Legalize / United Kingdom / Public General Act

Pensions Act 2004

Type Public General Act

Publication 2004-11-18

State In force

Department Statute Law Database

Source legislation.gov.uk

Reform history JSON API

Part 1 — The Pensions Regulator

Establishment

The Pensions Regulator

1

There shall be a body corporate called the Pensions Regulator (in this Act referred to as “the Regulator”).

Effect of winding up order on freezing order

2

(1) The Regulator is to consist of the following members—

(a) a chairman appointed by the Secretary of State,

(b) the Chief Executive of the Regulator, and

(2) The chairman must not be appointed from the staff of the Regulator or be the chairman of the Board of the Pension Protection Fund (see section 108).

(3) At least two of the members appointed under subsection (1)(c) must be appointed from the staff of the Regulator.

(4) In appointing persons under subsection (1)(c) the Secretary of State must secure that a majority of the members of the Regulator are non-executive members.

(5) No member of the staff of the Board of the Pension Protection Fund is eligible for appointment as a member of the Regulator.

(6) In this Part—

(a) references to executive members of the Regulator are to—

(i) the Chief Executive, and

(ii) the members appointed under subsection (1)(c) from the staff of the Regulator, and

(b) references to non-executive members of the Regulator are to members who are not executive members.

Payments made by employers to personal pension schemes

3

Schedule 1 makes further provision about the Regulator, including provision as to—

the terms of appointment, tenure and remuneration of members,

the appointment of the Chief Executive and other staff,

the proceedings of the Regulator,

its funding and accounts, and

the status and liability of the Regulator, its members and staff.

General provisions about functions

Investigations

4

(1) The Regulator has—

(a) the functions transferred to it from the Occupational Pensions Regulatory Authority by virtue of this Act or any provisions in force in Northern Ireland corresponding to this Act, and

(b) any other functions conferred by, or by virtue of, this or any other enactment.

(2) As regards the exercise of the Regulator’s functions—

(a) the non-executive functions listed in subsection (4) of section 8 must, by virtue of subsection (2) of that section, be discharged by the committee established under that section,

(b) the functions mentioned in the following provisions are exercisable only by the Determinations Panel—

(i) section 10(1) (the power in certain circumstances to determine whether to exercise the functions listed in Schedule 2 and to exercise them), and

(ii) section 99(10) (the functions concerning the compulsory review of certain determinations), and

(3) Subsection (2) is subject to any regulations made by the Secretary of State under paragraph 21 of Schedule 1 (power to limit or permit delegation of functions).

Regulator’s objectives

5

(1) The main objectives of the Regulator in exercising its functions are—

(a) to protect the benefits under occupational pension schemes of, or in respect of, members of such schemes,

(b) to protect the benefits under personal pension schemes of, or in respect of, members of such schemes within subsection (2),

(c) to reduce the risk of situations arising which may lead to compensation being payable from the Pension Protection Fund (see Part 2),

(cza) in relation to the exercise of its functions under Part 3 only, to minimise any adverse impact on the sustainable growth of an employer,

(ca) to maximise compliance with the duties under Chapter 1 of Part 1 (and the safeguards in sections 50 and 54) of the Pensions Act 2008, and

(d) to promote, and to improve understanding of, the good administration of work-based pension schemes.

(2) For the purposes of subsection (1)(b) the members of personal pension schemes within this subsection are—

(a) the members who are employees in respect of whom direct payment arrangements exist, and

(b) where the scheme is a stakeholder pension scheme, any other members.

(3) In this section—

“stakeholder pension scheme” means a personal pension scheme which is or has been registered under section 2 of the Welfare Reform and Pensions Act 1999 (c. 30) (register of stakeholder schemes);

“work-based pension scheme” means—an occupational pension scheme,a personal pension scheme where direct payment arrangements exist in respect of one or more members of the scheme who are employees, ora stakeholder pension scheme.

Supplementary powers

6

The Regulator may do anything (except borrow money) which—

(a) is calculated to facilitate the exercise of its functions, or

(b) is incidental or conducive to their exercise.

Transfer of OPRA’s functions to the Regulator

7

(1) Subject to the provisions of this Act, the functions of the Occupational Pensions Regulatory Authority (“OPRA”) conferred by or by virtue of—

(a) the Pension Schemes Act 1993 (c. 48),

(b) the Pensions Act 1995 (c. 26), and

are hereby transferred to the Regulator.

(2) Accordingly—

(a) in section 181(1) of the Pension Schemes Act 1993 (which defines “the Regulatory Authority” to mean OPRA), for the definition of “the Regulatory Authority” substitute—

“the Regulatory Authority” means the Pensions Regulator;

(b) in section 124(1) of the Pensions Act 1995 (which defines “the Authority”, in Part 1 of that Act, to mean OPRA), for the definition of “the Authority” substitute—

“the Authority” means the Pensions Regulator,

(c) in section 8(1) of the Welfare Reform and Pensions Act 1999 (c. 30) (which defines “the Authority”, in Part 1 of that Act to mean OPRA), for the definition of “the Authority” substitute—

“the Authority” means the Pensions Regulator;

, and

(d) in section 33 of that Act (time for discharge of pension credit liability), in subsection (5) for “the Occupational Pensions Regulatory Authority” substitute “ the Pensions Regulator ”.

Non-executive functions

8

(1) The functions listed in subsection (4) (in this Part referred to as “the non-executive functions”) are functions of the Regulator.

(2) The Regulator must establish a committee to discharge the non-executive functions on its behalf.

(3) Only non-executive members of the Regulator may be members of the committee.

(4) The non-executive functions are—

(a) the duty to keep under review the question whether the Regulator’s internal financial controls secure the proper conduct of its financial affairs;

(b) the duty to determine under paragraph 8(4)(b) of Schedule 1, subject to the approval of the Secretary of State, the terms and conditions as to remuneration of any Chief Executive appointed under paragraph 8(4)(a) of that Schedule.

(5) The committee established under this section must prepare a report on the discharge of the non-executive functions for inclusion in the Regulator’s annual report to the Secretary of State under section 11.

(6) The committee’s report must relate to the same period as that covered by the Regulator’s report.

(7) The committee may establish sub-committees, and the members of any such sub-committee—

(a) may include persons who are not members of the committee or of the Regulator, but

(b) must not include persons who are executive members or other staff of the Regulator.

(8) The committee may authorise any of its members or any of its sub-committees to discharge on its behalf—

(a) any of the non-executive functions;

(b) the duty to prepare a report under subsection (5).

(9) The committee (or any of its sub-committees) may be authorised under paragraph 20(1) of Schedule 1 to exercise further functions of the Regulator.

(10) This section is subject to any regulations made by the Secretary of State under paragraph 21 of Schedule 1 (power to limit or permit delegation of functions).

The Determinations Panel

9

(1) The Regulator must establish and maintain a committee consisting of—

(a) a chairman, and

(b) at least six other persons,

(in this Part referred to as “the Determinations Panel”).

(2) The Regulator must appoint as the chairman of the Panel the person nominated in accordance with paragraph 11 of Schedule 1 (nomination by a committee established by the chairman of the Regulator).

(3) The chairman of the Panel must—

(a) decide the number of persons to be appointed as the other members of the Panel, and

(b) nominate a person suitable for each of those appointments.

(4) The Regulator must then appoint as the other members of the Panel the persons nominated by the chairman of the Panel.

(5) The following are ineligible for appointment as members of the Panel—

(a) any member of the Regulator;

(b) any member of the staff of the Regulator;

(d) any member of the staff of that Board.

(6) The Panel may establish sub-committees consisting of members of the Panel.

(7) Further provision about the Panel is made in Schedule 1, including provision as to the terms of appointment, tenure and remuneration of members and as to its procedure.

Functions exercisable by the Determinations Panel

10

(1) The Determinations Panel is to exercise on behalf of the Regulator—

(a) the power to determine, in the circumstances described in subsection (2), whether to exercise a reserved regulatory function, and

(b) where it so determines to exercise a reserved regulatory function, the power to exercise the function in question.

(2) Those circumstances are—

(a) where the Regulator considers that the exercise of the reserved regulatory function may be appropriate, or

(b) where an application is made under, or by virtue of, any of the provisions listed in subsection (6) for the Regulator to exercise the reserved regulatory function.

(3) Where subsection (1) applies, the powers mentioned in that subsection are not otherwise exercisable by or on behalf of the Regulator.

(4) For the purposes of this Part, a function of the Regulator is a “reserved regulatory function” if it is a function listed in Schedule 2.

(5) Regulations may amend Schedule 2 by—

(a) adding any function of the Regulator conferred by, or by virtue of, this or any other enactment,

(b) omitting any such function, or

(6) The provisions referred to in subsection (2)(b) are—

(a) section 20(10) (application to permit payments out of an account that is subject to a restraining order);

(b) section 26(2) (application for order validating action taken in contravention of freezing order);

(d) section 50(7) (application for the issue of a revised contribution notice under section 50(9));

(e) section 3(3) of the Pensions Act 1995 (c. 26) (application for revocation of prohibition order);

(ea) section 3A(3) of that Act (application for waiver of prohibition);

(f) section 4(5) of that Act (application for revocation of a suspension order);

(g) section 7(5A) of that Act (application for appointment of a trustee under section 7(3)(a) or (c) of that Act);

(h) section 29(5) of that Act (application for waiver of disqualification);

(ha) section 58(7) of that Act (power of the Regulator in prescribed circumstances to extend or further extend the period referred to in section 58(6) of that Act in relation to a schedule of contributions);

(hb) section 60(7) of that Act (power of the Regulator in prescribed circumstances to extend or further extend the period applicable under section 60(3) of that Act in relation to securing an increase in value);

(i) section 69(1) of that Act (application for order authorising modification or modifying a scheme);

(j) section 71A(2) of that Act (application for modifying a scheme to secure winding up);

(k) section 99(4A) of the Pension Schemes Act 1993 (c. 48) (application for extension under section 99(4) of that Act of a period for compliance);

(l) section 101J(6)(a) of that Act (application for extension under section 101J(2) of that Act of a period for compliance).

(7) Regulations may amend subsection (6) by—

(a) adding any provision of this or any other enactment to the list in that subsection, or

(b) omitting or altering the description of any provision mentioned in that list.

(8) The Panel may be authorised under paragraph 20(4) or (6) of Schedule 1 to exercise further functions of the Regulator on behalf of the Regulator.

(9) The Panel may authorise any of its members or any of its sub-committees to exercise on its behalf—

(a) any of the functions of the Regulator which are exercisable by the Panel on behalf of the Regulator, or

(b) any of the functions of the Panel under section 93(3), section 99(11) and paragraph 18(2) of Schedule 1 (procedure).

(10) This section is subject to any regulations made by the Secretary of State under paragraph 21 of Schedule 1 (power to limit or permit delegation of functions).

Annual report

Annual reports to Secretary of State

11

(1) The Regulator must prepare a report for each financial year.

(2) Each report—

(a) must deal with the activities of the Regulator in the financial year for which it is prepared, including the matters mentioned in subsection (3), and

(b) must include the report prepared under subsection (5) of section 8 by the committee established under that section.

(3) The matters referred to in subsection (2)(a) are—

(a) the strategic direction of the Regulator and the manner in which it has been kept under review;

(b) the steps taken to scrutinise the performance of the Chief Executive in securing that the Regulator’s functions are exercised efficiently and effectively;

(c) the Regulator’s objectives and targets (including its main objectives as set out in section 5 or in any corresponding provision in force in Northern Ireland) and the steps taken to monitor the extent to which they are being met;

(d) the exercise of the Regulator's functions in relation to public service pension schemes.

(4) The Regulator must send each report to the Secretary of State as soon as practicable after the end of the financial year for which it is prepared.

(5) The Secretary of State must lay before each House of Parliament a copy of every report received by him under this section.

(6) In this section “financial year” means—

(a) the period beginning with the date on which the Regulator is established and ending with the next following 31st March, and

(b) each successive period of 12 months.

Provision of information, education and assistance

12

(1) The Regulator may provide such information, education and assistance as it considers appropriate to those involved in—

(a) the administration of work-based pension schemes, or

(b) advising the trustees or managers in relation to such schemes as to their operation.

(2) To the extent that it is not authorised to do so under subsection (1), the Regulator may also provide such information, education and assistance as it considers appropriate to—

(a) employers in relation to work-based pension schemes,

(b) persons involved in advising such employers as to the operation of such schemes, or

(3) For the purposes of subsection (2), “employers in relation to work-based pension schemes” means, in the case of stakeholder pension schemes, the persons upon whom duties are imposed by or by virtue of section 3 of the Welfare Reform and Pensions Act 1999 (c. 30) (duty of employers to facilitate access to stakeholder pension schemes).

(4) In this section—

“assistance” does not include financial assistance;

“stakeholder pension scheme” and “work-based pension scheme” have the same meaning as in section 5 (Regulator’s objectives).

New powers in respect of occupational and personal pension schemes

Improvement notices

13

(1) If the Regulator is of the opinion that a person—

(a) is contravening one or more provisions of the pensions legislation, or

(b) has contravened one or more of those provisions in circumstances that make it likely that the contravention will continue or be repeated,

it may issue a notice (an “improvement notice”) to that person directing him to take, or refrain from taking, such steps as are specified in the notice in order to remedy or prevent a recurrence of the contravention.

(2) An improvement notice must—

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