The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations (Northern Ireland) 2021

Made: 9th November 2021

Coming into operation: 30th November 2021

The Department for Communities makes the following Regulations in exercise of the powers conferred by sections 91(6ZA) to (6ZC), 97F(5A) to (5C), 177(2) and (3) and 178(1) of the Pension Schemes (Northern Ireland) Act 1993[^f00001] and now vested in it[^f00002].

Citation, commencement and interpretation

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• (1) These Regulations may be cited as the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations (Northern Ireland) 2021 and shall come into operation on 30th November 2021.

• (2) In these Regulations—

• “the 1993 Act” means the Pension Schemes (Northern Ireland) Act 1993;

• “the 2000 Act” means the Financial Services and Markets Act 2000[^f00003];

• “the 2001 Order” means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001[^f00004];

• “the 2004 Act” means the Finance Act 2004[^f00005];

• “the 2021 Act” means the Pension Schemes Act 2021[^f00006];

• “amber flag” has the meaning given by regulation 9;

• “cash equivalent” has the meaning given by regulation 2(2)(a);

• “the First Condition” has the meaning given by regulation 7(1);

• “member” has the meaning given by regulation 2(2)(b);

• “pension scheme” means an occupational pension scheme or a personal pension scheme;

• “QROPS” means a qualifying recognised overseas pension scheme as defined by section 169(2)[^f00007] of the 2004 Act (recognised transfers);

• “receiving scheme” means the pension scheme to which a member is seeking to make a transfer, subject to regulation 7(6);

• “red flag” has the meaning given by regulation 8(3) to (6);

• “request to make a transfer” has the meaning given by regulation 2(3);

• “the Second Condition” has the meaning given by regulation 8(1);

• “transfer” has the meaning given by regulation 2(3);

• “transferring scheme” means the pension scheme from which a member is seeking to make a transfer.

• (3) Subject to paragraph (4), the Interpretation Act (Northern Ireland) 1954[^f00008] shall apply to these Regulations as it applies to an Act of the Assembly.

• (4) Without prejudice to any other method of service authorised under section 24 of the Interpretation Act (Northern Ireland) 1954, the requirement to send any document under these Regulations may be met by sending it by ordinary post.

Application of the conditions to all uses of the cash equivalent

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• (1) The conditions set out in these Regulations apply to all of the specified ways in which the cash equivalent may be used in accordance with the provisions of section 91[^f00009] of the 1993 Act (ways of taking right to cash equivalent) set out in subsection (6ZA) of that section and the authorised purposes for which the cash equivalent may be used in accordance with the provisions of section 97F[^f00010] of the 1993 Act (power to give transfer notice) set out in subsection (5A) of that section.

• (2) In these Regulations—

• (a) “cash equivalent”, in relation to a member’s transferrable rights[^f00011], means the cash equivalent referred to in section 90(1) or (2)[^f00012] of the 1993 Act (right to cash equivalent), and, in relation to a member’s pension credit rights[^f00013], means an amount equal to the cash equivalent referred to in section 97F(1) of that Act;

• (b) “member” means either a member[^f00014] of a pension scheme who has transferrable rights, or an eligible member[^f00015] of a pension scheme who has pension credit rights.

• (3) In these Regulations, “transfer” means using the cash equivalent in one of the specified ways, or for one of the authorised purposes, in accordance with the provisions referred to in paragraph (1), and “request to make a transfer” means, respectively, an application, or giving notice, to use the cash equivalent in one of those ways or for one of those purposes.

Transfers to which these Regulations apply

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These Regulations apply to transfers where, in a case where the member applies for a statement of the cash equivalent value of their transferrable rights under section 89A[^f00016] of the 1993 Act (right to statement of entitlement: benefits other than money purchase), the date of the member’s application, and in any other case, the date of the member’s request to make a transfer, occurs on or after the day that these Regulations come into operation.

Conditions satisfied upon a decision by the trustees or managers of the transferring scheme

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• (1) The prescribed conditions under sections 91(6ZA) (ways of taking right to cash equivalent) and 97F(5A) (power to give transfer notice) of the 1993 Act are the First Condition and the Second Condition, and, for the purposes of those sections, the prescribed conditions are satisfied in respect of a transfer when the trustees or managers of the transferring scheme make a decision that either the First Condition or the Second Condition is satisfied in respect of that transfer.

• (2) Where the trustees or managers of the transferring scheme have made a decision that neither the First Condition nor the Second Condition is satisfied in respect of a transfer, in either of the circumstances set out in sub-paragraphs (a) and (b) of paragraph (3) the First Condition or the Second Condition is satisfied in respect of the transfer.

• (3) The circumstances referred to in paragraph (2) are where the trustees or managers of the transferring scheme remake the decision referred to in that paragraph, to the effect that either the First Condition or the Second Condition is satisfied, because subsequent to that decision—

• (a) they realise that the decision was incorrect, or

• (b) they receive further evidence or information from the member, which enables them to conclude that the First Condition or the Second Condition is satisfied, and they consider that the delay in this being provided was for good reason and no longer than was necessary in the circumstances.

Requirement to inform the member of the conditions and notify decisions regarding satisfaction of the conditions

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• (1) Subject to paragraph (2), the trustees or managers of the transferring scheme must ensure that the member is informed about the provision in regulation 4(1), in a case where the member applies for a statement of the cash equivalent value of their transferrable rights under section 89A of the 1993 Act (right to statement of entitlement: benefits other than money purchase), within the period of one month after the date of the member’s application for that statement, or, in any other case, within the period of one month after the date of the member’s request to make a transfer.

• (2) The requirement in paragraph (1) does not apply where, before the date on which the period of one month referred to in that paragraph has passed, the trustees or managers of the transferring scheme have made the transfer.

• (3) The trustees or managers of the transferring scheme must ensure that the member is sent notification of their decision that—

• (a) either the First Condition or the Second Condition is satisfied, by no later than the date on which the member is sent confirmation that the transfer to the receiving scheme has been made, or

• (b) neither the First Condition nor the Second Condition is satisfied, and that the member has lost their right to use the cash equivalent in respect of that request, in accordance, as relevant, either with sections 94(2)[^f00017] (loss of right to cash equivalent) and 95(2ZA)[^f00018] (trustees’ duties after exercise of option) of the 1993 Act, or with section 97J(2AA)[^f00019] of that Act (time for compliance with transfer notice), within the period of 7 working days after the date of that decision.

• (4) In paragraph (3)(b), “working day” means a day other than—

• (a) a Saturday or Sunday, or

• (b) a day which is a bank holiday under the Banking and Financial Dealings Act 1971[^f00020].

Standards of proof, relevant evidence or information, and timing for decisions regarding satisfaction of the conditions

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• (1) In order for the trustees or managers of the transferring scheme to decide that the First Condition is satisfied, they must satisfy themselves beyond reasonable doubt either that the receiving scheme is established, or listed as authorised, as set out in regulation 7(4).

• (2) Where the trustees or managers of the transferring scheme proceed to make a decision as to whether the Second Condition is satisfied in accordance with regulation 10(2), without making a request for evidence or information from the member in accordance with regulation 10(1) or (3)—

• (a) in order to reach a decision that none of the red flags in regulation 8(5), and none of the amber flags in regulation 9(5), is present, they must decide on the balance of probabilities that none is present, and

• (b) where, after applying sub-paragraph (a), they do not reach a decision that a red flag is present, they must decide that the Second Condition is satisfied.

• (3) Where the trustees or managers of the transferring scheme do not proceed to make a decision in respect of the Second Condition in accordance with paragraph (2), and they make a request for evidence or information from the member in accordance with regulation 10(1) or (3)—

• (a) in order to reach a decision that—

• (i) either of the red flags in regulation 8(4), or the amber flag in regulation 9(2), is present, they must decide beyond reasonable doubt that it is present, and

• (ii) any of the red flags in regulation 8(5), or any of the amber flags in regulation 9(3) to (5), is present, they must decide whether they have reason to believe that it is present, and

• (b) where, after applying sub-paragraph (a), they do not reach a decision that a red flag is present, they must decide that the Second Condition is satisfied.

• (4) In paragraph (3)(a)(ii), “reason to believe” means that there is a reasonable foundation for the belief, on the basis of all of the evidence and information available.

• (5) For the purposes of paragraph (4), “all of the evidence and information available” to the trustees or managers of the transferring scheme means not only evidence or information provided by the member in a formal response to a request made in accordance with regulation 10(1) or (3), but also other relevant evidence or information, including in particular—

• (a) any information provided by the member or another party to the transfer other than in such a response;

• (b) the fact of a general or specific omission of evidence or information from that formal response, or

• (c) any evidence or information obtained by the trustees or managers of the transferring scheme, including in the course of carrying out their duties in relation to that, or another, pension scheme.

• (6) Where the trustees or managers of the transferring scheme have made a request for evidence or information in accordance with regulation 10(1) or (3)—

• (a) they may decide that the red flag in regulation 8(4)(a) is present provided that a further request to provide the evidence or information was sent at least one month after the date of the first request and at least one month has passed since the further request was sent;

• (b) they may decide that the amber flag in regulation 9(2) is present provided that a further request to provide the evidence or information missing from the member’s response has been sent to the member and at least one month has passed since the further request was sent, and

• (c) they may decide that any of the red or amber flags other than those referred to in sub-paragraph (a) or (b) are present no earlier than the soonest of—

• (i) the date on which they have received all of the evidence or information requested;

• (ii) the date on which they have received sufficient evidence or information in response to their request to decide that the Second Condition is satisfied in accordance with paragraph (3), or

• (iii) the date on which they may apply the amber flag in regulation 9(2) in accordance with sub-paragraph (b).

The First Condition: transfers into certain receiving schemes

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• (1) For the purposes of these Regulations, this regulation will be referred to as “the First Condition”.

• (2) The First Condition applies to a transfer to a receiving scheme that is one of the types of scheme specified in paragraph (3).

• (3) The types of receiving scheme referred to in paragraph (2) are any of the following—

• (a) a public service pension scheme as defined in section 1(1)[^f00021] of the 1993 Act (categories of pension schemes);

• (b) a Master Trust scheme—

• (i) for the purposes of Part 1 of the Pension Schemes Act 2017[^f00022] (Master Trusts), which is authorised by the Pensions Regulator[^f00023] for the purposes of that Part and listed as such in accordance with section 13(1) of that Act (list of authorised schemes), or

• (ii) for the purposes of Part 1 of the Pension Schemes Act (Northern Ireland) 2021[^f00024] (Master Trusts), which is authorised by the Pensions Regulator for the purposes of that Part and listed as such in accordance with section 13(1) of that Act (list of authorised schemes);

• (c) a collective money purchase scheme—

• (i) for the purposes of Part 1 of the 2021 Act (collective money purchase benefits), which is authorised by the Pensions Regulator for the purposes of that Part, and listed as such in accordance with section 26(1) of that Act (list of authorised schemes), or

• (ii) for the purposes of Part 2 of the 2021 Act (collective money purchase benefits), which is authorised by the Pensions Regulator for the purposes of that Part, and listed as such in accordance with section 77(1) of that Act (list of authorised schemes).

• (4) The First Condition is satisfied where the trustees or managers of the transferring scheme have satisfied themselves that the receiving scheme is established, in the case of sub-paragraph (a) of paragraph (3), or is listed as authorised by the Pensions Regulator, in the case of sub-paragraph (b) or (c) of that paragraph, in accordance with the legislation referred to in the relevant sub-paragraph.

• (5) In satisfying themselves of the relevant matter required by paragraph (4), the trustees or managers of the transferring scheme must not require that the member provide evidence or information apart from the details necessary for the trustees or managers of the transferring scheme to identify the correct receiving scheme.

• (6) For the purposes of paragraph (3)(c), where a pension scheme is divided into sections and the transfer is into a section that is a collective money purchase scheme for the purposes of Part 1 or Part 2 of the 2021 Act, receiving scheme means that section of the divided pension scheme.

The Second Condition: transfers into all other receiving schemes

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• (1) For the purposes of these Regulations, this regulation will be referred to as “the Second Condition”.

• (2) The Second Condition applies to all transfers to which the First Condition does not apply.

• (3) The Second Condition is satisfied where none of the circumstances in paragraphs (4) and (5) (“the red flags”) are present in respect of the transfer.

• (4) There is a red flag present where the trustees or managers of the transferring scheme decide that —

• (a) the member has failed to provide a substantive response to a request for evidence or information in respect of the Second Condition made in accordance with regulation 10(1) or (3), or

• (b) further to requiring that the member takes the specified guidance in accordance with regulation 9(1)(a), due to presence of one or more amber flags in respect of the transfer, the member has not provided the specified evidence that this has been taken in accordance with regulation 9(1)(b).

• (5) There is a red flag present where the trustees or managers of the transferring scheme decide that—

• (a) a person without the appropriate regulatory status has carried on a regulated activity for the member in respect of the transfer in breach of section 19 (the general prohibition) or 20 (authorised persons acting without permission) of the 2000 Act;

• (b) the member’s request to make the transfer has been made further to unsolicited contact for the purpose of direct marketing of the transfer;

• (c) the member has been offered an incentive to make the transfer, or

• (d) the member has been, or considers that they have felt, pressured to make the transfer.

• (6) In this regulation—

• “appropriate regulatory status”, in relation to carrying on a regulated activity, means being either an authorised person who has, or an exempt person who is exempt from requiring, permission to carry on that activity;

• “authorised person” means a person who has permission under Part 4A[^f00025] of the 2000 Act (permission to carry on regulated activities) to carry on one or more regulated activities;

• “direct marketing”, in respect of the transfer, has the same meaning as in regulation 21B of the Privacy and Electronic Communications (EC Directive) Regulations 2003[^f00026] (calls for direct marketing in relation to pension schemes) in relation to occupational pension schemes or personal pension schemes;

• “exempt person”, in relation to carrying on a regulated activity, means a person who is exempt from section 19 of the 2000 Act in respect of that activity by virtue of an exemption order made under section 38(1) (exemption orders), or as a result of section 39(1) (exemption of appointed representatives), of that Act;

• “existing client relationship” has the same meaning as in regulation 21B of the Privacy and Electronic Communications (EC Directive) Regulations 2003;