The Occupational Pension Schemes (Charges and Governance) Regulations (Northern Ireland) 2015

(26) Where a relevant scheme is a relevant multi-employer scheme, the statement prepared in accordance with regulation 23 must include such of the following additional information as is relevant to the scheme— (a) how the requirements of regulation 27(2) have been met during the year; (b) where a trustee who is non-affiliated (within the meaning of regulations 27 and 28) was appointed during the year, details of how the requirement of regulation 28(1) was met; (c) details of the arrangements in place during the year to meet the requirement of regulation 29. (27) (1) A relevant multi-employer scheme which is a trust scheme must have at least 3 trustees (but see also paragraphs (4) to (7)). (2) A majority of the trustees of a relevant multi-employer scheme which is a trust scheme, including the chair of the trustees, must be non-affiliated (but see also paragraphs (4) to (7)). (3) Where there is a chair of the trustees at the time any other trustee is appointed, the chair must be consulted on the appointment. (4) In relation to a company which is not a professional trustee body and which is a trustee of a relevant multi-employer scheme, this regulation applies as if— (a) the company were not a trustee of the scheme; and (b) each individual who is a director of the company and through whom the company exercises its functions as trustee, and any professional trustee body which is a director of the company, were a trustee of the scheme. (5) A new relevant multi-employer scheme must meet the requirements of paragraphs (1) and (2) before the end of the period of 3 months beginning with the date on which the scheme is established (or, if later, the date on which the scheme becomes a relevant multi-employer scheme which is a trust scheme). (6) Where a trustee of a relevant multi-employer scheme— (a) ceases to be a trustee for any reason; or (b) in the case of a trustee who was non-affiliated, ceases to be non-affiliated, the requirements of paragraphs (1) and (2) must be met before the end of the period of 3 months beginning with the date on which the former trustee ceases to be a trustee or, as the case may be, the trustee ceases to be non-affiliated. (7) Where a relevant multi-employer scheme was established, or became a relevant multi-employer scheme, before 6th April 2015 and the requirements of paragraph (1) or (2) are not met on that date, the requirement in question must be met before the end of the period of 3 months beginning with that date. (8) In this regulation and in regulation 28 “non-affiliated” means independent of any undertaking which provides advisory, administration, investment or other services in respect of the relevant multi-employer scheme (but see also regulation 28). (28) (1) The appointment process for a trustee who is to count as non-affiliated for the purposes of regulation 27(2) must be open and transparent. (2) For the purposes of paragraph (1), an appointment process which is open and transparent includes (but is not limited to) a process which— (a) includes advertisement of the vacancy for a trustee in at least one appropriate national publication; (b) includes engagement of the services of a recruitment agency to assist in the selection of candidates; or (c) meets the requirements of Article 218(2) or, as the case may be, 219(2) of the 2005 Order (requirements for member-nominated trustees and member-nominated directors of corporate trustees). (3) For the purposes of determining whether a person is non-affiliated, the following matters must be taken into account— (a) whether the person— (i) is a director, manager, partner or employee of an undertaking which provides advisory, administration, investment or other services in respect of the scheme (a “service provider”) or an undertaking which is connected to a service provider; or (ii) has been such a director, manager, partner or employee during the period of 5 years ending with the date of the person's appointment as a trustee; (b) whether the person receives any payment or other benefit from a service provider, other than— (i) a payment or other benefit in respect of a role in the governance of a personal pension scheme in which the person is required to act in the interests of some or all of the scheme members; or (ii) a payment in respect of the person's role as trustee of the relevant multi-employer scheme; (c) whether or not, in the person's relationship with a service provider, the person's obligations to the service provider conflict with their obligations as a trustee of the relevant multi-employer scheme and whether their obligations as a trustee will take priority in the case of a conflict. (4) A trustee who is an individual is not to count as non-affiliated for the purposes of regulation 27(2) for— (a) any one period of more than 5 years; or (b) subject to paragraph (5), more than 10 years in total. (5) No period of appointment of a trustee who is an individual is to be taken into account for the purposes of paragraph (4)(b) if more than 5 years have elapsed since the trustee last held office as a trustee of the same relevant multi-employer scheme. (6) Paragraphs (1) to (5) apply to an individual who is a director of a corporate trustee and to whom regulation 27 applies as if he were a trustee as they apply to a trustee who is an individual. (7) Where a trustee who is to count as non-affiliated for the purposes of regulation 27(2) is a professional trustee body— (a) the trustee is not to count as non-affiliated for any one period of more than 5 years; (b) a nominated individual must act as representative of the trustee; and (c) the nominated individual may not act as representative of the trustee for more than 10 years in total. (8) For the purposes of paragraph (3)(a), 2 undertakings are “connected” if they are— (a) part of a group of companies consisting of a holding company and one or more subsidiaries within the meaning of section 1159(1) of the Companies Act 2006; or (b) partnerships, each having the same persons as at least half of its partners. (29) The trustees or managers of a relevant multi-employer scheme must make arrangements to encourage members of the scheme, or their representatives, to make their views on matters relating to the scheme known to the trustees or managers.

23

In regulation 1(2) of the Administration Regulations (interpretation) in the definition of “relevant multi-employer scheme”—

• (a) at the end of paragraph (a) insert “ or ”;

• (b) at the end of paragraph (b) omit “or”;

• (c) omit paragraph (c).

24

In regulation 3(1) of the Register of Occupational and Personal Pension Schemes Regulations (Northern Ireland) 2005 (registrable information)—

• (a) in sub-paragraph (e) for “employer, and” substitute “ employer; ”;

• (b) in sub-paragraph (g) for “commenced.” substitute “ commenced; ”;

• (c) after sub-paragraph (g) add—

(h) in the case of an occupational pension scheme which is a relevant scheme within the meaning of the Occupational Pension Schemes (Scheme Administration) Regulations (Northern Ireland) 1997, whether the trustees or managers of that scheme have prepared the statement that they are required to prepare in accordance with regulation 23 of those Regulations (annual statement regarding governance), and (i) in the case of an occupational pension scheme in respect of which the requirements of Part 2 of the Occupational Pension Schemes (Charges and Governance) Regulations (Northern Ireland) 2015 (restrictions on charges) apply to one or more of its members, whether the trustees or managers of that scheme have complied with those requirements in respect of each member to whom they apply.

25

In Article 9(7) of the 2005 Order (improvement notices)—

• (a) at the end of sub-paragraph (d) omit “or”;

• (b) in sub-paragraph (e) for “2014.” substitute “ 2014, or ”;

• (c) after sub-paragraph (e) add—

(f) paragraph 2 of Schedule 18 to the Pensions Act (Northern Ireland) 2015 (power to impose requirements relating to administration or governance).

26

• (1) The Regulator may issue a compliance notice to a person in any of the circumstances of non-compliance in paragraph (2).

• (2) The circumstances mentioned in paragraph (1) are—

• (a) receipt of an indication pursuant to regulation 3(1)(i) of the Register of Occupational and Personal Pension Schemes Regulations (Northern Ireland) 2005 (registrable information) that the person has not complied with Part 2;

• (b) if the Regulator is of the opinion that the person is not complying with, or has not complied with, or have not complied with, Part 2.

• (3) A compliance notice is a notice directing the person to whom it is issued to take, or refrain from taking, the steps specified in the notice.

• (4) The steps mentioned in paragraph (3) may be any steps that the Regulator reasonably requires with a view to ensuring that any non-compliance with Part 2 is remedied and, where appropriate, not repeated.

• (5) A direction in a compliance notice may be expressed to be conditional on compliance by a third party with a specified direction contained in a third party compliance notice under regulation 27.

• (6) A compliance notice may, in particular—

• (a) state the period within which any step must be taken or must cease to be taken;

• (b) require the person to provide within a specified period specified information relating to the non-compliance;

• (c) require the person to inform the Regulator, within a specified period, how the person has complied with or is complying with the notice;

• (d) state that if the Regulator is of the opinion that the person has failed to comply with the requirements of the notice, the Regulator may issue a penalty notice under regulation 28(1)(b)(i);

• (e) give the person a choice between different ways of remedying, or preventing the recurrence of, the non-compliance.

• (7) A compliance notice must—

• (a) state which of the circumstances of non-compliance in paragraph (2) applies, and

• (b) if the circumstance in paragraph (2)(b) applies, state—

• (i) which provision of Part 2 the Regulator believes was not, or is not being, complied with, and

• (ii) the evidence on which that belief is based.

27

• (1) Where in any of the circumstances of non-compliance in paragraph (2)—

• (a) the Regulator is of the opinion that the non-compliance is or was, wholly or partly, a result of a failure of another person (“the third party”), and

• (b) that failure is not in itself a contravention of Part 2,

the Regulator may issue to the third party a third party compliance notice.

• (2) The circumstances mentioned in paragraph (1) are—

• (a) receipt of an indication pursuant to regulation 3(1)(i) of the Register of Occupational and Personal Pension Schemes Regulations (Northern Ireland) 2005 (registrable information) that the person has not complied with Part 2;

• (b) receipt of an indication that the person is unable to confirm whether they are complying or will be able to comply with Part 2, or

• (c) if the Regulator is of the opinion that the person is not complying with, or has not complied with, Part 2.

• (3) A third party compliance notice is a notice directing the third party to take, or refrain from taking, the steps specified in the notice.

• (4) The steps mentioned in paragraph (3) may be any steps that the Regulator reasonably requires with a view to remedying and, where appropriate, preventing a recurrence of the failure mentioned in paragraph (1).

• (5) A third party compliance notice may, in particular—

• (a) state the period within which any step must be taken or must cease to be taken;

• (b) require the third party to provide within a specified period specified information relating to the failure;

• (c) require the third party to inform the Regulator, within a specified period, how the third party has complied with or is complying with the notice;

• (d) state that, if the Regulator is of the opinion that the third party has failed to comply with the requirements of the notice, the Regulator may issue a penalty notice under regulation 28(1)(a);

• (e) give the third party a choice between different ways of remedying or preventing the recurrence of the failure.

• (6) A third party compliance notice must state—

• (a) which of the circumstances of non-compliance in paragraph (2) applies;

• (b) the matters which the Regulator believes constitute the failure by the third party, and

• (c) if the circumstance in paragraph (2)(c) applies, in addition to the matters mentioned in sub-paragraphs (a) and (b)—

• (i) which provision of Part 2 the Regulator believes was not, or is not being, complied with, and

• (ii) the evidence on which the Regulator's belief is based.

28

• (1) Subject to paragraph (2), the Regulator may issue a penalty notice to—

• (a) a third party where it is of the opinion that the third party has failed to comply with a third party compliance notice under regulation 27, or

• (b) a person where it is of the opinion that the person has failed to comply with—

• (i) a compliance notice under regulation 26;

• (ii) a provision in Part 2, or

• (iii) a provision in Part V of the Administration Regulations (governance of relevant schemes).

• (2) Where—

• (a) the Regulator is in receipt of an indication pursuant to regulation 3(1)(h) of the Register of Occupational and Personal Pension Schemes Regulations (Northern Ireland) 2005 (registrable information) that the trustees or managers have failed to prepare the statement that they are required to prepare by regulation 23 of the Administration Regulations (annual statement regarding governance), or

• (b) the Regulator is of the opinion that the trustees or managers have failed to prepare the statement that they are required to prepare by regulation 23 of the Administration Regulations,

the Regulator must issue a penalty notice to the trustees or managers in relation to a first failure in connection with a scheme year.

• (3) A penalty notice is a notice requiring the person to whom it is issued to pay a penalty within the period specified in the notice.

• (4) The amount of a penalty is to be determined by the Regulator but—

• (a) in relation to a penalty notice issued under paragraph (1) must not exceed—

• (i) £5,000 if the person is an individual, or

• (ii) £50,000 if the person is a body corporate or any other person;

• (b) in relation to a penalty notice issued under paragraph (2), must be at least £500 and must not exceed £2,000.

• (5) A penalty notice must—

• (a) where it is issued to trustees or managers, be issued to all the trustees or managers of the relevant scheme and specify their joint and several liability for the penalty;

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

• (c) state the amount of the penalty;

• (d) state the date, which must be at least 4 weeks after the date on which the notice is issued, by which the penalty must be paid;

• (e) state the period (if any) to which the penalty relates;

• (f) if the notice is issued under paragraph (1)(a) or (b)(i), specify the failure to which the notice relates;

• (g) if the notice is issued under paragraph (1)(b)(ii) or (iii), specify the provision or provisions that have not been complied with;

• (h) notify the person to whom the notice is issued of the review process under regulation 31 and the right of referral to a tribunal under regulation 32.

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29

• (1) Any penalty required by a penalty notice is recoverable by the Regulator.

• (2) Article 10(8A) of the 1995 Order applies to a penalty recoverable under these Regulations as it applies to a penalty recoverable under that Article.

• (3) The Regulator must pay into the Consolidated Fund any penalty recovered under this regulation.

30

• (1) Where—

• (a) a penalty under regulation 28 is recoverable from a body corporate by reason of any act or omission of the body, and

• (b) the act or omission was done with the consent or connivance of, or is attributable to any neglect on the part of, any persons mentioned in paragraph (2),

the Regulator may issue the notice to each of those persons who consented to, or connived in, the act or omission or to whose neglect the act or omission was attributable.

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

• (a) any director, manager, secretary, or other similar officer of the body, or a person purporting to act in any such capacity, and

• (b) where the affairs of a body corporate are managed by its members, any member who has management functions.

• (3) Where the Regulator requires any person mentioned in paragraph (2) to pay a penalty, it—

• (a) may not also require the body corporate in question to pay a penalty in respect of the same act or omission, and

• (b) must issue the penalty notice to the person who is required to pay, but may also notify the relevant body corporate.

31

• (1) The Regulator may review a notice to which this paragraph applies—

• (a) on the written application of the person to whom the notice was issued, or

• (b) if the Regulator otherwise considers it appropriate.

• (2) Paragraph (1) applies to—

• (a) a compliance notice issued under regulation 26;

• (b) a third party compliance notice issued under regulation 27, and

• (c) a penalty notice issued under regulation 28.

• (3) The period within which—

• (a) an application to review a notice may be made under paragraph (1)(a) is 28 days, beginning on the day on which the notice is issued to a person, and

• (b) a notice may be reviewed under paragraph (1)(b) is 18 months, beginning on the day on which the notice is issued to a person.

• (4) On a review of a notice, the effect of the notice is suspended for the period beginning on the day the Regulator determines to carry out the review and ending on the day on which the review is completed.

• (5) In carrying out a review, the Regulator must consider any representations made by the person to whom the notice was issued.

• (6) The Regulator's powers on a review are to—

• (a) confirm, vary or revoke the notice;

• (b) substitute a different notice.

32

• (1) A person to whom a penalty notice is issued under regulation 28 may, if one of the conditions in paragraph (2) is satisfied, make a reference to the Tribunal in respect of—

• (a) the issue of the notice;

• (b) the amount of the penalty under the notice.

• (2) The conditions are—

• (a) that the Regulator has completed a review of the notice under regulation 31, or

• (b) that the person to whom the notice was issued has made an application for the review of the notice under regulation 31(1)(a) and the Regulator has determined not to carry out such a review.

• (3) On a reference to the Tribunal in respect of a notice, the effect of the notice is suspended for the period beginning on the day on which the Tribunal receives notice of the reference and ending—

• (a) on the day on which the reference is withdrawn;

• (b) if the reference is made out of time, on the day that the Tribunal determines not to allow the reference to proceed, or

• (c) when the reference is completed.

• (4) For the purposes of paragraph (3)(c), a reference is completed when—

• (a) the reference has been determined, and

• (b) the Tribunal has remitted the matter to the Regulator.

• (5) In this regulation—

• “the Tribunal” means—the Upper Tribunal, in any case where it is determined by or under Tribunal Procedure Rules that the Upper Tribunal is to hear the reference;the First-tier Tribunal, in any other case;

• “Tribunal Procedure Rules” means—the Tribunal Procedure (Upper Tribunal) Rules 2008 in relation to the Upper Tribunal, andthe Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009 in relation to the First-tier Tribunal.

Editorial notes