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The Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025

Type Statutory-Instrument

Publication 2025-12-15

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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(5) For the purposes of paragraph (1)(e), the costs solely attributable to holding a physical asset include—

(a) the costs of managing and maintaining the asset;

(b) fees for valuing the asset;

(d) ground rent, charges, rates, taxes and utilities bills incurred in relation to the asset.

(6) In this regulation—

“commodity” means any goods of a fungible nature that are capable of being delivered, including metals and their ores and alloys, agricultural products and energy such as electricity, but not including cash or financial instruments (within the meaning of article 3 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001⁴⁹);

“member’s flexi-access drawdown fund” has the meaning given in paragraph 1 (1) of Schedule 6;

“physical asset” means an asset whose value depends on its physical form, including— land, buildings and other structures on land or sea, vehicles, ships, aircraft or rolling stock, and commodities;

“receiving scheme” has the meaning given in section 45(8) of the Act.

Part 5 — Amendment of the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022

Amendment of the Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022

58

The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022⁵⁰ are amended in accordance with regulations 59 to 77.

Application

59

After regulation 1 (citation, extent and commencement) insert—

(1A) (1) Parts 2 to 6 and Part 1 insofar as it relates to those Parts apply in relation to single or connected employer schemes⁵¹. (2) Part 7 and Part 1 insofar as it relates to Part 7 apply in relation to all collective money purchase schemes.

Amendment of regulation 2: interpretation and notices

60

In regulation 2(1) (interpretation and notices)—

(a) in the definition of “Code”, at the end insert “under section 90 of the Pensions Act 2004”;

(b) after the definition of “multi-annual reduction” insert—

“pension credit member” has the meaning given in section 124(1) of the 1995 Act;

Omission of regulation 3

61

Omit regulation 3 (connected employers).

Amendment of regulation 4: qualifying schemes

62

For regulation 4(1) (qualifying schemes) substitute—

(1) The combinations of qualifying benefits described for the purposes of section 3(8) of the Act (qualifying schemes) are— (a) qualifying benefits in respect of which the rates or amounts by reference to which the qualifying benefits are provided each year under the scheme are different; (b) qualifying benefits in respect of which the rates or amounts of contributions paid by the employer are different; (c) qualifying benefits in respect of which the rates or amounts of contributions paid by the employee are different; (d) qualifying benefits in respect of which the normal pension ages as specified in the rules of the scheme are different.

Amendment of regulation 5: schemes divided into sections

63

In regulation 5 (schemes divided into sections)—

(a) for paragraph (1)(b) substitute—

(b) the rates or amounts, and age, described in regulation 4(1), and specified in the rules by reference to which the qualifying benefits are provided under that section of the divided scheme, are the same as those provided for under the undivided scheme.

(b) in paragraph (2) for “providing benefits with the same characteristics set out in regulation 4(1)” substitute “of that scheme to which paragraph (1) applies”.

Amendment of regulation 6: authorisation - contents

64

In regulation 6 (authorisation: contents)—

(a) in paragraph (2)(a)(v)—

(i) after “(criminal conviction certificates)” insert “, a Level 1 disclosure within the meaning of section 1 of the Disclosure (Scotland) Act 2020”;

(ii) for “any equivalent document” substitute “any document that is equivalent to such a certificate or disclosure”;

(b) in paragraph (2)(b) for “section 11(2)(a) to (d)” substitute “section 11(2) of the Act”;

; (g) an explanation of how the scheme satisfies the definition of a collective money purchase scheme under section 1(2) of the Act (collective money purchase schemes), including— (i) an explanation of how the requirements of section 3 of the Act (qualifying schemes) are met in respect of the scheme, and (ii) where the scheme is a section of a qualifying scheme, an explanation of how the requirements of section 3 of the Act are met in respect of that section

Amendment of regulation 8: fit and proper persons requirement

65

In regulation 8(2) (fit and proper persons requirement), omit “For the purposes of section 11(2)(e) of the Act,”.

Amendment of regulation 10: viability report

66

In regulation 10(4) (viability report), for sub-paragraph (b) substitute—

(b) the conclusions reached by the scheme actuary on— (i) the matters contained in regulation 11(2); (ii) whether the rules of the scheme meet the requirements of section 18 of the Act (calculation of benefits) and the requirements of regulation 17; and

Amendment of regulation 11: viability certificate

67

In regulation 11 (viability certificate)—

(a) in paragraph (2)—

(i) omit sub-paragraph (a);

(ii) in sub-paragraph (b)—

(aa) before “member booklet” insert “scheme’s”;

(bb) before “statement of scheme design” insert “scheme’s”;

(cc) before “most recent” insert “scheme’s”;

(b) in paragraph (3)—

(i) before “member booklet” insert “scheme’s”;

(ii) before “statement of scheme design” insert “scheme’s”;

(iii) before “statements of benefits” insert “scheme’s”;

(i) in the definition of “member booklet”—

(aa) after ““member booklet”” insert “, in relation to a scheme,”;

(bb) omit “, in relation to a collective money purchase scheme,”;

(ii) in the definition of “statement of benefits”—

(aa) after ““statement of benefits”” insert “, in relation to a scheme,”;

(bb) for “a collective money purchase” substitute “the”;

(cc) omit sub-paragraph (ii);

(iii) in the definition of “statement of scheme design”—

(aa) after ““statement of scheme design”” insert “, in relation to a scheme,”;

(bb) for “a collective money purchase” substitute “the”.

Amendment of regulation 17: calculation of benefits

68

In regulation 17 (calculation of benefits)⁵²—

(a) in paragraph (4), for sub-paragraph (e) substitute—

(e) that, except where there is a multi-annual reduction in effect, the amount of any adjustment required or made to the rate or amount of benefits provided under the scheme that is an increase must be determined on the assumptions that— (i) that increase will be made in each year for the remaining lives of— (aa) the beneficiaries of the scheme on the effective date; (bb) the expected survivors in relation to the members of the scheme on the effective date, and (ii) that increase will include the projected change in inflation.

(b) omit paragraph (5);

Amendment of regulation 18: advice of scheme actuary

69

In regulation 18 (advice of scheme actuary), after paragraph (b) insert—

(c) the Financial Reporting Council Limited.

Amendment of regulation 19: actuarial valuations

70

In regulation 19(4) (actuarial valuations)—

(a) in sub-paragraph (c) for “pensioner members and survivors” substitute “pension credit members and pensioner members, and of survivors”;

(b) in sub-paragraph (d) after “deferred members,” insert “, pension credit members”.

Amendment of regulation 21: powers of the Regulator

71

In regulation 21 (powers of the Regulator), omit paragraph (2).

Amendment of regulation 25: triggering events: notification requirements

72

In regulation 25 (triggering events: notification requirements), in paragraph (1), for sub-paragraph (a) substitute—

(a) that, unless not required to submit an implementation strategy by virtue of section 39(2)(a) or (3)(a), the trustees— (i) have submitted an implementation strategy to the Regulator and the date on which they did so, or (as the case may be) will submit an implementation strategy to the Regulator before the end of the period specified in regulation 26; and (ii) will make the implementation strategy available to each employer and any relevant former employer after it has been approved by the Regulator;

Amendment of Schedule 1: fit and proper persons requirement

73

(1) Schedule 1 (fit and proper persons requirement) is amended as follows.

(2) In paragraph 1, in sub-paragraph (3) omit the definition of “the Accountant in Bankruptcy”.

(3) In paragraph 2—

(a) in sub-paragraph (a)(v)—

(i) for “(including” substitute “or”;

(ii) at the end omit the closing bracket;

(b) in sub-paragraph (b)—

(i) in paragraph (ii) omit “to the Accountant in Bankruptcy for sequestration”;

(ii) in paragraph (v)—

(aa) for “within the meaning given by”, in both places it occurs, substitute “made under”—

(bb) for “(including” substitute “or”;

(cc) at the end omit the closing bracket;

(i) for “(including” substitute “or”;

(ii) at the end omit the closing bracket.

Amendment of Schedule 2: scheme design requirement

74

In Schedule 2 (scheme design requirement)—

(a) in paragraph 1 omit sub-paragraph (b);

(b) in paragraph 9 omit sub-paragraph (a);

(b) when providing the viability certificate, the scheme actuary— (i) has had regard to the matters specified in regulation 11(2), as applicable; and (ii) is satisfied that the scheme has rules that meet the requirements of section 18 of the Act (calculation of benefits) and the requirements of regulation 17.

Amendment of Schedule 3: financial sustainability requirement

75

In Schedule 3 (financial sustainability requirement), in paragraph 2(g) for “the scheme” substitute “any”.

Amendment of Schedule 5: systems and processes requirement

76

In Schedule 5 (systems and processes requirement)—

(a) in paragraph 2(h), for “, the annual allowance and the lifetime allowance” substitute “and the annual allowance”;

(b) in paragraph 12(a), for “policy” substitute “strategy”.

Amendment of Schedule 6: continuity option 1 - transfer out and winding up

77

In Schedule 6 (continuity option 1: transfer out and winding up)—

(a) in paragraph 1(1)—

(i) in the definition of “final quantification”, for “means the final quantification” substitute “means the quantification”;

(ii) in the definition of “initial quantification”, for “means the initial quantification” substitute “means the quantification”;

(b) in paragraph 5(1), for “The quantification of the value of each beneficiary’s accrued rights to benefits under the scheme” substitute “Quantification”;

(d) in paragraph 9(1), for “was a collective money purchase scheme” substitute “was a single or connected employer scheme”;

(e) in paragraph 12(2)(c)—

(i) after “whether” insert “the scheme’s liability to the beneficiary in respect of”;

(ii) for “are discharged” substitute “is discharged”;

(f) in paragraph 14—

(i) for sub-paragraph (2)(b)—

(b) transferring the value of those rights to a scheme which is— (i) registered under Chapter 2 of Part 4 of the Finance Act 2004 (registration of pension schemes), and (ii) a personal pension scheme within the meaning given in section 1(1) of the Pension Schemes Act 1993 (categories of pension schemes)⁵³ or an occupational pension scheme;

(ii) in sub-paragraph (4)(b), for “paragraph 15” substitute “paragraph 17(1)”;

(g) in paragraph 18(5), for “a continuity strategy to the Regulator” substitute “a strategy to the Regulator under section 12 of the Pension Schemes Act 2017 (continuity strategy requirement)⁵⁴”.

Part 6 — Consequential amendments

Amendment of the Pension Schemes Act 1993

78

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

(2) In section 100B (meaning of “scheme rules”: occupational pension schemes)⁵⁵, in subsection (2)—

(a) in paragraph (a)—

(i) in sub-paragraph (xvi)⁵⁶, after “sections” insert “31,”;

(ii) after sub-paragraph (xvi) insert—

(xvii) regulations 40 and 56 of the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025 (S.I. 2025/1313);

(b) in paragraph (b)—

(i) in sub-paragraph (xii)⁵⁷ after “18(7)(b),” insert “31(4A),”;

(ii) after sub-paragraph (xii) insert—

(xiii) regulation 40 (1)(b)) of the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025.

(3) In section 101AI (right to cash transfer sum and contribution refund: further provisions)⁵⁸, in subsection (8)—

(a) in paragraph (a)—

(i) in sub-paragraph (xiv)⁵⁹, after “sections” insert “31,”;

(ii) after sub-paragraph (xiv) insert—

(xv) regulations 40 and 56 of the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025 (S.I. 2025/1313);

(b) in paragraph (b)—

(i) in sub-paragraph (xi)⁶⁰, after “18(7)(b),” insert “31(4A),”;

(ii) after sub-paragraph (xi) insert—

(xii) regulation 40 (1)(b) of the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025.

Amendment of the Pensions Act 1995

79

In section 67A of the Pensions Act 1995 (the subsisting rights provisions: interpretation)⁶¹, in subsection (9)—

(a) in paragraph (a)—

(i) in sub-paragraph (xv)⁶², after “sections” insert “31,”;

(ii) after sub-paragraph (xv) insert—

(xvi) regulations 40 and 56 of the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025 (S.I. 2025/1313);

(b) in paragraph (b)—

(i) in sub-paragraph (xii)⁶³, after “18(7)(b),” insert “31(4A),”;

(ii) after sub-paragraph (xii) insert—

(xiii) regulation 40 (1)(b) of the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025.

Amendment of the Pensions Act 2004

80

(1) The Pensions Act 2004 is amended as follows.

(2) In section 93(2)(pc) (the Regulator’s procedure in relation to its regulatory functions)⁶⁴, after “section 29(1)” insert “, (1A)”.

(3) In section 318 (general interpretation)—

(a) in subsection (3)(a)—

(i) in sub-paragraph (xv)⁶⁵, after “sections” insert “31,”;

(ii) after sub-paragraph (xv) insert—

(xvi) regulations 40 and 56 of the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025 (S.I. 2025/1313);

(b) in subsection (3)(b)—

(i) in sub-paragraph (xii)⁶⁶, after “18(7)(b),” insert “31(4A),”;

(ii) after sub-paragraph (xii) insert—

(xiii) regulation 40 (1)(b) of the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025.

Amendment of the Pension Schemes Act 2017

81

(1) The Pension Schemes Act 2017 is amended as follows.

(2) In section 1 (master trust schemes: definition)—

(a) at the end of subsection (1)(c) omit “and”;

(b) at the end of subsection (1)(d) insert “, and”;

(e) is not a collective money purchase scheme.

(d) after subsection (1) insert—

(1A) Where a Master Trust scheme has a section which is a collective money purchase scheme by virtue of section 1(2)(b) of the Pension Schemes Act 2021, references in the following provisions of this Act to a Master Trust scheme do not include any such section, except as provided in section 39(4A) to (4C).

(3) In section 39 (interpretation of Part 1)—

(a) in subsection (1)—

(i) in the definition of the “accounts” of a Master Trust scheme for “subsection (2)” substitute “subsections (2) and (4A)”;

(ii) at the appropriate place insert—

“collective money purchase scheme” has the meaning given in section 1(2) of the Pension Schemes Act 2021;

(b) after subsection (4) insert—

(4A) In relation to a Master Trust scheme, a section of which is a collective money purchase scheme, references in this Part to the scheme’s accounts are to be read as references to the accounts of the scheme as a whole. (4B) The reference in section 10(3) to activities that relate directly to Master Trust schemes is, in its application to a Master Trust scheme a section of which is a collective money purchase scheme, to be read as a reference to activities that relate directly to the scheme as a whole. (4C) This Part applies to a Master Trust scheme— (a) a section of which is a collective money purchase scheme, and (b) for which there is no power to wind up the scheme to the extent only that it is not a collective money purchase scheme, as if references to winding up the scheme, or to the scheme being wound up, were to ceasing to operate the scheme, or the scheme ceasing to operate, to the extent that it is not a collective money purchase scheme.

Collective money purchase schemes - amendments to secondary legislation

82

Schedule 7 contains consequential amendments to secondary legislation in relation to collective money purchase schemes.

Schedule 1 — Fit and proper persons requirement

1

(1) In this Schedule—

“arrangement” means a voluntary arrangement entered into by an individual with their creditors;

“the Bankruptcy Act” means the Bankruptcy (Scotland) Act 2016⁶⁷;

“the Insolvency Act” means the Insolvency Act 1986⁶⁸;

“the Insolvency Order” means the Insolvency (Northern Ireland) Order 1989⁶⁹;

“the registrar of companies” has the meaning given by section 1060(3) of the Companies Act 2006.

(2) In paragraph 2(a)—

“adjudicator” has the meaning given by section 385(1) of the Insolvency Act⁷⁰;

“creditor” has the meaning given by section 383(1) of the Insolvency Act⁷¹.

(3) In paragraph 2(b)—

“creditor” has the meaning given by section 383(1) of the Insolvency Act;

“debtor application” has the meaning given by section 228(1) of the Bankruptcy Act;

“sequestration” means sequestration under the Bankruptcy Act.

(4) In paragraph 2(c)—

“bankrupt”, “bankruptcy order” and “bankruptcy petition” have the meanings given in Article 9(1) of the Insolvency Order;

“the court” is defined in rule 0.2 of the Insolvency Rules (Northern Ireland) 1991⁷²;

“creditor” has the meaning given in Article 9(1) of the Insolvency Order.

(5) In paragraph 2(d), “director” has the meaning given in section 251 of the Insolvency Act.

2

The matters that the Pensions Regulator must take into account are—

(a) whether, in England and Wales, the person has—

(i) made any arrangement with the person’s creditors,

(ii) applied to an adjudicator under section 263H of the Insolvency Act⁷³ (bankruptcy applications to an adjudicator) for a bankruptcy order within the meaning given by section 381(2) of the Insolvency Act⁷⁴ (“bankrupt” and associated terminology),

(iii) been served with a bankruptcy petition within the meaning given by section 381(3) of the Insolvency Act,

(iv) been made bankrupt within the meaning given by section 381(1) of the Insolvency Act⁷⁵,

(v) been the subject of a bankruptcy restrictions order made under paragraph 1 (bankruptcy restrictions order) of Schedule 4A to the Insolvency Act⁷⁶ or an interim bankruptcy restrictions order made under paragraph 5 (interim bankruptcy restrictions order) of that Schedule, or

(vi) offered a bankruptcy restrictions undertaking made under paragraph 7 (bankruptcy restrictions undertaking) of Schedule 4A to the Insolvency Act;

(b) whether, in Scotland, the person has—

(i) made any arrangement with the person’s creditors,

(ii) made a debtor application,

(iii) been served with a petition for sequestration,

(iv) been the subject of an award of sequestration in accordance with section 22 of the Bankruptcy Act (when sequestration is awarded)⁷⁷, or

(v) been the subject of a bankruptcy restrictions order made under section 155(1) (bankruptcy restrictions order) of the Bankruptcy Act or an interim bankruptcy restrictions order made under section 160 (interim bankruptcy restrictions orders) of that Act;

(i) made any arrangement with the person’s creditors,

(ii) petitioned the court for a bankruptcy order,

(iii) been served with a bankruptcy petition,

(iv) been adjudged bankrupt,

(v) been the subject of a bankruptcy restrictions order made under paragraph 1 (bankruptcy restrictions order) of Schedule 2A to the Insolvency Order⁷⁸ or an interim bankruptcy restrictions order made under paragraph 5 (interim bankruptcy restrictions order) of that Schedule, or

(vi) offered a bankruptcy restrictions undertaking made under paragraph 7 (bankruptcy restrictions undertaking) of Schedule 2A to the Insolvency Order;

(d) whether the person has been a director or partner of, or otherwise concerned in the management of, a business that has gone into insolvency, liquidation or administration while the person was concerned with that business or within one year of their being so concerned;

(e) whether—

(i) in Great Britain, the person has been convicted of any criminal offence, excluding convictions that are spent within the meaning of the Rehabilitation of Offenders Act 1974⁷⁹, or

(ii) in Northern Ireland, the person has been convicted of any criminal offence, excluding convictions that are spent within the meaning of the Rehabilitation of Offenders (Northern Ireland) Order 1978⁸⁰;

(f) whether there has been a judgment against the person or the person has reached a settlement in civil proceedings, particularly in connection with investment or other financial business, misconduct, fraud or the formation or management of a body corporate;

(g) whether—

(i) in Great Britain, the person has been subject to a disqualification order under section 1(1) (disqualification orders: general) or a disqualification undertaking under section 1A(1) (disqualification undertakings: general) of the Company Directors Disqualification Act 1986⁸¹, or

(ii) in Northern Ireland, the person has been subject to a disqualification order under Article 3(1) (disqualification orders: general) or a disqualification undertaking under Article 4(1) (disqualification undertakings: general) of the Company Directors Disqualification (Northern Ireland) Order 2002⁸²;

(h) whether the person has contravened any of the requirements or standards of—

(i) a regulator, including the Pensions Regulator, or

(ii) the registrar of companies;

(i) any information received from—

(i) a regulator, or

(ii) the registrar of companies;

(j) the person’s conduct in relation to, or arising out of or in connection with, any work the person has carried out in one or more of the capacities mentioned in section 11(2) of the Act, or carried out in respect of, or on behalf of, a person mentioned in paragraphs (a) to (d) of section 11(2) of the Act—

(i) in the period of five years ending with the date of the application for authorisation of the scheme, and

(ii) at any time since the date of the application for authorisation of the scheme;

(k) whether—

(i) in Great Britain, the person has been prohibited from being a trustee of any trust, including any trust scheme within the meaning of section 124(1) of the Pensions Act 1995 (interpretation of Part 1), under—

(aa) section 3 of that Act (prohibition orders)⁸³, or

(bb) any other legislation, or

(ii) in Northern Ireland, the person has been prohibited from being a trustee of any trust, including any trust scheme within the meaning of Article 121(1) of the Pensions (Northern Ireland) Order 1995 (interpretation of Part 2)⁸⁴, under—

(aa) Article 3 of that Order (prohibition orders)⁸⁵, or

(bb) any other legislation;

(l) whether—

(i) in Great Britain, the person has been disqualified from being a trustee of any trust, including any trust scheme within the meaning of section 124(1) of the Pensions Act 1995, under—

(aa) section 29 of that Act (persons disqualified for being trustees)⁸⁶, or

(bb) any other legislation, or

(ii) in Northern Ireland, the person has been disqualified from being a trustee of any trust, including any trust scheme within the meaning of Article 121(1) of the Pensions (Northern Ireland) Order 1995, under—

(aa) Article 29 of that Order (persons disqualified for being trustees)⁸⁷, or

(bb) any other legislation.

3

In assessing whether a person is a fit and proper person to act in a particular capacity, the Pensions Regulator must take into account—

(a) the knowledge and skills gained from a person’s significant experience as a trustee, in assessing whether the person is fit and proper to act in that capacity;

(b) whether a person has successfully completed such relevant training as may be set out in a Code, in assessing whether the person is fit and proper to act in the capacity of a trustee of the scheme;

(c) the collective expertise and experience of persons acting together in the capacity of trustees, in assessing whether they are fit and proper to act in that capacity;

(d) a person’s relevant experience and professional competence, in assessing whether the person is fit to act in a capacity specified in section 11(2)(ba), (bb), (bc) or (bd) of the Act⁸⁸;

(e) the collective expertise and experience of individuals acting together to perform the functions of a scheme proprietor, in assessing whether they are fit and proper to act in that capacity;

(f) the collective expertise and experience of individuals acting together to perform the functions of a person who promotes or markets the scheme, in assessing whether they are fit and proper to act in that capacity;

(g) the collective expertise and experience of individuals acting together to perform the functions of a chief financial officer, in assessing whether they are fit and proper to act in that capacity;

(h) the collective expertise and experience of individuals acting together to perform the functions of a chief investment officer, in assessing whether they are fit and proper to act in that capacity.

Schedule 2 — Scheme design requirement

Part 1 — Matters that the Pensions Regulator must take into account

1

The Pensions Regulator must take into account the following matters in deciding whether it is satisfied that the design of an unconnected multiple employer scheme is sound—

(a) the information or documents mentioned in regulation 33 (3) that are provided to the Pensions Regulator in accordance with section 13(6) of the Act (viability report);

(b) whether the Pensions Regulator is satisfied that the rules of the scheme meet—

(i) the requirements of section 18 of the Act (calculation of benefits), and

(ii) the requirements of regulation 40;

(i) the trustees as provided for in paragraph 8 (1)(b) and (c);

(ii) the scheme actuary on the matters in regulation 34 (2),

as set out in the viability report and viability certificate, are justified;

(d) whether the Pensions Regulator considers that—

(i) the contents of the viability report,

(ii) the contents of the viability certificate, and

(iii) the information provided to the Pensions Regulator concerning the testing or modelling used for the purposes of determining whether the design of the scheme is sound,

are sufficiently comprehensive in order to enable the Pensions Regulator to decide whether it is satisfied that the design of the scheme is sound.

Part 2 — Information that must be included in a viability report

General

2

The date which has been chosen in respect of the viability report in accordance with regulation 33 (6).

3

The name and contact details of the person to be contacted in respect of the viability report.

4

A statement, signed by the trustees, confirming that—

(a) in their opinion, the design of the scheme is sound;

(b) the viability report has been approved by the trustees.

5

Where the viability report is required to be provided to the Pensions Regulator in accordance with section 13(6)(a) of the Act (on applying for authorisation), a statement, signed by the scheme proprietor, confirming that the viability report has been approved by the scheme proprietor.

6

A statement, signed by the scheme actuary, confirming that, to the extent that the viability report refers to actuarial matters, the scheme actuary is satisfied that those references accurately reflect those matters in respect of the scheme.

7

The name of the scheme in respect of which the viability report has been prepared.

Information about the design of the scheme

8

(1) An explanation of—

(a) the design of the scheme;

(b) the reasons why the trustees consider the design of the scheme to be sound and the evidence on which this consideration is based;

(c) what changes to the investment strategy the trustees consider would be changes that result in qualifying benefits in respect of which—

(i) the rates or amounts by reference to which the qualifying benefits are provided each year under the scheme are materially different, or

(ii) the expected adjustments to those rates or amounts are materially different.

(2) The evidence referred to in sub-paragraph (1)(b) must include—

(a) the document prepared by the scheme actuary for the purposes of regulation 33 (3)(b);

(b) the scheme’s investment strategy.

9

The explanation required by paragraph 8 (1) must include an explanation as to why the trustees are satisfied that the rules of the scheme meet—

(a) the requirements of section 18 of the Act (calculation of benefits);

(b) the requirements of regulation 40.

Part 3 — Information that must be included in a viability certificate

10

The date which has been agreed in respect of the viability certificate in accordance with regulation 34 (9).

11

The name and contact details of the scheme actuary.

12

The name of the scheme in respect of which the viability certificate is being obtained.

13

A statement, signed by the scheme actuary, confirming that—

(a) in the scheme actuary’s opinion, the design of the scheme is sound;

(b) when providing the viability certificate, the scheme actuary—

(i) has had regard to the matters specified in regulation 34 (2), as applicable, and

(ii) is satisfied that the scheme has rules that meet the requirements of section 18 of the Act (calculation of benefits) and the requirements of regulation 40.

Schedule 3 — Financial sustainability requirement

Part 1 — Information required on application for authorisation

1

The other information to be included in an application, in relation to whether the scheme is financially sustainable, is—

(a) in relation to whether the scheme has sufficient financial resources to meet the costs mentioned in section 14(2)(a) of the Act (financial sustainability requirement)—

(i) an estimate of the cost of setting up the scheme;

(ii) an estimate of the cost of running the scheme, in accordance with any requirements set out in a Code;

(iii) details of the scheme’s sources of income including estimates of the amount of income from each source, in accordance with any requirements set out in a Code;

(iv) the scheme proprietor’s strategy for meeting any shortfall between the scheme’s income and the costs mentioned in section 14(2)(a) of the Act;

(v) an explanation of how any estimates provided have been calculated and of the assumptions used in reaching those estimates;

(vi) an explanation of the circumstances in which, and the extent to which, the scheme’s actual costs and income may vary from the estimates provided and any measures in place to address such variations;

(vii) details of any financing arrangements entered into by the scheme proprietor in respect of the costs mentioned in section 14(2)(a) of the Act;

(viii) details of the security and enforceability of any loans or other funding commitments provided to the trustees in respect of the scheme, including the reasons why the trustees consider these commitments to be secure and enforceable;

(ix) where the scheme has any arrangements with service providers that meet the description in paragraph 2 (h), details of the matters set out in that paragraph in respect of each arrangement;

(x) details of any insurance held in respect of the scheme, in respect of the costs mentioned in section 14(2)(a) of the Act, including details of the matters set out in paragraph 2 (i);

(b) in relation to whether the scheme has sufficient financial resources to meet the costs mentioned in section 14(2)(b) of the Act—

(i) an estimate of the costs mentioned in section 14(2)(b)(i) of the Act;

(ii) an estimate of the costs mentioned in section 14(2)(b)(ii) of the Act;

(iii) the scheme proprietor’s strategy for meeting the costs mentioned in section 14(2)(b) of the Act;

(iv) the amount and classes of assets held by the scheme proprietor, or that will be available to the trustees, to meet those costs;

(v) an explanation of how any estimates provided have been calculated and of the assumptions used in reaching those estimates;

(vi) details of the security and enforceability of any loans or other funding commitments provided to the trustees in respect of the scheme, including the reasons why the trustees consider these commitments to be secure and enforceable;

(vii) details of any insurance held in respect of the scheme, in respect of the costs mentioned in section 14(2)(b) of the Act, including details of the matters set out in paragraph 3 (g);

(viii) details of any compensation for which members are eligible in the event of a scheme failure, including details of the matters set out in paragraph 3 (i).

Part 2 — Matters which the Pensions Regulator must take into account

2

The Pensions Regulator must take account of the following matters in deciding whether it is satisfied that an unconnected multiple employer purchase scheme has sufficient financial resources to meet the costs mentioned in section 14(2)(a) of the Act (financial sustainability requirement)—

(a) the scheme’s sources of income, including the estimated amount of income from each source;

(b) the estimated cost of setting up the scheme;

(d) the scheme proprietor’s strategy for meeting any shortfall between the scheme’s income and the costs mentioned in section 14(2)(a) of the Act;

(e) the robustness of any estimates provided to the Pensions Regulator in relation to the costs mentioned in section 14(2)(a) of the Act, and the robustness of the strategy mentioned in sub-paragraph (d);

(f) any financing arrangements entered into by the scheme proprietor in respect of the costs mentioned in section 14(2)(a) of the Act;

(g) the security and enforceability of loans and other funding commitments provided to the trustees in respect of the scheme;

(h) where the scheme has an arrangement with a service provider under which the service provider accepts the risk that its costs will exceed any fee paid to it, the provisions made to secure this service and any limitation on the service provider’s liability for those costs;

(i) any insurance held in respect of the costs mentioned in section 14(2)(a) of the Act, including details of—

(i) the insurance provider;

(ii) the policy holder;

(iii) the beneficiary of the policy;

(iv) any limitations on the insurer’s liability.

3

The Pensions Regulator must take account of the following matters in deciding whether it is satisfied that an unconnected multiple employer scheme has sufficient financial resources to meet the costs mentioned in section 14(2)(b) of the Act—

(a) the most recent estimates of the costs mentioned in section 14(2)(b) of the Act provided in respect of the scheme;

(b) the extent and manner in which the scheme proprietor has made provision to meet those costs;

(d) the robustness of any estimates provided to the Pensions Regulator in relation to the costs mentioned in section 14(2)(b) of the Act, and the robustness of the strategy for meeting those costs;

(e) the security and enforceability of loans and other funding commitments provided to the trustees in respect of the scheme;

(f) the alignment between the actions set out in the scheme’s continuity strategy and the estimate in the strategy of the costs of carrying out those actions;

(g) any insurance held in respect of the costs mentioned in section 14(2)(b) of the Act, including details of—

(i) the insurance provider;

(ii) the policy holder;

(iii) the beneficiary of the policy;

(iv) any limitations on the insurer’s liability;

(h) the quality of the scheme’s records and data;

(i) whether the members are eligible for compensation in the event of a scheme failure and, if so, details of—

(i) the compensation provider;

(ii) the basis on which the compensation is payable;

(iii) any limits on the amount of compensation payable;

(j) the scheme’s most recent continuity strategy.

Part 3 — Requirements to be met by the unconnected multiple employer scheme

4

An unconnected multiple employer scheme must meet the following requirements relating to its financing—

(a) any assets held by the scheme proprietor, or available to the trustees, to meet the costs mentioned in section 14(2) of the Act (financial sustainability requirement) must be—

(i) of the classes and in the proportions set out in a Code;

(ii) valued in accordance with any discounted rates set out in a Code;

(iii) available to be used when the relevant costs fall due;

(b) the scheme’s trustees must have first call on the assets referred to in sub-paragraph (a);

(c) any funding commitment made to the scheme in respect of the costs mentioned in section 14(2) of the Act must be given in writing and duly executed by the party making the commitment.

Schedule 4 — Communication requirement

Part 1 — Interpretation

1

In this Schedule—

“relevant functions” are— the development, production, provision or review of scheme communications, record-keeping in respect of scheme communications, quality assurance activities in respect of scheme communications, and any other functions, in respect of scheme communications, set out in a Code;

“scheme communication” means a notification, notice, document, statement or other communication relating to the scheme which is provided, or made available, to a relevant person by, on behalf of or in respect of the scheme.

Part 2 — Matters that the Pensions Regulator must take into account

Functionality, quality and maintenance of IT systems

2

Whether the IT systems used for the purposes of carrying out relevant functions—

(a) have the necessary capacity and capability to enable relevant functions to be carried out by, on behalf of or in respect of the scheme in accordance with—

(i) any legal requirement in relation to scheme communications, and

(ii) the scheme’s systems and processes concerning scheme communications;

(b) are monitored to ensure that they continue to have the necessary capacity and capability;

(d) have a back-up system which allows data concerning scheme communications to be recovered if the main system fails;

(e) have restricted physical and electronic access, with firewalls and other appropriate protection against viruses and other threats;

(f) are maintained at regular intervals, either automatically or by a person with the appropriate skills and experience;

(g) are backed up and updated regularly, including the maintenance of firewalls and other preventative systems.

Resource planning

3

Whether there are systems and processes for ensuring that there are sufficient individuals, with the relevant skills, qualifications and capacity necessary to enable relevant functions to be carried out by, on behalf of or in respect of the scheme in accordance with—

(a) any legal requirement in relation to scheme communications, and

(b) the scheme’s systems and processes concerning scheme communications.

Quality assurance

4

Whether there are systems and processes—

(a) for assessing and improving the effectiveness of scheme communications and for updating scheme communications to take into account these assessments;

(b) for ensuring that the information contained in scheme communications is accurate and is not misleading;

(d) for ensuring that scheme communications are provided or made available in a timely manner;

(e) for scheme communications to be reviewed by such persons as the trustees consider appropriate before being provided or made available and for scheme communications to be kept under review as appropriate.

Member engagement

5

Whether there are systems and processes—

(a) for gathering feedback from members concerning scheme communications;

(b) for evaluating feedback from members concerning scheme communications and sharing this feedback with trustees;

(c) for taking into account feedback from members concerning scheme communications in the design of scheme communications;

(d) for reporting to the trustees, and members, as to how feedback from members has been taken into account in the design of scheme communications.

Schedule 5 — Systems and processes requirement - matters that the Pensions Regulator must take into account

Features and functionality of IT systems

1

Whether the IT systems have the capacity and capability—

(a) to process financial transactions securely, accurately and by automated means, including the core transactions described in regulation 24(2) of the Occupational Pension Schemes (Scheme Administration) Regulations 1996⁸⁹ (requirements for processing financial transactions);

(b) to make and receive electronic payments;

(d) to exchange data with other IT systems, including those used by employers and service providers;

(e) to process information securely, accurately and by automated means for the purposes of calculating the rate or amount of benefits to be provided under the scheme, in accordance with the scheme rules;

(f) to reconcile data on transactions and produce reports so that those activities can be monitored and transaction errors rectified promptly;

(g) to identify and categorise transactions and payments for authorisation and countersigning at an appropriate level of authority;

(h) to be updated to reflect changes in the legal requirements affecting transactions, payments and records, including changes in tax thresholds and the annual allowance;

(i) to reconcile contributions paid by or on behalf of an employer with the records of the member to whom they relate.

Standards required of IT systems

2

Whether the IT systems—

(a) are capable of being upgraded to reflect changes in required transactions and capacity;

(b) have restricted physical and electronic access, with firewalls and other appropriate protection against viruses and other threats;

(d) are of sufficient standard to allow the scheme to meet the objectives set out in the scheme’s business plan⁹⁰.

Maintenance of IT systems

3

Whether the IT systems—

(a) are maintained at regular intervals, either automatically or by a person with the appropriate skills and experience;

(b) are backed up and updated regularly, including the maintenance of firewalls and other preventative systems;

Member records

4

Whether the scheme’s systems and processes ensure that—

(a) there is an accurate record on the relevant IT system of each member’s details, including the member’s pensionable service, within the meaning given in section 124(1) of the Pensions Act 1995, and pensionable salary and, on an annual basis, the amount that represents the member’s share of the available assets of the scheme;

(b) any unpaid contributions by or in respect of active members can be explained to the Pensions Regulator and remedied;

(c) members’ records are reviewed regularly for completeness and accuracy and updated promptly with changes of information;

(d) errors in member’s records can be identified and addressed, and any financial impact of such errors on members can be rectified;

(e) for each financial year, records are maintained—

(i) in respect of each person receiving payment of a pension or other benefits under the scheme, including the amount of benefits received during the year;

(ii) in respect of each person receiving payment of a periodic income in accordance with paragraph 7 of Schedule 6, including the amount of income received during the year;

(f) for each financial year, there is an accurate record of the amount that represents the value of accrued rights to benefits under the scheme that has been transferred out of the scheme during the financial year.

Trustees and others

5

Whether there are systems and processes—

(a) for the fair and transparent recruitment, appointment, resignation and removal of trustees;

(b) for the fair and transparent recruitment, appointment, resignation and removal of the scheme actuary;

(c) for determining and recording that persons involved in the scheme in the capacities mentioned in section 11(2) of the Act (fit and proper persons requirement) are, and remain, fit and proper;

(d) for monitoring and recording trustees’ learning and development, and for ensuring that it is appropriate for the scheme’s activities;

(e) in relation to meetings of trustees, including—

(i) the intervals at which meetings of trustees are to take place;

(ii) the number of trustees required to authorise decisions on risk management, resource planning and investments;

(iii) the process for managing the scheme’s business between meetings of the trustees;

(f) for recording, maintaining and managing all documents relating to the trustees in an accessible medium;

(g) for managing the scheme’s business if one or more trustees are absent.

Contracts and service providers

6

Whether there are systems and processes—

(a) for establishing that service providers have the necessary qualifications, experience or approval, as applicable;

(b) for establishing that service providers have the capability to provide their services in respect of the scheme—

(i) in accordance with any scheme rules that relate to those services;

(ii) in accordance with any statutory requirement in relation to those services to which the trustees are subject in respect of the scheme, to the extent that the services are provided on behalf of the trustees;

(c) for ensuring that trustees are appropriately engaged in overseeing service providers and in decisions concerning them, including their appointment;

(d) for informing the scheme proprietor about the appointment, removal, roles and responsibilities of service providers;

(e) for informing the trustees of—

(i) any failure by service providers to deliver services;

(ii) any actions or omissions by service providers which may prejudice the effective running of the scheme;

(iii) any actions or omissions by service providers which may prejudice the ability to meet the objectives set out in the scheme’s business plan;

(f) for recording, maintaining and managing all documents relating to service providers in an accessible medium.

Governance

7

Whether there are systems and processes—

(a) for the identification of roles and responsibilities in respect of the governance of the scheme;

(b) for the appointment of persons with sufficient skills, knowledge and experience to carry out those roles and responsibilities;

(c) for setting clear objectives concerning the governance of the scheme and for monitoring whether those objectives are being met within the relevant timescales;

(d) for documenting and reporting to the scheme proprietor and the trustees of the scheme matters relating to the governance of the scheme;

(e) for identifying and addressing any failures in the governance of the scheme.

Risk management

8

Whether there are systems and processes—

(a) for identifying, managing and monitoring operational, financial, regulatory and compliance risks;

(b) for identifying, managing and monitoring risks in respect of the soundness of the design of the scheme;

(d) for ensuring that risks are managed in a timely manner by persons with the appropriate skills, knowledge and resources;

(e) for informing the trustees about risks that have arisen and the steps being taken to manage them.

Security

9

Whether there are systems and processes—

(a) for preventing unauthorised access to sensitive records and infrastructure, including those containing member information, financial details or investment information;

(b) for monitoring and recording electronic and physical access to sensitive records and infrastructure;

Resource planning

10

Whether there are systems and processes for ensuring that there are sufficient individuals with the skills, qualifications and capacity necessary to comply with the requirements of Part 1 of the Act (collective money purchase benefits) and, in particular—

(a) to run and maintain the scheme’s systems and processes,

(b) to provide for the effective running of the scheme,

(c) to send appropriate and timely notifications, information and documents to the Pensions Regulator, including information about the scheme’s systems and processes, and

(d) to meet the objectives set out in the scheme’s business plan.

Investments

11

Whether there are systems and processes—

(a) for investing contributions in a timely manner in accordance with the scheme’s investment strategy;

(b) for recording investment decisions;

(d) for recording, managing and reviewing the risks associated with investment decisions;

(e) for informing trustees about questions, decisions and risks relating to investments.

Valuation and benefit adjustment

12

Whether there are systems and processes—

(a) for ensuring that the rules of the scheme meet the requirements of section 18 of the Act (calculation of benefits) and regulation 40;

(b) for ensuring that the trustees comply with section 19(1) of the Act (advice of scheme actuary);

(d) for ensuring that the trustees obtain actuarial valuations in accordance with section 20 of the Act (actuarial valuations) and regulation 42;

(e) for establishing that the scheme actuary has complied with section 21 of the Act (certificate that actuarial valuation prepared in accordance with scheme rules);

(f) for complying with the requirements of section 22 of the Act (benefits adjustments), where applicable;

(g) for responding to a direction given under section 23(2) of the Act (powers of the Pensions Regulator).

Member engagement

13

Whether there are systems and processes—

(a) for facilitating members’ engagement with the scheme;

(b) for bringing members’ views to the attention of the trustees;

Schedule 6 — Continuity Option 1: transfer out and winding up

Interpretation and notices

1

(1) In this Schedule—

“arrangement” has the meaning given in section 152 of the Finance Act 2004⁹¹;

“default arrangement” has the meaning given in regulation 3 of the Occupational Pension Schemes (Charges and Governance) Regulations 2015⁹²;

“default discharge option” means the way the trustees propose to discharge the scheme’s liability to a beneficiary in respect of the beneficiary’s accrued rights to benefits under the scheme, unless the beneficiary specifies otherwise in accordance with paragraph 14;

“dependant” has the meaning given in paragraph 15 of Schedule 28 to the Finance Act 2004⁹³;

“dependants’ income withdrawal” has the meaning given in paragraph 21 of Schedule 28 to the Finance Act 2004⁹⁴;

“dependant’s flexi-access drawdown fund” has the meaning given in paragraph 22A of Schedule 28 to the Finance Act 2004⁹⁵;

“discharge time” in relation to a beneficiary under the scheme means the time that the scheme’s liability to the beneficiary in respect of the value of the beneficiary’s accrued rights to benefits under the scheme is discharged;

“final quantification” means the quantification carried out immediately prior to the discharge time, in accordance with paragraph 5 (1)(f);

“income withdrawal” has the meaning given in paragraph 7 of Schedule 28 to the Finance Act 2004⁹⁶;

“initial quantification” means the quantification carried out in accordance with paragraph 5 (1)(c);

“member’s flexi-access drawdown fund” has the meaning given in paragraph 8A of Schedule 28 to the Finance Act 2004⁹⁷;

“nominee” has the meaning given in paragraph 27A of Schedule 28 to the Finance Act 2004⁹⁸;

“nominees’ income withdrawal” has the meaning given in paragraph 27D of Schedule 28 to the Finance Act 2004⁹⁹;

“nominee’s flexi-access drawdown fund” has the meaning given in paragraph 27E of Schedule 28 to the Finance Act 2004¹⁰⁰;

“pensioner beneficiary”, in relation to the unconnected multiple employer scheme, means a person who is entitled to the present payment of pension or other benefits under the scheme;

“penultimate quantification” means the quantification carried out not less than one month before the proposed discharge time, in accordance with paragraph 5 (1)(e);

“periodic income” means a payment made by a scheme under paragraph 7, which is not the payment of a benefit (including pension) under the scheme;

“quantification” means the quantification of the amount that represents the value of each beneficiary’s accrued rights to benefits under the scheme;

“successor” has the meaning given in paragraph 27F of Schedule 28 to the Finance Act 2004¹⁰¹;

“successors’ income withdrawal” has the meaning given in paragraph 27J of Schedule 28 to the Finance Act 2004¹⁰²;

“successor’s flexi-access drawdown fund” has the meaning given in paragraph 27K of Schedule 28 to the Finance Act 2004¹⁰³;

“winding-up commencement time” means the time, determined in accordance with these Regulations and the scheme rules, that winding-up is taken to begin for the purposes of continuity option 1;

“winding-up period” means the period beginning with the winding-up commencement time and ending when the winding up of the scheme is completed;

“winding-up quantification” means the quantification carried out after the Pensions Regulator notifies the trustees that the implementation strategy is approved, in accordance with paragraph 5 (1)(d).

(2) Notices given under this Schedule must be sent—

(a) in writing, by post or email,

(b) to the addressee’s last known address, and

(3) For the purposes of sub-paragraph (2), a person’s email address is—

(a) any email address provided for the time being by that person as an address for contacting that person, or

(b) if no such address has been provided, any email address by means of which the sender reasonably believes that the notice will come to the attention of that person or (where that person is a body corporate) any director or other officer of that body corporate.

(4) A notice under this Schedule sent to a person by email is taken to have been received by that person 48 hours after it is sent.

Alternative ways of discharging the scheme’s liability

2

(1) The ways of discharging an unconnected multiple employer scheme’s liability to each beneficiary in respect of the beneficiary’s accrued rights to benefits under the scheme referred to in section 36(1)(b) of the Act (continuity option 1: discharge of liabilities and winding up) include—

(a) transferring the value of those rights to an occupational pension scheme;

(b) transferring the value of those rights to a member's flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the beneficiary to income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004 (pension schemes etc);

(c) transferring the value of those rights to a dependant’s flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the dependant to dependants’ income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004 (pension schemes etc);

(d) transferring the value of those rights to a nominee’s flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the nominee to nominees’ income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004 (pension schemes etc);

(e) transferring the value of those rights to a successor’s flexi-access drawdown fund in respect of an arrangement for the purposes of entitlement by the successor to successors’ income withdrawal which is an authorised member payment for the purposes of Part 4 of the Finance Act 2004 (pension schemes etc).

(2) The way of discharging an unconnected multiple employer scheme’s liability to each beneficiary in respect of the beneficiary’s accrued rights to benefits under the scheme referred to as an “alternative payment mechanism” in section 36(2)(c) of the Act is securing the payment of benefits by the purchase of one or more policies from one or more insurers authorised by the Financial Conduct Authority for carrying on long-term insurance business in the United Kingdom.

Requirements of rules of scheme

3

(1) The rules of an unconnected multiple employer scheme must make provision about how continuity option 1 is to be given effect in the event that the trustees are required or decide to pursue continuity option 1.

(2) The rules must include the following—

(a) the time when the winding up is to be taken to begin for the purposes of continuity option 1, taking account of the requirements of paragraph 4;

(b) how the value of the available assets of the scheme is to be determined;

(c) how the amount that represents the value of each beneficiary’s accrued rights to benefits under the scheme is to be quantified for the purposes of the initial quantification, the winding-up quantification and any subsequent quantification (including the penultimate quantification) carried out prior to the final quantification;

(d) how the amount that represents the value of each beneficiary’s accrued rights to benefits under the scheme is to be quantified for the purposes of the final quantification;

(e) how the amount or rate of periodic income payable during the winding-up period is to be calculated and adjusted from time to time.

(3) Rules for determining how the amount that represents the value of each beneficiary’s accrued rights to benefits under the scheme is to be quantified must apply to all beneficiaries of the scheme without variation.

Winding-up commencement time

4

(1) Where the trustees of an unconnected multiple employer scheme are required to pursue continuity option 1 because a triggering event which is an item 1 or 2 triggering event has occurred in relation to the scheme, the winding-up commencement time must be on the date the decision to withdraw authorisation becomes final for the purposes of Part 1 of the Act (collective money purchase benefits).

(2) Where the trustees of an unconnected multiple employer scheme are required to pursue continuity option 1 because a triggering event which is an item 3 triggering event has occurred in relation to the scheme, the winding-up commencement time must be on the date on which the Pensions Regulator gives a notification under section 7(3) of the Act (scheme not authorised).

(3) Subject to sub-paragraphs (1) and (2), the winding-up commencement time shall be determined in accordance with subsections (3A) to (3D) of section 124 of the Pensions Act 1995¹⁰⁴ (interpretation of Part 1).

Quantification of the value of beneficiaries’ accrued rights to benefits

5

(1) Quantification must be carried out—

(a) in accordance with these Regulations and with the scheme rules,

(b) on an actuarial basis,

(c) as an initial estimate before the end of the period of 28 days beginning with the date of the winding-up commencement time,

(d) as a subsequent estimate within the period of six months beginning with the date on which the Pensions Regulator notifies the trustees that the implementation strategy is approved,

(e) as a final estimate not less than one month before the proposed discharge time, and

(f) as a final figure immediately prior to the discharge time in relation to the beneficiary.

(2) The quantification must be carried out by reference to the realisable value of the available assets of the scheme.

(3) The amount that represents the value of a beneficiary’s accrued rights to benefits under the scheme for the purposes of the final quantification must be reduced to take account of any periodic income received by that beneficiary in accordance with paragraph 7.

Winding-up period

6

(1) Subject to sub-paragraph (5), no new members may be admitted to the scheme during the winding-up period.

(2) No further contributions by or on behalf or in respect of members of the scheme may be paid towards the scheme (other than those due to be paid before the beginning of the winding-up period) during the winding-up period.

(3) No benefits may accrue to or in respect of members of the scheme during the winding-up period.

(4) Subject to sub-paragraph (6), no pension or other benefits may be paid by the scheme to or in respect of beneficiaries during the winding-up period.

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