The Occupational Pension Schemes (Employer Debt) Regulations 2005

Preliminary

Citation, commencement, application and extent

Interpretation

Disapplication of the 1996 Regulations

Schemes to which section 75 of the 1995 Act does not apply

Valuations

Calculation of the value of scheme liabilities and assets: defined benefit schemes

Multi-employer schemes

Multi-employer schemes: general

Multi-employer schemes: valuations for employment cessation events

Multi-employer schemes: sectionalised schemes

Former employers

Former employers

Money purchase schemes

Money purchase schemes: fraud and levy deficiencies etc.

Money purchase schemes: valuations etc.

Multi-employer money purchase schemes

Former employers of money purchase schemes

Other schemes treated as more than one scheme

Schemes covering United Kingdom and foreign employment

Schemes with partial government guarantee

Supplementary

Modification of schemes: apportionment of section 75 debts

Disregard of staying of voluntary winding up of employer for purposes of section 75 of the 1995 Act

Consequential amendments

Given for the purposes of regulation 5(18) and regulation 6(8) of the Occupational Pension Schemes (Employer Debt) Regulations 2005 (“the Employer Debt Regulations”)

Name of scheme

Date used as the applicable time for purposes of calculations

1 Comparison of value of scheme assets with amount of scheme liabilities

In my opinion, at the applicable time, the value of the assets of the scheme was less than the amount of the liabilities of the scheme.

[name of Employer]'s debt was calculated on the liability share basis, where-

The amount of the total liabilities was [approximately]

The amount of the total difference between the value of the assets of the scheme and the amount of the liabilities of the scheme was [approximately]

2 Valuation principles

"applicable time" means the time as at which the value of the assets of a scheme and the amount of the liabilities are to be determined, calculated and verified for the purposes of section 75 of the Pensions Act;

Signature

Name

Address

Note:

The liability share amount was reduced to reflect a relevant transfer deduction under regulation 6(6) of the Employer Debt Regulations [delete as appropriate].

The MFR Regulations

The Occupational Pension Schemes (Winding Up) Regulations 1996

The Occupational Pension Schemes (Investment) Regulations 1996

Editorial notes

Multi-employer schemes: employment-cessation events and withdrawal

Calculation of amounts due from cessation employer by virtue of regulation 7

7A

• (1) The conditions which apply to a regulated apportionment arrangement are as follows—

• (a) the arrangement applies to a trust scheme where—

• (i) the trustees are of the opinion that there is a reasonable likelihood of an assessment period commencing in relation to the scheme within the following twelve months; or

• (ii) an assessment period has already commenced in relation to the scheme and has not come to an end;

• (b) where an assessment period has not already commenced, each of the following persons agrees to the arrangement—

• (i) the trustees of the scheme, and either

• (ii) where the employer’s liability share is increased, the employer, or

• (iii) where the employer’s liability share is reduced, any remaining employer to whom all or part of the amount that would have been the employer’s liability share is being apportioned;

• (c) the arrangement and any amendments to the arrangement are approved by the Authority by a notice of approval; and

• (d) the Board of the PPF do not object to the arrangement.

• (2) A notice of approval is a confirmation, issued by the Authority, that in their opinion in the circumstances described in the application it would be reasonable to issue a notice of approval.

Calculation of amounts due from guarantors by virtue of regulation 7

7B

• (1) For the purposes of regulation 7(3), amount B depends on whether the approved withdrawal arrangement provides for amount B to be the amount provided for under paragraph (2).

• (2) If the approved withdrawal arrangement so provides, amount B is equal to the amount (if any) that would be the amount of the debt due from the cessation employer under section 75(4) of the 1995 Act if—

• (a) the employment-cessation event had occurred at the guarantee time;

• (b) the cessation employer had not entered into an approved withdrawal arrangement; and

• (c) there were no cessation expenses attributable to the employer.

• (3) If the approved withdrawal arrangement does not provide for amount B to be the amount provided for under paragraph (2), amount B is equal to the amount that would be the amount treated as due from the cessation employer under section 75(4) of the 1995 Act if the cessation employer had not entered into an approved withdrawal arrangement, less the sum of—

• (a) the amount that is amount A for the purposes of regulation 7(3);

• (b) if the amount that the approved withdrawal arrangement provides for the cessation employer to pay exceeds that amount, an amount equal to the excess; and

• (c) the relevant transferred liabilities deduction.

• (4) The value of the assets and the amount of the liabilities of a scheme which are to be taken into account for the purposes of determining the amount (if any) that would be the amount of the debt due from the cessation employer under section 75(4) of the 1995 Act in the case mentioned in paragraph (2) must be certified by the actuary in the form set out in Schedule 1 to these Regulations, but—

• (a) substituting for the reference to regulation 5 a reference to paragraph (2) of this regulation;

• (b) if the actuary is of the opinion that the value of the assets of the scheme was not less than the amount of the liabilities of the scheme—

• (i) substituting in the first sentence of the comparison of value of scheme assets with amount of scheme liabilities for the words “was less” the words “was not less”; and

• (ii) omitting the last sentence of that comparison; and

• (c) if the scheme is being wound up on the date as at which the valuation is made, omitting from the Note the words from “if the scheme” onwards.

• (5) In this regulation—

• “the cessation expenses attributable to the employer” has the meaning given by regulation 6(5); and

• “the relevant transferred liabilities deduction” has the meaning given by regulation 6(6), as inserted by the modification of regulation 6 made by regulation 7A(5)(b), except that for the purposes of this regulation the amount of the relevant transferred liabilities is to be calculated in accordance with regulation 5 without the modifications made by regulation 7A(4).

Multi-employer schemes: sectionalised schemes

SCHEDULE1A — Withdrawal Arrangements and Approved Withdrawal Arrangements

Withdrawal arrangements

1

The conditions a withdrawal arrangement, or a withdrawal arrangement after it has been approved by the Authority, must comply with are—

• (a) the trustees or managers, the cessation employer and the guarantor are parties;

• (b) it provides the date on which it is to come into force;

• (c) it provides that at or before the time specified the cessation employer will pay—

• (i) in the case of a withdrawal arrangement, the withdrawal arrangement share; or

• (ii) in the case of an approved withdrawal arrangement, the approved withdrawal arrangement share;

• (d) where the withdrawal arrangement share or approved withdrawal arrangement share will be paid in instalments, the dates for payment of such instalments;

• (e) it provides that the guarantors will pay an amount or amounts equal to amount B;

• (f) it provides that if an event specified in paragraph 3 of this Schedule occurs before amount B has been paid and while the agreement is still in force, the guarantors will pay amount B;

• (g) it specifies whether amount B is calculated under either sub-paragraph (2) or (3) of paragraph 5 of this Schedule;

• (h) specifies where there is more than one guarantor, whether the guarantors are jointly or jointly and severally liable;

• (i) provides details of any relevant transfer deduction which may apply, the anticipated relevant transfer liabilities, the anticipated corresponding assets and the anticipated time scale for finalisation of the relevant transfer deduction;