Legalize / United Kingdom / Public General Act

Pension Schemes Act 2015

Type Public General Act

Publication 2015-03-03

State In force

Department Statute Law Database

Source legislation.gov.uk

Reform history JSON API

PART 1 — Categories of pension scheme

Introduction

1

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Defined benefits scheme

2

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Shared risk scheme (sometimes known as “defined ambition”)

3

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Defined contributions scheme

4

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Meaning of “pensions promise” etc

5

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Treatment of a scheme as two or more separate schemes

6

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Interpretation of Part 1

7

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PART 2 — Collective benefits

Introduction and nature of collective benefits

Introduction and definition

8

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Duty to set targets for collective benefits

9

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Policy about factors used to determine each benefit

10

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Power to impose requirements about factors used to determine each benefit

11

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Contributions

Payment schedule

12

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Overdue contributions and other payments

13

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Investment

Statement of investment strategy

14

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Investment performance reports

15

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Investment powers

16

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Restriction on borrowing by trustees or managers

17

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Investment powers: duty of care

18

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Valuation

Valuation reports

19

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Valuation process

20

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Dealing with deficits and surpluses

Policy for dealing with a deficit or surplus

21

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Power to impose requirements about dealing with a deficit or surplus

22

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Deficits attributable to an offence or the imposition of a levy

23

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Payment of amounts out of collective benefit funds

24

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Cash equivalents

Policy for calculating cash equivalent of benefits

25

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Winding up

26

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Requirement to wind up scheme in specified circumstances

27

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Policies about winding up

28

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Identifying assets

Working out which assets are available for the provision of which benefits

29

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Regulations under Part 2: general

Requirement to obtain actuarial advice

30

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Sub-delegation

31

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Publication of documents etc

32

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Enforcement

33

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Overriding requirements

34

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Interpretation of Part 2

35

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PART 3 — General changes to legislation about pension schemes

Administration and governance

Pensions promise obtained from third party

36

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Duty to act in the best interests of members

37

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Disclosure of information about schemes

38

(1) Section 113 of the Pension Schemes Act 1993 (disclosure of information about schemes to members etc) is amended as follows.

(2) In subsection (1)—

(a) in the opening words, for “the persons mentioned in subsection (2)” substitute “ persons of prescribed descriptions ”;

(b) in paragraph (ca), omit “to the member” and “by him”.

(3) Omit subsection (2).

(4) Before subsection (3) insert—

(2A) In complying with requirements specified in the regulations, a person must have regard to any guidance prepared from time to time by the Secretary of State.

(5) For subsection (4) substitute—

(4) Where the regulations specify requirements to be complied with in the case of an occupational pension scheme with respect to keeping recognised trade unions informed, the regulations must make provision for referring to an employment tribunal any question whether an organisation is a recognised trade union. (4A) For the purposes of subsection (4) a trade union is a recognised trade union in relation to an occupational pension scheme if it is an independent trade union recognised to any extent for the purposes of collective bargaining in relation to members and to prospective members of the scheme.

(6) In subsection (5), for “some or all of the persons mentioned in subsection (2)” substitute “ persons of a prescribed description ”.

(7) Omit paragraph 17 of Schedule 12 to the Pensions Act 2004, which is no longer needed given subsection (3).

Early leavers

Extension of preservation of benefit under occupational pension schemes

39

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Revaluation of accrued benefits

40

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Indexation

Collective benefits exempt from indexation

41

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Regulatory own fund schemes exempt from indexation

42

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Power to create other exemptions from indexation

43

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Independent trustees

Removal of requirement to maintain register of independent trustees

44

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Rules about modification of schemes

45

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Other amendments

Other amendments to do with Parts 1 and 2

46

Schedule 2—

(a) contains amendments to do with Parts 1 and 2, and

(b) replaces references to “money purchase scheme” so as to limit the number of different ways of categorising pension schemes.

PART 4 — Pensions flexibilities

CHAPTER 1 — Pensions guidance

Pensions guidance

47

Schedule 3 contains amendments of the Financial Services and Markets Act 2000, and of other legislation, that are about the giving of pensions guidance to pension scheme members, and survivors of pension scheme members, with a right or entitlement to flexible benefits.

CHAPTER 2 — Independent advice

Great Britain

Independent advice in respect of conversions and transfers: Great Britain

48

(1) Where a member of a pension scheme has subsisting rights in respect of any safeguarded benefits, or a survivor of a member has subsisting rights in respect of any safeguarded benefits, the trustees or managers must check that the member or survivor has received appropriate independent advice before—

(a) converting any of the benefits into different benefits that are flexible benefits under the scheme;

(b) making a transfer payment in respect of any of the benefits with a view to acquiring a right or entitlement to flexible benefits for the member or survivor under another pension scheme;

(2) The Secretary of State may by regulations make provision about—

(a) what the trustees or managers must do to check that a member or survivor has received appropriate independent advice for the purposes of subsection (1), and

(b) when the check must be carried out for the purposes of that subsection.

(3) The Secretary of State may by regulations—

(a) create an exception to subsection (1) in the case of a member or survivor whose subsisting rights in respect of safeguarded benefits under the scheme, or safeguarded benefits under the scheme and any other schemes, are worth less than a specified amount;

(b) create other exceptions to subsection (1).

(4) Regulations under subsection (3)(a) may, in particular, make provision about—

(a) the valuation of the subsisting rights;

(b) the process for determining whether the exception applies.

(5) In subsection (1)(b) the reference to another pension scheme includes a scheme established in a country or territory outside Great Britain.

(6) Where the trustees or managers fail to carry out a check required by this section, section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager who failed to take reasonable steps to ensure that the check was carried out.

(7) Failure to carry out a check required by this section does not affect the validity of any transaction.

(8) In this section—

“appropriate independent advice” means advice that—is given by an authorised independent adviser, andmeets any other requirements specified in regulations made by the Secretary of State;

“authorised independent adviser” means a person who—has permission under Part 4A of the Financial Services and Markets Act 2000, or resulting from any other provision of that Act, to carry on a regulated activity specified in regulations made by the Secretary of State, or is acting as an appointed representative (within the meaning given by section 39(2) of that Act) in relation to a regulated activity so specified, andmeets such other requirements as may be specified in regulations made by the Secretary of State for the purpose of ensuring that the person is independent;

“safeguarded benefits” means benefits other than—money purchase benefits, andcash balance benefits.

Power to require employer to arrange advice for purposes of section 48

49

(1) The Secretary of State may by regulations specify circumstances in which an employer must arrange or pay for a member of a pension scheme, or a survivor of a member of a pension scheme, to receive appropriate independent advice for the purpose of satisfying a requirement imposed by section 48.

(2) Regulations under subsection (1) may, in particular—

(a) impose limitations on the amount that an employer may be required to pay;

(b) prohibit an employer from seeking in any way to recover, from a member or survivor, costs incurred by the employer in complying with the regulations;

(c) provide for section 10 of the Pensions Act 1995 (civil penalties) to apply to a failure by an employer to comply with the regulations.

(3) In this section “employer” has the meaning given by regulations made by the Secretary of State.

Independent advice: consequential amendments: Great Britain

50

(1) The Pension Schemes Act 1993 is amended as follows.

(2) In section 99 (trustees' duties after exercise of option), after subsection (2) insert—

(2A) Subsection (2) does not apply if— (a) the trustees or managers have been unable to carry out the check required by section 48 of the Pension Schemes Act 2015 by reason of factors outside their control, or (b) the trustees or managers have carried out the check required by section 48 of the Pension Schemes Act 2015 but the check did not confirm that the member had received appropriate independent advice.

(3) In section 101J (time for compliance with transfer notice in respect of pension credit benefits), after subsection (2A) (inserted by paragraph 18(3) of Schedule 4 to this Act) insert—

(2B) Subsection (1) does not apply if— (a) the trustees or managers have been unable to carry out the check required by section 48 of the Pension Schemes Act 2015 by reason of factors outside their control, or (b) the trustees or managers have carried out the check required by section 48 of the Pension Schemes Act 2015 but the check did not confirm that the member had received appropriate independent advice.

Northern Ireland

Independent advice in respect of conversions and transfers: Northern Ireland

51

(1) Where a member of a pension scheme has subsisting rights in respect of any safeguarded benefits, or a survivor of a member has subsisting rights in respect of any safeguarded benefits, the trustees or managers must check that the member or survivor has received appropriate independent advice before—

(a) converting any of the benefits into different benefits that are flexible benefits under the scheme;

(b) making a transfer payment in respect of any of the benefits with a view to acquiring a right or entitlement to flexible benefits for the member or survivor under another pension scheme;

(2) The Department for Social Development in Northern Ireland may by regulations make provision about—

(a) what the trustees or managers must do to check that a member or survivor has received appropriate independent advice for the purposes of subsection (1), and

(b) when the check must be carried out for the purposes of that subsection.

(3) The Department for Social Development in Northern Ireland may by regulations—

(a) create an exception to subsection (1) in the case of a member or survivor whose subsisting rights in respect of safeguarded benefits under the scheme, or safeguarded benefits under the scheme and any other schemes, are worth less than a specified amount;

(b) create other exceptions to subsection (1).

(4) Regulations under subsection (3)(a) may, in particular, make provision about—

(a) the valuation of the subsisting rights;

(b) the process for determining whether the exception applies.

(5) In subsection (1)(b) the reference to another pension scheme includes a scheme established in a country or territory outside Northern Ireland.

(6) Where the trustees or managers fail to carry out a check required by this section, Article 10 of the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213 (N.I. 22)) (civil penalties) applies to any trustee or manager who failed to take reasonable steps to ensure that the check was carried out.

(7) Failure to carry out a check required by this section does not affect the validity of any transaction.

(8) In this section—

“appropriate independent advice” means advice that—is given by an authorised independent adviser, andmeets any other requirements specified in regulations made by the Department for Social Development in Northern Ireland;

“authorised independent adviser” means a person who—has permission under Part 4A of the Financial Services and Markets Act 2000, or resulting from any other provision of that Act, to carry on a regulated activity specified in regulations made by the Department for Social Development in Northern Ireland, or is acting as an appointed representative (within the meaning given by section 39(2) of that Act) in relation to a regulated activity so specified, andmeets such other requirements as may be specified in regulations made by the Department for Social Development in Northern Ireland for the purpose of ensuring that the person is independent;

“safeguarded benefits” means benefits other than—money purchase benefits, andcash balance benefits.

Power to require employer to arrange advice for purposes of section 51

52

(1) The Department for Social Development in Northern Ireland may by regulations specify circumstances in which an employer must arrange or pay for a member of a pension scheme, or a survivor of a member of a pension scheme, to receive appropriate independent advice for the purpose of satisfying a requirement imposed by section 51.

(2) Regulations under subsection (1) may, in particular—

(a) impose limitations on the amount that an employer may be required to pay;

(b) prohibit an employer from seeking in any way to recover, from a member or survivor, costs incurred by the employer in complying with the regulations;

(c) provide for Article 10 of the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213 (N.I. 22)) (civil penalties) to apply to a failure by an employer to comply with the regulations.

(3) In this section “employer” has the meaning given by regulations made by the Department for Social Development in Northern Ireland.

Independent advice: consequential amendments: Northern Ireland

53

(1) The Pension Schemes (Northern Ireland) Act 1993 is amended as follows.

(2) In section 95 (trustees' duties after exercise of option), after subsection (2) insert—

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