The Occupational Pension Schemes (Investment) Regulations (Northern Ireland) 2005

[^key-cffa172c42991f2f21c104cb3232a738]: Words in reg. 1(2) omitted (31.12.2020) by virtue of The Occupational and Personal Pension Schemes (Amendment etc.) (Northern Ireland) (EU Exit) Regulations 2019 (S.I. 2019/193), regs. 1, 25(2)(a); 2020 c. 1, Sch. 5 para. 1(1)

[^key-fec4e8bd41dd0de3210a7fcb3ba6c1ed]: Words in reg. 1(2) omitted (31.12.2020) by virtue of The Occupational and Personal Pension Schemes (Amendment etc.) (Northern Ireland) (EU Exit) Regulations 2019 (S.I. 2019/193), regs. 1, 25(2)(b); 2020 c. 1, Sch. 5 para. 1(1)

[^key-dfc1950a97a476d5995a6d0fa5001fe4]: Reg. 17 omitted (31.12.2020) by virtue of The Occupational and Personal Pension Schemes (Amendment etc.) (Northern Ireland) (EU Exit) Regulations 2019 (S.I. 2019/193), regs. 1, 25(5); 2020 c. 1, Sch. 5 para. 1(1)

[^key-9edec6816dfd36300c85ac4a05333814]: Reg. 15A(2)(b) omitted (31.12.2020) by virtue of The Occupational and Personal Pension Schemes (Amendment etc.) (Northern Ireland) (EU Exit) Regulations 2019 (S.I. 2019/193), regs. 1, 25(4); 2020 c. 1, Sch. 5 para. 1(1)

[^key-d3ad98dd23750aae502f2a337eb4b428]: Words in reg. 4(11) substituted (31.12.2020) by The Occupational and Personal Pension Schemes (Amendment etc.) (Northern Ireland) (EU Exit) Regulations 2019 (S.I. 2019/193), regs. 1, 25(3)(a); 2020 c. 1, Sch. 5 para. 1(1)

[^key-56320c9cdee6c1acb5551b877b6d3bc5]: Words in reg. 4(11) omitted (31.12.2020) by virtue of The Occupational and Personal Pension Schemes (Amendment etc.) (Northern Ireland) (EU Exit) Regulations 2019 (S.I. 2019/193), regs. 1, 25(3)(b)(i); 2020 c. 1, Sch. 5 para. 1(1)

[^key-528288a8a6fe0ecf07b90a66c5a077e2]: Words in reg. 4(11) substituted (31.12.2020) by The Occupational and Personal Pension Schemes (Amendment etc.) (Northern Ireland) (EU Exit) Regulations 2019 (S.I. 2019/193), regs. 1, 25(3)(b)(ii); 2020 c. 1, Sch. 5 para. 1(1)

[^key-f781cd7408fb13de1fabf47642fdcf2f]: Words in reg. 1(2) substituted (with application in accordance with reg. 1(4) of the amending Rule) by The Occupational Pension Schemes (Administration, Investment and Charges and Governance) (Amendment) Regulations (Northern Ireland) 2021 (S.R. 2021/272), regs. 1(1), 4(2)

[^key-f704dd58feddf835dabde397a58c3e13]: Words in reg. 2A(3) inserted (with application in accordance with reg. 1(4) of the amending Rule) by The Occupational Pension Schemes (Administration, Investment and Charges and Governance) (Amendment) Regulations (Northern Ireland) 2021 (S.R. 2021/272), regs. 1(1), 4(3)(a)

[^key-4d8ecc6cd347736cbc2457b039edcbe5]: Reg. 2A(6) inserted (with application in accordance with reg. 1(4) of the amending Rule) by The Occupational Pension Schemes (Administration, Investment and Charges and Governance) (Amendment) Regulations (Northern Ireland) 2021 (S.R. 2021/272), regs. 1(1), 4(3)(b)

[^key-99fbbf909abe43283f6e187838bf044c]: Words in reg. 8(1)(a) substituted (1.10.2021) by The Occupational Pension Schemes (Administration, Investment and Charges and Governance) (Amendment) Regulations (Northern Ireland) 2021 (S.R. 2021/272), regs. 1(1), 4(4)

[^key-98ef81df52d5bc87db82db614a3562e6]: Reg. 2A(7) added (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) (Modifications and Consequential and Miscellaneous Amendments) Regulations (Northern Ireland) 2022 (S.R. 2022/192), regs. 1(1), 10

[^key-f3711e8853f5c6be547a0c227af0697a]: Regs. 16A, 16B inserted (1.10.2022) by The Occupational Pension Schemes (Investment) (Employer-related Investments by Master Trusts) (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/210), regs. 1(1), 3(6)

[^key-9bc3412a0c40f1e86fc6a6abc2d28519]: Words in reg. 1(5) inserted (1.10.2022) by The Occupational Pension Schemes (Investment) (Employer-related Investments by Master Trusts) (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/210), regs. 1(1), 3(2)

[^key-389c081e4114d8de6151a05fe386a155]: Words in reg. 15A(1) inserted (1.10.2022) by The Occupational Pension Schemes (Investment) (Employer-related Investments by Master Trusts) (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/210), regs. 1(1), 3(4)

[^key-0fa88683cfee733abf87cc13deda0f73]: Words in reg. 16(5) substituted (1.10.2022) by The Occupational Pension Schemes (Investment) (Employer-related Investments by Master Trusts) (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/210), regs. 1(1), 3(5)

[^key-4e914fbf80ae2037c86a7f913c4511bd]: Words in reg. 12(2) substituted (1.10.2022) by The Occupational Pension Schemes (Investment) (Employer-related Investments by Master Trusts) (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/210), regs. 1(1), 3(3)(a)

[^key-8fc35c163a4d61daed8b84110a863086]: Words in reg. 12(2A) substituted (1.10.2022) by The Occupational Pension Schemes (Investment) (Employer-related Investments by Master Trusts) (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/210), regs. 1(1), 3(3)(b)

[^key-6eadecea6279b6bb0a7e66cc0e5d2fc6]: Words in reg. 12(2B) substituted (1.10.2022) by The Occupational Pension Schemes (Investment) (Employer-related Investments by Master Trusts) (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/210), regs. 1(1), 3(3)(c)(i)

[^key-c8f3d5270b1ee1ace7b91eb86076a4d4]: Words in reg. 12(2B) substituted (1.10.2022) by The Occupational Pension Schemes (Investment) (Employer-related Investments by Master Trusts) (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/210), regs. 1(1), 3(3)(c)(ii)

[^key-099670a0f2557bc937b3262090d46332]: Words in reg. 12(3) substituted (1.10.2022) by The Occupational Pension Schemes (Investment) (Employer-related Investments by Master Trusts) (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/210), regs. 1(1), 3(3)(d)

[^key-cba7169966303a61b5abbd37c910170a]: Reg. 2B inserted (with application in accordance with reg. 1(7) of the amending Rule) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations (Northern Ireland) 2024 (S.R. 2024/79), regs. 1(1), 3(3), 6

[^key-7bc39b0353cc0a0d0b823a429bbc3bca]: Reg. 2A(1)(aa) inserted (with application in accordance with reg. 1(6) of the amending Rule) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations (Northern Ireland) 2024 (S.R. 2024/79), regs. 1(1), 3(2)(a)(i), 6

[^key-16127e66867d5a7eb137f524d7badcf7]: Words in reg. 2A(1)(c) inserted (with application in accordance with reg. 1(6) of the amending Rule) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations (Northern Ireland) 2024 (S.R. 2024/79), regs. 1(1), 3(2)(a)(ii), 6

[^key-e345ec6fb41c5b08c30fd6a96a8e207c]: Reg. 2A(1A) inserted (with application in accordance with reg. 1(6) of the amending Rule) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations (Northern Ireland) 2024 (S.R. 2024/79), regs. 1(1), 3(2)(b), 6

[^key-b51b17a875a7a65a13937d0cb1acbc0e]: Reg. 2A(6A) inserted (with application in accordance with reg. 1(6) of the amending Rule) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations (Northern Ireland) 2024 (S.R. 2024/79), regs. 1(1), 3(2)(c), 6

[^key-07ff2eaa2c8b4f8525c673b95becef48]: Word in reg. 6 heading inserted (with application in accordance with reg. 1(7) of the amending Rule) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations (Northern Ireland) 2024 (S.R. 2024/79), regs. 1(1), 3(4)(a), 6

[^key-2c12390463e8e8a0297afd4715fa3545]: Word in reg. 6(1) inserted (with application in accordance with reg. 1(7) of the amending Rule) by The Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations (Northern Ireland) 2024 (S.R. 2024/79), regs. 1(1), 3(4)(b), 6

Deposits

15A

• (1) Regulation 12(2A) shall not prohibit an investment mentioned in paragraph (2) of this regulation to the extent that it can be construed as an employer-related loan mentioned in regulation 12(4) or 16A(5).

• (2) This regulation applies to any employer-related investment of resources in an account (including a current, deposit or shared account) with—

• (a) a person who has permission under Part IV of the FSM Act (permission to carry on regulated activities) to accept deposits;

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .or

• (c) the Bank of England.

Multi-employer schemes

Scheme undertaking cross-border activities

Revocations

Additional requirements in relation to default arrangement

2A

• (1) The trustees or managers of a relevant scheme must prepare a statement of the investment principles governing decisions about investments for the purposes of the default arrangement, and that statement must be in writing and must cover at least the following matters—

• (a) the aims and objectives of the trustees or managers in respect of such investments;

• (aa) their policy in relation to investment in illiquid assets;

• (b) their policies in relation to the matters mentioned in regulation 2(3)(b) and, if that scheme has 100 or more members, regulation 2(3)(c) and (d) in respect of the default arrangement, and

• (c) an explanation of how the aims and objectives mentioned in sub-paragraph (a) , the policy mentioned in sub-paragraph (aa) and the policies mentioned in sub-paragraph (b) (together “the default strategy”) are intended to ensure that assets are invested in the best interests of the group of persons consisting of relevant members and relevant beneficiaries.

• (1A) For the purposes of paragraph (1)(aa), their policy in relation to investment in illiquid assets must include—

• (a) a statement as to whether or not investments held for the purposes of the default arrangement will include illiquid assets;

• (b) where those investments will include illiquid assets—

• (i) a description of the age profile of those members in respect of whom investments will be held in illiquid assets;

• (ii) an explanation of whether investments will be held directly in illiquid assets, or via a collective investment scheme;

• (iii) an explanation of the types of illiquid assets in which investments will be held, and

• (iv) an explanation of why the trustees or managers have a policy of investing in illiquid assets including their assessment of the advantages to members of investing in illiquid assets, when compared to investments in other classes of assets;

• (c) where those investments will not include illiquid assets, an explanation of why the trustees or managers have a policy of not investing in illiquid assets, and

• (d) an explanation of whether the trustees have any plans to invest in illiquid assets or increase their investment in illiquid assets, in the future.

• (2) The trustees or managers must review both the default strategy and the performance of the default arrangement—

• (a) at least every three years, and

• (b) without delay after any significant change in—

• (i) investment policy, or

• (ii) the demographic profile of relevant members.

• (3) The trustees or managers must, in particular, review the extent to which the return on investments relating to the default arrangement (after deduction of any charges and transaction costs relating to those investments) is consistent with the aims and objectives of the trustees or managers in respect of the default arrangement.

• (4) The trustees or managers must revise the statement prepared in accordance with paragraph (1) after every review unless they decide that no action is needed as a result of the review in paragraph (3).

• (5) For the purposes of this regulation and regulation 4A, a person is a relevant member or a relevant beneficiary if assets relating to that member or, as the case may be, that beneficiary (as defined in regulation 4(11)), are invested in the default arrangement.

• (6) For the purposes of this regulation, “transaction costs” has the meaning given in regulation 2(1) of the Occupational Pension Schemes (Charges and Governance) Regulations (Northern Ireland) 2015.

• (6A) For the purposes of this regulation, “illiquid assets” means assets of a type which cannot easily or quickly be sold or exchanged for cash and, where assets are invested in a collective investment scheme, includes any such assets held by the collective investment scheme.

• (7) This regulation does not apply to a scheme or a section of a scheme which is a collective money purchase scheme for the purposes of Part 2 of the Pension Schemes Act 2021 (collective money purchase benefits: Northern Ireland).

Application of regulation 2 in relation to multi-employer schemes

Investment by trustees

Investments relating to a default arrangement

4A

Where regulation 4(2) does not apply to a relevant scheme, the assets allocated to the scheme’s default arrangement must be invested—

• (a) in the best interests of relevant members and relevant beneficiaries, and

• (b) in the case of a potential conflict of interest, in the sole interest of those members and beneficiaries.

Borrowing and guarantees by trustees

Disapplication of Article 35 and of regulations 2 and 3 in respect of certain schemes

Disapplication of regulations 4 and 5 in respect of schemes with fewer than 100 members

Modification of regulation 2 in respect of wholly-insured schemes

Partial disapplication of regulation 4 in respect of schemes being wound up

Connected and associated persons

Prescription of investments as employer-related investments

Restrictions on employer-related investments

Investments to which restrictions do not apply

Transitional provisions

Loans that become employer-related

Deposits

Multi-employer schemes

Scheme undertaking cross-border activities

Revocations

Authorised Master Trust schemes

16A

• (1) Subject to paragraphs (2) and (3), this regulation applies to a scheme which is—

• (a) a Master Trust scheme to which Part 1 of the 2021 Act applies (and where that scheme provides money purchase benefits in conjunction with other benefits, references to that scheme are to the scheme only to the extent that it provides money purchase benefits);

• (b) authorised in accordance with section 5(4)(a) of the 2021 Act (decision on application), and

• (c) used by 500 or more employers.

• (2) This regulation continues to apply to a scheme during any period of less than two years in which the number of employers using the scheme falls below 500.

• (3) If a scheme to which this regulation applies ceases to be authorised in accordance with section 5(4)(a) of the 2021 Act, this regulation continues to apply to the scheme until the date which is two years after the date on which a decision to withdraw authorisation from the scheme becomes final in accordance with section 35 of the 2021 Act.

• (4) For the purposes of determining whether the scheme complies with regulation 12(2), “employer-related investments” means—

• (a) shares or other securities issued by a relevant person;

• (b) land which is occupied or used by, or subject to a lease in favour of, a relevant person;

• (c) property (other than land) which is used for the purposes of any business carried on by a relevant person;

• (d) loans to a relevant person;

• (e) any guarantee of, or security given to secure, obligations of a relevant person, and for the purposes of Article 40 and these Regulations a guarantee or security given by the trustees or managers shall be regarded as an investment of resources of the scheme equal to the amount of the obligations guaranteed or secured;

• (f) any loan arrangement entered into with any person whereby the trustees’ or managers’ right to or expectation of repayment depends on the actions or situation of a relevant person, unless it was not the trustees’ or managers’ purpose in entering into the arrangement to provide financial assistance to the relevant person;

• (g) the proportion attributable to the scheme’s resources (whether directly or through any intervening collective investment scheme) of any investments which—

• (i) have been made by the operator of any collective investment scheme, and

• (ii) would, if they had been made by the scheme, have met any of the descriptions set out in sub-paragraphs (a) to (f);

• (h) where any of a scheme’s resources are invested in an insurance policy that meets the description set out in regulation 11(d), the proportion of the scheme’s resources invested in that policy which is the same proportion as B is of A where—

• A represents all the assets of the insurer held in the fund, and

• B represents that part of A which would, if invested by the scheme, have met any of the descriptions set out in sub-paragraphs (a) to (f), and

• (i) where any of a scheme’s resources are invested in an insurance policy that meets the description set out in regulation 11(e), any investments made by the insurer from the premiums or other consideration or monies described in regulation 11(e), which would have met any of the descriptions set out in sub-paragraphs (a) to (f) if they had been made by the scheme.

• (5) For the purposes of determining whether the scheme complies with regulation 12(2A) and for the purposes of regulation 12(2B), “employer-related loan” means—

• (a) a loan to a relevant person (including one which falls within this description by virtue of Article 40(3));

• (b) a security described in paragraph (4)(a) which is an instrument creating or acknowledging indebtedness, except any such security which is listed on a recognised stock exchange;

• (c) an employer-related investment prescribed as such by regulation 11(b), which meets the description set out in paragraph (4)(e), and

• (d) an employer-related investment prescribed as such by regulation 11(c), which meets the description set out in paragraph (4)(f).

• (6) For the purposes of regulation 12(3), “employer-related investment” has the meaning set out in paragraph (4).

• (7) In regulation 13(10), “employer-related investments” has the meaning set out in paragraph (4).

• (8) Regulation 16(5)(a) applies with the omission of “and in any event must not exceed 20 per cent. of the current market value of the scheme”.

• (9) If an investment falls within the definition of “employer-related investments” set out in paragraph (4) or the definition of “employer-related loan” set out in paragraph (5) on or after 1st October 2022, other than as a result of new investment by the scheme, the investment may be retained, or left undischarged, until whichever is the later of—

• (a) the date falling two years after the date on which it first fell within the definition set out in paragraph (4) or (5), and

• (b) where repayment cannot by virtue of contractual or other legal obligations be required, or where disinvestment cannot be effected before the date mentioned in sub-paragraph (a), the earliest date on which repayment can be enforced or disinvestment effected.

• (10) Paragraph (9) does not apply in respect of any sum regarded as a loan under Article 40(3).

• (11) For the purposes of this regulation—

• “the 2021 Act” means the Pension Schemes Act (Northern Ireland) 2021;

• “active member” has the meaning set out in Article 121(1);

• “employer” means a person who employs or engages persons who are, or are entitled to become, members of the scheme, including at least one active member of the scheme;

• “money purchase benefits” has the meaning set out in section 176(1) of the Pension Schemes Act;

• “relevant person” means a scheme funder, a scheme strategist or any person who is connected with, or an associate of, a scheme funder or a scheme strategist;

• “scheme funder” and “scheme strategist” have the meanings set out in section 39 of the 2021 Act;

• “securities” has the meaning set out in Article 40(2A) (restriction on employer-related investments) and must be read in accordance with Article 40(2B).

Schemes to which regulation 16A ceases to apply

16B

To the extent that—

• (a) an investment becomes an employer-related loan or an employer-related investment as a result of regulation 16A ceasing to apply to a scheme, and

• (b) repayment or disinvestment cannot be effected immediately by virtue of contractual or other legal obligations,

the investment may be retained until the earliest date on which, having regard to contractual and other legal obligations, repayment or disinvestment can be effected.

Scheme undertaking cross-border activities

Revocations

Additional requirements in relation to qualifying collective money purchase schemes

2B

• (1) The trustees of a qualifying collective money purchase scheme must ensure that the statement of investment principles prepared under Article 35 covers their policy in relation to investment in illiquid assets with respect to assets held for the purposes of the qualifying collective money purchase scheme.

• (2) For the purposes of this regulation, their policy in relation to investment in illiquid assets must include—

• (a) a statement as to whether or not investments held for the purposes of the qualifying collective money purchase scheme will include illiquid assets;

• (b) where those investments will include illiquid assets—

• (i) a description of the age profile of those members in respect of whom investments will be held in illiquid assets;

• (ii) an explanation of whether investments will be held in respect of the qualifying collective money purchase scheme directly in illiquid assets, or via a collective investment scheme;

• (iii) an explanation of the types of illiquid assets in which investments will be held, and

• (iv) an explanation of why the trustees have a policy of investing in illiquid assets, including their assessment of the advantages to members of the qualifying collective money purchase scheme of investing in illiquid assets, when compared to investments in other classes of assets;

• (c) where those investments will not include illiquid assets, an explanation of why the trustees have a policy of not investing in illiquid assets, and

• (d) an explanation of whether the trustees have any plans to invest in illiquid assets or increase their investment in illiquid assets for the purposes of the qualifying collective money purchase scheme, in the future.

• (3) For the purposes of this regulation—

• “illiquid assets” has the same meaning as in regulation 2A(6A);

• “qualifying collective money purchase scheme” has the meaning given in regulation 2(1) of the Occupational Pension Schemes (Charges and Governance) Regulations (Northern Ireland) 2015.

Application of regulation 2 in relation to multi-employer schemes

Investment by trustees

Investments relating to a default arrangement

Borrowing and guarantees by trustees

Disapplication of Article 35 and of regulations 2 , 2B and 3 in respect of certain schemes

Disapplication of regulations 4 and 5 in respect of schemes with fewer than 100 members

Modification of regulation 2 in respect of wholly-insured schemes

Partial disapplication of regulation 4 in respect of schemes being wound up

Connected and associated persons

Prescription of investments as employer-related investments

Restrictions on employer-related investments

Investments to which restrictions do not apply

Transitional provisions

Loans that become employer-related

Deposits

Multi-employer schemes

Authorised Master Trust schemes

Schemes to which regulation 16A ceases to apply

Scheme undertaking cross-border activities

Revocations