statement under section 223 must be reviewed, and if necessary revised—

(a) within 15 months after the effective date of each subsequent actuarial valuation, and

(b) within a reasonable period after any occasion on which the Regulator has exercised any of the powers conferred by section 231(2) of the 2004 Act in relation to the scheme.

    (4) A statement under section 223 must specify the date on which it was prepared, or, if it has been revised, the date on which it was last revised.

Actuarial valuations and reports
     7. —(1) In addition to the regular valuations provided for in section 224(1)(a) of the 2004 Act, the trustees or managers of a scheme must obtain an actuarial valuation where the Regulator has given directions under section 231(2)(b)(i) of that Act as to the manner in which the scheme's technical provisions are to be calculated.

    (2) Where the trustees or managers have obtained an actuarial valuation or an actuarial report, they must ensure that it is received by them—

(a) in the case of a valuation under section 224(1)(a), within 15 months after its effective date;

(b) in the case of a valuation where the Regulator has given directions under section 231(2)(b)(i)—


(i) within three months after the date of the directions if the effective date of the valuation is before the date of the directions, and

(ii) within six months after the effective date of the valuation if that date is the same as or later than the date of the directions;



(c) in the case of a report, within 12 months after its effective date.

    (3) Where the assets taken into account in an actuarial valuation include rights under an insurance policy, the valuation must state the reason why the value given to such rights is considered appropriate in the circumstances of the case.

    (4) An actuarial valuation must include—

(a) the actuary's certification of the calculation of the technical provisions, in the relevant form set out in Schedule 1, and

(b) the actuary's estimate of the solvency of the scheme.

    (5) An actuarial report must include an assessment by the actuary of changes in the value of the scheme's assets since the last actuarial valuation was prepared.

    (6) In paragraph (4), "the actuary's estimate of the solvency of the scheme" means—

(a) except in the case referred to in sub-paragraph (b), an estimate by the actuary of whether, on the effective date of a valuation, the value of assets of the scheme to be taken into account under paragraph (1) of regulation 3 exceeded or fell short of the sum of—


(i) the cost of purchasing annuities, of the type described in section 74(3)(c) of the 1995 Act[10] (discharge of liabilities by purchase of annuities satisfying prescribed requirements) and on terms consistent with those in the available market, which would be sufficient to satisfy the liabilities taken into account under paragraph (2) of regulation 3, and

(ii) the other expenses which, in the opinion of the actuary, would be likely to be incurred in connection with a winding up of the scheme,



and the amount of the excess or, as the case may be, the shortfall;

(b) where the actuary considers that it is not practicable to make an estimate in accordance with sub-paragraph (a), an estimate of the solvency of the scheme on the effective date of the valuation made in such manner as the actuary considers appropriate in the circumstances of the case.

    (7) Where the actuary's estimate of solvency is made under paragraph (6)(b), the valuation must include a brief account of the principles adopted in making the estimate.

Recovery plan
     8. —(1) Where section 226(1) of the 2004 Act applies, and the trustees or managers of a scheme are required, following an actuarial valuation, either to prepare a recovery plan or to review and if necessary revise an existing recovery plan, they must do so—

(a) in the case of the first actuarial valuation obtained by them under section 224 of the Act and each subsequent valuation under section 224(1)(a), within 15 months after the effective date of the valuation;

(b) in the case of a valuation under section 224(1)(b) and regulation 7(1), within whichever period is applicable under regulation 7(2)(b).

    (2) In preparing or revising a recovery plan, the trustees or managers must take account of the following matters—

(a) the asset and liability structure of the scheme;

(b) its risk profile;

(c) its liquidity requirements;

(d) the age profile of the members, and

(e) in the case of a scheme under which the rates of contributions payable by the employer are determined—


(i) by or in accordance with the advice of a person other than the trustees or managers, and

(ii) without the agreement of the employer,



the recommendations of that person.

    (3) A recovery plan must be reviewed, and if necessary revised, where the Regulator has given directions under section 231(2)(b)(ii) of the 2004 Act as to the period within which, and manner in which, a failure to meet the statutory funding objective is to be remedied.

    (4) Where paragraph (3) applies, the review and any necessary revision must be completed within a reasonable period after the date of the Regulator's directions.

    (5) A recovery plan may be reviewed, and if necessary revised, where the trustees or managers consider that there are reasons that may justify a variation to it.

    (6) A recovery plan must specify the date on which it was prepared, or, if it has been revised, the date on which it was last revised.

    (7) A copy of any recovery plan sent to the Regulator by the trustees or managers of a scheme must be accompanied—

(a) in a case where the plan has been prepared or revised following an actuarial valuation, by a summary of the information contained in the valuation, and

(b) in a case where the plan has been revised in the circumstances described in paragraph (5), by an explanation of the reasons for the revision.

    (8) The commencement of the winding up of an eligible scheme, as defined in section 126 of the 2004 Act (eligible schemes), during the recovery period specified in the scheme's recovery plan is a notifiable event for the purposes of section 69(2)(a) of that Act (duty to notify the Regulator of prescribed events in respect of eligible schemes).

Schedule of contributions
     9. —(1) A schedule of contributions for a scheme must be prepared within 15 months after the effective date of the first actuarial valuation following the establishment of the scheme.

    (2) Where a schedule of contributions has been prepared, it must be reviewed, and if necessary revised—

(a) within 15 months after the effective date of each subsequent actuarial valuation under section 224(1)(a) of the 2004 Act;

(b) within whichever period is applicable under regulation 7(2)(b) after any valuation under section 224(1)(b) and regulation 7(1), and

(c) within a reasonable period after any revision of a recovery plan under regulation 8(3) or (5).

Content and certification of schedules of contributions
     10. —(1) A schedule of contributions must show the rates and due dates of all contributions (other than voluntary contributions) payable towards the scheme by or on behalf of the employer and the active members during the relevant period.

    (2) In this regulation, "the relevant period" means the period of five years after the date on which the schedule is certified, or, in a case where—

(a) a recovery plan is in force, and

(b) the period set out in the recovery plan as the period within which the statutory funding objective is to be met is longer than five years after the date on which the schedule is certified,

that longer period.

    (3) The schedule must show separately—

(a) the rates and due dates of contributions payable by or on behalf of active members of the scheme;

(b) the rates and due dates of the contributions payable by or on behalf of the employer, and

(c) if separate contributions to satisfy liabilities other than those referred to in regulation 3(2) which are likely to fall due for payment by the trustees or managers during the relevant period are made to the scheme, the rates and due dates of those contributions.

    (4) Where additional contributions are required in order to give effect to a recovery plan, the rates and dates of those contributions must be shown separately from the rates and dates of contributions otherwise payable.

    (5) The schedule must be signed by the trustees or managers of the scheme, and make provision for signature by the employer in order to signify his agreement to the matters included in it.

    (6) The schedule must incorporate the actuary's certification, in the relevant form set out in Schedule 1.

Records
     11. —(1) The trustees or managers of a scheme to which Part 3 of the 2004 Act applies must keep records of all contributions made to the scheme by any person, showing separately—

(a) the aggregate amounts of contributions paid by or on behalf of active members of the scheme (whether by deductions from their earnings or otherwise) and the dates on which they are paid, distinguishing voluntary contributions from other contributions, and showing the amounts of voluntary contributions paid by each member, and

(b) the aggregate amounts of contributions paid by or on behalf of each person who is an employer in relation to the scheme and the dates on which they are paid.

    (2) The trustees or managers must also keep records of any action taken by them to recover—

(a) the amount of any contributions which are not paid on the date on which they are due, and

(b) the amount of any debt which has arisen under section 75(2) or (4) of the 1995 Act (deficiencies in the assets).

Failure to make payments
     12. The trustees or managers of a scheme are not required to give notice, under section 228(2) of the 2004 Act (requirement to notify Regulator of failure likely to be of material significance), of a failure to make a payment in accordance with the schedule of contributions where they have given the Regulator notice of the failure under—

(a) section 49(9)(b) of the 1995 Act[11] (failure to remit deductions from members' earnings), or

(b) section 30(7)(c) of the 2004 Act (failure to pay employer's contributions in accordance with Regulator's order).

Period for obtaining employer's agreement
     13. Where, following an actuarial valuation, the trustees or managers of a scheme are required under section 229(1) of the 2004 Act to obtain the agreement of the employer to any of the matters mentioned in paragraphs (a) to (d) of that provision, they must do so within 15 months after the effective date of the valuation.

Powers of the Regulator
     14. —(1) In exercising any of the powers conferred by section 231 of the 2004 Act in the case of a scheme of the kind referred to in regulations 5(3)(b) and 8(2)(e), the Regulator must take into account any relevant recommendations made to the trustees or managers under those regulations.

    (2) In exercising the power in section 231(2)(b)(i) to give directions as to the manner in which a scheme's technical provisions are to be calculated, the Regulator must include a direction specifying the effective date by reference to which assets are valued and the amount of liabilities is determined.

Guidance relating to actuarial advice
     15. When advising the trustees or managers of a scheme on any of the matters specified in section 230(1) of the 2004 Act, the actuary shall have regard to the guidance note "Occupational Pension Schemes – scheme funding matters on which advice of actuary must be obtained" (GN49) prepared and published by the Institute of Actuaries and the Faculty of Actuaries and approved for the purposes of these Regulations by the Secretary of State, with such revisions as have been so approved[12].

Modification of shared cost schemes
     16. —(1) The trustees of a shared cost scheme to which Part 3 of the 2004 Act applies may by resolution modify the scheme with a view to making such provision that, where any additional contributions are required to give effect to a recovery plan, those contributions are payable by the employer and the members in the appropriate proportions, unless the employer and the trustees or managers agree—

(a) that the additional contributions should be payable by the employer alone, or

(b) that he should pay a greater proportion than would otherwise fall to be paid by him.

    (2) In paragraph (1)—

"shared cost scheme" means a scheme under the provisions of which—

(a) the level of benefits expected to be provided is defined;

(b) contributions are payable by the employer and the active members in specified proportions, and

(c) if—


(i) it appears to the trustees or managers, or

(ii) an actuarial valuation shows,



that otherwise the assets of the scheme will (or are likely to) fall short of its technical provisions, the rates of contributions payable by both the active members and the employer may be increased in specified proportions, and

"the appropriate proportions" means those specified proportions.

    (3) For the purposes of paragraph (2) there shall be disregarded—

(a) voluntary contributions by members and any associated contributions by the employer, and

(b) any temporary suspension of the liability to make contributions, or alteration in the proportions in which the contributions are payable, under any provision of the scheme allowing such a suspension or alteration in any circumstances.

Exemptions - general
     17. —(1) Part 3 of the 2004 Act does not apply to—

(a) a scheme which—


(i) is established by or under an enactment (including a local Act), and

(ii) is guaranteed by a public authority;



(b) a pay-as-you-go scheme;

(c) a scheme which is made under section 2 of the Parliamentary and other Pensions Act 1987[13] (power to provide for pensions for Members of the House of Commons etc.);

(d) a scheme which is treated as such by virtue of paragraph 4 or 5 of Schedule 2 to these Regulations and—



(i) in the cases described in paragraphs 4(2) and 5(2)(a) of that Schedule, applies to members in employment outside the member States, and

(ii) in the cases described in paragraphs 4(3) and 5(2)(b) of that Schedule, applies to members in employment outside the United Kingdom;



(e) a scheme which—



(i) provides relevant benefits;

(ii) is neither a relevant statutory scheme nor a tax approved scheme, or, from 6th April 2006, is not a tax registered scheme, and

(iii) has fewer than 100 members;



(f) a section 615(6) scheme which has fewer than 100 members;

(g) a scheme which has fewer than two members;

(h) a scheme which has fewer than 12 members, where all the members are trustees of the scheme and either—



(i) the provisions of the scheme provide that all decisions which fall to be made by the trustees are made by the unanimous agreement of the trustees who are members of the scheme, or

(ii) the scheme has a trustee who is an independent trustee in relation to the scheme for the purposes of section 23 of the 1995 Act[14] (power to appoint independent trustees) and is registered in the register maintained by the Authority in accordance with regulations made under subsection (4) of that section;



(i) a scheme which has fewer than 12 members, where a company is a trustee of the scheme and all the members of the scheme are directors of the company and either—



(i) the provisions of the scheme provide that any decision made by the company in its capacity as trustee is made only by the unanimous agreement of the directors who are members of the scheme, or

(ii) one of the directors is a trustee who is independent in relation to the scheme for the purposes of section 23 of the 1995 Act and is registered in the register maintained by the Authority in accordance with regulations made under subsection (4) of that section;



(j) a scheme under which the only benefits provided for (other than money purchase benefits) are death benefits, if the death benefits are secured by insurance policies or annuity contracts;

(k) a scheme which is the subject of a scheme failure notice under section 122 or 130 of the 2004 Act;

(l) subject to regulation 18, a scheme which is being wound up, or

(m) the Chatsworth Settlement Estate Pension Scheme.

    (2) In paragraph (1)—

"enactment" includes an enactment comprised in, or in an instrument under, an Act of the Scottish Parliament;

"pay-as-you-go scheme" means an occupational pension scheme under which there is no requirement for assets to be set aside in advance for the purpose of providing benefits under the scheme (disregarding any requirements relating to additional voluntary contributions);

"public authority" means—

(a) a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975)[15];

(b) a government department (including any body or authority exercising statutory functions on behalf of the Crown);

(c) the Scottish Ministers;

(d) the National Assembly for Wales, or

(e) a local authority;

"relevant benefits" has the meaning given in section 612(1) of the Income and Corporation Taxes Act 1988[16] (interpretation) or, from 6th April 2006, section 393B of the Income Tax (Earnings and Pensions) Act 2003[17] (relevant benefits);

"relevant statutory scheme" has the meaning given in section 611A(1) of the Income and Corporation Taxes Act 1988[18] (definition of relevant statutory scheme);

"section 615(6) scheme" means a scheme with such a superannuation fund as is mentioned in section 615(6) of the Income and Corporation Taxes Act 1988[19] (funds for the provision of benefits in respect of employment outside the United Kingdom);

"a tax approved scheme" means a scheme which is approved or was formerly approved under section 590 or 591 of the Income and Corporation Taxes Act 1988[20] (approval of retirement benefit schemes) or in respect of which an application for such approval has been duly made but has not been determined;

"a tax registered scheme" means a scheme which is, or is treated as, registered under Chapter 2 of Part 4 of the Finance Act 2004 (registration of pension schemes).

    (3) In paragraph (2), "local authority" means—

(a) in relation to England, a county council, a district council, a London borough council, the Greater London Authority, the Common Council of the City of London in its capacity as a local authority or the Council of the Isles of Scilly;

(b) in relation to Wales, a county council or county borough council;

(c) in relation to Scotland, a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994[21] (constitution of councils);

(d) an administering authority as defined in Schedule 1 to the Local Government Pension Scheme Regulations 1997[22].

    (4) Where Part 3 of the 2004 Act ceases to apply to a scheme to which it previously applied, because the scheme satisfies any of the criteria for exemption in paragraph (1), that does not affect any rights or obligations arising before Part 3 ceased to apply.

Exemption connected with winding up
     18. —(1) Where the winding up of a scheme begins on or after the commencement date, the exemption provided for in regulation 17(1)(l) is subject to the condition set out in paragraph (2).

    (2) The condition referred to in paragraph (1) is that the trustees or managers of the scheme ensure that they receive, before the end of each scheme year following the scheme year in which the winding up of the scheme begins, the actuary's estimate of the solvency of the scheme as at the end of the preceding scheme year.

    (3) In paragraph (2)—

"the actuary's estimate of the solvency of the scheme" means—

(a) except in the case referred to in sub-paragraph (b), an estimate by the actuary of whether, at the end of the relevant scheme year, the value of assets of the scheme to be taken into account under paragraph (1) of regulation 3 exceeded or fell short of the sum of—


(i) the cost of purchasing annuities, of the type described in section 74(3)(c) of the 1995 Act[23] and on terms consistent with those in the available market, which would be sufficient to satisfy the liabilities to be taken into account under paragraph (2) of regulation 3, and

(ii) the other expenses which, in the opinion of the actuary, would be likely to be incurred in connection with the winding up of the scheme,



and the amount of the excess or, as the case may be, the shortfall;

(b) where the actuary considers that it is not practicable to make an estimate in accordance with sub-paragraph (a), an estimate of the solvency of the scheme at the end of the relevant scheme year made in such manner as the actuary considers appropriate in the circumstances of the case;

"scheme year" means—

(a) either—


(i) a year specified for the purposes of the scheme rules in any document which contains those rules, or

(ii) if no such year is specified, the 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 six 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.

Modification of provisions of the 2004 Act
     19. Schedule 2 has effect for the purpose of modifying Part 3 of the 2004 Act and these Regulations as they apply in the circumstances specified there.

Supplementary and consequential provisions, transitional provisions and savings
     20. —(1) Schedule 3 has effect for the purpose of making supplementary provisions and consequential amendments connected with the commencement of Part 3 of the 2004 Act and Part IV of the Pensions (Northern Ireland) Order 2005[24] and the coming into force of these Regulations.

    (2) Schedule 4 has effect for the purpose of making transitional modifications of the 2004 Act and these Regulations, and saving the effect of repealed provisions of the 1995 Act and provisions revoked by these Regulations.

Revocations
     21. The enactments mentioned in Schedule 5 are revoked to the extent specified, subject to the savings in Schedule 4.



Signed by authority of the Secretary of State for Work and Pensions.


Stephen C. Timms
Minister of State, Department for Work and Pensions

8th December 2005

Regulations 7(4)(a) and 10(6)


ACTUARY'S CERTIFICATES

and part of the scheme is or was treated as a separate scheme under section 611(3) of the Income and Corporation Taxes Act 1988[25].

    (3) Where this paragraph applies, Part 3 of the 2004 Act and these Regulations shall apply as if the separated parts of the scheme were separate schemes.

(a) in section 224 of the Act—


(i) in subsection (1)(a), the words from "or," to the end of the subsection are omitted;

(ii) paragraphs (c) and (d) of subsection (2) are omitted;

(iii) the word "and" at the end of paragraph (a) of subsection (3) and paragraph (b) of that subsection are omitted;

(iv) the words "or report" in subsections (4), (6) and (7) and the words "or reports" in subsection (5) are omitted;



(b) in section 226—



(i) in subsection (1), for the words from "within the prescribed time" to the end of the subsection there is substituted—


" (a) send a summary of the valuation to the Regulator within a reasonable period, and

(b) take such steps as are necessary to ensure that the statutory funding objective is met within two years after that date.", and


(ii) subsections (2) to (6) are omitted;



(c) in section 227, for the words "by the end of the period specified in the recovery plan" in subsection (6)(b)(i) there is substituted "within two years after that date";

(d) in section 231, the words from "with respect to" in paragraph (d) of subsection (1) to the end of that paragraph are omitted;

(e) in regulations 6(2) and (3)(a), 7(2)(a), 9(1) and (2)(a) and 13 of these Regulations, for "15 months" there is substituted "12 months";

(f) in regulation 7(2), the words "or an actuarial report" are omitted;

(g) regulations 7(2)(c) and (5), 8, 9(2)(c) and 17(1)(a) and (e) to (i) are omitted;

(h) in regulation 10—



(i) in paragraph (2), for "five years", where those words first appear, there is substituted "two years", and the words from "or, in a case where" to the end of that paragraph are omitted;

(ii) in paragraph (4), for "give effect to a recovery plan", there is substituted "comply with section 226", and



(i) in Schedule 1, in the first of the alternative statements in the form of certification of the adequacy of the rates of contributions, for "by the end of the period specified in the recovery plan dated [dd/mm/yyyy]" there is substituted "within two years after the effective date of the last actuarial valuation".

    (3) In the case of a pre-23rd September 2005 scheme—

(a) section 226 of the 2004 Act applies as if it were subject to the following modifications in place of the modifications in sub-paragraph (2)(b)—


(i) for the words from "they must, within the prescribed time" in subsection (1) to the end of that subsection there is substituted—

" they must—
(a) send a summary of the valuation to the Regulator within a reasonable period, and

(b) take such steps as are necessary to ensure that the statutory funding objective is met—


(i) if the valuation is the first valuation the trustees or managers have obtained under section 224, by 22nd September 2008, and

(ii) in any other case, within two years after that date.", and



(ii) subsections (2) to (6) are omitted;



(b) these Regulations apply as if, in addition to the modifications in sub-paragraph (2)(e) to (i), paragraph 2(a)(i) of Schedule 4 is modified so that, after "this Schedule" there is inserted "and, without prejudice to any of those requirements, by reference to an effective date which is no later than 22nd September 2006".

    (4) In sub-paragraph (3), "pre-23rd September 2005 scheme" has the meaning given by article 3 of the Pensions Act 2004 (Commencement No. 8) Order 2005[26].

(a) the Secretary of State for Defence;

(b) a person duly authorised by him, or

(c) a company of which the Secretary of State for Defence or a nominee of his is a shareholder, or a subsidiary (within the meaning of section 736 of the Companies Act 1985[27]) of such a company.

    (2) Where this paragraph applies, sections 224(7) and 229 of the 2004 Act shall apply as if references to the employer were both to the employer and the Secretary of State for Defence or, in a case where the consent of a company is required, both to the employer and that company.

(a) the rates of contributions payable by the employer are determined by the trustees or managers without the agreement of the employer, and

(b) no person other than the trustees or managers is permitted to reduce those rates or to suspend payment of contributions,

section 229 of the 2004 Act and regulation 13 shall apply as if they were subject to the modifications set out in sub-paragraphs (2) and (3), and the reference to section 229 in paragraph 8(2) above shall be read as a reference to that section as modified by sub-paragraph (2).

    (2) The modifications of section 229 of the 2004 Act are as follows—

(a) in the heading, for "agreement of the employer" there is substituted "consultation or agreement";

(b) in subsection (1), for "obtain the agreement of the employer to" there is substituted "consult the employer regarding";

(c) in subsection (2), for the words before "(if the employer agrees)" there is substituted "After consulting the employer regarding any such matter, the trustees or managers may";

(d) subsection (5) is omitted, and

(e) in subsection (6), for "(1), (4) or (5)" there is substituted "(1) or (4)".

    (3) The modifications of regulation 13 are as follows—

(a) in the heading, for "obtaining employer's agreement" there is substituted "consulting employer", and

(b) in the text, for "obtain the agreement of the employer to" there is substituted "consult the employer regarding".

    (4) Where the power of the trustees or managers to determine the rates of contributions payable by the employer without the employer's agreement is subject to conditions, the modifications provided for in sub-paragraphs (2) and (3) have effect only in circumstances where the conditions are satisfied.

    (5) In the case of a scheme under which the rates of contributions payable by the employer are determined by the actuary without the agreement of the employer, section 227(6) of the 2004 Act shall apply as if it required that, in addition to the matters specified there, the actuary's certificate must state that the rates shown in the schedule of contributions are not lower than the rates he would have provided for if he, rather than the trustees or managers of the scheme, had the responsibility of preparing or revising the schedule, the statement of funding principles and any recovery plan.

    (6) In the case to which sub-paragraph (5) applies, regulation 10(6) and Schedule 1 apply as if the form of certification of the adequacy of the rates of contributions shown in the schedule of contributions included an additional statement that—

" I also certify that the rates of contributions shown in this schedule are not lower than I would have provided for had I had responsibility for preparing or revising the schedule, the statement of funding principles and any recovery plan".

    (7) Where the power of the actuary to determine the rates of contributions payable by the employer without the employer's agreement is subject to conditions, the modifications provided for in sub-paragraphs (5) and (6) have effect only in circumstances where the conditions are satisfied.

    (8) In the case of a scheme to which paragraph 8 applies, the references to the employer's agreement in sub-paragraphs (4), (5) and (7) of this paragraph shall be read as if the extended meaning of "employer" given by paragraph 8(2) applied.

(a) had fewer than 100 members on the effective date of its last actuarial valuation;

(b) is not exempted from the application of Part 3 of the 2004 Act by regulation 17(1), and

(c) is not a scheme in relation to which the application of that Part of the Act is modified by paragraph 6 of this Schedule.

    (2) Where this paragraph applies—

(a) section 224(1)(a) of the 2004 Act shall apply as if it required the trustees or managers of the scheme to obtain an actuarial valuation the effective date of which is not more than three years after that of the last such valuation, and an actuarial report for any intervening year at any time in which the scheme had 100 or more members, and

(b) section 224(3) of that Act shall apply as if—


(i) all but paragraph (b) were omitted, and

(ii) that paragraph required that the effective date of any actuarial report must be an anniversary of the effective date of the last actuarial valuation.

Schemes subject to a change of circumstances affecting the certification of the schedule of contributions

     12. —(1) In circumstances where the actuary considers that, because of the possibility of significant changes in the value of the assets of the scheme or in the scheme's technical provisions since the effective date of the last actuarial valuation, he is unable to certify the schedule of contributions in the terms set out in paragraph (b) of section 227(6) of the 2004 Act, that paragraph applies as if it provided for a statement that the rates shown in that schedule are such that—

(a) where the statutory funding objective was not met on the effective date of the last actuarial valuation, the statutory funding objective could have been expected on that date to be met by the end of the period specified in the recovery plan, or

(b) where the statutory funding objective was met on the effective date of the last actuarial valuation, the statutory funding objective could have been expected on that date to continue to be met for the period for which the schedule is to be in force.

    (2) In circumstances where the statutory funding objective was met on the effective date of the last actuarial valuation but the actuary considers that, having regard to—

(a) the rates of contributions payable towards the scheme since that date, or

(b) the rates of contributions payable since that date taken together with the possibility of significant changes in the value of the assets of the scheme or in the scheme's technical provisions,

he is unable to certify the schedule of contributions in the terms set out in paragraph (b)(ii) of section 227(6) of the 2004 Act, that paragraph applies as if it provided for a statement that the rates shown in that schedule are such that the statutory funding objective could have been expected on that date to be met by the end of the period for which the schedule is to be in force.

    (3) In the case to which sub-paragraph (1) applies, regulation 10(6) and Schedule 1 apply as if the alternative statements in the form of certification of the adequacy of the rates of contributions shown in the schedule of contributions were as follows—

" “the statutory funding objective could have been expected on [effective date of valuationon which the schedule is based] to be met by the end of the period specified in the recovery plan.
the statutory funding objective could have been expected on [effective date of valuationon which the schedule is based] to continue to be met for the period for which the schedule is to be in force.".

    (4) In the case to which sub-paragraph (2) applies, regulation 10(6) and Schedule 1 apply as if the alternative statements in the form of certification of the adequacy of the rates of contributions shown in the schedule of contributions were replaced by the following statement—

" “the statutory funding objective could have been expected on [effective date of valuationon which the schedule is based] to be met by the end of the period for which the schedule is to be in force.".

    (5) Where paragraph 6 of this Schedule applies, sub-paragraphs (1) and (3) of this paragraph apply as if the references to the period specified in the recovery plan were to the period of two years from the effective date of the last actuarial valuation.

(a) after the definition of "the 1995 Act" insert—

" "the 2004 Act" means the Pensions Act 2004;";

(b) omit the definition of "minimum funding requirement".

    (3) In regulation 6(2) (information to be confirmed by an employer in writing), for sub-paragraph (g) substitute—

" (g) in the case of a scheme to which Part 3 of the 2004 Act (scheme funding) applies, that the requirements of sections 224, 225, 226 (if applicable) and 227 of that Act and any regulations under those provisions are complied with.".

    (4) In regulation 18 (requirement as to the resources of a salary-related contracted-out scheme)—

(a) in paragraph (1), for the words from "the amount of the resources of the scheme must be" to the end substitute "either the resources of the scheme must be sufficient to enable the scheme to meet the statutory funding objective provided for in section 222(1) of the 2004 Act, or the actuary to the scheme must have certified under section 227(6)(b)(i) of that Act that in his opinion the rates shown in the schedule of contributions are such that the statutory funding objective can be expected to be met by the end of the period specified in the recovery plan.";

(b) in paragraph (2), for "section 56 of the 1995 Act" substitute "Part 3 of the 2004 Act";

(c) after paragraph (2) add the following paragraph—

    " (3) In a case where the trustees of a scheme are authorised under section 288 of the 2004 Act to accept contributions from European employers or approved under section 289 of that Act to accept contributions from a particular European employer, paragraph (1) has effect with the substitution for the words "by the end of the period specified in the recovery plan" of "within two years after the date of the last actuarial valuation under section 224 of the 2004 Act".".

    (5) In regulation 49(4)(a)(i) (determination of cash equivalent of rights under a scheme which is not a money purchase scheme)—

(a) for "section 56 of the 1995 Act applies (minimum funding requirement)" substitute "Part 3 of the 2004 Act applies (scheme funding)";

(b) for "subsection (1) of that section" substitute "section 222(1) of that Act".

    (6) In regulation 72 (transitional requirements as to sufficiency of resources of salary-related schemes)—

(a) in paragraph (1A), for "section 58 of the 1995 Act" substitute "section 227 of the 2004 Act";

(b) in paragraph (3), for "section 56(3) of the 1995 Act (minimum funding requirement)" substitute "section 222(3) of the 2004 Act (statutory funding objective)";

(c) in paragraph (6), for "section 56 of the 1995 Act" substitute "Part 3 of the 2004 Act".

    (7) The amendments in this paragraph have effect subject to paragraph 17 of Schedule 4.

(a) after the definition of "the 1995 Act" insert—

" "the 2004 Act" means the Pensions Act 2004;";

(b) after the definition of "public service pension scheme" insert—

" "the Regulator" means the Pensions Regulator established under section 1 of the 2004 Act;".

    (3) In regulation 5 (information to be made available to individuals)—

(a) in paragraph (1), for "paragraphs (2) to (12)" substitute "paragraphs (2) to (12ZA)";

(b) after paragraph (12) insert the following paragraph—

    " (12ZA) Where the trustees of a scheme to which Part 3 of the 2004 Act applies have obtained an actuarial valuation or report under section 224 of that Act, they shall furnish the information mentioned in paragraphs 17 to 22 of Schedule 2, in the form of a summary funding statement, as of course to all members and beneficiaries (except excluded persons), within a reasonable period after the date by which they are required by that section to ensure that the valuation or report is received by them.";

(c) after paragraph (12AA) insert the following paragraph—

    " (12AB) If a scheme has been modified by the Regulator under section 231(2)(a) of the 2004 Act (modifications as regards the future accrual of benefits), the trustees must inform all active members of the fact within one month of the modification taking effect.";

(d) in paragraph (12A) (sectionalised multi-employer schemes)—


(i) for "Schedule 5 to the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996" substitute "Schedule 2 to the Occupational Pension Schemes (Scheme Funding) Regulations 2005";

(ii) for "section 56 of the 1995 Act" substitute "Part 3 of the 2004 Act", and

(iii) for "section 56 does not apply" substitute "Part 3 does not apply".

    (4) In regulation 6(1)(c) (annual report to contain actuary's certificate)—

(a) for "section 56 of the 1995 Act" substitute "Part 3 of the 2004 Act", and

(b) before "that Act" insert "section 227 of".

    (5) For the heading to regulation 7, substitute "Availability of other documents".

    (6) For sub-paragraphs (a) to (c) in regulation 7(1), substitute the following sub-paragraphs—

" (a) the statement of funding principles where required under section 223 of the 2004 Act;

(b) where Part 3 of the 2004 Act applies to the scheme, the last actuarial valuation under section 224 of that Act received by the trustees, or, if an actuarial report under that section was received by them more recently than the last actuarial valuation, both that valuation and any report received subsequently;

(c) any recovery plan prepared under section 226 of the 2004 Act which is currently in force;


(ca) the payment schedule where required under section 87 of the 1995 Act or schedule of contributions where required under section 227 of the 2004 Act, and".

    (7) In Schedule 2 (information to be made available to individuals), after paragraph 16 add—

     " 17. A summary, based on the last actuarial valuation under section 224 of the 2004 Act received by the trustees and any actuarial report received subsequently, of the extent to which the assets of the scheme are adequate to cover its technical provisions.

     18. An explanation of any change in the funding position of the scheme—


(a) in the case of the first summary funding statement issued in respect of the scheme, since the last actuarial valuation in respect of the scheme under regulation 30 of the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996[30] (ongoing actuarial valuations), or, if no such valuation was obtained, since the last actuarial valuation under the rules of the scheme, and

(b) in the case of any subsequent summary funding statement, since the date of the last summary funding statement.



     19. The actuary's estimate of solvency contained in the last actuarial valuation under section 224 of the 2004 Act received by the trustees.

     20. A summary of any recovery plan prepared under section 226 of the 2004 Act which is currently in force.

     21. Whether the scheme has been modified under section 231(2)(a) of the 2004 Act, is subject to directions under section 231(2)(b) of that Act or bound by a schedule of contributions imposed under section 231(2)(c) of that Act, and if so an account of the circumstances in which the modification was made, the direction given or the schedule of conditions imposed.

     22. Whether any payment has been made to the employer under section 37 of the 1995 Act [31](payment of surplus to employer)—



(a) in the case of the first summary funding statement issued in respect of the scheme, in the 12 months preceding the date on which it is prepared, and

(b) in the case of any subsequent summary funding statement, since the date of the last such statement,



and, if so, the amount of the payment.".

     3. —(1) Until the trustees or managers of a scheme have prepared a schedule of contributions under section 227 of the 2004 Act (in accordance with regulation 9(1) of, or paragraph 5 of Schedule 4 to, these Regulations), the Disclosure Regulations have effect in relation to a scheme to which Part 3 of the 2004 Act applies as if—

(a) the amendments in paragraph 2 of this Schedule had not been made;

(b) those Regulations included the requirement in sub-paragraph (2) of this paragraph, and

(c) regulations 1(2) (so far as material), 10 and 11 of those Regulations applied in respect of that requirement.

    (2) The requirement referred to in paragraph (1)(b) is that, before 22nd September in 2006 and each subsequent year the trustees or managers of the scheme furnish all members and beneficiaries (except excluded persons) with the following information, in the form of a summary funding statement—

(a) a summary, based on the last actuarial valuation under regulation 30 of the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996 ("the MFR Regulations") received by the trustees or managers or, if no such valuation was obtained, the last actuarial valuation under the rules of the scheme, of the extent to which the assets of the scheme are adequate to meet its liabilities as they fall due;

(b) an explanation of any change in the funding position of the scheme—


(i) in the case of the first summary statement issued in respect of the scheme, since the last actuarial valuation in respect of the scheme under regulation 30 of the MFR Regulations, or, if no such valuation was obtained, since the last actuarial valuation under the rules of the scheme, and

(ii) in the case of any subsequent summary funding statement, since the date of the last summary funding statement;



(c) any estimate by the actuary of the solvency of the scheme, or, if the actuary has made more than one estimate of solvency, the latest such estimate;



(i) whether any payment has been made to the employer under section 37 of the 1995 Act—in the case of the first summary funding statement issued in respect of the scheme, in the 12 months preceding the date on which it is prepared, and

(ii) in the case of any subsequent summary funding statement, since the date of the last such statement,



and, if so, the amount of the payment.

    (3) The trustees or managers of a scheme are not required to comply with the requirement in sub-paragraph (2) in any year if the scheme had fewer than 100 members during the 12 months ending on 31st August in that year.

    (4) A summary funding statement furnished under sub-paragraph (2) must be accompanied by a written statement that further information about the scheme is available, giving the address to which enquiries about it should be sent.

" "the 2004 Act" means the Pensions Act 2004;".

    (3) In regulation 16A(2)[33] (circumstances in which notice of an employer's failure to make payments to trustees or managers need not be given), for sub-paragraph (b) substitute the following—

" (b) where the scheme is exempt from the requirement to prepare, review and if necessary revise a schedule of contributions under section 227 of the 2004 Act, by virtue of any of sub-paragraphs (a) to (i) and (k) to (m) of regulation 17(1) of the Occupational Pension Schemes (Scheme Funding) Regulations 2005; or".


Occupational Pension Schemes (Transfer Values) Regulations 1996

     5. —(1) The Occupational Pension Schemes (Transfer Values) Regulations 1996[34] are amended as follows.

    (2) In regulation 1(2) (interpretation), after the definition of "the 1995 Act" insert—

" "the 2004 Act" means the Pensions Act 2004;".

    (3) In regulation 7 (manner of calculation and verification of cash equivalents)—

(a) insert the word "and" at the end of paragraph (3)(b)(ii);

(b) omit the word "and" at the end of paragraph (3)(b)(iii), and

(c) omit paragraphs (3)(b)(iv) and (4).

    (4) In regulation 8 (further provisions as to calculation of cash equivalents)—

(a) in paragraph (4), for "section 56 of the 1995 Act (minimum funding requirement)" substitute "Part 3 of the 2004 Act (scheme funding)";

(b) in paragraph (4B), omit "then, subject to paragraph (4D)";

(c) omit paragraphs (4D) to (4I), (4K) and (4L);

(d) in paragraph (5)—


(i) for "section 61 of the 1995 Act" substitute "section 232 of the 2004 Act";

(ii) for "section 56" substitute "Part 3", and

(iii) for "paragraphs (4), (4A) and (4G)" substitute "paragraphs (4) and (4A)", and



(e) omit paragraph (6).



Personal and Occupational Pension Schemes (Pensions Ombudsman) Regulations 1996

     6. —(1) The Personal and Occupational Pension Schemes (Pensions Ombudsman) Regulations 1996[35] are amended as follows.

    (2) In regulation 4(2) (compliance with particular requirements excluded from ombudsman's jurisdiction), after sub-paragraph (g) add—

" “or the requirements under Part 3 of the Pensions Act 2004.".

(a) for "Schedule 5 to the MFR Regulations" substitute "Schedule 2 to the Occupational Pension Schemes (Scheme Funding) Regulations 2005", and

(b) for "section 56" substitute "Part 3 of the Pensions Act 2004".

    (3) In regulation 13 (hybrid schemes), omit paragraphs (6) and (7).

(a) for "Article 56 of the Order applies (minimum funding requirement)" substitute "Part IV of the 2005 Order[38] applies (scheme funding)", and

(b) for "Article 56(1)" substitute "Article 201(1) of that Order".

Pension Sharing (Valuation) Regulations 2000

     9. —(1) The Pension Sharing (Valuation) Regulations 2000[39] are amended as follows.

    (2) In regulation 1(2) (interpretation), after the definition of "the 1999 Act" insert—

" "the 2004 Act" means the Pensions Act 2004;".

    (3) In regulation 4 (calculation and verification of cash equivalents)—

(a) insert the word "and" at the end of paragraph (3)(b)(i);

(b) omit the word "and" at the end of paragraph (3)(b)(ii), and

(c) omit paragraphs (3)(b)(iii) and (4).

    (4) In regulation 5 (further provisions as to calculation of cash equivalents)—

(a) in paragraph (3), for "section 56 of the 1995 Act" substitute "Part 3 of the 2004 Act";

(b) in paragraph (3B), omit "then, subject to paragraph (3D)";

(c) omit paragraphs (3D) to (3I), (3K) and (3L);

(d) in paragraph (4)—


(i) for "Schedule 5 to the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996" substitute "Schedule 2 to the Occupational Pension Schemes (Scheme Funding) Regulations 2005";

(ii) for "section 56 of the 1995 Act" substitute "Part 3 of the 2004 Act", and

(iii) for "paragraphs (3), (3A) and (3G)" substitute "paragraphs (3) and (3A)", and



(e) in paragraph (5), for "paragraphs (3) and (3F)" substitute "paragraph (3)".



Pension Sharing (Implementation and Discharge of Liability) Regulations 2000

     10. —(1) The Pension Sharing (Implementation and Discharge of Liability) Regulations 2000[40] are amended as follows.

    (2) In regulation 1(2) (interpretation), after the definition of "the 1999 Act" insert—

" "the 2004 Act" means the Pensions Act 2004;".

    (3) In regulation 16 (adjustments to the amount of pension credit)—

(a) in paragraph (2), for "section 56 of the 1995 Act" substitute "Part 3 of the 2004 Act (scheme funding)";

(b) in paragraph (2B), omit "then, subject to paragraph (2D)";

(c) omit paragraphs (2D) to (2I), (2K) and (2L), and

(d) in paragraph (3)—


(i) for "Schedule 5 to the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996" substitute "Schedule 2 to the Occupational Pension Schemes (Scheme Funding) Regulations 2005";

(ii) for "section 56 of the 1995 Act (minimum funding requirement)" substitute "Part 3 of the 2004 Act", and

(iii) for "paragraphs (2), (2A) and (2G)" substitute "paragraphs (2) and (2A)".

Pension Sharing (Pension Credit Benefit) Regulations 2000

     11. —(1) The Pension Sharing (Pension Credit Benefit) Regulations 2000[41] are amended as follows.

    (2) In regulation 1(2) (interpretation), after the definition of "the 1999 Act" insert—

" "the 2004 Act" means the Pensions Act 2004;".

    (3) In regulation 24 (calculation and verification of cash equivalents)—

(a) insert the word "and" at the end of paragraph (3)(b)(ii);

(b) omit the word "and" at the end of paragraph (3)(b)(iii), and

(c) omit paragraphs (3)(b)(iv) and (4).

    (4) In regulation 27 (increases and reductions of cash equivalents)—

(a) in paragraph (4), for "section 56 of the 1995 Act" substitute "Part 3 of the 2004 Act";

(b) in paragraph (4B), omit "then, subject to paragraph (4D)";

(c) omit paragraphs (4D) to (4I), (4K) and (4L);

(d) in paragraph (4M), for "paragraphs (4J) and (4K)" substitute "paragraph (4J)", and

(e) in paragraph (5)—


(i) for "Schedule 5 to the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996" substitute "Schedule 2 to the Occupational Pension Schemes (Scheme Funding) Regulations 2005";

(ii) for "section 56 of the 1995 Act" substitute "Part 3 of the 2004 Act", and

(iii) for "paragraphs (4), (4A) and (4G)" substitute "paragraphs (4) and (4A)".

Stakeholder Pension Schemes Regulations 2000

     12. —(1) The Stakeholder Pension Schemes Regulations 2000[42] are amended as follows.

    (2) In regulation 19 (requirement for trustees of a stakeholder pension scheme established under a trust), omit "except the reference to section 56 in section 35(2) and 35(5)(b) of that Act".

" "the 2004 Act" means the Pensions Act 2004;".

    (3) In regulation 2 (exemption of Republic of Ireland schemes – general provision), after "the 1995 Act" insert "or the 2004 Act".

    (4) In the Schedule, at the end insert—

Provision of the 2004 Act	Purpose of provision
Part 3	Scheme funding

" (d) the scheme is exempt from the requirement to prepare, review and if necessary revise a schedule of contributions under section 227 of the 2004 Act, by virtue of any of sub-paragraphs (a) to (i) and (k) to (m) of regulation 17(1) of the Occupational Pension Schemes (Scheme Funding) Regulations 2005.".

(a) is either—


(i) subject to section 56 of the 1995 Act (minimum funding requirement), or

(ii) exempted from the application of that section by regulation 28 of the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations 1996[45] ("the 1996 Regulations"),



immediately before the commencement date, and

(b) becomes subject to Part 3 of the 2004 Act (scheme funding) on that date.

     2. Section 224 of the 2004 Act (actuarial valuations and reports) applies to the scheme as if—

(a) it included a requirement for the trustees or managers of the scheme—


(i) to obtain an actuarial valuation ("the first valuation under the 2004 Act"), in accordance with the requirements specified in paragraph 3 of this Schedule, and

(ii) to ensure that the first valuation under the 2004 Act is received by them within the relevant period specified in paragraph 4 of this Schedule;



(b) neither paragraph (a) of subsection (1) nor subsection (4) applied in relation to the first valuation under the 2004 Act, and

(c) paragraph (a) of subsection (3) were omitted.

     3. —(1) Except where sub-paragraph (3), (5) or (7) applies, the trustees or managers of the scheme must obtain the first valuation under the 2004 Act by reference to an effective date not more than one year after the commencement date.

    (2) Sub-paragraph (3) applies where—

(a) the trustees or managers received, before the commencement date, in accordance with any provisions of section 57 of the 1995 Act (valuation and certification of assets and liabilities) and the 1996 Regulations, or receive—


(i) on or after the commencement date, and

(ii) within one year of its effective date,



in accordance with any such provisions which continue in force under Part 2 of this Schedule, an actuarial valuation by reference to an effective date on or after 21st September 2002, and

(b) neither sub-paragraph (5) nor sub-paragraph (7) applies.

    (3) Where this sub-paragraph applies, the trustees or managers must obtain the first actuarial valuation under the 2004 Act by reference to an effective date which is—

(a) no earlier than 22nd September 2005, and

(b) not more than three years after the effective date of the last valuation they received under the 1995 Act.

    (4) Subject to sub-paragraph (8), sub-paragraph (5) applies where—

(a) immediately before the commencement date, the trustees or managers were required under section 57(2)(a) of the 1995 Act to obtain an actuarial valuation by virtue of a certificate in the terms set out in that provision, or

(b) on or after the commencement date, the trustees or managers receive a certificate in the terms set out in section 57(2)(a) of the 1995 Act in consequence of the requirements saved by paragraph 15 of this Schedule,

and the trustees or managers have determined before that date, or determine subsequently, that the valuation should be obtained by reference to an effective date which is no earlier than 22nd September 2005 and not more than three years after the effective date of the last valuation they received under the 1995 Act.

    (5) Where this sub-paragraph applies, the trustees or managers must obtain the first valuation under the 2004 Act by reference to the effective date they have determined.

    (6) Subject to sub-paragraph (8), sub-paragraph (7) applies where—

(a) immediately before the commencement date, the trustees or managers were required under section 57(2)(b) of the 1995 Act to obtain an actuarial valuation by virtue of the occurrence of an event of the kind described in regulation 13 of the 1996 Regulations (section 75 debts in multi-employer schemes), and

(b) they have determined before that date, or determine subsequently, that the valuation should be obtained by reference to an effective date which is no earlier than 22nd September 2005 and not more than three years after the effective date of the last valuation they received under the 1995 Act.

    (7) Where this sub-paragraph applies, the trustees or managers must obtain the first valuation under the 2004 Act by reference to the effective date they have determined.

    (8) In a case where, but for this provision, sub-paragraph (5) would apply, by virtue of the receipt by the trustees or managers of a certificate in the terms set out in section 57(2)(a) of the 1995 Act, and sub-paragraph (7) would also apply, by virtue of the occurrence of an event of the kind described in regulation 13 of the 1996 Regulations, sub-paragraph (5) applies only if the certificate was received before the event occurred and sub-paragraph (7) applies only if the event occurred before the certificate was received.

     4. The trustees or managers must ensure that the first valuation under the 2004 Act is received by them—

(a) where paragraph 3(1) applies, or where paragraph 3(3) applies and the trustees or managers obtained that valuation by reference to an effective date which is after 29th December 2005, within 15 months after its effective date;

(b) where paragraph 3(3) applies and the trustees or managers obtained that valuation by reference to an effective date between 22nd September and 29th December 2005, within 18 months after its effective date;

(c) where paragraph 3(5) applies, within 18 months after the date on which the certificate referred to in paragraph 3(4) is signed, and

(d) where paragraph 3(7) applies, within 18 months after the date on which the event referred to in paragraph 3(6) occurred.

     5. Section 227 of the 2004 Act (schedule of contributions) applies to the scheme as if it included a requirement for the trustees or managers of the scheme to prepare a schedule of contributions ("the first schedule of contributions under the 2004 Act") within the same period as that within which they are required by paragraph 4 to ensure that they receive the first valuation under the 2004 Act.

     6. In the circumstances described in paragraph 4(b), (c), and (d), regulation 6(2) of these Regulations (first statement of funding principles) applies to the scheme, and regulations 8(1)(a) and 13 apply in relation to the first valuation under the 2004 Act, as if the period there referred to were the same period as that within which the trustees or managers are required by paragraph 4 to ensure that they receive the first valuation under the 2004 Act.

     7. References in sections 224 to 231 of the 2004 Act to actuarial valuations or schedules of contributions shall be taken to exclude any such valuation or schedule of contributions under the 1995 Act as in force before the commencement date or as continued in force by paragraphs 9 to 16 of this Schedule.

those provisions apply to the scheme on and after the commencement date in respect of that valuation and statement.

     14. Where a requirement to obtain a valuation is preserved by any of paragraphs 10 to 13 of this Schedule, section 57(5) to (7) of the 1995 Act, regulations 3 to 9 of the 1996 Regulations and (except in the case to which paragraph 13 applies) regulation 14 of and Schedule 1 to those Regulations apply in respect of that valuation.

     15. Where, immediately before the commencement date, the trustees or managers of the scheme were required under section 57(1)(b) of the 1995 Act and regulation 18 of the 1996 Regulations (occasional and periodic certification of adequacy of contributions) to obtain annual certificates as to the adequacy of contributions payable towards the scheme, those provisions, sections 57(5) to (7) of that Act and Schedule 3 to the 1996 Regulations apply to the scheme until the effective date of the first valuation under the 2004 Act relating to the scheme.

     16. Section 61 of the 1995 Act (supplementary), regulation 2 of the 1996 Regulations (interpretation) and regulation 29 of, and Schedule 5 to, those Regulations (modifications) apply, so far as material, on and after the commencement date in relation to the provisions of the Act and Regulations saved by paragraphs 9 to 15 of this Schedule.

     17. Where any provision of the 1995 Act or the 1996 Regulations applies to the scheme on or after the commencement date by virtue of this Schedule, any reference to that provision in the Occupational Pension Schemes (Contracting-out) Regulations 1996[46] ("the Contracting-out Regulations") applies in relation to the scheme on and after the commencement date as if—

(a) in the case of a provision of the 1995 Act, the repeal of that provision by the 2004 Act had not come into force on that date in accordance with the Pensions Act 2004 (Commencement No. 8) Order 2005[47] ("the Commencement Order");

(b) in the case of a provision in the 1996 Regulations, those Regulations had not been revoked by regulation 21, and

(c) the amendments of the Contracting-out Regulations in paragraph 1 of Schedule 3 to these Regulations had not come into force.

     18. Where any provision of the 1995 Act or the 1996 Regulations applies to the scheme on or after the commencement date by virtue of this Schedule, regulation 4(2) of the Personal and Occupational Pension Schemes (Pensions Ombudsman) Regulations 1996[48] shall be taken to include a reference to that provision notwithstanding its repeal by the 2004 Act in accordance with the Commencement Order or the revocation of the 1996 Regulations by regulation 21.

     19. Any reference to the 1995 Act or the 1996 Regulations in—

(a) the Occupational Pension Schemes (Winding Up) Regulations 1996[49];

(b) the Occupational Pension Schemes (Deficiency on Winding Up etc.) Regulations 1996[50], or

(c) the Occupational Pension Schemes (Employer Debt) Regulations 2005[51],

applies to the scheme on and after the commencement date as if, where the reference is to a provision of the Act, the repeal of that provision by the 2004 Act had not come into force on that date in accordance with the Commencement Order, and, where the reference is to a provision in the 1996 Regulations, those Regulations had not been revoked by regulation 21.

[2] See paragraph 5(4A) of Schedule 1 to the Pension Schemes (Northern Ireland) Act 1993.back

[3] 1995 c.26; section 124(1) is cited for the definitions of "prescribed" and "regulations".back

[4] 2004 c.35; section 318(1) is cited for the definitions of "modifications", "prescribed" and "regulations".back

[5] Section 120(1) of the Pensions Act 1995 provides that the Secretary of State must consult such persons as he considers appropriate before making regulations by virtue of Part 1 of that Act. Section 317(1) of the Pensions Act 2004 makes similar provision with respect to regulations under that Act. The duty under the 2004 Act does not apply where regulations are made within six months of the coming into force of the provisions under which they are made.back

[6] 1993 c.48.back

[7] The definition of "pension credit rights" was inserted into section 124(1) of the 1995 Act by paragraph 61(3) of Schedule 12 to the Welfare Reform and Pensions Act 1999 (c.30).back

[8] Section 41 was amended by paragraph 12 of Schedule 5 to the Child Support, Pensions and Social Security Act 2000 (c.19) and paragraph 52 of Schedule 12 to the Pensions Act 2004.back

[9] Section 75 was amended by section 271 of the Pensions Act 2004.back

[10] Section 74(3)(c) was amended by S.I. 2001/3649.back

[11] Section 49(9)(b) of the 1995 Act was inserted by section 10(1) of the Welfare Reform and Pensions Act 1999.back

[12] Copies of GN49 may be obtained from the Institute of Actuaries, Staple Inn Hall, High Holborn, London WC1V 7QJ and from the Faculty of Actuaries, Maclaurin House, 18 Dublin Street, Edinburgh EH1 3PP.back

[13] 1987 c.45.back

[14] Section 23 was substituted by the Pensions Act 2004, section 36(3).back

[15] 1975 c.26.back

[16] 1988 c.1; the definition of "relevant benefits" was amended by paragraph 10(1) of Schedule 10 to the Finance Act 1999 (c.16). Section 612(1) is repealed by Part 3 of Schedule 42 to the Finance Act 2004 (c.12) with effect from 6th April 2006.back

[17] 2003 c.1; section 393B is inserted by section 249(3) of the Finance Act 2004 with effect from 6th April 2006..back

[18] Section 611A was inserted by paragraph 15 of Schedule 6 to the Finance Act 1989 (c.26) and amended by paragraph 5 of Schedule 5 to the Finance Act 1999. The section is repealed by Part 3 of Schedule 42 to the Finance Act 2004 with effect from 6th April 2006.back

[19] Section 615(6) was amended by paragraph 11 of Schedule 10 to the Finance Act 1999.back

[20] Section 590 is amended by paragraph 3 of Schedule 6 to the Finance Act 1989.back

[21] 1994 c.39.back

[22] S.I. 1997/1612.back

[23] Section 74(3)(c) was amended by S.I. 2001/3649.back

[24] S.I. 2005/255 (N.I. 1).back

[25] 1988 c.1; section 611 is repealed by Part 3 of Schedule 42 to the Finance Act 2004 with effect from 6th April 2006.back

[26] S.I. 2005/3331 (C.141).back

[27] 1985 c.6; section 736 was substituted by section 144(1) of the Companies Act 1989 (c.40).back

[28] S.I. 1996/1172; relevant amending instruments are S.I. 1997/786 and 2002/681.back

[29] S.I. 1996/1655; relevant amending instruments are S.I. 1997/786 and 2002/459.back

[30] S.I. 1996/1536. Regulation 30 was amended by S.I. 1997/786.back

[31] Section 37 is substituted by section 250 of the Pensions Act 2004.back

[32] S.I. 1996/1715; relevant amending instruments are S.I. 2000/679 and 2005/2426.back

[33] Regulation 16A was inserted by S.I. 2000/679 and amended by S.I. 2005/2426.back

[34] S.I. 1996/1847; relevant amending instruments are S.I. 1997/786, 2003/1727 and 2005/706.back

[35] S.I. 1996/2475, to which there are amendments not relevant to these Regulations.back

[36] S.I. 1996/3126, to which there are amendments not relevant to these Regulations.back

[37] S.R. (NI) 1996 No. 493; to which there are amendments not relevant to these Regulations.back

[38] For the purposes of these Regulations "2005 Order" refers to S.I. 2005/255 (N.I. 1).back

[39] S.I. 2000/1052; relevant amending instruments are S.I. 2000/2691 and 2005/706.back

[40] S.I. 2000/1053, amended by S.I. 2005/706; there are other amending instruments but none is relevant.back

[41] S.I. 2000/1054, amended by S.I. 2005/706; there are other amending instruments but none is relevant.back

[42] S.I. 2000/1403, to which there are amendments not relevant to these Regulations.back

[43] S.I. 2000/3198, to which there are amendments not relevant to these Regulations.back

[44] S.I. 2005/2426.back

[45] S.I. 1996/1536; relevant amending instruments are S.I. 1997/786 and 1997/3038.back

[46] S.I. 1996/1172; relevant amending instruments are S.I. 1997/786 and 2002/681.back

[47] S.I. 2005/3331.back

[48] S.I. 1996/2475, to which there are amendments not relevant to these Regulations.back

[49] S.I. 1996/3126, to which there are amendments not relevant to these Regulations.back

[50] S.I. 1996/3128, amended by S.I. 1997/786 and 3038, 1999/3198, 2002/380, 2004/403, 2005/72 and 678.back

[51] S.I. 2005/678, amended by S.I. 2005/2224.back

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