The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations (Northern Ireland) 2010

• (b) 8% of the amount of the relevant jobholder's pensionable earnings in the certification period, being earnings which are equal to or more than the basic pay of that jobholder.

• (6) The third set of requirements is that—

• (a) all of the benefits that may be provided to the relevant jobholder under the scheme are money purchase benefits;

• (b) there is, in relation to the relevant jobholder, an agreement between the provider of the scheme and the employer under which—

• (i) the employer must pay contributions in respect of the jobholder, and

• (ii) the employer's contribution must be equal to or more than 3% of the amount of the jobholder's earnings in the certification period;

• (c) if there is a shortfall, there is an agreement between the provider of the scheme and the relevant jobholder which provides that the jobholder must pay contributions which are equal to or more than the shortfall, and

• (d) there are direct payment arrangements between the relevant jobholder and the employer within the meaning of section 107A of the 1993 Act.

• (7) In paragraph (6)(c) “shortfall” means the difference (if any) between—

• (a) the employer's contributions in respect of the relevant jobholder under the agreement referred to in paragraph (6)(b), and

• (b) 7% of the amount of the relevant jobholder's earnings in the certification period.

• (8) Subject to paragraph (9), for the purposes of paragraphs (1) to (7), a scheme as referred to in paragraph (1) may satisfy the first, second or third set of requirements even though under the agreements referred to in paragraphs (2) to (7) there is an upper limit (however expressed) to the amount of contributions that may be paid by the employer or the relevant jobholder or both of those persons.

• (9) The upper limit must not result in the payment of contributions by the employer, or by the employer and the relevant jobholder, that are less than those required by the relevant quality requirement.

• (10) For the purposes of paragraphs (2) to (9), a reference to “the relevant jobholder” is a reference to each of the relevant jobholders.

Alternative requirements for a hybrid scheme

32G

• (1) Subject to paragraph (2), in relation to a hybrid scheme to the extent to which requirements within section 24(1)(a) (quality requirement: UK hybrid schemes) apply or which is referred to in regulation 32J(2), the prescribed alternative requirement is any of the sets of requirements set out in regulation 32E in relation to a money purchase scheme or, in respect of any jobholders accruing rights to benefits under a collective money purchase scheme, the set of requirements set out in regulation 32EA.

• (2) Where, by virtue of a rule made under section 24(2) to (4), regulation 43(2) to (4) applies in relation to a hybrid scheme as referred to in paragraph (1), the prescribed alternative requirement is any of the sets of requirements set out in regulation 32E in relation to a money purchase scheme, as modified by regulation 43 but as if regulation 43 were modified as follows—

• (a) in paragraph (2) for “paragraph (a) quality requirements” there were substituted “ elements of the alternative requirement ”;

• (b) for paragraph (3)(a) there were substituted —

(a) all of the elements of the alternative requirement are met apart from either or both of the employer's contribution requirement (“requirement X”) and the total contribution requirement;

• (c) for paragraph (4)(a) there were substituted —

(a) the extent to which requirement X is met as a proportion of the minimum rate of employer's contribution specified in regulation 32E(2)(b), (3)(a)(ii) or (4)(b), as the case may be

, and

• (d) after paragraph (6) there were added—

(7) For the purposes of paragraphs (2) to (4)— - “the alternative requirement” means any of the sets of requirements set out in regulation 32E in relation to a money purchase scheme; - “the employer's contribution requirement” means the requirement set out in regulation 32E(2)(b), (3)(a)(ii) or (4)(b), as the case may be; - “the total contribution requirement” means the requirement set out in regulation 32E(2)(c), (3)(a)(iii) or (4)(c), as the case may be.

Scheme not to be treated as satisfying the relevant quality requirement in certain circumstances

32H

• (1) Where—

• (a) a certificate has been given in relation to an employer and the employer's relevant jobholders with respect to a relevant quality requirement or an alternative requirement under regulation 32E, 32F or 32G;

• (b) the Regulator is of the view referred to in paragraph (3), and

• (c) one of the conditions referred to in paragraph (4) is, or both of them are, satisfied,

the Regulator may give to the employer a notice as referred to in paragraph (5).

• (1A) Where—

• (a) a certificate has been given in relation to an employer and its relevant jobholders with respect to an alternative quality requirement under regulation 32EA;

• (b) the Regulator is of the view that, when the certificate was given, there were not reasonable grounds for a person to be of the opinion that the scheme was able to satisfy the requirement referred to in regulation 32EA(2), and

• (c) in relation to all or any part of the certification period, the requirement referred to in regulation 32EA(2) was not met,

the Regulator may give to the employer a notice as referred to in paragraph (8A).

• (2) Subject to paragraphs (8) and (9), where the Regulator gives a notice as referred to in paragraph (5) or (8A) and a requirement of the notice is not complied with within the time specified in the notice, the scheme is not to be treated by virtue of regulation 32A as having satisfied the relevant quality requirement in relation to the relevant jobholders.

• (3) The view referred to is that, when the certificate was given, there were not reasonable grounds for a person to be of the opinion that the scheme was able to satisfy the relevant quality requirement or the applicable alternative requirement, as the case may be, with respect to one or more of the relevant jobholders throughout the certification period.

• (4) The conditions referred to are that, in relation to all or any part of the certification period and one or more of the relevant jobholders—

• (a) a scheme shortfall has occurred;

• (b) where the alternative requirement in regulation 32E(3) (including as applied by regulation 32G) or 32F(4) applied, the condition referred to in regulation 32E(3)(b) or 32F(4)(d) was not met.

• (5) The notice referred to is a notice with respect to one or more of the relevant jobholders (not necessarily all of the relevant jobholders referred to in paragraph (4)) and the relevant payment period, requiring the employer, within the period specified in the notice, to pay to the trustees, managers or provider of the scheme—

• (a) subject to sub-paragraph (b), where paragraph (4)(a) applies, the scheme shortfall, or

• (b) where paragraph (4)(b) applies (whether or not paragraph (4)(a) also applies), the shortfall between the contributions that were required to be paid by the employer and those relevant jobholders under the requirements of the scheme or the agreements referred to in regulation 32F(4), as the case may be, and the contributions that were required to be paid by those persons under the first set of requirements in regulation 32E or 32F respectively.

• (6) A notice as referred to in paragraph (5) may also require the employer, within a period specified in the notice, to amend the certificate, under regulation 32B, so that the certification period ends on a specified day, being a day before the last day of the certification period but not before the last day of the relevant payment period.

• (7) A notice as referred to in paragraph (5) must be copied to—

• (a) in the case of a money purchase or hybrid scheme, the trustees or managers of the scheme, or

• (b) in the case of a personal pension scheme, the provider of the scheme.

• (8) Where a notice as referred to in paragraph (5) has been given and, under regulation 32B, the employer amends the certificate so that the certification period ends before the last day of the relevant payment period—

• (a) the relevant payment period shall be treated as if it ended on the last day of the new certification period;

• (b) the employer must, within a period of 2 weeks beginning with the day on which the certificate was amended, notify the Regulator in writing of the amendment, and

• (c) the Regulator may decide to alter the period, as set out in the notice as referred to in paragraph (5), within which the employer must pay a shortfall of contributions as referred to in that paragraph.

• (8A) The notice referred to is a notice requiring the employer, within the period specified in the notice, to pay to the trustees or managers of the scheme the shortfall between the contributions that are required to be paid by the employer and the relevant jobholders under the scheme, and the contributions that were required to be paid to meet the requirement in regulation 32EA(2) during the certification period.

• (8B) A notice as referred to in paragraph (8A) may also require the employer, within a period specified in the notice, to amend the certificate, under regulation 32B, so that the certification period ends on a specified day, being a day before the last day of the certification period but not before the last day of the relevant payment period.

• (8C) A notice as referred to in paragraph (8A) must be copied to the trustees or managers of the scheme.

• (8D) Where a notice as referred to in paragraph (8A) has been given and the employer amends the certificate under regulation 32B(5) so that the certification period ends before the last day of the relevant payment period—

• (a) the relevant payment period shall be treated as though it ended on the last day of the new certification period;

• (b) the employer must, within a period of 2 weeks beginning with the day on which the certificate was amended, notify the Regulator in writing of the amendment, and

• (c) the Regulator may decide to alter the period, as set out in the notice as referred to in paragraph (8A), within which the employer must pay a shortfall of contributions as referred to in that paragraph.

• (9) Where the Regulator decides under paragraph (8)(c) or (8D)(c) to alter the period within which the employer must pay a shortfall, the Regulator must give a notice to the employer informing the employer of the new period within which the shortfall must be paid.

• (10) For the purposes of this regulation—

• “the relevant payment period” means a period, set out in the notice as referred to in paragraph (5) or (8A), that constitutes all or part of the certification period;

• “scheme shortfall” means the shortfall between the contributions that are required to be paid by the employer and a relevant jobholder under the scheme, contribution agreements or like agreements referred to in regulation 32F, as the case may be, and the contributions that are required to be paid by those persons under the relevant quality requirement or the applicable alternative requirement (ignoring the requirements in regulations 32E(3)(b) and 32F(4)(d)), as the case may be.

Contributions under alternative requirements during transitional periods

32I

• (1) During the first transitional period referred to in section 29(1) (transitional periods for money purchase and personal pension schemes) and the second transitional period referred to in section 29(3)... there are substituted for the percentages referred to in the provisions mentioned in Column 1 of the Table the percentage shown in the corresponding entry for the transitional period in question.

Table
Provision of Regulations	1st Transitional Period	2nd Transitional Period
Regulations 32E(2)(b) and 32F(2)(b)(ii)	2%	3%
(first set of requirements – employer)
Regulations 32E(2)(c) and 32F(3)(b)	3%	6%
(first set of requirements – total contributions)
Regulations 32E(3)(a)(ii) and 32F(4)(b)(ii)	1%	2%
(second set of requirements – employer)
Regulations 32E(3)(a)(iii) and 32F(5)(b)	2%	5%
(second set of requirements – total contributions)
Regulations 32E(4)(b) and 32F(6)(b)(ii)	1%	2%
(third set of requirements – employer)
Regulations 32E(4)(c) and 32F(7)(b)	2%	5%
(third set of requirements – total contributions)

Pension schemes based in an EEA state other than the United Kingdom

32J

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation

32K

• (1) In this Part—

• “actuary” means an actuary appointed by the scheme or the employer;

• “alternative requirement” means an alternative requirement prescribed by regulation 32E, 32EA, 32F or 32G, including regulations 32E and 32F as modified by regulation 32I;

• “basic pay” means the gross earnings of the jobholder from the jobholder's employment by the employer, disregarding the gross amount of—any commission, bonuses, overtime or similar payments;any shift premium pay, andany reasonable allowance with respect to—any duty of the jobholder, such as a duty in connection with the role of fire or bomb warden, that is ancillary to the main duties of the jobholder's employment;the cost of relocation of the jobholder to a different place of work;in a case not covered by sub-paragraph (ii), the purchase, lease or maintenance of a vehicle;in a case not covered by sub-paragraph (ii) or (iii), the purchase, lease or maintenance of an item;in a case not covered by sub-paragraph (ii), (iii) or (iv), the delivery of a service to the jobholder;

• “certification period” means the period for which a certificate is in force;

• “collective money purchase scheme” has the meaning set out in section 52(2) of the Pension Schemes Act 2021;

• “earnings” has the same meaning as in section 13(3) (qualifying earnings);

• “pensionable earnings” means the gross earnings of the jobholder on which contributions are payable to the pension scheme in question by the employer or the jobholder;

• “shift premium pay” means, where the employer applies different rates of pay to different periods of time for which the jobholder works within a certification period, the difference between the earnings that result from the application of the different rates of pay to the periods to which each of them respectively applies and the earnings that would result from the application of the lowest of the different rates of pay to the total time worked during the certification period.

• (2) In regulations 32E to 32J and this regulation “certificate” means a certificate that is given in accordance with regulations 32B to 32D.

Requirement for satisfying the test scheme under section 23(2)(b)

39A

• (1) For the purposes of section 23(6) (test scheme), the requirement relating to the sum of money is specified in paragraph (2) in the case of a final salary lump sum test scheme and paragraph (3) in the case of an average salary lump sum test scheme.

• (2) The requirement for a final salary lump sum test scheme is that the sum of money to be made available for the provision of benefits to a member amounts to 16% of final pensionable pay, multiplied by the number of years of pensionable service up to a maximum of 40 years.

• (3) The requirement for an average salary lump sum test scheme is that either of the requirements specified in paragraph (4) or (5) is met.

• (4) The requirement in this paragraph is that the sum of money to be made available for the provision of benefits to a member amounts to 16% of average annual qualifying earnings during pensionable service multiplied by the number of years of pensionable service up to a maximum of 40 years.

• (5) The requirement in this paragraph is that the sum of money to be made available for the provision of benefits to a member amounts to the sum of—

• (a) 8% of average annual qualifying earnings during pensionable service multiplied by the number of years of pensionable service up to a maximum of 40 years, plus

• (b) during any period in which a member is deferred, an amount equal to an annual increase on accrued rights at 3.5% above any increase that is required by virtue of regulation 37(2)(a).

• (6) For the purposes of paragraphs (4) and (5), average annual qualifying earnings are to be calculated on the basis that each year’s qualifying earnings are revalued during pensionable service at—

• (a) the minimum rate specified in regulation 36(4), where paragraph (4) applies, and

• (b) 3.5% above the minimum rate specified in regulation 36(4), where paragraph (5) applies.

• (7) In this regulation—

• “average salary lump sum test scheme” means a test scheme falling within section 23(2)(b) under which the sum of money is determined by reference to average qualifying earnings over the period of pensionable service;

• “final pensionable pay” means average annual qualifying earnings in the last 3 tax years preceding the end of pensionable service;

• “final salary lump sum test scheme” means a test scheme falling within section 23(2)(b) under which the sum of money is determined by reference to final pensionable pay.

Prescribed requirements for non-UK qualifying schemes

Meaning of “provider”

47A

For the purposes of paragraph (b) of the definition of “provider” in section 78 (interpretation of Part), a provider is a person whose normal business includes the provision of personal pensions.

SCHEDULE 2 — Information

1

A statement that the jobholder has been or will be enrolled into a pension scheme.

2

The jobholder’s automatic enrolment date, automatic re-enrolment date or enrolment date, as the case may be or, for a jobholder to whom regulation 28 or 29 applies, the day or date mentioned in regulation 6 as modified by regulation 28 or 29, as the case may be.

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

• (1) The value of any contributions payable to the scheme by the employer and the jobholder in any applicable pay reference period.

• (2) The information to be given to the jobholder under sub-paragraph (1) includes information on any change in the value of any contributions payable to the scheme by the employer or jobholder in any applicable pay reference period which will occur as the result of any changes to contributions brought about by the transitional periods for money purchase and personal pension schemes under section 29.

• (3) The “value” of contributions may be expressed as a fixed amount or a percentage of any qualifying earnings or pensionable pay due to the jobholder in any applicable pay reference period.

5

A statement that any contributions payable to the scheme by the jobholder have been or will be deducted from any qualifying earnings or pensionable pay due to the jobholder.

6

Confirmation as to whether tax relief is or will be given on employee contributions.

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

A statement that the jobholder has the right to opt out of the scheme during the opt out period.

9

A statement indicating the start and end dates of the opt out period applicable to the jobholder if that information is known to the employer but if not, a statement that the opt out period is the period determined in accordance with regulation 9(2) or (3).

10

Where the opt out notice may be obtained.

11

A statement that opting out means that the jobholder shall be treated for all purposes as not having become an active member of the scheme on that occasion.

12

A statement that after a valid opt out notice is given to the employer in accordance with regulation 9(2) or (3) any contributions paid by the jobholder shall be refunded to the jobholder by the employer.

13

A statement that where the jobholder opts out the jobholder may opt in, in which case the employer shall be required to arrange for that jobholder to become an active member of an automatic enrolment scheme once in any 12 month period.

14

A statement that after the opt out period the jobholder may cease to make contributions in accordance with scheme rules.

15

A statement that a jobholder who opts out or who ceases active membership of the scheme shall normally be automatically re-enrolled into an automatic enrolment scheme by the employer in accordance with regulations made under section 5.

16

A statement that the jobholder may, by giving written notice to the employer, require the employer to make arrangements for the jobholder to become an active member of an automatic enrolment scheme and that the jobholder shall be entitled to employer’s contributions.

17

A statement that the worker (W) may, where W is working or ordinarily works in Northern Ireland and is aged at least 16 and under 75 and is not a member of a pension scheme that satisfies the requirements of section 9 (workers without qualifying earnings), by giving written notice to the employer, require the employer to make arrangements for W to become an active member of such a pension scheme.

18

A statement that by giving written notice to the employer, the worker who is aged at least 16 and under 75 and—

• (a) who earns more than the lower qualifying earnings limit as specified in section 13(1)(a) (and the amount must be specified in the statement) and is not an active member of a qualifying scheme, may require the employer to arrange for that worker to become an active member of an automatic enrolment scheme and will be entitled to employer’s contributions, or

• (b) who earns no more than the lower qualifying earnings limit as specified in section 13(1)(a) (and the amount must be specified in the statement) and is not a member of a pension scheme that satisfies the requirements of section 9 (workers without qualifying earnings), may require the employer to arrange for that worker to become an active member of such a pension scheme but will not be entitled to employer’s contributions.

19

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20

A statement that the employer has deferred automatic enrolment until the deferral date (and the date must be given).

21

A statement that the employer shall automatically enrol the worker into an automatic enrolment scheme if, on the deferral date, the worker is aged 22 or more but less than state pension age, the worker is working or ordinarily works in Northern Ireland, earnings of more than the amount specified in section 3(1)(c) (and the amount must be given) are payable to the worker and the worker is not already an active member of a qualifying scheme.

22

A statement that the employer intends to defer automatic enrolment in respect of that jobholder until the end of the transitional period for defined benefit and hybrid schemes.

23

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24

A statement that a written notice from the worker must be signed by the worker or, if it is given by means of an electronic communication, must include a statement that the worker personally submitted the notice.

25

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART 1A — Exemption and exceptions

Exemption of European employers

5A

Sections 2(1), 3(2), 5(2), 7(3), 9(2) and 54 (employer’s obligations regarding membership of a qualifying scheme) do not apply in relation to a person’s employment of an individual in relation to whom the person is a European employer.

Appropriate age

Lump sum test scheme requirements

WHAT YOU NEED TO KNOW

Your employer cannot ask you or force you to opt out.

If you are asked or forced to opt out you can tell the Pensions Regulator – see www.thepensionsregulator.gov.uk.

If you change your mind you may be able to opt back in – write to your employer if you want to do this.

If you stay opted out your employer will normally put you back into pension saving in around 3 years.

If you change job your new employer will normally put you back into pension saving straight away.

If you have another job your other employer might also put you into pension saving, now or in the future. This notice only opts you out of pension saving with the employer you name above. A separate notice must be filled out and given to any other employer you work for if you wish to opt out of that pension saving as well.

Notice of termination of employment

5B

• (1) This regulation applies, subject to paragraph (3), where notice of termination of a worker’s employment is given before the end of the period of 6 weeks beginning with the automatic enrolment date or automatic re-enrolment date, as the case may be.

• (2) Where this regulation applies—

• (a) sections 3(2) (automatic enrolment) and 5(2) (automatic re-enrolment) are to be read as if for “must” there were substituted “may”;

• (b) section 7(3) (jobholder’s right to opt in) is to be read as if there were inserted at the end “unless notice of termination of employment of that jobholder has been given (and the jobholder and the employer have not agreed that such notice is withdrawn)”;

• (c) section 9(2) (workers without qualifying earnings) is to be read as if there were inserted at the end “unless notice of termination of employment of that worker has been given (and the worker and the employer have not agreed that such notice is withdrawn)”.

• (3) Where a jobholder and employer agree that the notice of termination of the jobholder’s employment referred to in this regulation is withdrawn, paragraphs (1) and (2) cease to apply on the date of that agreement and, subject to paragraph (4), for the purposes of sections 3(2) and 5(2), as the case may be—

• (a) the automatic enrolment date, or

• (b) the automatic re-enrolment date,

is the date of that agreement.

• (4) Where, on the date referred to in paragraph (3), section 3 or 5, as the case may be, does not apply to the jobholder, the next date on which one of those sections applies to that jobholder is to be taken as the automatic enrolment date or automatic re-enrolment date, as the case may be, in relation to that jobholder.

Former members

5C

• (1) This regulation applies where a person (P) is a jobholder and—

• (a) P ceased to be an active member of a qualifying scheme because of an action or omission by P or an action by the employer at P’s request, or

• (b) at a time when P was a worker, but not a jobholder, ceased to be an active member of a scheme which would have been a qualifying scheme in relation to P, had P been a jobholder, because of an action or omission by P or an action by the employer at P’s request.

• (2) This regulation also applies where a jobholder gives notice under section 8 (jobholder’s right to opt out).

• (3) Where this regulation applies in relation to the jobholder mentioned in paragraph (1) or (2)—

• (a) during the period of 12 months beginning with the date that jobholder ceased to be an active member or gives notice, sections 3(2) (automatic enrolment) and 5(2) (automatic re-enrolment) are to be read as if for “must” there were substituted “may”, and

• (b) after the expiry of that period, section 3(2) does not apply.

Tax protection

5D

• (1) This regulation applies where an employer has reasonable grounds to believe that one of the following provisions applies in relation to a jobholder—

• (a) paragraph 7 or 12 of Schedule 36 to the Finance Act 2004 (pension schemes etc: transitional provisions and savings);

• (b) paragraph 14 of Schedule 18 to the Finance Act 2011 (lifetime allowance charge);

• (c) paragraph 1 of Schedule 22 to the Finance Act 2013 (transitional provision relating to reduction in standard lifetime allowance etc);

• (d) paragraph 1 of Schedule 6 to the Finance Act 2014 (transitional provision relating to new standard lifetime allowance for the tax year 2014-15 etc);

• (e) paragraph 1 or 9 of Schedule 4 to the Finance Act 2016 (pensions: lifetime allowance: transitional provision).

• (2) Where this regulation applies, in relation to the jobholder referred to in paragraph (1), sections 3(2) (automatic enrolment) and 5(2) (automatic re-enrolment) are to be read as if for “must” there were substituted “may”.

Winding-up lump sum

5E

• (1) This regulation applies to a worker where—

• (a) that worker has received a winding-up lump sum as defined in paragraph 10 of Schedule 29 to the Finance Act 2004 (registered pension schemes: authorised lump sums - supplementary);

• (b) at the time the winding-up lump sum was paid, the worker was employed by the person mentioned in paragraph 10(1)(c) of Schedule 29 to the Finance Act 2004, and

• (c) during the period of 12 months beginning with the date on which the winding-up lump sum was paid—

• (i) the worker has ceased to be employed and been re-employed by that person, and

• (ii) after re-employment, either section 3(1) (automatic enrolment) or 5(1A) or (1B) (automatic re-enrolment) of the Act applies to the worker.

• (2) In relation to the worker to whom this regulation applies—

• (a) during the period of 12 months beginning with the date on which the winding-up lump sum was paid—

• (i) sections 3(2) (automatic enrolment) and 5(2) (automatic re-enrolment) are to be read as if for “must” there were substituted “may”, and

• (ii) sections 7 (jobholder’s right to opt in) and 9 (workers without qualifying earnings) do not apply, and

• (b) after the expiry of that period, section 3(2) does not apply.

Effect of exercise of discretion

5F

• (1) This regulation applies to an employer who—

• (a) exercises a discretion under section 3(2) (automatic enrolment) or 5(2) (automatic re-enrolment), as conferred by regulation 5B, 5C, 5D , 5E, 5EA or 5EB, so that the prescribed arrangements are made whereby the jobholder will become an active member of an automatic enrolment scheme;

• (b) makes the arrangements referred to in section 7(3) (jobholder’s right to opt in) for a jobholder, unless notice of termination of employment of that jobholder has been given (and the jobholder and the employer have not agreed that such notice is withdrawn), or

• (c) makes the arrangements referred to in section 9(2) (workers without qualifying earnings) for a worker, unless notice of termination of employment of that worker has been given (and the worker and the employer have not agreed that such notice is withdrawn).

• (2) In relation to the employer to whom this regulation applies, the employer is to be treated for all purposes as if the employer were acting under the duty which would apply by virtue of section 3(2) or 5(2) or were required to make the arrangements in section 7(3) or 9(2) but for the provisions of this Part.

Information to be given to workers

PART 7B — Alternative quality requirements: UK defined benefits schemes

Alternative quality requirements for UK defined benefits schemes

32L

• (1) A defined benefits scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if section 23A(1)(a) (alternative quality requirements for UK defined benefits schemes) is satisfied and for the purpose of that section, the scheme is of a prescribed description if the conditions in paragraph (2) are satisfied.

• (2) The conditions referred to in paragraph (1) are—

• (a) the benefits provided to the member are calculated by reference to factors which include the contributions made to the scheme by or on behalf of or in respect of the member;

• (b) the contributions referred to in sub-paragraph (a) are converted in accordance with the scheme rules, as soon as reasonably practicable and no later than one month after their receipt into the scheme, into a right to an income for life;

• (c) the benefits payable to the member under the scheme are payable no later than the member’s pensionable age;

• (d) following any conversion referred to in sub-paragraph (b), the amount of the member’s benefits under the scheme cannot be reduced unless this is at the member’s request;

• (e) following any valuation of the scheme’s assets and determination of its liabilities, the trustees or managers of the scheme have absolute discretion to use any excess assets to increase the benefits of the members in relation to whose contributions the excess assets may be attributed, and

• (f) where a member’s benefits are increased using the excess assets referred to in sub-paragraph (e), the amount of those benefits cannot be reduced unless this is at the member’s request.

32M

• (1) A defined benefits scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if section 23A(1)(b) (alternative quality requirements for UK defined benefits schemes) is satisfied.

• (2) Terms defined for the purpose of section 23A have the meanings prescribed in the following paragraphs.

• (3) Subject to paragraphs (4) , (5A) and (6), the relevant members are the active members of the defined benefits scheme of which the jobholder is a member.

• (4) Subject to paragraph (5A), where there is or was, as the case may be, a material difference in the cost of providing the benefits accruing for different groups of relevant members over the relevant period by taking into account the criteria under which members accrue or accrued benefits including—

• (a) the rate at which benefits accrue or accrued;

• (b) the provision of survivor’s benefits;

• (c) the normal pension age;

• (d) the definition of “pensionable earnings” used by the scheme;

• (e) the method of revaluation provided for by Schedule 2 to the 1993 Act (methods of revaluing accrued pension benefits);

• (f) the method of an annual increase in the rate of pension provided for under Article 51 of the 1995 Order (annual increase in rate of pension) or under the scheme rules;

• (g) the maximum pensionable service period;

• (h) the calculation of service, and

• (i) the terms for retirement before normal pension age,

the relevant members are the active members of each such group.

• (5) For the purposes of paragraph (4), whether a difference in cost is a material difference is to be determined by the actuary.

• (5A) Subject to paragraph (5C), where the conditions in paragraph (5B) are met, the employer of the jobholder may choose, notwithstanding paragraph (4), that the relevant members are the members of the scheme who were active members and in contracted-out employment on the effective date of the most recent written report from an actuary.

• (5B) The conditions to be met for the purposes of paragraph (5A) are—

• (a) the jobholder was in contracted-out employment on 5th April 2016, and

• (b) the rules of the scheme of which the jobholder is a member have not been amended, on or after the coming into operation of these Regulations, in any way which would mean that the rules of the scheme would not satisfy the contracting-out requirements if those requirements were still in operation.

• (5C) Paragraph (5A) applies until the earlier of—

• (a) the date the first written report determining whether there is, or was, a material difference in the cost of providing the benefits accruing for different groups of relevant members over the relevant period, taking into account the criteria mentioned in paragraph (4), is signed by an actuary after 5th April 2016;

• (b) 5th April 2019.

• (5D) For the purposes of paragraph (5A), the effective date of the most recent written report is the date by reference to which the information in that report is stated.

• (6) Subject to paragraphs (4) and (5A), in the case of a multi-employer scheme, the employer of the jobholder may choose that the relevant members are the active members who are also employed by that employer.

• (7) Subject to paragraph (8), the relevant period is—

• (a) where the most recent written report signed (including by way of an electronic signature (within the meaning given by section 7(2) of the Electronic Communications Act 2000) by an actuary provides details of the cost of accruals by reference to a period which begins later than the date of that report, that period, and

• (b) in any other case, any period of 12 months.

• (8) Where, after the date of the report referred to in paragraph (7)(a) or the period referred to in paragraph (7)(b) begins (whether or not it has ended), a change is made to the benefits provided to a relevant member, the relevant period is a period of 12 months commencing with the day on which that change takes effect.

• (9) Relevant earnings are the earnings which the scheme uses to determine pensionable earnings provided that they are equal to or more than the relevant member’s—

• (a) qualifying earnings;

• (b) basic pay;

• (c) ... basic pay and, taking all the relevant members together, the pensionable earnings of those members constitute at least 85% of the earnings of those members in the relevant period;

• (d) earnings, or

• (e) basic pay above—

• (i) the amount of the lower earnings limit specified for the purposes of section 5(1)(a)(i) of the Contributions and Benefits Act (earnings limits and thresholds for Class 1 contributions), or

• (ii) the amount of the basic state pension specified in the first figure in section 44(4) of the Contributions and Benefits Act (Category A retirement pension).

• (10) Subject to paragraph (11), for the purposes of section 23A(1)(b), the prescribed percentage is, in relation to—

• (a) paragraph (9)(a) and (c), 10%;

• (b) paragraph (9)(b), 11%;

• (c) paragraph (9)(d), 9%, and

• (d) paragraph (9)(e), 13%.

• (11) Where the scheme does not provide pension benefits payable on the death of a relevant member, the respective percentages mentioned in paragraph (10) are to be reduced by 1%.

• (12) In this regulation—

• “actuary” means an actuary appointed by the scheme or the employer;

• “basic pay” means the gross earnings of the relevant member from their employment by the employer, disregarding the gross amount of—any commission, bonuses, overtime or similar payments;any shift premium pay, as defined in regulation 32K as if—“jobholder” read “relevant member”, and“within a certification period” and “during the certification period” were omitted, andany reasonable allowance with respect to—any duty of the relevant member, such as a duty in connection with the role of fire or bomb warden, that is ancillary to the main duties of the relevant member’s employment;the cost of relocation of the relevant member to a different place of work;in a case not covered by sub-paragraph (ii), the purchase, lease or maintenance of a vehicle;in a case not covered by sub-paragraph (ii) or (iii), the purchase, lease or maintenance of an item;in a case not covered by sub-paragraph (ii), (iii) or (iv), the delivery of a service to the relevant member;

• “contracted-out employment” has the meaning given in section 4(1) of the 1993 Act (meaning of “contracted-out” employment);

• “contracting-out requirements” means the requirements set out in section 5 of the 1993 Act (requirements for certification of schemes: general) as they had effect immediately before 6th April 2016;

• “multi-employer scheme” means an occupational pension scheme in relation to which there is more than one employer;

• “normal pension age” has the meaning given by section 175 of the 1993 Act;

• “pensionable earnings” means the gross earnings of the relevant member on which contributions are payable to the pension scheme in question by the employer or the relevant member.

Company directors

5EA

• (1) This regulation applies to a jobholder who holds office as a director of the company by which that jobholder is employed.

• (2) In relation to the jobholder to whom this regulation applies, sections 3(2) (automatic enrolment) and 5(2) (automatic re-enrolment) are to be read as if for “must” there were substituted “ may ”.

Limited liability partnerships

5EB

• (1) This regulation applies where a person (P) is a jobholder and—

• (a) P is a member of a limited liability partnership;

• (b) qualifying earnings are payable to P by that limited liability partnership, and

• (c) P is not treated for income tax purposes as being employed by that limited liability partnership under section 863A of the Income Tax (Trading and other Income) Act 2005 (limited liability partnerships: salaried members).

• (2) Where this regulation applies, in relation to the jobholder referred to in paragraph (1), sections 3(2) (automatic enrolment) and 5(2) (automatic re-enrolment) are to be read as if for “must” there were substituted “ may ”.

Effect of exercise of discretion

Alternative quality requirements for a collective money purchase scheme

32EA

• (1) In relation to—

• (a) a money purchase scheme to which section 20 of the Act (quality requirement: UK money purchase schemes) applies, under which all the benefits that may be provided are collective money purchase benefits;

• (b) a money purchase scheme to which section 20 of the Act applies, in respect of any jobholders accruing rights to benefits under a collective money purchase scheme, and

• (c) a hybrid scheme—

• (i) to the extent that requirements within section 24(1)(a) of the Act (quality requirement: UK hybrid schemes) apply, and

• (ii) in respect of any jobholders accruing rights to benefits under a collective money purchase scheme,

the prescribed alternative requirement is set out in paragraph (2).

• (2) The requirement is, subject to paragraphs (3) and (4), that taking all relevant jobholders together, the contributions by, or on behalf of, or in respect of, those relevant jobholders over the certification period are of a total amount equal to at least the prescribed percentage (specified in paragraph (7)) of the applicable category of total relevant earnings for those jobholders (specified in paragraph (6)) over that period.

• (3) Where there is or was, as the case may be, a difference in the rights to benefits accruing under a collective money purchase scheme for different groups of relevant jobholders over the certification period as regards all or any of the criteria set out in paragraph (4)(a), and that difference (or those differences taken together) mean that there is or was as the case may be a material difference in the cost of providing those rights, the relevant jobholders for the purposes of paragraph (2) are the relevant jobholders in each such group.

• (4) For the purposes of paragraph (3)—

• (a) the criteria are—

• (i) the rate at which rights to benefits under a collective money purchase scheme accrue or accrued;

• (ii) the provision of survivor’s benefits;

• (iii) the normal pension age;

• (iv) the definition of ‘pensionable earnings’ used by the scheme;

• (v) differences in the calculation or methodology applying to the revaluation and indexation of benefits;

• (vi) the calculation of service, and

• (vii) the terms for retirement before normal pension age, and

• (b) whether a difference in cost is a material difference is to be determined by the actuary.

• (5) Where, after the certification period begins (whether or not it has ended), a change is made to the benefits provided to the relevant jobholders under a collective money purchase scheme, the certification period is a period of 18 months commencing with the day on which that change takes effect.

• (6) For the purposes of paragraph (2), the relevant earnings are the earnings which the scheme uses to determine pensionable earnings for the purposes of providing collective money purchase benefits to the relevant jobholders, provided that they must be equal to or more than those relevant jobholders’ earnings in one of the following categories—

• (a) qualifying earnings;

• (b) basic pay;

• (c) basic pay in circumstances where, taking all the relevant jobholders together, the pensionable earnings of those jobholders constitute at least 85% of the earnings of those jobholders in the certification period;

• (d) earnings, or

• (e) basic pay above—

• (i) the amount of the lower earnings limit specified for the purposes of section 5(1)(a)(i) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (earnings limits and thresholds for Class 1 contributions), or

• (ii) the amount of the basic state pension specified in the first figure in section 44(4) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (Category A retirement pension).

• (7) For the purposes of this regulation, the prescribed percentage is, in relation to the category of earnings described in—

• (a) paragraph (6)(a) and (c), 10%;

• (b) paragraph (6)(b), 11%;

• (c) paragraph (6)(d), 9%, and

• (d) paragraph (6)(e), 13%.

• (8) Where the scheme does not provide pension benefits payable on the death of a relevant jobholder, the respective percentages mentioned in paragraph (7) are to be reduced by 1%.

Alternative requirements for a personal pension scheme

Alternative requirements for a hybrid scheme

Scheme not to be treated as satisfying the relevant quality requirement in certain circumstances

Contributions under alternative requirements during transitional periods

Pension schemes based in an EEA state other than the United Kingdom

Interpretation