Pension Schemes (Northern Ireland) Act 1993

Part I — Preliminary

Staying court proceedings where a complaint is made or a dispute is referred.

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• (1) In this Act—

“occupational pension scheme” means a pension scheme—

• (a) that—

• (i) for the purpose of providing benefits to, or in respect of, people with service in employments of a description, or

• (ii) for that purpose and also for the purpose of providing benefits to, or in respect of, other people,

is established by, or by persons who include, a person to whom subsection (2) applies when the scheme is established or (as the case may be) to whom that subsection would have applied when the scheme was established had that subsection then been in force, ...

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

a pension scheme that is prescribed or is of a prescribed description;

“personal pension scheme” means a pension scheme that—

• (a) is not an occupational pension scheme, and

• (b) is established by a person within ... section 154(1) of the Finance Act 2004;

“public service pension scheme” means an occupational pension scheme established by or under an enactment or the Royal prerogative or a Royal charter, being a scheme—

• (a) all the particulars of which are set out in, or in a legislative instrument made under, an enactment, Royal warrant or charter, or

• (b) which cannot come into force, or be amended, without the scheme or amendment being approved by a Minister of the Crown or government department,

and includes any occupational pension scheme established, with the concurrence of the Department of Finance and Personnel, by or with the approval of another government department and any occupational pension scheme prescribed by regulations made by the Department and the Department of Finance and Personnel jointly as being a scheme which ought in their opinion to be treated as a public service pension scheme for the purposes of this Act.

• (2) This subsection applies—

• (a) where people in employments of the description concerned are employed by someone, to a person who employs such people,

• (b) to a person in an employment of that description, and

• (c) to a person representing interests of a description framed so as to include—

• (i) interests of persons who employ people in employments of the description mentioned in paragraph (a), or

• (ii) interests of people in employments of that description.

• (3) For the purposes of subsection (2), if a person is in an employment of the description concerned by reason of holding an office (including an elective office) and is entitled to remuneration for holding it, the person responsible for paying the remuneration shall be taken to employ the office-holder.

• (4) In the definition in subsection (1) of “occupational pension scheme”, the reference to a description includes a description framed by reference to an employment being of any of two or more kinds.

• (5) In subsection (1) “pension scheme” (except in the phrases “occupational pension scheme”, “personal pension scheme” and “public service pension scheme”) means a scheme or other arrangements, comprised in one or more instruments or agreements, having or capable of having effect so as to provide benefits to or in respect of people—

• (a) on retirement,

• (b) on having reached a particular age, or

• (c) on termination of service in an employment.

Part II — Administration

Registration of schemes

Registration of occupational and personal pension schemes

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Part III — Schemes that were contracted-out etc. and Effects on Members’ State Scheme Rights ...

Chapter I — Schemes that were contracted-out: guaranteed minimum pensions and alteration of scheme rules etc.

Preliminary

Issue of contracting-out and appropriate scheme certificates

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• (1) Regulations shall provide for HMRC to issue certificates stating that the employment of an earner in employed earner's employment is contracted-out employment by reference to an occupational pension scheme.

• (1A) In this Act such a certificate is referred to as “a contracting-out certificate”.

• (2) The regulations shall provide for contracting-out certificates to be issued to employers and to specify—

• (a) the employments which are to be treated, either generally or in relation to any specified description of earners, as contracted-out employments; and

• (b) the occupational pension schemes by reference to which those employments are to be so treated.

• (2A) The regulations may provide, in the case of contracting-out certificates issued before the principal appointed day, for their cancellation by virtue of the regulations—

• (a) at the end of a prescribed period beginning with (and including) that day, or

• (b) if prescribed conditions are not satisfied at any time in that period.

but for them to continue to have effect until so cancelled; and the regulations may provide that a certificate having effect on and after that day by virtue of this subsection is to have effect, in relation to any earner’s service on or after that day, as if issued on or after that day.

• (2B) In this Act “the principal appointed day” means the day designated by an order under Article 1 of the Pensions (Northern Ireland) Order 1995 as the principal appointed day for the purposes of Part IV of that Order.

• (3) An occupational pension scheme is a contracted-out scheme in relation to an earner’s employment if it is for the time being specified in a contracting-out certificate in relation to that employment; and references in this Act to the contracting-out of a scheme are references to its inclusion in such a certificate.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (7) Except in prescribed circumstances, no contracting-out certificate ... shall have effect from a date earlier than that on which the certificate is issued.

• (8) References in this Act to a contracting-out certificate, a contracted-out scheme and to contracting-out in a context relating to a money purchase contracted-out scheme are to be construed in accordance with section 176A.

Meaning of “contracted-out employment”, “guaranteed minimum pension” and “minimum payment”

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• (1) In relation to any period before the second abolition date, the employment of an earner in employed earner's employment was “contracted-out employment” in relation to the earner during that period if—

• (a) the earner was under pensionable age;

• (b) the earner's service in the employment was service which qualified the earner for a pension provided by a salary related contracted-out scheme; and

• (c) there was in force a contracting-out certificate issued in accordance with this Chapter (as it then had effect) stating that the employment was contracted-out employment by reference to the scheme.

• (1A) In addition, in relation to any period before the first abolition date, the employment of an earner in employed earner's employment was “contracted-out employment” in relation to him during that period if—

• (a) he was under pensionable age;

• (b) his employer made minimum payments in respect of his employment to a money purchase contracted-out scheme, and

• (c) there was in force a contracting-out certificate issued in accordance with this Chapter (as it then had effect) stating that the employment was contracted-out employment by reference to the scheme.

• (1B) In the following provisions of this Act “earner”, in relation to a scheme, means a person who was an earner in contracted-out employment by reference to the scheme.

• (2) In this Act—

• “guaranteed minimum pension” means any pension which is provided , by a scheme that was a salary related contracted-out scheme, in accordance with the requirements of sections 9 and 13 to the extent to which its weekly rate is equal to the earner’s or, as the case may be, the earner’s widow's, widower’s , surviving same sex spouse’s or surviving civil partner's guaranteed minimum as determined for the purposes of those sections respectively; and

• “minimum payment”, in relation to an earner’s employment in any tax week, means the rebate percentage of so much of the earnings paid to or for the benefit of the earner in that week as exceeds the current lower earnings limit but not the applicable limit (or the prescribed equivalents if he is paid otherwise than weekly);

and for the purposes of this subsection “rebate percentage” means the appropriate flatrate percentage for the tax year in which the week falls as specified in an order made under section 38B (as it had effect before the first abolition date).

• (2A) In subsection (2) “the applicable limit” means—

• (a) in relation to a tax year before 2009–10, the upper earnings limit;

• (b) in relation to 2009–10 or any subsequent tax year, the upper accrual point.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) A contracting-out certificate that was in force in respect of an employed earner's employment is to be taken as conclusive that the employment was, at that time, contracted-out employment.

• (5) Regulations shall provide for the determination by the Department of any question whether an employment is to be treated as contracted-out employment or as to the persons in relation to whom, or the period for which, an employment is to be so treated.

General requirements for certification

Requirements for certification of schemes: general

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• (1) Subject to subsection (4), an occupational pension scheme can be contracted-out in relation to an earner’s employment only if it satisfies subsection (2) ....

• (2) An occupational pension scheme satisfies this subsection only if—

• (a) in relation to any earner’s service before the principal appointed day, it satisfies the conditions of subsection (2A); and

• (b) in relation to any earner’s service on or after that day, it satisfies the conditions of subsection (2B).

• (2A) The conditions of this subsection are that—

• (a) the scheme complies in all respects with sections 9 to 20E or, in such cases or classes of case as may be prescribed, with those sections as modified by regulations; and

• (b) the rules of the scheme applying to guaranteed minimum pensions are framed so as to comply with the relevant requirements.

• (2B) The conditions of this subsection are that the Inland Revenueare satisfied that—

• (a) the scheme complies with section 8A;

• (b) restrictions imposed under Article 40 of the Pensions (Northern Ireland) Order 1995 (restriction on employer-related investments) apply to the scheme and the scheme complies with those restrictions;

• (c) the scheme satisfies such other requirements as may be prescribed (which—

• (i) must include requirements as to the amount of the resources of the scheme, and

• (ii) may include a requirement that, if the only members of the scheme were those falling within any prescribed class or description, the scheme would comply with section 8A), and

• (d) the scheme does not fall within a prescribed class or description;

and are satisfied that the rules of the scheme are framed so as to comply with the relevant requirements.

• (2C) Regulations may modify subsection (2B)(a) and (b) in their application to occupational pension schemes falling within a prescribed class or description.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) Where there are two or more occupational pension schemes in force in relation to an earner’s employment, none of which can by itself be a contracted-out scheme, the Inland Revenue may, if they think fit, treat them for contracting-out purposes as a single scheme.

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5A) Regulations about pension schemes made under this Chapter may contain provisions framed by reference to whether or not a scheme is a registered pension scheme under section 153 of the Finance Act 2004.

• (6) In this section “relevant requirements” means—

• (a) the requirements of any regulations prescribing the form and content of rules of contracted-out ... schemes; and

• (b) such other requirements as to form and content (not inconsistent with regulations) as may be imposed by the Department as a condition of contracting-out ... either generally or in relation to a particular scheme.

Protected rights and money purchase benefits

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Elections as to employments covered by contracting-out certificates

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• (1) Subject to the provisions of this Part, an employment otherwise satisfying the conditions for inclusion in a contracting-out certificate shall be so included if and so long as the employer so elects and not otherwise.

• (2) Subject to subsections (3) and (4), an election may be so made, and an employment so included, either generally or in relation only to a particular description of earners.

• (3) Except in such cases as may be prescribed, an employer shall not, in making or abstaining from making any election under this section, discriminate between different earners on any grounds other than the nature of their employment.

• (4) If the Inland Revenue consider that an employer is contravening subsection (3) in relation to any scheme, they may—

• (a) refuse to give effect to any election made by him in relation to that scheme; or

• (b) cancel any contracting-out certificate held by him in respect of it.

• (5) Regulations may make provision—

• (a) for regulating the manner in which an employer is to make an election with a view to the issue, variation or surrender of a contracting-out certificate;

• (b) for requiring an employer to give a notice of his intentions in respect of making or abstaining from making any such election in relation to any existing or proposed scheme—

• (i) to employees in any employment to which the scheme applies or to which it is proposed that it should apply;

• (ii) to any independent trade union recognised to any extent for the purpose of collective bargaining in relation to those employees;

• (iii) to the trustees and managers of the scheme; and

• (iv) to such other persons as may be prescribed;

• (c) for requiring an employer, in connection with any such notice, to furnish such information as may be prescribed and to undertake such consultations as may be prescribed with any such trade union as is mentioned in paragraph (b)(ii);

• (d) for empowering the Inland Revenue to refuse to give effect to an election made by an employer unless they are satisfied that he has complied with the requirements of the regulations;

• (e) for referring to an industrial tribunal any question—

• (i) whether an organisation is such a trade union as is mentioned in paragraph (b)(ii), or

• (ii) whether the requirements of the regulations as to consultation have been complied with.

Determination of basis on which scheme is contracted-out

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Guaranteed minimum pensions

Minimum pensions for earners

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• (1) Subject to the provisions of this Part, the scheme must—

• (a) provide for the earner to be entitled to a pension under the scheme if he attains pensionable age; and

• (b) contain a rule to the effect that the weekly rate of the pension will be not less than his guaranteed minimum (if any) under sections 10 to 12.

• (1A) But a scheme may be amended so as to omit provision of the kind specified in subsection (1)(a) and (b) if the conditions specified in section 20B are satisfied.

• (2) In the case of an earner who was a married woman or widow who was liable to pay primary Class 1 contributions at a reduced rate by virtue of section 19(4) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 at a time during a relevant year when she was in contracted-out employment by reference to the scheme, subject to the provisions of this Part, the scheme must—

• (a) provide for her to be entitled to a pension under the scheme if she attains pensionable age . . .

• (b) satisfy such other conditions as may be prescribed.

“Relevant year” has the meaning given by section 10(8).

• (3) Subject to subsection (4), the scheme must provide for the pension to commence on the date on which the earner attains pensionable age and to continue for his life.

• (4) Subject to subsection (5), the scheme may provide for the commencement of the earner’s guaranteed minimum pension to be postponed for any period for which he continues in employment after attaining pensionable age.

• (5) The scheme must provide for the earner’s consent to be required—

• (a) for any such postponement by virtue of employment to which the scheme does not relate; and

• (b) for any such postponement after the expiration of five years from the date on which he attains pensionable age.

• (6) Equivalent pension benefits for the purposes of the former legislation are not to be regarded as constituting any part of the earner’s guaranteed minimum pension.

• (7) The benefits referred to in subsection (6) are any to which the earner may be immediately or prospectively entitled in respect of a period of employment which—

• (a) was for him non-participating employment under that legislation; and

• (b) was not on its termination the subject of any payment in lieu of contributions;

but subsection (6) excludes only so much of those benefits as had to be provided in order that the employment should for that period be treated as non-participating.

• (8) In this section “the former legislation” means Part III of the National Insurance Act (Northern Ireland) 1966 and the previous corresponding enactments.