Pensions Act 1995

Part I — Occupational pensions

Occupational Pensions Regulatory Authority

The new authority.

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Reports to Secretary of State.

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Supervision by the Authority

Prohibition orders.

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• (1) The Authority may by order prohibit a person from being a trustee of—

• (a) a particular trust scheme,

• (b) a particular description of trust schemes, or

• (c) trust schemes in general,

if they are satisfied that he is not a fit and proper person to be a trustee of the scheme or schemes to which the order relates.

• (2) Where a prohibition order is made under subsection (1) against a person in respect of one or more schemes of which he is a trustee, the order has the effect of removing him.

• (3) The Authority may, on the application of any person prohibited under this section, by order revoke the order either generally or in relation to a particular scheme or description of schemes.

• (4) An application under subsection (3) may not be made—

• (a) during the period within which the determination to exercise the power to make the prohibition order may be referred to a tribunal under section 96(3) or 99(7) of the Pensions Act 2004, and

• (b) if the determination is so referred, until the reference, and any appeal against the determination of the tribunal concerned, has been finally disposed of.

• (5) A revocation made at any time under this section cannot affect anything done before that time.

• (6) The Authority must prepare and publish a statement of the policies they intend to adopt in relation to the exercise of their powers under this section.

• (7) The Authority may revise any statement published under subsection (6) and must publish any revised statement.

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prohibition orders: directors of corporate trustees etc

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• (1) A company or Scottish partnership is prohibited from being a trustee of a trust scheme at any time when an individual who is a director of the company or a partner in the partnership is prohibited from being a trustee of the scheme by an order under section 3.

• (2) Where a company or partnership which is a trustee of a trust scheme becomes prohibited under subsection (1) in relation to the scheme, that subsection has the effect of removing the company or partnership as a trustee.

• (3) The Authority may, on the application of a company or Scottish partnership, give notice in writing to the applicant waiving the prohibition under subsection (1)—

• (a) in relation to an individual against whom an order under section 3 has been made, and

• (b) either generally or in relation to a particular scheme or particular description of schemes.

• (4) A notice may be given under subsection (3) only if the Authority is satisfied that the applicant would be a fit and proper person to be a trustee of the scheme or schemes to which the notice relates despite the individual being, or even if the individual were to become, a director of or partner in the applicant.

• (5) A notice given at any time under subsection (3) cannot affect anything done before that time.

• (6) An application under subsection (3) may not be made—

• (a) during the period within which the determination to exercise the power to make the order against the individual may be referred to the Tribunal under section 96(3) or 99(7) of the Pensions Act 2004 (whether by a company or partnership which became prohibited under subsection (1) on the making of the order or by another person), and

• (b) if the determination is so referred, until the reference, and any appeal against the Tribunal's determination, has been finally disposed of.

• (7) The Authority must prepare and publish a statement of the policies they intend to adopt in relation to the exercise of their powers under this section.

• (8) The Authority may revise any statement published under subsection (7) and must publish any revised statement.

• (9) References in this section to an order under section 3 are to an order under that section made on or after the date on which section 46(2) of the Pensions Act 2014 comes fully into force.

Suspension orders.

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• (1) The Authority may by order suspend a trustee of a trust scheme—

• (a) pending consideration being given to the making of an order against him under section 3(1),

• (aa) pending consideration being given to the institution of proceedings against him for an offence involving dishonesty or deception,

• (b) where proceedings have been instituted against him for an offence involving dishonesty or deception and have not been concluded,

• (ba) where an application has been made under section 263H of the Insolvency Act 1986 for an order making him bankrupt and the application has not been determined,

• (c) where a petition has been presented to the court for an order adjudging him bankrupt, or for the sequestration of his estate, and proceedings on the petition have not been concluded or an application has been made by him for a debt relief order (under Part 7A of the Insolvency Act 1986) and the application has not been determined,

• (d) where the trustee is a company, if a petition for the winding up of the company has been presented to the court and proceedings on the petition have not been concluded,

• (e) where an application has been made to the court for a disqualification order against him under the Company Directors Disqualification Act 1986 or under the Company Directors Disqualification (Northern Ireland) Order 2002 and proceedings on the application have not been concluded, or

• (f) where the trustee is a company or Scottish partnership and, if any director or, as the case may be, partner were a trustee, the Authority would have power to suspend him under paragraph (aa), (b), (c) or (e).

• (2) An order under subsection (1)—

• (a) if made by virtue of paragraph (a) or (aa) or, in a case where the Authority would have power to suspend a director or partner under paragraph (aa), by virtue of paragraph (f), has effect for an initial period not exceeding twelve months, and

• (b) in any other case, has effect until the proceedings in question are concluded or, in the case of an application for a debt relief order, the application is determined;

but the Authority may by order extend the initial period referred to in paragraph (a) for a further period of twelve months, and any order suspending a person under subsection (1) ceases to have effect in relation to a trust scheme if an order is made against that person under section 3(1) in relation to that scheme.

• (3) An order under subsection (1) has the effect of prohibiting the person suspended, during the period of his suspension, from exercising any functions as trustee of any trust scheme to which the order applies; and the order may apply to a particular trust scheme, a particular description of trust schemes or trust schemes in general.

• (4) An order under subsection (1) may be made on one of the grounds in paragraphs (b) to (e) whether or not the proceedings were instituted, petition presented or application made (as the case may be) before or after the coming into force of that subsection.

• (5) The Authority may, on the application of any person suspended under subsection (1), by order revoke the order, either generally or in relation to a particular scheme or a particular description of schemes; but a revocation made at any time cannot affect anything done before that time.

• (5A) An application under subsection (5) may not be made—

• (a) during the period within which the determination to exercise the power to make an order under subsection (1) may be referred to a tribunal under section 96(3) or 99(7) of the Pensions Act 2004, and

• (b) if the determination is so referred, until the reference, and any appeal against the determination of the tribunal concerned, has been finally disposed of.

• (6) An order under this section may make provision as respects the period of the trustee’s suspension for matters arising out of it, and in particular for enabling any person to execute any instrument in his name or otherwise act for him and for adjusting any rules governing the proceedings of the trustees to take account of the reduction in the number capable of acting.

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Removal of trustees: notices.

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Removal or suspension of trustees: consequences.

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• (1) A person who purports to act as trustee of a trust scheme while prohibited from being a trustee of the scheme under section 3 or 3A or suspended in relation to the scheme under section 4 is guilty of an offence and liable—

• (a) on summary conviction, to a fine not exceeding the statutory maximum, and

• (b) on conviction on indictment, to a fine or imprisonment or both.

• (2) An offence under subsection (1) may be charged by reference to any day or longer period of time; and a person may be convicted of a second or subsequent offence under that subsection by reference to any period of time following the preceding conviction of the offence.

• (3) Things done by a person purporting to act as trustee of a trust scheme while prohibited from being a trustee of the scheme under section 3 or 3A or suspended in relation to the scheme under section 4 are not invalid merely because of that prohibition or suspension.

• (4) Nothing in section 3 , 3A or 4 or this section affects the liability of any person for things done, or omitted to be done, by him while purporting to act as trustee of a trust scheme.

Appointment of trustees.

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• (1) Where a trustee of a trust scheme is removed by an order under section 3, by section 3A or ... by reason of his disqualification, the Authority may by order appoint another trustee in his place.

• (2) Where a trustee appointed under subsection (1) is appointed to replace a trustee appointed under section 23(1), sections 22 to 26 shall apply to the replacement trustee as they apply to a trustee appointed under section 23(1).

• (3) The Authority may also by order appoint a trustee of a trust scheme where they are satisfied that it is reasonable to do so in order—

• (a) to secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the scheme,

• (b) to secure that the number of trustees is sufficient for the proper administration of the scheme, ...

• (c) to secure the proper use or application of the assets of the scheme , or

• (d) otherwise to protect the interests of the generality of the members of the scheme.

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

• (5) The power to appoint a trustee by an order under this section includes power by such an order—

• (a) to determine the appropriate number of trustees for the proper administration of the scheme,

• (b) to require a trustee appointed by the order to be paid fees and expenses out of the scheme’s resources,

• (c) to provide for the removal or replacement of such a trustee.

• (5A) An application may be made to the Authority in relation to a trust scheme by—

• (a) the trustees of the scheme,

• (b) the employer, or

• (c) any member of the scheme,

for the appointment of a trustee of the scheme under subsection (3)(a) or (c).

• (6) Regulations may make provision about the descriptions of persons who may or may not be appointed trustees under this section.

Appointment of trustees: consequences.

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• (1) An order under section 7 appointing a trustee may provide for any fees and expenses of trustees appointed under the order to be paid—

• (a) by the employer,

• (b) out of the resources of the scheme, or

• (c) partly by the employer and partly out of those resources.

• (2) Such an order may also provide that an amount equal to the amount (if any) paid out of the resources of the scheme by virtue of subsection (1)(b) or (c) is to be treated for all purposes as a debt due from the employer to the trustees of the scheme.

• (3) Subject to subsection (4), a trustee appointed under that section shall, unless he is the independent trustee and section 22 applies in relation to the scheme, have the same powers and duties as the other trustees.

• (4) Such an order may make provision—

• (a) for restricting the powers or duties of a trustee so appointed, ...

• (b) for powers or duties to be exercisable by a trustee so appointed to the exclusion of other trustees.

Removal and appointment of trustees: property.

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Where the Authority have power under this Part to appoint or remove a trustee or a trustee is removed under section 3A, they may exercise by order the same jurisdiction and powers as are exercisable by the High Court or, in relation to a trust scheme subject to the law of Scotland, the Court of Session for vesting any property in, or transferring any property to, trustees in consequence of the appointment or of the removal.

Civil penalties.

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• (1) Where the Authority are satisfied that by reason of any act or omission this section applies to any person, they may by notice in writing require him to pay, within a prescribed period, a penalty in respect of that act or omission not exceeding the maximum amount.

• (2) In this section “the maximum amount” means—

• (a) £5,000 in the case of an individual and £50,000 in any other case, or

• (b) such lower amount as may be prescribed in the case of an individual or in any other case,

and the Secretary of State may by order amend paragraph (a) by substituting higher amounts for the amounts for the time being specified in that paragraph.

• (3) Regulations made by virtue of this Part may provide for any person who has contravened any provision of such regulations to pay, within a prescribed period, a penalty under this section not exceeding an amount specified in the regulations; and the regulations must specify different amounts in the case of individuals from those specified in other cases and any amount so specified may not exceed the amount for the time being specified in the case of individuals or, as the case may be, others in subsection (2)(a).

• (4) An order made under subsection (2) or regulations made by virtue of subsection (3) do not affect the amount of any penalty recoverable under this section by reason of an act or omission occurring before the order or, as the case may be, regulations are made.

• (5) Where—

• (a) apart from this subsection, a penalty under this section is recoverable from a body corporate or Scottish partnership by reason of any act or omission of the body or partnership ... , and

• (b) the act or omission was done with the consent or connivance of, or is attributable to any neglect on the part of, any persons mentioned in subsection (6),

this section applies to each of those persons who consented to or connived in the act or omission or to whose neglect the act or omission was attributable.

• (6) The persons referred to in subsection (5)(b)—

• (a) in relation to a body corporate, are—

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

• (ii) where the affairs of a body corporate are managed by its members, any member in connection with his functions of management, and

• (b) in relation to a Scottish partnership, are the partners.

• (7) Where the Authority requires any person to pay a penalty by virtue of subsection (5), they may not also require the body corporate, or Scottish partnership, in question to pay a penalty in respect of the same act or omission.

• (8) A penalty under this section is recoverable by the Authority.

• (8A) Any penalty recoverable under this section—

• (a) shall, if the county court so orders, be recoverable under section 85 of the County Courts Act 1984 or otherwise as if it were payable under an order of that court; and

• (b) may be enforced as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom in Scotland.

• (9) The Authority must pay to the Secretary of State any penalty recovered under this section.

• (10) The Authority may not require a person to pay a penalty under this section in respect of an act or omission if the Authority have issued a notice to the person under section 88A of the Pensions Act 2004 (financial penalties) in respect of the same act or omission.

Powers to wind up schemes.

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• (1) Subject to the following provisions of this section, the Authority may by order direct or authorise an occupational pension scheme to be wound up if they are satisfied that—

• (a) the scheme, or any part of it, ought to be replaced by a different scheme,

• (b) the scheme is no longer required, or

• (c) it is necessary in order to protect the interests of the generality of the members of the scheme that it be wound up.

• (2) The Authority may not make an order under this section on either of the grounds referred to in subsection (1)(a) or (b) unless they are satisfied that the winding up of the scheme—

• (a) cannot be achieved otherwise than by means of such an order, or

• (b) can only be achieved in accordance with a procedure which—

• (i) is liable to be unduly complex or protracted, or

• (ii) involves the obtaining of consents which cannot be obtained, or can only be obtained with undue delay or difficulty,

and that it is reasonable in all the circumstances to make the order.

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