The Occupational Pension Schemes (Charges and Governance) Regulations 2015

• (7) Where the prohibition in paragraph (2) applies it overrides any term of a relevant contract to the extent that the term conflicts with it.

Relevant information

11B

• (1) The trustees or managers of a specified scheme must notify the service provider in writing that the scheme is a specified scheme within 3 months beginning with whichever is the later of—

• (a) 6th April 2016;

• (b) the date on which the scheme becomes a specified scheme; or

• (c) the date on which the service provider becomes a service provider in relation to the specified scheme.

• (2) Subject to paragraphs (2B) and (5), regulation 11A does not apply until the expiry of the period of 1 month beginning with the date on which the service provider receives the notification in paragraph (1).

• (2A) This paragraph applies where the relevant contract—

• (a) was entered into before 6th April 2016; and

• (b) has not been varied or renewed on or after that date.

• (2B) Subject to paragraph (5), where paragraph (2A) applies regulation 11A does not apply until the expiry of the period of 6 months beginning with 1st October 2017.

• (3) Except in a case to which paragraph (2A) applies, the service provider must confirm in writing to the trustees or managers who provided the notification in paragraph (1) that it is compliant with the prohibition in regulation 11A(2) in relation to all members to whom that regulation applies within 1 month beginning with the date on which that regulation first applies.

• (3A) In a case to which paragraph (2A) applies, subject to paragraph (5), the service provider must confirm in writing to the trustees or managers of the specified scheme within 1 month beginning with 1st April 2018 that it is complying with the prohibition in regulation 11A(2) in relation to all members to whom paragraph (2A) applies.

• (4) Where the service provider is unable to comply with the prohibition in regulation 11A(2) in relation to all members because the service provider requires information about which members are former workers to whom regulation 11A applies, the service provider may request the information from the trustees or managers of the specified scheme to enable it to comply.

• (5) Where a request is made under paragraph (4), the time period referred to—

• (a) in paragraphs (2) or (2B) in respect of those members about whom a request has been made and to whom regulation 11A applies; or

• (b) paragraphs (3) or (3A),

commences on the date on which the information requested is received by the service provider.

• (6) The service provider must inform the trustees or managers of the specified scheme in writing if the confirmation that it has given in compliance with paragraph (3) or (3A) is no longer accurate as soon as practicable, and in any event within 1 month, beginning with the date on which it is no longer accurate.

• (7) Where a request is made under paragraph (4), the trustees or managers must provide the information requested within 1 month beginning with the date of receipt of the request.

• (8) In this regulation, in relation to a specified section, references to a “specified scheme” are to be read as references to a “specified section”.

Member agreement for payments to advisers

11C

• (1) Subject to paragraphs (3) and (4), the prohibition in regulation 11A(2)(a) does not apply in relation to advice or a service given to a member of a specified scheme where—

• (a) the service provider; and

• (b) the trustees or managers of the specified scheme,

have received a copy of an agreement for the provision of that advice or service made between the member and an adviser, provided the conditions in paragraph (2) are satisfied.

• (2) The conditions referred to in paragraph (1) are that the agreement must—

• (a) be in writing;

• (b) include a description of the advice or service that will be provided to the member;

• (c) state that entering into the agreement is not a condition of becoming or remaining a member of a specified scheme;

• (d) state that by entering into the agreement the member will incur charges of an amount specified in the agreement which will be imposed over a period specified in the agreement and that such charges would otherwise not be permitted under regulation 11A(2)(a); and

• (e) be entered into before the charges are imposed.

• (3) Where the charge limits apply to a member and the trustees or managers are of the opinion that charges imposed under an agreement under this regulation would be likely to place the trustees or managers in breach of those limits in relation to that member, they may inform—

• (a) the member;

• (b) the adviser; and

• (c) the service provider,

within 1 month beginning with the date on which they receive a copy of the agreement under this regulation, that they require that a member agreement for advice or services under regulation 9 is entered into by the member before the agreement under this regulation can take effect.

• (4) Where the trustees or managers are of the opinion that the value of the member’s rights in the scheme is not, or will not be, sufficient to pay the amount specified in an agreement under this regulation, the agreement does not take effect if the trustees or managers inform—

• (a) the member;

• (b) the adviser; and

• (c) the service provider,

of their opinion within 1 month beginning with the date on which they receive a copy of the agreement.

• (5) In this regulation—

• “charge limits” has the meaning given in regulation 10(10); and

• “specified scheme” does not include a relevant scheme that is a collective money purchase scheme.

Amendment of the Stakeholder Pension Schemes Regulations 2000

Amendments of other regulations

Service of notices

33

Sections 303 to 305 of the Pensions Act 2004 (service of documents and electronic working) are treated as applying to notices issued under Part 4 of these Regulations.

CHAPTER 1 — DEFAULT ARRANGEMENTS, qualifying collective money purchase schemes, NON-CONTRIBUTING MEMBERS AND PAYMENTS TO ADVISERS

Restrictions on charges

Prohibited charge structures

Limits on charges

Assessment of charges

Alternative assessment of charges

Member agreement for services

Charge limits adjustment

Non-contributing members

Payments to advisers

Relevant information

Member agreement for payments to advisers

Amendment of the Stakeholder Pension Schemes Regulations 2000

Amendments of other regulations

CHAPTER 2 — RESTRICTIONS ON EARLY EXIT CHARGES

Early exit charges

13A

• (1) For the purposes of this Chapter an early exit charge in relation to a member of a relevant scheme is a charge which—

• (a) is imposed under the scheme or a relevant contract when a member who has reached normal minimum pension age takes the action mentioned in subsection (2); but

• (b) is only imposed, or only imposed to that extent, if the member takes that action before the member’s normal pension age.

• (2) The action is the member taking benefits under the scheme, converting benefits under the scheme into different benefits or transferring benefits to another pension scheme.

• (3) For the purposes of this regulation—

• “normal minimum pension age” has the meaning given in section 279(1) of the Finance Act 2004;

• “normal pension age” means the earliest age at which, or the earliest occasion on which, the member is entitled to receive the benefit without adjustment for taking it early or late (disregarding any special provision as to early payment on the grounds of ill-health or otherwise and any administration charges); anda reference to “benefits” includes any part or all of those benefits.

Prohibition of early exit charges

13B

• (1) This regulation applies to a member of a relevant scheme who joined that scheme on or after 1st October 2017.

• (2) Service providers and trustees and managers of a relevant scheme must not impose an early exit charge, or permit such a charge to be imposed, on a member of the scheme to whom this regulation applies.

Limits on early exit charges

13C

• (1) This regulation applies to a member of a relevant scheme who joined that scheme before 1st October 2017.

• (2) Service providers and trustees and managers of a relevant scheme must not impose, or permit to be imposed, on a member of the scheme to whom this regulation applies an early exit charge that exceeds the lower of—

• (a) 1% of the value of the member’s benefits being taken, converted or transferred; or

• (b) such amount as was provided for under the scheme rules or a relevant contract as at 1st October 2017.

• (3) Where no provision for an early exit charge was made under the scheme rules or a relevant contract as at 1st October 2017, service providers and trustees and managers of a relevant scheme must not impose an early exit charge, or permit such a charge to be imposed, on a member of the scheme to whom this regulation applies.

• (4) Trustees and managers of a relevant scheme must not—

• (a) include provision in a relevant scheme for an early exit charge, where such provision did not exist on 1st October 2017; or

• (b) vary provision for an early exit charge in such a scheme to increase or potentially increase the charge.

• (5) Nothing in this regulation permits an early exit charge to be imposed—

• (a) that is higher than the limits prescribed by regulation 6 (limits on charges) where that regulation applies; or

• (b) where section 33 of the Pension Schemes Act 2017 (prohibition on increasing charges etc during triggering event period) applies.

• (6) Nothing in regulation 6 permits—

• (a) an early exit charge which is lower than 0.75% of the value of the member’s benefits being taken, converted or transferred, to be increased; or

• (b) an early exit charge to be imposed where one did not exist.

• (7) The value of a member’s benefits in paragraphs (2)(a) and (6)(a)—

• (a) means the value calculated at the point when the trustee or manager of the scheme receives confirmation from the member of the instruction to take the action giving rise to the early exit charge; and

• (b) is to be calculated in accordance with guidance issued from time to time by the Secretary of State.

Conflicting contract terms

13D

Regulations 13B and 13C override any term of a relevant contract to the extent that the term conflicts with those regulations.

Relevant information

13E

• (1) A service provider must confirm in writing to the trustees or managers of a relevant scheme that it is complying with the restrictions in regulations 13B and 13C within 1 month beginning with whichever is the later of—

• (a) 1st October 2017; or

• (b) the date on which the service provider becomes a service provider in relation to the relevant scheme.

• (2) The service provider must inform the trustees or managers of the relevant scheme in writing if the confirmation that it has given in compliance with paragraph (1) is no longer accurate as soon as practicable, and in any event within 1 month, beginning with the date on which that confirmation is no longer accurate.

Imposition of more than one flat fee charge

6ZA

• (1) Paragraph (2) applies where more than one flat fee charge under regulation 6(4)(a) is imposed, under a single default arrangement, on a member in respect of a charges year.

• (2) The trustees or managers must, as soon as practicable, restore the value of the member’s rights under the default arrangement to the value it would have been if only one such charge had been imposed.

• (3) When restoring the value of the member’s rights under paragraph (2), the trustees or managers must have regard to—

• (a) the restrictions on flat fee charges imposed by regulation 5(3)(b); and

• (b) the limit specified in regulation 6(4)(a).

Assessment of charges

Alternative assessment of charges

Member agreement for services

Charge limits adjustment

Non-contributing members

Payments to advisers

Relevant information

Member agreement for payments to advisers

Amendment of the Stakeholder Pension Schemes Regulations 2000

Amendments of other regulations

Qualifying collective money purchase schemes

3A

• (1) A relevant scheme is a “qualifying collective money purchase scheme” if—

• (a) it is a collective money purchase scheme; and

• (b) it is being used—

• (i) as a qualifying scheme in relation to one or more relevant jobholders; or

• (ii) by a qualifying scheme in relation to one or more relevant jobholders.

• (2) Where a scheme is a qualifying collective money purchase scheme, it continues to be such a scheme regardless of whether it continues to satisfy paragraph (1)(b).

• (3) Where a qualifying collective money purchase scheme that is not divided into sections (an “undivided scheme”) becomes a scheme that is divided into sections, any section of that scheme that is a collective money purchase scheme (for the purposes of section 1(2) of the 2021 Act) under which collective money purchase benefits may be provided to persons who were members of the undivided scheme (to whom such benefits were payable under that scheme), is a qualifying collective money purchase scheme regardless of whether it satisfies paragraph (1)(b).

• (4) In this regulation, “relevant jobholder” means a jobholder of one or more of the employers that is using the qualifying collective money purchase scheme.

Prohibited charge structures - default arrangements

Prohibited charge structures – qualifying collective money purchase schemes

5A

• (1) The description of the charges which are prohibited under regulation 4(1ZA)(b) are charges under a charge structure other than—

• (a) a collective single charge structure; or

• (b) a collective combination charge structure.

• (2) In these Regulations, a collective single charge structure is one under which charges are calculated solely by reference to the value of members’ rights under the scheme.

• (3) In these Regulations, a collective combination charge structure is one under which charges are calculated by reference to the value of members’ rights under the scheme (‘a collective existing rights charge’) and either—

• (a) calculated as a percentage of the value of contributions made by or on behalf or in respect of members of the scheme towards the scheme (‘a collective contribution percentage charge’); or

• (b) calculated by reference to a period of time and not by reference to contributions made by or on behalf or in respect of members of the scheme towards the scheme or to the value of members’ rights under the scheme (‘a collective flat fee charge’).

• (4) For the purposes of regulation 4(1ZA)(b), neither the charge structure, nor the type of collective combination charge structure, that applies to the members may be changed during a charges year.

Limits on charges - default arrangements

Limits on charges – qualifying collective money purchase schemes

6A

• (1) The limits on charges for the purposes of regulation 4(1ZA)(a) are the limits specified in this regulation and the trustees must choose whether to assess them in accordance with regulation 7A or 8A (but see regulation 8A(7)).

• (2) The limit in the case of a collective single charge structure is 0.75% annually of the value of members’ rights under the scheme.

• (3) The limit in the case of a collective combination charge structure whose charges fall within regulation 5A(3)(a) is—

• (a) in relation to the collective contribution percentage charge, 2.5% of contributions made by or on behalf or in respect of members allocated under the scheme—

• (i) annually, or

• (ii) where, in relation to a charges year, regulation 4 does not apply in respect of members for the whole of the year, in the period for which that regulation applies; and

• (b) in relation to the collective existing rights charge, the percentage annually of the value of members’ rights under the scheme which is the figure in Column 2 of the following table which corresponds to the collective contribution percentage charge rate in Column 1 of that table which is imposed on the members.

Column 1Collective contribution percentage charge rate (%)	Column 2Collective existing rights charge rate (%)
1 or lower	0.6
Higher than 1 but no higher than 2	0.5
Higher than 2 but no higher than 2.5	0.4

• (4) The limit in the case of a collective combination charge structure whose charges fall within regulation 5A(3)(b) is—

• (a) in relation to the collective flat fee charge, £25 annually per member; and

• (b) in relation to the collective existing rights charge, the percentage annually of the value of members’ rights under the scheme which is the figure in Column 2 of the following table which corresponds to the annual collective flat fee charge per member in Column 1 of that table which is imposed on the members.

Column 1Collective flat fee charge (£ per member)	Column 2Collective existing rights charge rate (%)
10 or less	0.6
More than 10 but no more than 20	0.5
More than 20 but no more than 25	0.4

Imposition of more than one flat fee charge

Assessment of charges - default arrangements

Assessment of charges – qualifying collective money purchase schemes

7A

• (1) If the trustees make the choice under regulation 6A(1) to assess charges in accordance with this regulation, the following provisions apply.

• (2) Trustees must calculate the value of members’ rights under the scheme at reference points set at equal intervals during the charges year of no more than 3 months (but see paragraphs (3), (6) and (7)).

• (3) Where trustees change the intervals between reference points chosen for the purposes of paragraph (2) during the charges year, the start of the first new interval must commence on the day following the reference point at the end of the previous interval.

• (4) The limit of permitted charges under—

• (a) a collective single charge structure; or

• (b) a collective existing rights charge in a collective combination charge structure,

is exceeded if the charges imposed on the members annually exceed the average of the reference point values multiplied by the applicable percentage.

• (5) The applicable percentage is—

• (a) in the case of a collective single charge structure, 0.75%; and

• (b) in the case of a collective existing rights charge in a collective combination charge structure, the percentage in Column 2 of the table—

• (i) in regulation 6A(3), where a collective contribution percentage charge is imposed; and

• (ii) in regulation 6A(4), where a collective flat fee is imposed.

• (6) Where members have rights under the scheme at only one reference point referred to in paragraph (2), paragraph (4) is to be read as if the words “average of the reference point values” read “value at the reference point”.

• (7) Where members have no rights under the scheme at a reference point referred to in paragraph (2), paragraph (4) is to be read as if the words “average of the reference point values” read “value of members’ rights under the scheme on the final day of the charges year or, if there are no members who have such rights on that day, on the final day on which there are members who have such rights,”.

• (8) In this regulation monthly, 2 monthly and 3 monthly intervals are to be treated as equal intervals.

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Alternative assessment of charges - default arrangements

Alternative assessment of charges – qualifying collective money purchase schemes

8A

• (1) If the trustees make the choice under regulation 6A(1) to assess charges in accordance with this regulation, the limit of permitted charges under—

• (a) a collective single charge structure; or

• (b) a collective existing rights charge in a collective combination charge structure,

is not exceeded if, on the first day of the charges year, the charges regime to be applied to members’ rights under the scheme meets the requirement in paragraph (2) and that charges regime is applied to members’ rights throughout that charges year.

• (2) The requirement referred to in paragraph (1) is that the charges regime would not result in charges being imposed on the members exceeding the limit of permitted charges when calculated in accordance with regulation 7A, if the assumptions in paragraph (3) ... are made for the purposes of those calculations.

• (3) The assumptions to be made for the purposes of paragraph (2) are—

• (a) the value of members’ rights under the scheme will not increase or decrease during the charges year when compared to the value on the first day of the charges year, other than as a result of charges imposed on the members; and

• (b) all the members may leave the scheme at any time during that charges year.

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

• (5) In this regulation, “charges regime” means—

• (a) the charges to be imposed, and any rebates of charges to be applied, as a percentage of the value of members’ rights under the scheme;

• (b) when they are to be deducted from, or added to, the value of members’ rights throughout the charges year;

• (c) how the value of members’ rights will be calculated for the purposes of imposing or rebating charges.

• (6) Where the first contribution made by or on behalf or in respect of members to the scheme is made after the first day of the charges year, paragraphs (1) and (3)(a) are to be read as if “on the first day of the charges year” read “on the date on which the first contribution is made in a charges year”.

• (7) Where the trustees make the choice under regulation 6A(1) to assess charges in accordance with this regulation but, during the charges year the charges regime fails to meet the requirement in paragraph (2), the trustees must assess charges for the whole charges year in accordance with regulation 7A.

Member agreement for services

Charge limits adjustment

Non-contributing members

Payments to advisers

Relevant information

Member agreement for payments to advisers

Amendment of the Stakeholder Pension Schemes Regulations 2000

Amendments of other regulations