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The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations (Northern Ireland) 2024

Type Ni-Statutory-Rule

Publication 2024-01-24

Last updated 2024-10-01

State In force

Jurisdiction Northern Ireland

Department Government Printer for Northern Ireland

Source legislation.gov.uk

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articles 1

Reform history JSON API

“receiving scheme” has the meaning given in section 96(8) of the 2021 Act.

PART 7 — Collective money purchase benefits – amendments to subordinate legislation

Collective money purchase benefits – amendments to subordinate legislation

35

Schedule 7 contains amendments to subordinate legislation in relation to pension schemes providing collective money purchase benefits.

PART 8 — Revocation

Revocation

36

The Occupational Pension Schemes (Collective Money Purchase Schemes) (No. 2) Regulations (Northern Ireland) 2023²⁵ are revoked.

SCHEDULE 1 — Fit and proper persons requirement

1

(1) In this Schedule—

“arrangement” means a voluntary arrangement entered into by an individual with their creditors;

“the Bankruptcy Act” means the Bankruptcy (Scotland) Act 2016²⁶;

“the Insolvency Act” means the Insolvency Act 1986²⁷;

“the Insolvency Order” means the Insolvency (Northern Ireland) Order 1989²⁸;

“the registrar of companies” has the meaning given by section 1060(3) of the Companies Act 2006²⁹.

(2) In paragraph 2(a)—

“adjudicator” has the meaning given by section 385(1)³⁰ of the Insolvency Act;

“creditor” has the meaning given by section 383(1)³¹ of the Insolvency Act.

(3) In paragraph 2(b)—

“the Accountant in Bankruptcy” has the meaning given by section 199(1) of the Bankruptcy Act;

“creditor” has the meaning given by section 383(1) of the Insolvency Act;

“debtor application” has the meaning given by section 228(1) of the Bankruptcy Act;

“sequestration” has the meaning given by section 1 of the Bankruptcy Act.

(4) In paragraph 2(c)—

“bankrupt”, “bankruptcy order” and “bankruptcy petition” have the meanings given in Article 9(1) of the Insolvency Order;

“the court” is defined in rule 0.2 of the Insolvency Rules (Northern Ireland) 1991³²;

“creditor” has the meaning given in Article 9(1) of the Insolvency Order.

2

For the purposes of section 62(3)(a) of the 2021 Act (fit and proper persons requirement), the Regulator must take into account the following matters when assessing whether a person is fit and proper to act in a capacity mentioned in section 62(2) of the 2021 Act—

(a) whether, in England and Wales, the person has—

(i) made any arrangement with the person’s creditors;

(ii) applied to an adjudicator under section 263H³³ of the Insolvency Act (bankruptcy applications to an adjudicator) for a bankruptcy order within the meaning given by section 381(2)³⁴ of the Insolvency Act (“bankrupt” and associated terminology);

(iii) been served with a bankruptcy petition within the meaning given by section 381(3) of the Insolvency Act;

(iv) been made bankrupt within the meaning given by section 381(1)³⁵ of the Insolvency Act;

(v) been the subject of a bankruptcy restrictions order made under paragraph 1 (bankruptcy restrictions order) of Schedule 4A³⁶ to the Insolvency Act (including an interim bankruptcy restrictions order made under paragraph 5 (interim bankruptcy restrictions order) of that Schedule), or

(vi) offered a bankruptcy restrictions undertaking made under paragraph 7 (bankruptcy restrictions undertaking) of Schedule 4A to the Insolvency Act;

(b) whether, in Scotland, the person has—

(i) made any arrangement with the person’s creditors;

(ii) made a debtor application to the Accountant in Bankruptcy for sequestration;

(iii) been served with a petition for sequestration;

(iv) been the subject of an award of sequestration in accordance with section 22 of the Bankruptcy Act (when sequestration is awarded), or

(v) been the subject of a bankruptcy restrictions order within the meaning given by section 155(1) (bankruptcy restrictions order) of the Bankruptcy Act (including an interim bankruptcy restrictions order within the meaning given by section 160 (interim bankruptcy restrictions orders) of the Bankruptcy Act);

(i) made any arrangement with the person’s creditors;

(ii) petitioned the court for a bankruptcy order;

(iii) been served with a bankruptcy petition;

(iv) been adjudged bankrupt;

(v) been the subject of a bankruptcy restrictions order made under paragraph 1 (bankruptcy restrictions order) of Schedule 2A³⁷ to the Insolvency Order (including an interim bankruptcy restrictions order made under paragraph 5 (interim bankruptcy restrictions order) of that Schedule), or

(vi) offered a bankruptcy restrictions undertaking made under paragraph 7 (bankruptcy restrictions undertaking) of Schedule 2A to the Insolvency Order;

(d) whether the person has been a director³⁸ or partner of, or otherwise concerned in the management of, a business that has gone into insolvency, liquidation or administration while the person was concerned with that business or within one year of their being so concerned;

(e) whether—

(i) in Great Britain, the person has been convicted of any criminal offence, excluding convictions that are spent within the meaning of the Rehabilitation of Offenders Act 1974³⁹, or

(ii) in Northern Ireland, the person has been convicted of any criminal offence, excluding convictions that are spent within the meaning of the Rehabilitation of Offenders (Northern Ireland) Order 1978⁴⁰;

(f) whether there has been a judgment against the person or the person has reached a settlement in civil proceedings, particularly in connection with investment or other financial business, misconduct, fraud or the formation or management of a body corporate;

(g) whether—

(i) in Great Britain, the person has been subject to a disqualification order under section 1(1) (disqualification orders: general), or a disqualification undertaking under section 1A(1) (disqualification undertakings: general) of the Company Directors Disqualification Act 1986⁴¹, or

(ii) in Northern Ireland, the person has been subject to a disqualification order under Article 3(1) (disqualification orders: general), or a disqualification undertaking under Article 4(1) (disqualification undertakings: general) of the Company Directors Disqualification (Northern Ireland) Order 2002⁴²;

(h) whether the person has contravened any of the requirements or standards of—

(i) a regulator, including the Regulator, or

(ii) the registrar of companies⁴³;

(i) any information received from—

(i) a regulator, or

(ii) the registrar of companies;

(j) the person’s conduct in relation to, or arising out of or in connection with, any work the person has carried out in one or more of the capacities mentioned in section 62(2) of the 2021 Act—

(i) in the period of 5 years ending with the date of the application for authorisation of the scheme, and

(ii) at any time since the date of the application for authorisation of the scheme;

(k) whether—

(i) in Great Britain, the person has been prohibited from being a trustee of any trust, including any trust scheme within the meaning of section 124(1) of the Pensions Act 1995⁴⁴ (interpretation of Part 1), under—

(aa) section 3⁴⁵ of the Pensions Act 1995 (prohibition orders), or

(bb) any other legislation, or

(ii) in Northern Ireland, the person has been prohibited from being a trustee of any trust, including any trust scheme within the meaning of Article 121(1) of the 1995 Order (interpretation of Part 2), under—

(aa) Article 3⁴⁶ of the 1995 Order (prohibition orders), or

(bb) any other legislation;

(l) whether—

(i) in Great Britain, the person has been disqualified from being a trustee of any trust, including any trust scheme within the meaning of section 124(1) of the Pensions Act 1995, under—

(aa) section 29⁴⁷ of the Pensions Act 1995 (persons disqualified from being trustees), or

(bb) any other legislation, or

(ii) in Northern Ireland, the person has been disqualified from being a trustee of any trust, including any trust scheme within the meaning of Article 121(1) of the 1995 Order, under—

(aa) Article 29⁴⁸ of the 1995 Order (persons disqualified for being trustees), or

(bb) any other legislation.

3

For the purposes of section 62(3)(a) of the 2021 Act, the Regulator must take into account—

(a) the knowledge and skills gained from a person’s significant experience as a trustee, in assessing whether the person is fit and proper to act in that capacity;

(b) whether a person has successfully completed such relevant training as may be set out in a Code, in assessing whether the person is fit and proper to act in the capacity of a trustee of the scheme;

SCHEDULE 2 — Scheme design requirement

PART 1 — Matters that the Regulator must take into account

1

The Regulator must take into account the following matters in deciding whether it is satisfied that the design of a collective money purchase scheme is sound—

(a) the information or documents mentioned in regulation 10(3) that are provided to the Regulator in accordance with section 64(6) of the 2021 Act (viability report);

(b) whether the Regulator is satisfied that the scheme is a collective money purchase scheme within the meaning of section 52(2) of the 2021 Act (collective money purchase benefits and schemes);

(i) the requirements of section 69 of the 2021 Act (calculation of benefits), and

(ii) the requirements of regulation 17;

(d) whether the Regulator is satisfied that the conclusions reached by—

(i) the trustees as provided for in paragraph 8(1)(b);

(ii) the scheme actuary on the matters in regulation 11(2),

as set out in the viability report and viability certificate, are justified;

(e) whether the Regulator considers that—

(i) the contents of the viability report;

(ii) the contents of the viability certificate, and

(iii) the information provided to the Regulator concerning the testing or modelling used for the purposes of determining whether the design of the scheme is sound,

are sufficiently comprehensive in order to enable the Regulator to decide whether it is satisfied that the design of the scheme is sound.

PART 2 — Viability report

Preliminary

2

A viability report must include the information set out in paragraphs 3 to 9.

General

3

The date which has been chosen in respect of the viability report in accordance with regulation 10(5).

4

The name and contact details of the person to be contacted in respect of the viability report.

5

A statement, signed by the trustees confirming that—

(a) in their opinion, the design of the scheme is sound;

(b) the viability report has been approved by the trustees.

6

A statement, signed by the scheme actuary, confirming that, to the extent that the viability report refers to actuarial matters, the scheme actuary is satisfied that those references accurately reflect those matters in respect of the scheme.

7

The name of the scheme in respect of which the viability report has been prepared.

Information about the design of the scheme

8

(1) An explanation of—

(a) the design of the scheme;

(b) the reasons why the trustees consider the design of the scheme to be sound and the evidence on which this consideration is based.

(2) The evidence referred to in sub-paragraph (1)(b) must include the documents prepared by—

(a) the scheme actuary for the purposes of regulation 10(3)(b);

(b) the trustees for the purposes of regulation 10(3)(c).

9

The explanation required by paragraph 8(1) must include—

(a) an explanation of how the scheme satisfies the definition of a collective money purchase scheme under section 52(2) of the 2021 Act (collective money purchase benefits and schemes), including—

(i) an explanation of how the requirements of section 54 of the 2021 Act (qualifying schemes) are met in respect of the scheme, and

(ii) where the scheme is a section of a qualifying scheme, an explanation of how the requirements of section 54 of the 2021 Act are met in respect of that section;

(b) an explanation as to why the trustees are satisfied that the rules of the scheme meet—

(i) the requirements of section 69 of the 2021 Act (calculation of benefits);

(ii) the requirements of regulation 17.

PART 3 — Viability certificate

10

The viability certificate must contain the information set out in paragraphs 11 to 14.

11

The date which has been agreed in respect of the viability certificate in accordance with regulation 11(11).

12

The name and contact details of the scheme actuary.

13

The name of the scheme in respect of which the viability certificate is being obtained.

14

A statement, signed by the scheme actuary, confirming that—

(a) in the scheme actuary’s opinion, the design of the scheme is sound;

(b) when providing the viability certificate, the scheme actuary has had regard to the matters specified in regulation 11(2), as applicable.

SCHEDULE 3 — Financial sustainability requirement

PART 1 — Information required on application for authorisation

1

The other information to be included in an application, in relation to whether the scheme is financially sustainable, is—

(a) in relation to whether the scheme has sufficient financial resources to meet the costs mentioned in section 65(2)(a) of the 2021 Act (financial sustainability requirement)—

(i) an estimate of the cost of setting up the scheme;

(ii) an estimate of the cost of running the scheme, in accordance with any requirements set out in a Code;

(iii) details of the scheme’s sources of income including estimates of the amount of income from each source, in accordance with any requirements set out in a Code;

(iv) the trustees’ strategy for meeting any shortfall between the scheme’s income and the costs mentioned in section 65(2)(a) of the 2021 Act;

(v) an explanation of how any estimates provided have been calculated and of the assumptions used in reaching those estimates;

(vi) an explanation of the circumstances in which, and the extent to which, the scheme’s actual costs and income may vary from the estimates provided and any measures in place to address such variations;

(vii) where one or more employers in relation to the scheme has agreed to fund any of the costs mentioned in section 65(2)(a) of the 2021 Act, the following financial information in respect of each such employer to the extent it is available—

(aa) a cash flow statement for the previous 12 months, including any undrawn overdraft facility or revolving credit facility;

(bb) forecast and actual profit and loss for the previous 12 months;

(cc) budget for the year to date and any variation from that budget;

(dd) cash resources;

(ee) cash flow forecast for each of the following 4 quarters;

(ff) operating costs;

(gg) inter-company loans and other forms of funding;

(hh) the employer’s most recent accounts;

(ii) such further information, concerning the financial position of the employer, as is set out in a Code;

(viii) details of any financing arrangements entered into by the trustees in respect of the costs mentioned in section 65(2)(a) of the 2021 Act;

(ix) details of the security and enforceability of any loans or other funding commitments provided to the trustees in respect of the scheme, including the reasons why the trustees consider these commitments to be secure and enforceable;

(x) where the scheme has any arrangements with service providers that meet the description in paragraph 2(i), details of the matters set out in that paragraph in respect of each arrangement;

(xi) details of any insurance held in respect of the scheme, in respect of the costs mentioned in section 65(2)(a) of the 2021 Act, including details of the matters set out in paragraph 2(j);

(b) in relation to whether the scheme has sufficient financial resources to meet the costs mentioned in section 65(2)(b) of the 2021 Act—

(i) an estimate of the costs mentioned in section 65(2)(b)(i) of the 2021 Act;

(ii) an estimate of the costs mentioned in section 65(2)(b)(ii) of the 2021 Act;

(iii) the trustees’ strategy for meeting the costs mentioned in section 65(2)(b) of the 2021 Act;

(iv) the amount and classes of assets held by, or that will be available to, the trustees to meet those costs;

(v) an explanation of how any estimates provided have been calculated and of the assumptions used in reaching those estimates;

(vi) where one or more employers in relation to the scheme has agreed to fund any of the costs mentioned in section 65(2)(b) of the 2021 Act, the following financial information in respect of each employer to the extent it is available—

(aa) a cash flow statement for the previous 12 months, including any undrawn overdraft facility or revolving credit facility;

(bb) forecast and actual profit and loss for the previous 12 months;

(cc) budget for the year to date and any variation from that budget;

(dd) cash resources;

(ee) cash flow forecast for each of the following 4 quarters;

(ff) operating costs;

(gg) inter-company loans and other forms of funding;

(hh) the employer’s most recent accounts;

(ii) such further information, concerning the financial position of the employer, as is set out in a Code;

(vii) details of the security and enforceability of any loans or other funding commitments provided to the trustees in respect of the scheme, including the reasons why the trustees consider these commitments to be secure and enforceable;

(viii) details of any insurance held in respect of the scheme in respect of the costs mentioned in section 65(2)(b) of the 2021 Act, including details of the matters set out in paragraph 3(i);

(ix) details of any compensation for which members are eligible in the event of a scheme failure, including details of the matters set out in paragraph 3(k) of this Schedule.

PART 2 — Matters which the Regulator must take into account

2

The Regulator must take account of the following matters in deciding whether it is satisfied that a collective money purchase scheme has sufficient financial resources to meet the costs mentioned in section 65(2)(a) of the 2021 Act (financial sustainability requirement)—

(a) the scheme’s sources of income, including the estimated amount of income from each source;

(b) the estimated cost of setting up the scheme;

(d) the trustees’ strategy for meeting any shortfall between the scheme’s income and the costs mentioned in section 65(2)(a) of the 2021 Act;

(e) the robustness of any estimates provided to the Regulator in relation to the costs mentioned in section 65(2)(a) of the 2021 Act, and the robustness of the strategy mentioned in sub-paragraph (d);

(f) where one or more employers in relation to the scheme has agreed to fund any of the costs mentioned in section 65(2)(a) of the 2021 Act, the financial position of each of those employers that the Regulator considers relevant;

(g) the scheme financing arrangements entered into by the trustees in respect of the costs mentioned in section 65(2)(a) of the 2021 Act;

(h) the security and enforceability of loans and other funding commitments provided to the trustees in respect of the scheme;

(i) where the scheme has an arrangement with a service provider under which the service provider accepts the risk that its costs will exceed any fee paid to it, the provisions made to secure this service and any limitation on the service provider’s liability for those costs;

(j) any insurance held in respect of the costs mentioned in section 65(2)(a) of the 2021 Act, including details of—

(i) the insurance provider;

(ii) the policy holder;

(iii) the beneficiary of the policy;

(iv) any limitations on the insurer’s liability.

3

(a) the most recent estimates of the costs mentioned in section 65(2)(b) of the 2021 Act provided in respect of the scheme;

(b) the extent and manner in which the trustees have made provision to meet those costs;

(d) the robustness of any estimates provided to the Regulator in relation to the costs mentioned in section 65(2)(b) of the 2021 Act, and the robustness of the strategy for meeting those costs;

(e) where one or more employers in relation to the scheme has agreed to fund the costs mentioned in section 65(2)(b) of the 2021 Act, the financial position of each of those employers that the Regulator considers relevant;

(f) the security and enforceability of loans and other funding commitments provided to the trustees in respect of the scheme;

(g) whether the scheme rules impose liability on any person for the following costs and, if so the identity of those liable—

(i) the costs of winding up the scheme;

(ii) the costs of converting the scheme into a closed scheme;

(h) the alignment between the actions set out in the scheme’s continuity strategy and the estimate in the strategy of the costs of carrying out those actions;

(i) any insurance held in respect of the costs mentioned in section 65(2)(b) of the 2021 Act, including details of—

(i) the insurance provider;

(ii) the policy holder;

(iii) the beneficiary of the policy;

(iv) any limitations on the insurer’s liability;

(j) the quality of the scheme’s records and data;

(k) whether the members are eligible for compensation in the event of a scheme failure and, if so, details of—

(i) the compensation provider;

(ii) the basis on which the compensation is payable;

(iii) any limits on the amount of compensation payable;

(l) the scheme’s most recent continuity strategy.

PART 3 — Requirements to be met by the collective money purchase scheme

4

A collective money purchase scheme must meet the following requirements relating to its financing—

(a) any assets held by or available to the trustees to meet the costs mentioned in section 65(2) of the 2021 Act (financial sustainability requirement) must be—

(i) of the classes and in the proportions set out in a Code;

(ii) valued in accordance with any discounted rates set out in a Code;

(iii) available to be used when the relevant costs fall due;

(b) the scheme’s trustees must have first call on the assets referred to in sub-paragraph (a);

(c) any funding commitment made to the scheme in respect of the costs mentioned in section 65(2) of the 2021 Act must be given in writing and duly executed by the party making the commitment.

SCHEDULE 4 — Communication requirement

Interpretation

1

In this Schedule—

“scheme communication” means a notification, notice, document, statement or other communication relating to the scheme which is provided, or made available, to a relevant person by or on behalf of the scheme;

“relevant functions” are—the development, production, provision or review of scheme communications;record-keeping in respect of scheme communications;quality assurance activities in respect of scheme communications, andany other functions, in respect of scheme communications, set out in a Code.

Preliminary

2

The matters that the Regulator must take into account in deciding, for the purposes of section 66 of the 2021 Act (communication requirement), whether it is satisfied that a collective money purchase scheme has adequate systems and processes for communicating with members and others, are set out in paragraphs 3 to 6.

Functionality, quality and maintenance of IT systems

3

Whether the IT systems used for the purposes of carrying out relevant functions—

(a) have the necessary capacity and capability to enable relevant functions to be carried out by or on behalf of the scheme in accordance with—

(i) any legal requirement in relation to scheme communications, and

(ii) the scheme’s systems and processes concerning scheme communications;

(b) are monitored to ensure that they continue to have the necessary capacity and capability;

(d) have a back-up system which allows data concerning scheme communications to be recovered if the main system fails;

(e) have restricted physical and electronic access, with firewalls and other appropriate protection against viruses and other threats;

(f) are maintained at regular intervals, either automatically or by a person with the appropriate skills and experience;

(g) are backed up and updated regularly, including the maintenance of firewalls and other preventative systems.

Resource planning

4

Whether there are systems and processes for ensuring that there are sufficient human resources, with the relevant skills, qualifications and capacity necessary to enable relevant functions to be carried out by or on behalf of the scheme in accordance with—

(a) any legal requirement in relation to scheme communications, and

(b) the scheme’s systems and processes concerning scheme communications.

Quality assurance

5

Whether there are systems and processes—

(a) for assessing and improving the effectiveness of scheme communications and for updating scheme communications to take into account these assessments;

(b) for ensuring that the information contained in scheme communications is accurate and is not misleading;

(d) for ensuring that scheme communications are provided or made available in a timely manner;

(e) for scheme communications to be reviewed by such persons as the trustees consider appropriate before being provided or made available and for scheme communications to be kept under review as appropriate.

Member engagement

6

Whether there are systems and processes—

(a) for gathering feedback from members concerning scheme communications;

(b) for evaluating feedback from members concerning scheme communications and sharing this feedback with trustees;

(c) for taking into account feedback from members concerning scheme communications in the design of scheme communications;

(d) for reporting to the trustees, and members, as to how feedback from members has been taken into account in the design of scheme communications.

SCHEDULE 5 — Systems and processes requirement

Preliminary

1

The matters that the Regulator must take into account in deciding, for the purposes of section 67 of the 2021 Act (systems and processes requirements), whether it is satisfied that the systems and processes used in running a collective money purchase scheme are sufficient to ensure that the scheme is run effectively are set out in paragraphs 2 to 14.

Features and functionality of IT systems

2

Whether the IT systems have the capacity and capability—

(a) to process financial transactions securely, accurately and by automated means, including the core transactions described in regulation 24(2) of the Occupational Pension Schemes (Scheme Administration) Regulations (Northern Ireland) 1997⁴⁹ (requirements for processing financial transactions);

(b) to make and receive electronic payments;

(d) to exchange data with other IT systems, including those used by employers and service providers;

(e) to process information securely, accurately and by automated means for the purposes of calculating the rate or amount of benefits to be provided under the scheme, in accordance with the scheme rules;

(f) to reconcile data on transactions and produce reports so that those activities can be monitored and transaction errors rectified promptly;

(g) to identify and categorise transactions and payments for authorisation and countersigning at an appropriate level of authority;

(h) to be updated to reflect changes in the legal requirements affecting transactions, payments and records, including changes in tax thresholds, the annual allowance and the lifetime allowance.

Standards required of IT systems

3

Whether the IT systems—

(a) are capable of being upgraded to reflect changes in required transactions and capacity;

(b) have restricted physical and electronic access, with firewalls and other appropriate protection against viruses and other threats;

Maintenance of IT systems

4

Whether the IT systems—

(a) are maintained at regular intervals, either automatically or by a person with the appropriate skills and experience;

(b) are backed up and updated regularly, including the maintenance of firewalls and other preventative systems;

Member records

5

Whether the scheme’s systems and processes ensure that—

(a) there is an accurate record on the relevant IT system of each member’s details, including the member’s pensionable service and pensionable salary and, on an annual basis, the amount that represents the member’s share of the available assets of the scheme;

(b) any unpaid contributions by or in respect of active members can be explained to the Regulator and remedied;

(c) members’ records are reviewed regularly for completeness and accuracy and updated promptly with changes of information;

(d) errors in member’s records can be identified and addressed, and any financial impact of such errors on members can be rectified;

(e) for each financial year, records are maintained—

(i) in respect of each person receiving payment of a pension or other benefits under the scheme, including the amount of benefits received during the year;

(ii) in respect of each person receiving payment of a periodic income in accordance with paragraph 7 of Schedule 6, including the amount of income received during the year;

(f) for each financial year, there is an accurate record of the amount that represents the value of accrued rights to benefits under the scheme that has been transferred out of the scheme during the financial year.

Trustees and others

6

Whether there are systems and processes—

(a) for the fair and transparent recruitment, appointment, resignation and removal of trustees;

(b) for the fair and transparent recruitment, appointment, resignation and removal of the scheme actuary;

(c) for determining and recording that persons involved in the scheme in the capacities mentioned in section 62(2) of the 2021 Act (fit and proper persons requirement) are, and remain, fit and proper;

(d) for monitoring and recording trustees’ learning and development, and for ensuring that it is appropriate for the scheme’s activities;

(e) in relation to meetings of trustees, including—

(i) the intervals at which meetings of trustees are to take place;

(ii) the number of trustees required to authorise decisions on risk management, resource planning and investments;

(iii) the process for managing the scheme’s business between meetings of the trustees;

(f) for recording, maintaining and managing all documents relating to the trustees in an accessible medium;

(g) for managing the scheme’s business if one or more trustees are absent.

Contracts and service providers

7

Whether there are systems and processes—

(a) for establishing that service providers have the necessary qualifications, experience or approval, as applicable;

(b) for establishing that service providers have the capability to provide their services in respect of the scheme—

(i) in accordance with any scheme rules that relate to those services;

(ii) in accordance with any statutory requirement in relation to those services to which the trustees are subject in respect of the scheme, to the extent that the services are provided on behalf of the trustees;

(c) for ensuring that trustees are appropriately engaged in overseeing service providers and in decisions concerning them, including their appointment;

(d) for informing the trustees of—

(i) any failure by service providers to deliver services;

(ii) any actions or omissions by service providers which may prejudice the effective running of the scheme;

(e) for recording, maintaining and managing all documents relating to service providers in an accessible medium.

Governance

8

Whether there are systems and processes—

(a) for the identification of roles and responsibilities in respect of the governance of the scheme; for identifying, managing and monitoring risks in respect of the soundness of the design of the scheme ;for the appointment of persons with sufficient skills, knowledge and experience to carry out those roles and responsibilities;

(b) for setting clear objectives concerning the governance of the scheme and for monitoring whether those objectives are being met within the relevant timescales;

(d) for identifying and addressing any failures in the governance of the scheme.

Risk management

9

Whether there are systems and processes—

(a) for identifying, managing and monitoring operational, financial, regulatory and compliance risks;

(b) for identifying, managing and monitoring risks in respect of the soundness of the design of the scheme;

(d) for ensuring that risks are managed in a timely manner by persons with the appropriate skills, knowledge and resources;

(e) for informing the trustees about risks that have arisen and the steps being taken to manage them.

Security

10

Whether there are systems and processes—

(a) for preventing unauthorised access to sensitive records and infrastructure, including those containing member information, financial details or investment information;

(b) for monitoring and recording electronic and physical access to sensitive records and infrastructure;

Resource planning

11

Whether there are systems and processes for ensuring that there are sufficient human resources with the skills, qualifications and capacity necessary to comply with the requirements of Part 2 of the 2021 Act (collective money purchase benefits: Northern Ireland) and, in particular—

(a) to run and maintain the scheme’s systems and processes;

(b) to provide for the effective running of the scheme, and

(c) to send appropriate and timely notifications, information and documents to the Regulator, including information about the scheme’s systems and processes.

Investments

12

Whether there are systems and processes—

(a) for investing contributions in a timely manner in accordance with the scheme’s investment policy;

(b) for recording investment decisions;

(d) for recording, managing and reviewing the risks associated with investment decisions, and

(e) for informing trustees about questions, decisions and risks relating to investments.

Valuation and benefit adjustment

13

Whether there are systems and processes—

(a) for ensuring that the rules of the scheme meet the requirements of section 69 of the 2021 Act (calculation of benefits) and regulation 17;

(b) for ensuring that the trustees comply with section 70(1) of the 2021 Act (advice of scheme actuary);

(d) for ensuring that the trustees obtain actuarial valuations in accordance with section 71 of the 2021 Act (actuarial valuations) and regulation 19;

(e) for establishing that the scheme actuary has complied with section 72 of the 2021 Act (certificate that actuarial valuation prepared in accordance with scheme rules);

(f) for complying with the requirements of section 73 of the 2021 Act (benefits adjustments), where applicable;

(g) for responding to a direction given under section 74(2) of the 2021 Act (powers of the Pensions Regulator).

Member engagement

14

Whether there are systems and processes—

(a) for facilitating members’ engagement with the scheme;

(b) for bringing members’ views to the attention of the trustees;

SCHEDULE 6 — Continuity option 1: transfer out and winding up

Definitions

1

(1) In this Schedule—

“arrangement” has the meaning given in section 152 of the Finance Act 2004⁵⁰;

“beneficiary” in relation to the collective money purchase scheme means—a member of the scheme, ora person who has survived a member of the scheme and has an entitlement to benefits, or a right to future benefits, under the scheme rules in respect of the member;

“default arrangement” has the meaning given in regulation 3 of the Occupational Pension Schemes (Charges and Governance) Regulations (Northern Ireland) 2015⁵¹;

“default discharge option” means the way the trustees propose to discharge the scheme’s liability to a beneficiary in respect of the beneficiary’s accrued rights to benefits under the scheme, unless the beneficiary specifies otherwise in accordance with paragraph 14;

“dependant” has the meaning given in paragraph 15 of Schedule 28 to the Finance Act 2004;

“dependants’ income withdrawal” has the meaning given in paragraph 21 of Schedule 28 to the Finance Act 2004;

“dependant’s flexi-access drawdown fund” has the meaning given in paragraph 22A of Schedule 28 to the Finance Act 2004;

“discharge time” in relation to a beneficiary under the scheme means the time that the scheme’s liability to the beneficiary in respect of the value of the beneficiary’s accrued rights to benefits under the scheme is discharged;

“final quantification” means the final quantification carried out immediately prior to the discharge time, in accordance with paragraph 5(1)(f);

“income withdrawal” has the meaning given in paragraph 7⁵² of Schedule 28 to the Finance Act 2004;

“initial quantification” means the initial quantification carried out in accordance with paragraph 5(1)(c);

“member’s flexi-access drawdown fund” has the meaning given in paragraph 8A⁵³ of Schedule 28 to the Finance Act 2004;

“nominee” has the meaning given in paragraph 27A of Schedule 28 to the Finance Act 2004;

“nominees’ income withdrawal” has the meaning given in paragraph 27D of Schedule 28 to the Finance Act 2004;

“nominee’s flexi-access drawdown fund” has the meaning given in paragraph 27E of Schedule 28 to the Finance Act 2004;

“pensioner beneficiary”, in relation to the collective money purchase scheme, means a person who is entitled to the present payment of pension or other benefits under the scheme;

“penultimate quantification” means the quantification carried out not less than one month before the proposed discharge time, in accordance with paragraph 5(1)(e);

“periodic income” means a payment made by a scheme under paragraph 7, which is not the payment of a benefit (including pension) under the scheme;

“quantification” means the quantification of the amount that represents the value of each beneficiary’s accrued rights to benefits under the scheme;

“successor” has the meaning given in paragraph 27F of Schedule 28 to the Finance Act 2004;

“successors’ income withdrawal” has the meaning given in paragraph 27J of Schedule 28 to the Finance Act 2004;

“successor’s flexi-access drawdown fund” has the meaning given in paragraph 27K of Schedule 28 to the Finance Act 2004;

“winding-up commencement time” means the time, determined in accordance with these Regulations and the scheme rules, that winding-up is taken to begin for the purposes of continuity option 1;

“winding-up period” means the period beginning with the winding-up commencement time and ending when the winding-up of the scheme is completed;

“winding-up quantification” means the quantification carried out after the Regulator notifies the trustees that the implementation strategy is approved, in accordance with paragraph 5(1)(d).

(2) Notices given under this Schedule must be sent—

(a) in writing, by post or email;

(b) to the addressee’s last known address, and

(3) For the purposes of sub-paragraph (2), a person’s email address is—

(a) any email address provided for the time being by that person as an address for contacting that person, or

(b) if no such address has been provided, any email address by means of which the sender reasonably believes that the notice will come to the attention of that person or (where that person is a body corporate) any director or other officer of that body corporate.

(4) A notice under this Schedule sent to a person by email is taken to have been received by that person 48 hours after it is sent.

Alternative ways of discharging the scheme’s liability

2

(1) For the purposes of section 87(2)(b) of the 2021 Act (continuity option 1: discharge of liabilities and winding up), the ways of discharging a collective money purchase scheme’s liability to each beneficiary in respect of the beneficiary’s accrued rights to benefits under the scheme (the “transferring scheme”) are—

(a) transferring the value of those rights to an occupational pension scheme (the “receiving scheme”) where an employer in relation to the transferring scheme is or is connected with a controlling employer or a principal employer of the receiving scheme;

(b) transferring the value of those rights to a member’s flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the beneficiary to income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004 (pension schemes etc);

(c) transferring the value of those rights to a dependant’s flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the dependant to dependants’ income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004;

(d) transferring the value of those rights to a nominee’s flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the nominee to nominees’ income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004;

(e) transferring the value of those rights to a successor’s flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the successor to successors’ income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004.

(2) For the purposes of section 87(2)(c) of the 2021 Act, the way of discharging a collective money purchase scheme’s liability to each beneficiary in respect of the beneficiary’s accrued rights to benefits under the scheme is securing the payment of benefits by the purchase of one or more policies from one or more insurers authorised by the Financial Conduct Authority for carrying on long-term insurance business in the United Kingdom.

(3) In this paragraph—

“controlling employer” in relation to a scheme is the employer that has the power to act on behalf of all employers in the scheme in relation to the scheme rules

“principal employer” in relation to a scheme is the principal employer for the purposes of the scheme in accordance with the scheme rules.

Requirements of rules of scheme

3

(1) The rules of a collective money purchase scheme must make provision about how continuity option 1 is to be given effect in the event that the trustees are required or decide to pursue continuity option 1.

(2) The rules must include the following—

(a) the time when the winding-up is to be taken to begin for the purposes of continuity option 1, taking account of the requirements of paragraph 4;

(b) how the value of the available assets of the scheme is to be determined;

(c) how the amount that represents the value of each beneficiary’s accrued rights to benefits under the scheme is to be quantified for the purposes of the initial quantification, the winding-up quantification and any subsequent quantification (including the penultimate quantification) carried out prior to the final quantification;

(d) how the amount that represents the value of each beneficiary’s accrued rights to benefits under the scheme is to be quantified for the purposes of the final quantification;

(e) how the amount or rate of periodic income payable during the winding-up period is to be calculated and adjusted from time to time.

(3) Rules for determining how the amount that represents the value of each beneficiary’s accrued rights to benefits under the scheme is to be quantified must apply to all beneficiaries of the scheme without variation.

Winding-up commencement time

4

(1) Where the trustees of a collective money purchase scheme are required to pursue continuity option 1 because a triggering event which is an item 1 or 2 triggering event has occurred in relation to the scheme, the winding-up commencement time must be on the date the decision to withdraw authorisation becomes final for the purposes of Part 2 of the 2021 Act (collective money purchase benefits: Northern Ireland).

(2) Where the trustees of a collective money purchase scheme are required to pursue continuity option 1 because a triggering event which is an item 3 triggering event has occurred in relation to the scheme, the winding-up commencement time must be on the date on which the Regulator gives a notification under section 58(3) of the 2021 Act (authorisation of collective money purchase schemes).

(3) Subject to sub-paragraphs (1) and (2), the winding-up commencement time shall be determined in accordance with paragraphs (4) to (7)⁵⁴ of Article 121 of the 1995 Order (interpretation of Part 2).

Quantification of the value of beneficiaries’ accrued rights to benefits

5

(1) The quantification of the value of each beneficiary’s accrued rights to benefits under the scheme must be carried out—

(a) in accordance with these Regulations and with the scheme rules;

(b) on an actuarial basis;

(d) as a subsequent estimate within the period of 6 months beginning with the date on which the Regulator notifies the trustees that the implementation strategy is approved;

(e) as a final estimate not less than one month before the proposed discharge time, and

(f) as a final figure immediately prior to the discharge time in relation to the beneficiary.

(2) The quantification must be carried out by reference to the realisable value of the available assets of the scheme.

(3) The amount that represents the value of a beneficiary’s accrued rights to benefits under the scheme for the purposes of the final quantification must be reduced to take account of any periodic income received by that beneficiary in accordance with paragraph 7.

Winding-up period

6

(1) Subject to sub-paragraph (5), no new members may be admitted to the scheme during the winding-up period.

(2) No further contributions by or on behalf or in respect of members of the scheme may be paid towards the scheme (other than those due to be paid before the beginning of the winding-up period) during the winding-up period.

(3) No benefits may accrue to or in respect of members of the scheme during the winding-up period.

(4) Subject to sub-paragraph (6), no pension or other benefits may be paid by the scheme to or in respect of beneficiaries during the winding-up period.

(5) Where a person is entitled to a pension credit derived from another person’s shareable rights under the scheme nothing in this Schedule prevents the trustees of the scheme discharging their liability in respect of the credit under Chapter 1 of Part 5 of the 1999 Order (sharing of rights under pension arrangements) by conferring appropriate rights under the scheme on that person.

(6) Nothing in this Schedule prevents the exercise of any right or power conferred by Chapter 2 of Part 4ZA⁵⁵ of the 1993 Act (early leavers: cash transfer sums and contribution refunds) or the discharge of any duty imposed by that Chapter.

(7) The requirements mentioned in sub-paragraph (8) cease to apply during the winding-up period and the trustees are discharged from any liability to carry out these requirements in respect of the winding-up period.

(8) The requirements are—

(a) obtaining actuarial valuations in accordance with section 71 of the 2021 Act (actuarial valuations);

(b) determining the rate or amount of benefits under the scheme, under scheme rules in accordance with section 69 of the 2021 Act (calculation of benefits), and

(c) providing qualifying benefits including the payment of a pension or other benefits under the scheme, as provided for in section 54 of the 2021 Act (qualifying schemes).

(9) In sub-paragraph (5)—

“appropriate rights” has the same meaning as in paragraph 5 of Schedule 5 to the 1999 Order (pension credits: mode of discharge);

“shareable rights” has the meaning given in Article 24(2) of the 1999 Order (scope of mechanism).

Periodic income

7

(1) Where a person was a pensioner beneficiary of the scheme immediately prior to the beginning of the winding-up period, or would have become a pensioner beneficiary of the scheme during the winding-up period but for the provisions of this Schedule, the trustees must pay that person a periodic income under and in accordance with this paragraph.

(2) A payment of periodic income by a scheme under this paragraph is not a payment of benefits (including pension) under the scheme.

(3) The periodic income is payable to a person who was a pensioner beneficiary of the scheme immediately prior to the beginning of the winding–up period during the period beginning with the date of the winding-up commencement time and continuing until the earlier of the date of the discharge time in relation to that person or the date that person would otherwise have ceased to be a pensioner beneficiary.

(4) The periodic income is payable to a person who would have become a pensioner beneficiary of the scheme during the winding-up period but for the provisions of this Schedule during the period beginning with the date that person would have become a pensioner beneficiary and continuing until the earlier of the date of the discharge time in relation to that person or the date that person would otherwise have ceased to be a pensioner beneficiary.

(5) In the case of a person who was a pensioner beneficiary immediately prior to the beginning of the winding-up period, payments of periodic income before the initial quantification has been carried out must be made—

(a) on the same date that a payment of pension would have been due to be made to that person had the winding-up of the scheme not commenced, and

(b) at the same rate or amount as the last payment of pension made to that person before the beginning of the winding-up period.

(6) In the case of a person who would have become a pensioner beneficiary of the scheme during the winding-up period but for the provisions of this Schedule, payments of periodic income before the initial quantification has been carried out must—

(a) be made on the same date that a payment of pension would have been due to be made to that person had the winding-up of the scheme not commenced, and

(b) be calculated by reference to the last actuarial valuation carried out before the beginning of the winding-up period.

(7) After the initial quantification has been carried out, the amount or rate of the periodic income payable to a person must—

(a) be calculated by reference to the amount that represents the value of the person’s accrued rights to benefits under the scheme;

(b) until the winding-up quantification has been carried out, be calculated and paid on the basis of the initial estimate;

(c) after the winding-up quantification has been carried out, be calculated and paid on the basis of the latest of the winding-up quantification or any subsequent quantification;

(d) be adjusted from time to time to take account of any subsequent quantification carried out up to and including the penultimate quantification.

Information about periodic income

8

(1) The information mentioned in sub-paragraph (2) must be given in accordance with the provisions of this paragraph to each person who was a pensioner beneficiary of the scheme immediately prior to the beginning of the winding-up period and to each person who would have become a pensioner beneficiary of the scheme during the winding-up period but for the provisions of this Schedule.

(2) The information is—

(a) that during the winding-up period pensions and other benefits cease to be payable under the scheme and instead the scheme must make payments of periodic income to persons who were and to persons who would have become pensioner beneficiaries;

(b) when payment of the periodic income to the person will commence or, if a payment of periodic income has already been made, when the payments commenced;

(c) an explanation that payment of the periodic income from the scheme will cease at the earlier of the date of the discharge time in relation to the person or the date the person would otherwise have ceased to be a pensioner beneficiary;

(d) details of when and how the periodic income is to be or is being paid;

(e) the amount that the person’s periodic income will be following the initial quantification, where this is known;

(f) an explanation of how the amount of the periodic income is calculated;

(g) that the amount may be adjusted during the winding-up period, and that the amount may reduce following an adjustment;

(h) how and when notice of any adjustment will be given to the person;

(i) that the value of the person’s accrued rights to benefits under the scheme at the discharge time will be reduced to take account of the periodic income payments made to the person during the winding-up period.

(3) In the case of a person who was a pensioner beneficiary under the scheme immediately prior to the beginning of the winding-up period, the information must be given as soon as practical and in any event no more than one month after the date of the winding-up commencement time.

(4) In the case of a person who would have become a pensioner beneficiary under the scheme during the winding-up period but for the provisions of this Schedule, the information must be given as soon as practical and in any event no more than one month after the date the person would have become a pensioner beneficiary.

Scheme to continue to be a CMPS during winding-up

9

(1) A “collective money purchase scheme” for the purposes of Part 2 of the 2021 Act (collective money purchase benefits: Northern Ireland)) includes a scheme or section of a scheme during the winding-up period where the scheme or section was a collective money purchase scheme immediately before the winding-up commencement time.

(2) Sub-paragraph (1) applies irrespective of the fact that in accordance with the requirements of this Schedule the scheme or section has, during the winding-up period—

(a) ceased to make payments of benefits including payments of pension under the scheme, and

(b) commenced payments of periodic income under paragraph 7(1).

Trustees’ notice to employers

10

(1) The trustees of a collective money purchase scheme that is pursuing continuity option 1 must send a notice to each employer and relevant former employer in relation to the scheme containing the information mentioned in sub-paragraph (2), in accordance with sub-paragraph (3).

(2) The information is—

(a) details of the default discharge options identified in respect of beneficiaries and details of which option will apply to different descriptions of beneficiary including the name of any scheme which has been identified as a default discharge option for beneficiaries of the scheme;

(b) that if a beneficiary does not specify an alternative in accordance with the requirements of this Schedule, the scheme’s liability to the beneficiary will be discharged in accordance with the relevant default discharge option;

(c) the beneficiary’s rights under Chapter 2 of Part 4ZA of the 1993 Act (early leavers: cash transfer sums and contribution refunds);

(d) the timetable for future communication with beneficiaries and employers;

(e) that the notice is for information only.

(3) A notice under this paragraph must be sent before the end of 14 days beginning with—

(a) the date on which the trustees identify the default discharge options, or

(b) if later, the date on which the Regulator notifies the trustees that the implementation strategy is approved.

Notification to receiving scheme

11

(1) The trustees of a collective money purchase scheme that is pursuing continuity option 1 must send a notice to the trustees or managers of any occupational pension scheme to which they propose to transfer the value of beneficiaries’ accrued rights to benefits under the scheme under a default discharge option, the trustees or managers of which are able and willing to accept the transfer.

(2) The notice sent under this paragraph must state that the scheme has been selected as a default discharge option for the purposes of section 87 of the 2021 Act (continuity option 1: discharge of liabilities and winding up), for the transfer of the value of beneficiaries’ accrued rights to benefits.

(3) The notice must be sent before the end of 14 days beginning with—

(a) the date on which the trustees identify the scheme as a default discharge option for those purposes, or

(b) if later, the date on which the Regulator notifies the trustees that the implementation strategy is approved.

Trustees’ first notice to beneficiaries in respect of discharge options

12

(1) The trustees of a collective money purchase scheme that is pursuing continuity option 1 must send a notice to each beneficiary of the scheme containing the information mentioned in sub-paragraph (2), in accordance with sub-paragraph (3).

(2) The information is—

(a) details of the default discharge option for the beneficiary;

(b) where the beneficiary can obtain information and guidance about the default discharge option;

(c) details of the beneficiary’s right to choose whether the value of the beneficiary’s accrued rights to benefits under the scheme are discharged by—

(i) the default discharge option proposed by the trustees, or

(ii) an alternative option specified by the beneficiary;

(d) details of the alternative options available to the beneficiary in accordance with paragraph 14(2);

(e) details of the beneficiary’s rights under Chapter 2 of Part 4ZA of the 1993 Act (early leavers: cash transfer sums and contribution refunds);

(f) next steps and the timetable for future communications with the beneficiary.

(3) A notice under this paragraph must be sent before the end of 14 days beginning with—

(a) the date on which the trustees identify the default discharge option in relation to the beneficiary, or

(b) if later, the date on which the Regulator notifies the trustees that the implementation strategy is approved.

Trustees’ second notice to beneficiaries in respect of discharge options

13

(1) The trustees of a collective money purchase scheme that is pursuing continuity option 1 must send a second notice to each beneficiary of the scheme containing the information mentioned in sub-paragraph (2), in accordance with sub-paragraph (3).

(2) The information is—

(a) the proposed discharge time;

(b) an estimate of the amount that represents the value of the beneficiary’s accrued rights to benefits under the scheme based on the latest quantification in relation to the beneficiary;

(c) details of the default discharge option for the beneficiary including the nature of the arrangement it is proposed will be used to discharge the scheme’s liability to the beneficiary and the name of the scheme or insurers the trustees propose to use;

(d) that the scheme’s liability to the beneficiary in respect of the value of the beneficiary’s accrued rights to benefits under the scheme will be discharged by the default discharge option unless the beneficiary specifies otherwise;

(e) where the beneficiary can obtain information and guidance about the default discharge option;

(f) details of the beneficiary’s right to choose whether the value of the beneficiary’s accrued rights to benefits under the scheme are discharged by—

(i) the default discharge option proposed by the trustees, or

(ii) an alternative option specified by the beneficiary;

(g) the requirement for a beneficiary who wishes to specify an alternative option to send the trustees of the collective money purchase scheme a notice in accordance with paragraph 14;

(h) details of the alternative options available to the beneficiary in accordance with paragraph 14(2);

(i) details of the beneficiary’s rights under Chapter 2 of Part 4ZA of the 1993 Act (early leavers: cash transfer sums and contribution refunds);

(j) details of where the beneficiary can obtain information and guidance about the alternative options available to the beneficiary;

(k) next steps and the timetable for future communications with beneficiaries.

(3) A notice under this paragraph must be sent before the end of the period of one month beginning with the date on which the winding-up quantification was completed.

Beneficiaries’ response to trustees

14

(1) A beneficiary who has received notice from the trustees under paragraph 13 may give notice to the trustees requiring them to discharge the scheme’s liability to the beneficiary in respect of the value of the beneficiary’s accrued rights to benefits under the scheme—

(a) in the way set out in the default discharge option, or

(b) in an alternative way specified by the beneficiary.

(2) The alternative ways which may be specified by the beneficiary are—

(a) transferring the value of the beneficiaries’ accrued rights to benefits under the scheme to an authorised collective money purchase scheme or an authorised Master Trust scheme;

(b) transferring the value of those rights to a personal pension scheme or an occupational pension scheme which is registered under Chapter 2 of Part 4 of the Finance Act 2004 (registration of pension schemes);

(c) transferring the value of those rights to a member’s flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the beneficiary to income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004 (pension schemes etc);

(ca) transferring the value of those rights to a dependant’s flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the dependant to dependants’ income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004;

(cb) transferring the value of those rights to a nominee’s flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the nominee to nominees’ income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004;

(cc) transferring the value of those rights to a successor’s flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the successor to successors’ income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004;

(d) securing the payment of benefits by the purchase of one or more policies from one or more insurers authorised by the Financial Conduct Authority for carrying on long-term insurance business in the United Kingdom.

(3) Where the alternative way specified by the beneficiary is that the value of the beneficiary’s accrued rights to benefits should be transferred to an alternative pension scheme, the scheme must be one which is able and willing to accept the transfer.

(4) A notice under this paragraph—

(a) must be sent before the end of the period of 3 months beginning with the day when the beneficiary received notice from the trustees under paragraph 13, and

(b) must contain sufficient information about the alternative way specified by the beneficiary, including bank account details, to enable the trustees to comply with paragraph 15.

Notice of expected discharge time

15

(1) Not less than one month before the date of the expected discharge time, the trustees of a collective money purchase scheme that is pursuing continuity option 1 must send a notice of the expected discharge time to—

(a) each beneficiary of the scheme, and

(b) the employers in relation to the scheme.

Trustees’ powers

16

(1) This paragraph applies where the trustees of a collective money purchase scheme that is pursuing continuity option 1 do not receive a notice from a beneficiary in accordance with paragraph 14.

(2) The trustees may discharge the scheme’s liability to a beneficiary in respect of the beneficiary’s accrued rights to benefits under the scheme in the way set out in the default discharge option for the beneficiary without the consent of the beneficiary.

(3) Where the default discharge option for a beneficiary is the way referred to in paragraph 2(2) and the scheme discharges its liability to the beneficiary in this way without the beneficiary’s consent, the beneficiary is deemed to have entered into an agreement with the insurer.

Trustees’ duty to transfer

17

(1) If the trustees of a collective money purchase scheme that is pursuing continuity option 1 receive notice from a beneficiary in accordance with paragraph 14, they must arrange for the scheme’s liability to the beneficiary in respect of the beneficiary’s accrued rights to benefits under the scheme to be discharged as specified in the notice.

(2) If the trustees do not receive notice from a beneficiary in accordance with paragraph 14, they must arrange for the scheme’s liability to the beneficiary in respect of the beneficiary’s accrued rights to benefits under the scheme to be discharged in accordance with the default discharge option.

(3) When the trustees have arranged for the scheme’s liability to a beneficiary to be discharged in accordance with sub-paragraph (1) or (2) they must notify the beneficiary of—

(a) the value of the beneficiary’s accrued rights to benefits under the scheme;

(b) any reductions made in accordance with paragraph 5(3), and

(c) who has or will become liable for the payment of benefits to the beneficiary when the scheme’s liability to the beneficiary in respect of the value of the beneficiary’s accrued rights to benefits under the scheme is discharged.

Administration charges

18

(1) This paragraph applies to the trustees or managers of any occupational pension scheme (the “proposed receiving scheme”) to which the trustees of a collective money purchase scheme that is pursuing continuity option 1 (the “transferring scheme”) propose to transfer the value of beneficiaries’ accrued rights to benefits under the scheme, under a default discharge option.

(2) The trustees of the proposed receiving scheme must provide to the Regulator, in accordance with this paragraph, a document setting out the level of administration charges that applies in relation to members of the proposed receiving scheme.

(3) The document must be provided before the end of 28 days beginning with the date on which the trustees of the proposed receiving scheme receive the notice under paragraph 11.

(4) The document must set out for each charge structure all levels of administration charges (including any discounted levels)—

(a) for each arrangement, including a default arrangement, and any different levels in relation to any one arrangement;

(b) for any additional charges, and the reason for imposing them;

(d) for any other type of administration charge in the scheme, and the reason for imposing it.

(5) Where the proposed receiving scheme is a Master Trust scheme the charges must be set out as at the most recent date, not falling within a triggering event period in relation to the transferring scheme, on which the receiving scheme submitted a continuity strategy to the Regulator.

(6) In all other cases the charges must be set out as at the date the triggering event occurred in relation to the transferring scheme as a result of which continuity option 1 is being pursued.

(7) The levels must be set out on an annualised basis.

(8) Where there is a discounted level, the reason for charging the lower level must also be set out.

(9) The document must include a statement explaining—

(a) how the scheme will be in compliance with section 96(2) of the 2021 Act (prohibition on increasing charges etc during triggering event period);

(b) whether the scheme is to be liable for the costs mentioned in section 96(4) of the 2021 Act, and

Trustee discharge

19

Where the trustees of a collective money purchase scheme that is pursuing continuity option 1 have discharged the scheme’s liability in respect of a beneficiary’s accrued rights to benefits under the scheme in accordance with the requirements of section 87 of the 2021 Act (continuity option 1: discharge of liabilities and winding up), the trustees cease to have any further obligation to provide benefits in relation to those rights.

Winding up

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