S.I. No. 419/1993 - Occupational Pension Schemes (Funding Standard) Regulations, 1993.

S.I. No. 419 of 1993.

OCCUPATIONAL PENSION SCHEMES (FUNDING STANDARD) REGULATIONS, 1993.

The Minister for Social Welfare, in exercise of the powers conferred on him by sections 5 , 42 , 43 , 47 and 52 of the Pensions Act, 1990 (No. 25 of 1990), hereby makes the following Regulations:—

1 Citation.

1. (1) These Regulations may be cited as the Occupational Pension Schemes (Funding Standard) Regulations, 1993.

(2) These Regulations shall come into operation on the 31st day of December, 1993.

2 Revocation.

2. The Occupational Pension Schemes (Funding Standard) Regulations, 1991 (No. 371 of 1991) are hereby revoked.

3 Definitions.

3. In these Regulations—

"the Act" means the Pensions Act, 1990 (No. 25 of 1990);

"active member" in relation to a scheme, means any member who is in reckonable service at the commencement of the relevant scheme year;

"actuarial funding certificate" has the meaning assigned to it in section 42 of the Act;

"affiliate" means another body corporate that is a subsidiary company or a holding company (within the meaning of section 155 of the Companies Act, 1963 ) of the employer or a fellow subsidiary of the employer's holding company;

"associate" means in relation to any person

( a ) that person's spouse, parent, brother, sister or minor child, or

( b ) the trustee of any trust, the principal beneficiaries of which are the person, his spouse or any of his minor children or any body corporate which he controls, or

( c ) a partner of that person, or

( d ) a body corporate which is controlled by that person:

For the purposes of (b) and (d) a person shall be deemed to control a body corporate if, but only if, he is alone or together with any of the persons referred to in (a), (b) or (c) above interested in more than one-half of the equity share capital (within the meaning of section 155 of the Companies Act, 1963 ) of that body or entitled to exercise or control the exercise of more than one-half of the voting power at any general meeting of that body. The reference to voting power exercised by a person shall include references to voting power exercised by another body corporate which that person controls;

"concentration of investment", in relation to a scheme, means investments exceeding a stated percentage of the resources of the scheme in one undertaking and in any associate of it or in one property, other than in the following categories:

( a ) Government securities;

( b ) insurance policies;

( c ) contracts of assurance;

( d ) managed funds;

( e ) unit trusts; and

( f ) cash deposits with authorised deposit taking institutions.

"self-investment", in relation to a scheme, means investment of all or part of the resources of the scheme in the business of any one or more of the following persons

(i) the employer of any person employed in the relevant employment,

(ii) an affiliate of the employer of any person employed in the relevant employment,

(iii) any director or shadow director (within the meaning of section 27 of the Companies Acts, 1963) of the employer or of an affiliate, or of an associate of any such director or shadow director,

and for this purpose "investment" shall be deemed to include investment in—

( a ) land which is occupied or used by or let to;

( b ) property, other than land, which is used for the purpose of any business carried on by;

( c ) loans to;

( d ) moneys due to the scheme held by

any such person referred to in paragraphs (i), (ii) or (iii) of this definition.

( e ) shares or other securities issued by any such person who is a body corporate,

but shall not include investment in land or buildings used for the purpose of any business carried on by any such person, which is let at full market value and which, for the purpose of calculating the resources of the scheme, is independently valued and is taken into account on the lower of its value on a vacant possession basis and its value subject to the letting;

"small member-controlled scheme" means a scheme with not more than 12 active members, all of whom are trustees of the scheme.

4 Actuarial funding certificates.

4. (1) For the purposes of section 42 of the Act—

( a ) the first actuarial funding certificate in respect of a relevant scheme which came into operation prior to the 1st day of January 1991, shall be in the form set out in Schedule A to these Regulations or, in a form substantially to the like effect, and

( b ) an actuarial funding certificate in respect of a relevant scheme other than a certificate referred to in paragraph (a) above shall be in the form set out in Schedule B to these Regulations or, in a form substantially to the like effect.

(2) Where the effective date of an actuarial funding certificate is a date prior to the 1st day of January, 1992, the said certificate shall be submitted to the Board by the trustees of the scheme within 15 months of such effective date.

5 Limitations on calculation of resources of relevant scheme.

5. In an actuarial funding certificate, any calculation of the resources of a relevant scheme shall exclude—

( a ) in the case of an actuarial funding certificate having an effective date on or before 31 December, 1993,

(i) self-investment in excess of 20 per cent of the resources of the scheme and

(ii) concentration of investment in excess of 20 per cent of the resources of the scheme,

( b ) in the case of an actuarial funding certificate having an effective date after 31 December, 1993 but on or before 30 June, 1997,

(i) self-investment in excess of 10 per cent or, in the case of a small member-controlled scheme, 20 per cent of the resources of the scheme and

(ii) concentration of investment in excess of 20 per cent of the resources of the scheme,

( c ) in the case of an actuarial funding certificate having an effective date after 30 June, 1997 but on or before 31 December, 2000,

(i) self-investment in excess of 5 per cent or, in the case of a small member-controlled scheme, 20 per cent of the resources of the scheme and

(ii) concentration of investment in excess of 15 per cent of the resources of the scheme, and

( d ) in the case of an actuarial funding certificate having an effective date after 31 December, 2000,

(i) self-investment in excess of 5 per cent or, in the case of a small member-controlled scheme, self-investment in excess of 20 per cent of the resources of the scheme and

(ii) concentration of investment in excess of 10 per cent of the resources of the scheme.

6 Exclusion of schemes for Part IV and Third Schedule.

6. (1) The provisions of Part IV of the Act shall not apply in the case of any of the schemes specified in Schedule C to these Regulations.

(2) Reference to a scheme in Schedule C to these Regulations shall be construed as a reference to that scheme as modified, amended or extended.

7 Modification of Part IV in the case of certain schemes.

7. (1) In the case of a scheme established under section 44 of the Forestry Act, 1988 (No. 26 of 1988)—

( a ) Section 44 (a) of the Act is hereby modified by the substitution for "liabilities of the scheme" of "liabilities of the scheme other than the liabilities arising under section 44 (9) and (10) of the Forestry Act, 1988 ",

( b ) Section 45 (2) of the Act is hereby modified by the insertion of the words "other than the benefits referred to in Section 44 (9) of the Forestry Act, 1988 " after the word "relates" in line 3 of that provision, and

( c ) Section 45 (2) (b) (i) of the Act is hereby modified by the substitution for "liabilities of the scheme" of "liabilities of the scheme other than the liabilities arising under section 44 (9) and (10) of the Forestry Act, 1988 ".

(2) ( a ) In the case of an external scheme section 43 (1) (a) of the Act is hereby modified by the substitution for "not later than 3 years after such commencement" of "not later than 4 years after such commencement",

( b ) In the case of an external scheme section 43(1) (b) of the Act is hereby modified by the substitution for paragraph (b) of sub-section (1) of section 43 of the following:—

"(b) (i) in the case of a relevant scheme which commenced between 1 January, 1991 and 30 June, 1991, not later than 31 December, 1994 and

(ii) in the case of a relevant scheme which commenced on or after 1 July, 1991, not later than 3½ years after the commencement of the scheme,".

SCHEDULE A

Article 4

First Actuarial Funding Certificate

This certificate has been prepared under the provisions of Section 42 of the Pensions Act 1990 ("the ACT") for submission to the Pensions Board by the trustees of the scheme

Scheme Name: ............................................................ .........................................

Scheme commencement date: ............................................................ ...............

Pensions Board Reference No: ............................................................ .............

Effective date of this certificate: ............................................................ ...........

On the basis of information supplied to me and having regard to such financial and other assumptions as I consider to be appropriate:—

(1) I hereby state the certified percentage(s) for the above scheme for the purposes of Section 45 of the Act to be:—

(2) I am of the opinion that the resources of the scheme at the effective date of this certificate *would/* would not have been sufficient if the scheme had been wound up at that date to provide for:—

( a ) the liabilities of the scheme determined in accordance with Section 44 (a) of the Act, and

( b ) the estimated expenses of administering the winding up scheme.

I therefore certify that as the effective date of this certificate the scheme *satisfies/* does not satisfy the funding standard provided for in Section 44 of the Act.

*delete whichever not applicable

SCHEDULE B

Article 4

Actuarial Funding Certificate

This certificate has been prepared under the provisions of Section 42 of the Pensions Act 1990 ("the ACT") for submission to the Pensions Board by the trustees of the scheme

Scheme Name: ............................................................ ...............................................

Scheme commencement date: ............................................................ .....................

Pensions Board Reference No: ............................................................ ...................

Effective date of:

This certificate: ............................................................ ...................................

Previous certificate: ............................................................ .............................

On the basis of information supplied to me and having regard to such financial and other assumptions as I consider to be appropriate I am of the opinion that the resources of the scheme at the effective date of this certificate *would/* would not have been sufficient if the scheme had been wound up at that date to provide for:—

( a ) the liabilities of the scheme determined in accordance with section 44 (a) of the Act, and

( b ) the estimated expenses of administering the winding up of the scheme.

I therefore certify that as the effective date of this certificate the scheme *satisfies/* does not satisfy the funding standard provided for in Section 44 of the Act.

* delete whichever not applicable

SCHEDULE C

Article 6

Schemes excluded from the provisions of Part IV of the Act

PART I

Agency for Personal Service Overseas Staff Superannuation Scheme (No. 2)

Agricultural Colleges Staff Superannuation Scheme, 1985

An Post Main Superannuation Scheme, 1990

An Bord Pleanála Staff Superannuation Scheme, 1986

An Bord Pleanála (Chairperson and Members) Superannuation Scheme, 1986

An Chomhairle Ealaoin Staff Superannuation Scheme, 1976

An tUdaras um Ard-Oideachas Superannuation Scheme, 1980

Bord na gCapall Staff Superannuation Scheme

Bord Iascaigh Mhara Staff Superannuation Scheme

Bord Iascaigh Mhara Craft and Manual Employees Superannuation Scheme

Central Bank of Ireland Superannuation Scheme

Central and Regional Fisheries Boards' Staff Superannuation Scheme, 1983

CERT Superannuation Scheme

Civil Service (Established Staff) Superannuation Acts, 1834 to 1963 and Superannuation and Pensions Act, 1976

Civil Service (Unestablished Staff) Non-contributory Pension Scheme for Non-established State employees

Colleges of Education Pension Scheme, 1954

Contributory Pension Scheme for Clerical Staff serving in National and Secondary Schools

Contributory Pension Scheme for Non-teaching Staff of Comprehensive and Community Schools

Crafts Council of Ireland Ltd. Staff Superannuation Scheme, 1986

Defence Forces (Pension) Scheme, 1937

Dublin Institute for Advanced Studies (Superannuation) Scheme, 1947

Dublin City University Superannuation Scheme

Dublin Institute for Advanced Studies Non-Established Employees (Superannuation) Scheme, 1983

Dublin Transport Authority Staff Superannuation Scheme, 1987

Economic and Social Research Institute Staff Superannuation Scheme

Economic and Social Research Institute Supervisors, Clerical and other Administrative Staffs Superannuation Scheme

Foyle Area (Pension) Regulation, 1963

Garda Síochána Pensions Orders, 1925 to 1981

Industrial Development Authority Staff Superannuation Scheme, 1970

Instiliúd Teangeolaoíchta Éireann Staff Superannuation Scheme, 1986

Institute of Public Administration Staff Superannuation Scheme, 1983

Irish Lights Pension Scheme

Labour Court (Members) Superannuation Scheme, 1971

Law Reform Commission Superannuation Scheme, 1982

Lay Land Commissioners Superannuation Scheme, 1979

Legal Aid Board Staff Superannuation Scheme, 1981

Local Government (Superannuation Revision) (Consolidation) Scheme, 1986

Local Government (Superannuation Revision) Act, 1956 (Consolidation) Scheme, 1987

National Institute for Physical Planning and Construction Research Limited (An Foras Forbartha Teoranta) Superannuation Scheme, 1975

National Safety Council Staff Superannuation Scheme, 1991

National Concert Hall Co. Staff Superannuation Scheme, 1987

National Schools Teachers' Superannuation Scheme, 1934

National College of Art and Design Staff Superannuation Scheme, 1984

National University of Ireland General Pension Scheme

National Council for Educational Awards Staff Superannuation Scheme, 1987

Nominated Health Agencies Superannuation Scheme, 1981

Nuclear Energy Board (An Bord Fuinnimh Nuicleigh) Staff Superannuation Scheme, 1985

Ombudsman Superannuation Scheme, 1987

Pension Scheme for the Staff of Colleges of Home Economics, 1987

Pensions Board Staff Superannuation Scheme, 1993

Regional Tourism Organisations Pension and Life Assurance Scheme

Restrictive Practices Commission (Members) Superannuation Scheme, 1981

Royal Irish Academy of Music Staff Superannuation Scheme, 1989

Scéim Aoisliúntas Fhoireann Bhord na Gaeilge, 1982

Scéim Aoisliúntas Fhoireann Údarás na Gaeltachta, 1991

Secondary Teachers' Superannuation Scheme, 1929

Shannon Free Airport Development Company Limited (General Employees) Superannuation Scheme, 1966

Special Schools Superannuation Scheme, 1980

St. Patrick's College, Maynooth, Non-contributory Pension Plan

Superannuation Scheme for officers employed under the scheme for the provision of (Oireachtas) secretarial assistance

Telecom Éireann Main Superannuation Scheme, 1988

Thomond College of Education Limerick Superannuation Scheme, 1984

Tourist Traffic Act 1952 (General Employees) Consolidating and Amending Scheme, 1991

Trinity College Dublin Pension Scheme

University College, Cork Pension Scheme Statute LXXIX

University College, Dublin Pension Scheme Statute XCVI

University College, Galway Pension Scheme Statute XVII Chapter XXV

University of Limerick Superannuation Scheme

Voluntary Hospitals Superannuation Scheme, 1969

Voluntary Hospitals (Non-Officers) Superannuation Scheme, 1985

Any scheme established under Section 9 of the Agriculture (Research, Training and Advice) Act, 1988

Any scheme established under Section 17 of the Bord Glas Act, 1990

Any scheme established under Section 14 of the Combat Poverty Agency Act, 1986

Any scheme established under Section 33 of the Environmental Protection Agency Act, 1992

Any scheme established under Article 5 of the Environmental Research Unit (Establishment) Order, 1988, ( S.I. No. 20 of 1988 )

Any scheme established under Section 15 of the Export Promotion Act, 1959

Any scheme established under Section 35 of the Industrial Research and Standards Act, 1961

Any scheme established under Section 8 of the Labour Services Act, 1987

PART II

Schemes for the purpose of providing benefits to the spouses and children of members of any of the schemes specified in Part I in the event of the death of a member.

GIVEN under the Official Seal of the Minister for Social Welfare, this 23rd day of December, 1993.

MICHAEL WOODS,

Minister for Social Welfare

The Minister for Finance hereby consents to the making of these Regulations.

GIVEN under the Official Seal of the Minister for Finance, this 30th day of December, 1993.

BERTIE AHERN,

Minister for Finance.

EXPLANATORY NOTE

These Regulations deal with a number of matters with regard to the implementation of the funding standard requirements set down in Part IV of the Pensions Act, 1990 .

The funding standard applies to defined benefit schemes and will ensure that, over a period, sufficient assets are held within the scheme to meet liabilities in the event of the scheme being wound up. Trustees of schemes are required to submit actuarial funding certificates to the Pensions Board at regular intervals for the purpose of certifying whether or not the scheme satisfies the funding standard at the effective date.

The Regulations prescribe the form and content of the actuarial funding certificates and extend the time-limit for submission of the certificate in the case of certain schemes.

They also provide that any self-investment or concentration of investment shall be reduced on a phased basis from the present level of 20 per cent of the assets of the scheme to 5 per cent in the case of self-investment (from July 1997) and 10 per cent in the case of concentration of investment (from January 2001). Any such investment above these levels shall not be taken into account for the purpose of certifying the adequacy of the assets to meet the minimum liabilities under the funding standard.

Provision is also made for the exclusion of certain public service schemes from the application of the funding standard and for certain modifications of the relevant provisions in the case of a scheme established under the Forestry Act, 1988 and in relation to external schemes.