The Pension Protection Fund (Pension Compensation Sharing and Attachment on Divorce etc) Regulations 2011

Made: 10th March 2011

Laid before Parliament: 15th March 2011

Coming into force: 6th April 2011

The Secretary of State for Work and Pensions makes the following Regulations in exercise of the powers conferred by sections 168A(1) and (3) , 206(4)(a), 207, 315(2) to (5) and 318(1) of the Pensions Act 2004 and sections 107(2), 108, 109(g)(ii), 110(1)(a), 112, 114(3), 115(1)(b)(ii) and (4), 116(6) and (8)(b), 117(1), (2)(b) and (c), 118, 119 and 144(2) and (4) of, and paragraphs 5(4), 7(5), 8(4)(a), 9(1), (2) and (6), 10(1),17(6), 18 and 19 of Schedule 5 to, the Pensions Act 2008 .

In accordance with section 317(1) of the Pensions Act 2004 the Secretary of State has consulted such persons as the Secretary of State considers appropriate.

PART 1 — General

Citation, commencement and interpretation

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• (1) These Regulations may be cited as the Pension Protection Fund (Pension Compensation Sharing and Attachment on Divorce etc) Regulations 2011 and shall come into force on 6th April 2011.

• (2) In these Regulations—

• “the Act” means the Pensions Act 2008;

• “the 2004 Act” means the Pensions Act 2004;

• “admissible rules” has the same meaning as in paragraph 35 (scheme rules, admissible rules etc) of Schedule 7 to the 2004 Act ;

• “child of the family” means—a child of the transferee; orany other child who has been treated by the transferee as a child of the family, other than a child placed with the transferee as a foster parent by a local authority or voluntary organisation;

• “compensation cap” has the same meaning as in paragraph 26(7) of Schedule 7 to the 2004 Act (compensation cap);

• “member” means the party who is entitled to present or future payment of PPF compensation under the pension compensation provisions and includes a pension compensation credit member;

• “pension compensation attachment order” means an order made under any of the provisions specified in regulation 17(1)(a) to (e);

• “pension compensation credit member” means a person who has rights to PPF compensation which are attributable to a pension compensation credit;

• “pension compensation debit” means a debit of the appropriate amount, to be applied to the transferor's shareable rights to PPF compensation, on the taking effect of a pension compensation sharing order or provision (see section 111 of the Act (creation of pension compensation debits and credits));

• “qualifying course” means a full time educational or vocational course at a recognised educational establishment where, in pursuit of that course, the time spent receiving instruction or tuition, undertaking supervised study, examination or practical work or taking part in any exercise, experiment or project for which provision is made in the curriculum of the course, exceeds 12 hours per week in normal term time, and includes any gaps between the ending of one course and the commencement of another, where the person is enrolled on and commences the latter course;

• “PPF” means the Pension Protection Fund;

• “relevant compensation” means the payments to which the member is entitled (or will become entitled on attaining normal pension age) under the pension compensation provisions by virtue of the member's shareable rights to PPF compensation that derive from rights under a specified scheme;

• “relevant partner” means a person who was not married to, or in a civil partnership with, the transferee but who was living with the transferee as if they were a married couple or civil partners;

• “surviving dependant” means—a child of the family who was financially dependent on the transferee at the time of the transferee's death and who is aged less than 18;a child of the family who was financially dependent on the transferee at the time of the transferee's death, who is aged less than 23 and who is—attending a qualifying course; orincapable of engaging in full time paid employment due to a condition that falls within the definition of a disability under section 6 (disability) of the Equality Act 2010 ; ora child of the transferee who is born after the transferee's death;

• “surviving partner” means the surviving widow, widower or civil partner of a deceased transferee;

• “valid nomination” means a signed written notice.

• (3) “Day”, in regulations 3, 5, 9, 11, 12, 17 and 18, means any day other than—

• (a) Christmas Day or Good Friday; or

• (b) a day which is, or is to be observed as, a bank holiday under Schedule 1 (bank holidays) to the Banking and Financial Dealings Act 1971 ;

and where the Board receives a request or order to provide information, an order or provision, a notification or other documents on a day which falls on one of the days specified in sub-paragraph (a) or (b), any period of time specified in regulation 3, 5, 9, 11, 12, 17 or 18 is to run from the next day after the day of receipt which is not a day specified in sub-paragraph (a) or (b).

PART 2 — Shareable rights

Rights to PPF compensation which are not shareable

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Any right of a person to PPF compensation is not shareable if—

• (a) the compensation is in payment; and

• (b) the compensation is derived directly or indirectly from the rights of a deceased person by virtue of being the surviving partner or surviving dependant of that person.

PART 3 — Supply of information about pension compensation in relation to divorce etc

Basic information about pension compensation and divorce or dissolution of a civil partnership

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• (1) The requirements imposed on the Board for the purposes of section 118(1)(a) of the Act (supply of information about pension compensation in relation to divorce etc.) are that the Board must supply—

• (a) on request from a member, the information specified in paragraphs (2) and (3)(b) and (c);

• (b) on request from the spouse or civil partner of the member, the information specified in paragraph (3); and

• (c) pursuant to an order of the court, the information specified in paragraph (2), (3), or (4),

to the member, the spouse or civil partner of the member, or, as the case may be, to the court.

• (2) The information specified in this paragraph is a valuation of the member's rights to PPF compensation and (if not the same as the member's rights to PPF compensation) a valuation of the member's rights to relevant compensation.

• (3) The information specified in this paragraph is—

• (a) a statement that on request from the member, or pursuant to an order of the court, a valuation of the member's rights to PPF compensation and to relevant compensation (if not the same as the member's rights to PPF compensation), will be supplied to the member, or, as the case may be, to the court;

• (b) a statement summarising the way in which the valuations referred to in paragraph (2) and sub-paragraph (a) are calculated;

• (c) a schedule of the charges that the Board will impose in accordance with regulation 18 (charges in respect of pension compensation sharing costs etc recoverable by the Board), and the method by which those charges may be recovered;

• (d) a statement that a person entitled to a pension compensation credit against the Board will be entitled to periodic compensation calculated in accordance with Schedule 5 (pension compensation payable on discharge of pension compensation credit) to the Act.

• (4) The information specified in this paragraph is any other information about the calculation and payment of PPF compensation relevant to any power exercisable under the provisions specified in section 118(1)(a) of the Act.

• (5) Where the member's request or the court order for the provision of information includes a request or an order for provision of a valuation under paragraph (2), the Board must supply all the information in that request or order within—

• (a) 3 months, beginning with the day that the Board receives the request or order for the provision of information;

• (b) 6 weeks, beginning with the day that the Board receives the request or order for the provision of information, where the member or the court has notified the Board on the date of the request or order that the information is needed in connection with proceedings commenced under any of the provisions specified in section 118(1)(a) of the Act; or

• (c) any shorter period, where the court specifies such a period in an order requiring the Board to supply a valuation in accordance with paragraph (2).

• (6) Where—

• (a) the member's request or the court order for supply of information does not include a request or an order for provision of a valuation under paragraph (2); or

• (b) the member's spouse or civil partner requests the information specified in paragraph (3),

the Board must supply that information within one month beginning with the day that the Board receives the request or the court order for the provision of the information.

Valuation of relevant compensation for the purposes of an application for financial relief or financial provision

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• (1) Where the Board is notified that—

• (a) an application for financial relief or financial provision under any of the provisions specified in section 118(1)(a) of the Act has been made or is in contemplation; or

• (b) a qualifying agreement containing provision corresponding to provision which may be made by an order under section 8 (orders for financial provision) of the Family Law (Scotland) Act 1985 is to be made or is in contemplation,

the value of the PPF compensation or relevant compensation to which the member is entitled or will become entitled must be calculated and verified for the purposes of section 118(1)(b) of the Act, or of regulation 3(2), in accordance with paragraphs (2) and (3).

• (2) The value of the PPF compensation or relevant compensation is the cash equivalent of the amount that would be required to make provision for the member's entitlement to PPF compensation or relevant compensation under the pension compensation provisions.

• (3) The cash equivalent of the PPF compensation or relevant compensation must be calculated and verified—

• (a) in accordance with actuarial assumptions approved by the Board; and

• (b) on the assumption that the date on which the valuation is carried out is the date that the Board received the request for the valuation.

Provision of information in response to a notification that a pension compensation sharing order etc may be made

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• (1) On a direction from the court or a request from the member, the Board must supply the information specified in paragraph (2) to the member or to the court, as the case may be—

• (a) within 21 days beginning with the day that the Board received the notification that a pension compensation sharing order, a pension compensation attachment order, or a qualifying agreement containing provision equivalent to such orders, may be made; or

• (b) if the court has specified a date which is before or after the 21 day period specified in sub-paragraph (a), by that date.

• (2) The information referred to in paragraph (1) is—

• (a) the full name and address of the person to whom any order or provision specified in section 109 of the Act (activation of pension compensation sharing) should be sent;

• (b) whether the Board is aware that the member's rights to PPF compensation are subject to any, and if so, which, of the following—

• (i) any order or provision specified in section 109 of the Act;

• (ii) any order or provision specified in section 28(1) (activation of pension sharing) of the Welfare Reform and Pensions Act 1999 ;

• (iii) an order under section 23 (financial provision orders in connection with divorce proceedings etc.) of the Matrimonial Causes Act 1973 , which includes provision made by virtue of section 25B (pensions) or 25C (pensions: lump sums) of that Act ;

• (iv) an order under Part 1 of Schedule 5 (financial provision orders in connection with dissolution of civil partnerships etc: England and Wales) to the Civil Partnership Act 2004 , which includes provision made by virtue of Part 6 of that Schedule (powers to include provision about pensions);

• (v) an order under section 23 of the Matrimonial Causes Act 1973, which includes provision made by virtue of section 25F (attachment of pension compensation) of that Act ;

• (vi) an order under Part 1 of Schedule 5 to the Civil Partnership Act 2004, which includes provision made by virtue of paragraph 34A (attachment of PPF compensation) of Part 7 of that Schedule ;

• (vii) an order under Article 25 (financial provision orders in connection with divorce proceedings, etc.) of the Matrimonial Causes (Northern Ireland) Order 1978 , which includes provision made by virtue of Article 27B (pensions) or 27C (pensions: lump sums) of that Order ;

• (viii) an order under Part 1 (financial provision in connection with divorce, nullity or separation) of Schedule 15 to the Civil Partnership Act 2004, which includes provision made by virtue of Part 5 (making of Part 1 orders having regard to pension benefits) of that Schedule ;

• (ix) an order under Article 25 of the Matrimonial Causes (Northern Ireland) Order 1978, which includes provision made by virtue of Article 27F (attachment of pension compensation) of that Order ;

• (x) an order under Part 1 of Schedule 15 to the Civil Partnership Act 2004, which includes provision made by virtue of paragraph 29A (attachment of PPF compensation) of Part 6 of that Schedule ;

• (xi) an order under section 8 (orders for financial provision) of the Family Law (Scotland) Act 1985, which includes provision made by virtue of section 12A(2) (orders for payment of capital sum: pensions lump sums) or (3) or 12B (order for payment of capital sum: pension compensation) of that Act ;

• (xii) any provision corresponding to provision which may be made by such an order, and which is contained in a qualifying agreement between the parties to a marriage or the partners to a civil partnership;

• (xiii) a forfeiture order;

• (xiv) a bankruptcy order;

• (xv) an award of sequestration on a member's estate or the making of the appointment on the member's estate of a judicial factor under section 41 (appointment of judicial factor) of the Solicitors (Scotland) Act 1980 ;

• (c) whether the member's rights to PPF compensation include rights which are not shareable or cannot be subject to a pension compensation attachment order;

• (d) if such information has not already been supplied, details of any charges that the Board will impose in accordance with regulation 18 (charges in respect of pension compensation sharing costs etc recoverable by the Board) and the method by which they may be recovered; and

• (e) whether the Board requires any information additional to that specified in regulation 9 (information to be supplied in order for the implementation period to begin) in order to implement the pension sharing order or provision.

Information to be provided by the Board to pension compensation credit members

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The information to be provided by the Board to pension compensation credit members and to beneficiaries of pension compensation credit members is to be determined in accordance with the provisions of the Schedule.

PART 4 — Pension compensation sharing and qualifying agreements (Scotland)

Prescribed form of provision corresponding to provision which may be made by a pension compensation sharing order

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For the purposes of section 109(g)(ii) of the Act, the form of a provision corresponding to provision which may be made by a pension compensation sharing order, and which is contained in a qualifying agreement between the parties to a marriage or the partners in a civil partnership, is that the provision must include—

• (a) in relation to the transferor, the information specified in regulation 9(1)(a);

• (b) in relation to the transferee, the information specified in regulation 9(1)(b);

• (c) details of—

• (i) the amount to be transferred to the transferee, or

• (ii) the percentage of the cash equivalent of the relevant compensation which is to be transferred to the transferee;

• (d) details of provision about the apportionment between the transferor and transferee (if any) of charges imposed by the Board in accordance with regulation 18(1);

• (e) confirmation by the transferor that the Board has been sent notification that a qualifying agreement is to be made, and that the Board has acknowledged receipt of that notification.

Circumstances in which an agreement is to be entered into, in order to be considered a “qualifying agreement” for the purposes of section 110(1)(a) of the Act

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The circumstances prescribed for the purposes of section 110(1)(a) of the Act are that —

• (a) the transferor has notified the Board that a qualifying agreement which makes provision corresponding to—

• (i) a pension compensation sharing order under section 8 of the Family Law (Scotland) Act 1985; or

• (ii) a capital sum order made under section 8 containing provision by virtue of section 12B of that Act,

is to be made; and

• (b) the transferor and transferee have entered into the agreement in order to determine the financial settlement on divorce or dissolution of a civil partnership.

PART 5 — Implementation and discharge of liability

Information to be supplied in order for the implementation period to begin

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• (1) Subject to paragraph (2), the information prescribed for the purposes of section 115(1)(b)(ii) of the Act (“implementation period”) is—

• (a) in relation to the transferor—

• (i) all names by which the transferor is or has been known;

• (ii) date of birth;

• (iii) address;

• (iv) National Insurance number; and

• (v) the name of the pension scheme for which the Board has assumed responsibility and to which the pension compensation sharing order or provision relates, or such other information as the Board may require to identify the pension scheme concerned;

• (b) in relation to the transferee—

• (i) the name of the transferee and, if the transferee is or will be entitled to PPF compensation other than by reason of the pension compensation credit, all other names by which the transferee is or has been known;