The Occupational Pension Schemes (Collective Money Purchase Schemes) (Modifications and Consequential and Miscellaneous Amendments) Regulations (Northern Ireland) 2022

Made: 1st July 2022

Coming into operation: 1st August 2022

The Department for Communities makes the following Regulations in exercise of the powers conferred by sections 69(2)(b) and (4)(b), 93(1), (2), (3) and (4) and 109(1), (2), (3) and (6) of the Pension Schemes (Northern Ireland) Act 1993[^f00001], Articles 35(4), 67(3A), 73(2)(b), 75(1), 87(2), 92(1)(b) and 166(1) and (2) of the Pensions (Northern Ireland) Order 1995[^f00002], Article 3(1) of the Welfare Reform and Pensions (Northern Ireland) Order 1999[^f00003], and now vested in it[^f00004], Articles 200(1)(b) and (2), 236(1) and (2) and 280(1)(a) of the Pensions (Northern Ireland) Order 2005[^f00005] and sections 97(1) and (2) and 102(2) of the Pension Schemes Act 2021[^f00006].

Part 1 — Introduction

Citation, commencement and interpretation

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• (1) These Regulations may be cited as the Occupational Pension Schemes (Collective Money Purchase Schemes) (Modifications and Consequential and Miscellaneous Amendments) Regulations (Northern Ireland) 2022 and shall come into operation on 1st August 2022.

• (2) The Interpretation Act (Northern Ireland) 1954[^f00007] shall apply to these Regulations as it applies to an Act of the Assembly.

Part 2 — Amendments

Amendment of the Occupational Pension Schemes (Preservation of Benefit) Regulations

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• (1) The Occupational Pension Schemes (Preservation of Benefit) Regulations (Northern Ireland) 1991[^f00008] are amended in accordance with paragraphs (2) and (3).

• (2) In regulation 12 (transfer of member’s accrued rights without consent)—

• (a) in paragraph (1)[^f00009] for “For the purposes of” substitute “Subject to paragraph (3A), for the purposes of”;

• (b) after paragraph (3) insert—

(3A) A scheme may not provide for the member’s accrued rights which are not relevant money purchase rights to be transferred to a collective money purchase scheme without the member’s consent.

• (c) in paragraph (11)[^f00010] before the definition of “controlling employer” insert—

• “collective money purchase scheme” means 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);

• (3) After regulation 12 insert—

(12A) (1) For the purposes of section 69(4), a collective money purchase scheme may provide for the scheme’s liability to a beneficiary in respect of the beneficiary’s accrued rights to benefits under the scheme to be discharged in accordance with the default discharge option for that beneficiary without the consent of the beneficiary where— (a) the scheme is pursuing continuity option 1 within the meaning of sections 85 (continuity options) and 87 (continuity option 1: discharge of liabilities and winding up) of the Pension Schemes Act 2021; and (b) the trustees of the scheme do not receive a notice from the beneficiary in accordance with paragraph 14 of Schedule 6 to the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022[^f00011] (continuity option 1: transfer out and winding up). (2) In this regulation— - “beneficiary” has the meaning given by section 87(8) of the Pension Schemes Act 2021; - “collective money purchase scheme” means 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); - “default discharge option” has the meaning given by paragraph 1(1) of Schedule 6 to the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022.

Amendment of the Occupational Pension Schemes (Transfer Values) Regulations

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• (1) The Occupational Pension Schemes (Transfer Values) Regulations (Northern Ireland) 1996[^f00012] are amended in accordance with paragraphs (2) to (9).

• (2) In regulation 1(2) (interpretation) after the definition of “categories of benefits”[^f00013] insert—

• “collective money purchase scheme” means 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);

• (3) After regulation 2 (pre-1986 leavers) insert—

(2A) (1) Chapter 1 of Part 4ZA[^f00014] of the Act does not apply to a member of a collective money purchase scheme which is pursuing continuity option 1 within the meaning of sections 85 (continuity options) and 87 (continuity option 1: discharge of liabilities and winding up) of the Pension Schemes Act 2021, during the winding-up period for that scheme. (2) In this regulation, “winding-up period” has the meaning given by paragraph 1(1) of Schedule 6 to the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022 (continuity option 1: transfer out and winding up).

• (4) In regulation 7(1)(a)[^f00015] (manner of calculation and verification of cash equivalents – general provisions)—

• (a) in head (i) omit “or”;

• (b) in head (ii)—

• (i) for “money purchase benefits and cash balance benefits” substitute “cash balance benefits and money purchase benefits other than collective money purchase benefits, or”;

• (ii) for “regulation 7C,” substitute “regulation 7C;”;

• (c) after head (ii) add—

(iii) for collective money purchase benefits, in accordance with regulation 7ZC,

• (d) for paragraph (5) substitute—

(5) Where the cash equivalent relates to more than one of the benefits specified in paragraph (1)(a)(i) to (iii), the initial cash equivalent is to be calculated— (a) for the portion falling within paragraph (1)(a)(i), in accordance with regulations 7A and 7B; (b) for the portion falling within paragraph (1)(a)(ii), in accordance with regulation 7C; and (c) for the portion falling within paragraph (1)(a)(iii), in accordance with regulation 7ZC[^f00016].

• (5) In the heading to regulation 7C[^f00017] (manner of calculation of initial cash equivalents for money purchase benefits and cash balance benefits not calculated by reference to final salary) after “money purchase benefits” insert “(other than collective money purchase benefits)”.

• (6) In regulation 7C(1)[^f00018] after “money purchase benefits” insert “other than collective money purchase benefits”.

• (7) After regulation 7C insert—

(7ZC) (1) For collective money purchase benefits, the initial cash equivalent is the realisable value of the member’s share at the date of calculation of the available assets of the collective money purchase scheme, and is to be calculated— (a) on an actuarial basis; (b) using assumptions determined in accordance with this regulation; and (c) in accordance with the scheme rules, to the extent that they are consistent with sub-paragraphs (a) and (b). (2) Having taken the advice of the actuary, the trustees must— (a) determine the economic, financial and demographic assumptions; and (b) calculate the initial cash equivalent by using the assumptions so determined. (3) In determining the demographic assumptions, the trustees must have regard to— (a) the main characteristics of the members of the scheme; or (b) where the members of the scheme do not form a large enough group to allow demographic assumptions to be made, the characteristics of a wider population sharing similar characteristics to themembers. (4) The trustees must have regard to the scheme’s investment strategy when deciding what assumptions will be included in calculating the discount rates in respect of the member. (5) The trustees must determine the assumptions under this regulation with the aim that, taken as a whole, they should lead to the best estimate of the initial cash equivalent. (6) In this regulation, “the available assets of the collective money purchase scheme” has the meaning given by section 53(2) of the Pension Schemes Act 2021.

• (8) In regulation 13(1)[^f00019] (extension of time limits for payment of cash equivalents)—

• (a) for “section 95(2)(a) or, as the case may be, (b)” substitute “section 95(2)(a), (b) or, as the case may be, (c)[^f00020]”;

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

• (c) after sub-paragraph (bb) insert—

(bc) the scheme is, or within 3 months immediately before the end of that period has been, the subject of a pause order under section 95(5) of the Pension Schemes Act 2021 which contains a direction under section 95(5)(e) of that Act (no transfers etc of members’ rights); or

• (d) in sub-paragraph (c) for “(ba) or (bb)” substitute “(ba), (bb) or (bc)”.

• (9) In Schedule 1 (information to be made available to members) after paragraph 3[^f00021] add—

(4) Where information is made available under this Schedule to a member of a collective money purchase scheme, the information to be made available to such a member also includes— (a) a statement that the Money and Pensions Service provides information about transfers that may assist the member in deciding whether to transfer; (b) an explanation of any potential adverse consequences for the member of transferring before normal pension age; (c) an explanation of the trustees’ duties under section 95A[^f00022] (trustees’ further duties: collective money purchase benefits); (d) an explanation that the member will not be able to transfer in the event of the scheme pursuing continuity option 1 within the meaning of sections 85 (continuity options) and 87 (continuity option 1: discharge of liabilities and winding up) of the Pension Schemes Act 2021.

Amendment of the Occupational Pension Schemes (Winding Up) Regulations

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In regulation 13 of the Occupational Pension Schemes (Winding Up) Regulations (Northern Ireland) 1996[^f00023] (hybrid schemes) for paragraph (2) substitute—

(2) In paragraph (1) “relevant money purchase benefits” means— (a) collective money purchase benefits[^f00024]; and (b) other money purchase benefits, other than— (i) benefits derived from the payment by any member of voluntary contributions; or (ii) underpin benefits.

Amendment of the Occupational Pension Schemes (Assignment, Forfeiture, Bankruptcy etc.) Regulations

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In regulation 8 of the Occupational Pension Schemes (Assignment, Forfeiture, Bankruptcy etc.) Regulations (Northern Ireland) 1997[^f00025] (exemptions from the inalienability and forfeiture provisions)—

• (a) after paragraph (7) insert—

(7A) Article 89(1)(c)[^f00026] 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) and which is pursuing continuity option 1 within the meaning of sections 85 (continuity options) and 87 (continuity option 1: discharge of liabilities and winding up) of that Act, to the extent that it would prevent a reduction to the quantification of the value of a beneficiary’s accrued rights to benefits under the scheme to take account of any periodic income received by that beneficiary in accordance with Schedule 6 to the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022 (continuity option 1: transfer out and winding up).

• (b) after paragraph (8) add—

(9) In paragraph (7A) “periodic income” has the meaning given by paragraph 1(1) of Schedule 6 to the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022.

Amendment of the Stakeholder Pension Schemes Regulations

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After regulation 19 of the Stakeholder Pension Schemes Regulations (Northern Ireland) 2000[^f00027] (requirement for trustees of a stakeholder pension scheme established under a trust) insert—

(19A) For the purposes of Article 3(1)(b), it shall be a condition of a scheme being a stakeholder pension scheme that it must not be a collective money purchase scheme for the purposes of Part 2 of the Pension Schemes Act 2021 (collective money purchase benefits: Northern Ireland).

Amendment of the Occupational Pension Schemes (Employer Debt) Regulations

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In regulation 10(4) of the Occupational Pension Schemes (Employer Debt) Regulations (Northern Ireland) 2005[^f00028] (money purchase schemes: fraud and levy deficiencies etc.)—

• (a) in the definition of “the levy deficit” for “paragraph (2).” substitute “paragraph (2);”;

• (b) after the definition of “the levy deficit” insert—

• “money purchase schemes” does not include a scheme or a section of a scheme that is a collective money purchase scheme for the purposes of Part 2 of the Pension Schemes Act 2021 (collective money purchase benefits: Northern Ireland).

Amendment of the Occupational Pension Schemes (Winding up, etc.) Regulations

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In regulation 3 of the Occupational Pension Schemes (Winding up, etc.) Regulations (Northern Ireland) 2005[^f00029] (schemes to which Article 73 of the 1995 Order does not apply) after paragraph (1) insert—

(1A) Article 73 of the 1995 Order does not apply to a section of a scheme that is a collective money purchase scheme for the purposes of Part 2 of the Pension Schemes Act 2021 (collective money purchase benefits: Northern Ireland).

Amendment of the Occupational Pension Schemes (Scheme Funding) Regulations

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In regulation 17(1) of the Occupational Pension Schemes (Scheme Funding) Regulations (Northern Ireland) 2005[^f00030] (exemptions – general)—

• (a) in sub-paragraph (k) for “114, or” substitute “114;”;

• (b) in sub-paragraph (l) for “wound up.” substitute “wound up, or”

• (c) after sub-paragraph (l) add—

(m) 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).

Amendment of the Occupational Pension Schemes (Investment) Regulations

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In regulation 2A of the Occupational Pension Schemes (Investment) Regulations (Northern Ireland) 2005[^f00031] (additional requirements in relation to default arrangement) after paragraph (6) add—

(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).

Amendment of the Occupational and Personal Pension Schemes (Consultation by Employers) Regulations

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In regulation 10 of the Occupational and Personal Pension Schemes (Consultation by Employers) Regulations (Northern Ireland) 2006[^f00032] (listed changes: exclusions)—

• (a) in paragraph (1) after sub-paragraph (ab) insert—

(ac) which is or results in an adjustment of the rate or amount of benefits provided under a collective money purchase scheme, provided that such adjustment is made in accordance with— (i) the most recent actuarial valuation or (as the case may be) any multi-annual reduction in effect, and (ii) the scheme rules; (ad) which is made in respect of a collective money purchase scheme that is pursuing continuity option 1 in accordance with— (i) Schedule 6 to the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022[^f00033] (continuity option 1: transfer out and winding up), or (ii) scheme rules made in accordance with that Schedule;

• (b) after paragraph (3) add—

(4) In this regulation— - “actuarial valuation”, in relation to a collective money purchase scheme, has the meaning given by section 71(2) of the Pension Schemes Act 2021; - “collective money purchase scheme” means 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); - “multi-annual reduction” has the meaning given by regulation 2 of the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022.

Amendment of the Occupational Pension Schemes (Modification of Schemes) Regulations

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• (1) The Occupational Pension Schemes (Modification of Schemes) Regulations (Northern Ireland) 2006[^f00034] are amended in accordance with paragraphs (2) and (3).

• (2) In regulation 1(2) (interpretation) after the definition of “the 2015 Act”[^f00035] insert—

• “actuarial valuation”, in relation to a collective money purchase scheme, has the meaning given by section 71(2) of the Pension Schemes Act 2021;
• “collective money purchase scheme” means a scheme or a section of a scheme that is a collective money purchase scheme for the purposes of Part 2 of the Pension Schemes Act 2021 (collective money purchase benefits: Northern Ireland);
• “multi-annual reduction” has the meaning given by regulation 2 of the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2022;

• (3) In regulation 3[^f00036] (non-application of the subsisting rights provisions)—

• (a) in paragraph (i)(ii) for “spouse, or” substitute “ spouse;”;

• (b) in paragraph (j)(ii) for “spouse.” substitute “ spouse;”;

• (c) after paragraph (j)(ii) add—