S.I. No. 469/2000 - Occupational Pension Schemes (External Schemes) (United Kingdom) Regulations, 2000

The Minister for Social, Community and Family Affairs, in exercise of the powers conferred on him by section 5 , section 5A and section 5B of the Pensions Act, 1990 (No. 25 of 1990), hereby makes the following Regulations:-

Citation and Commencement

1. (1) These Regulations may be cited as the Occupational Pension Schemes (External Schemes) (United Kingdom) Regulations, 2000.

(2) These Regulations shall come into operation on the 31^st day of December, 2000.

Revocation

2.       The Occupational Pension Schemes (External Schemes) (United Kingdom) Regulations, 1994 ( S.I. No. 238 of 1994 ) are hereby revoked.

Definitions

3.       In these Regulations:-

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

“the Disclosure Regulations” means the Occupational Pension Schemes (Disclosure of Information) (No.2) Regulations, 1998 ( S.I. No. 349 of 1998 );

“the Funding Standard Regulations” means the Occupational Pension Schemes (Funding Standard) Regulations, 1993 ( S.I. No. 419 of 1993 );

“Irish benefits” means benefits payable under a UK scheme which relate to a period of Irish reckonable service, including

(a)      additional benefit to which a member is entitled by virtue of thepayment while in Irish reckonable service of additional voluntary contributions, and

(b)      additional benefit granted in respect of a transfer, made while the member concerned is in Irish reckonable service, of accrued rights from another pension arrangement;

“Irish member” means a “member” as defined in section 2 (1) of the Pensions Act, 1990 ;

“Irish reckonable service” means service given while in an employment in respect of which the employee is an employed contributor for the purposes of the Social Welfare Acts;

“non-qualifying UK scheme” means a UK scheme which is not a qualifying UK scheme;

“qualifying UK scheme” means a UK scheme at least one member of which is an Irish member and at least one member of which is a UK member;

“the Registration Regulations” means the Occupational Pension Schemes (Registration) Regulations, 1991 ( S.I. No. 325 of 1991 );

“UK member” means an external member of a UK scheme who remains entitled to any benefit under the scheme in respect of a period of service whilst employed in the United Kingdom;

“UK scheme” means an external scheme-

(a) which is established under irrevocable trusts in England, Wales, Scotland or Northern Ireland, and

(b) which is wholly or primarily administered in England, Wales, Scotland or Northern Ireland, and

(c) which is approved for the purpose of tax under any provisions in force under the laws of the United Kingdom relating to the approval of occupational pension schemes within the meaning of the Pension Schemes Act 1993 of the United Kingdom or the Pension Schemes (Northern Ireland) Act 1993 of Northern Ireland.

General Provision as to functions of the Trustees under the Act

4.       Any function conferred on the trustees of a UK scheme by the Act or by any regulations made thereunder shall, in so far as it relates to any Irish member of the scheme, be conferred also on any employer of that Irish member who participates in the scheme.

Application of Part II

5.       Part II of the Act shall apply to a qualifying UK scheme with and subject to the modification that section 25 of the Act shall not apply to a qualifying UK scheme.

Application of Part III

6.       Part III of, and the Second Schedule to, the Act shall apply to a UK scheme with and subject to the following modifications:-

(a)     notwithstanding section 28(1), Part III and the Second Schedule shall not apply to a member of the scheme who is not an Irish member,

(b)     a preserved benefit payable under section 29 shall be calculated on the basis that:-

(i)       the period B in paragraph 1(1) of the Second Schedule shall be the period of Irish reckonable service completed after the commencement of Part III,

(ii)      the period E in paragraph 1(2) of the Second Schedule shall be the period of Irish reckonable service completed after the date on which the basis of the calculation was altered,

(iii)     the amount X in paragraph 3(1) of the Second Schedule shall be the amount of any additional long service benefit or increase in long service benefit to which a member is entitled by virtue of the payment of additional voluntary contributions while in Irish reckonable service,

(iv)     the reference in paragraph 1(3) of the Second Schedule to the period of reckonable service completed after the commencement of Part III shall be construed as a reference to the period of Irish reckonable service completed after the commencement of Part III, and

(v)      section 29(7) shall apply only to a transfer of accrued rights from another pension arrangement made while the member concerned is in Irish reckonable service,

(c)     a preserved benefit payable under Section 30 shall be calculated on the basis that:-

(i)       for the purposes of section 30(4) and (5) contributions paid otherwise than while in Irish reckonable service shall not be appropriate contributions, and

(ii)      section 30(6) shall apply only to a transfer of accrued rights from another pension arrangement made while the member concerned is in Irish reckonable service, and

(d)     notwithstanding section 34, the actuarial value of a transfer payment under that section may be calculated by a person appointed under UK law to act as actuary in respect of the scheme.

Application of Part IV of the Act

7. (1) Part IV of, and the Third Schedule to, the Act and the Funding Standard Regulations shall apply to a non-qualifying UK scheme with and subject to the following modifications:-

(a)     notwithstanding section 44, the scheme shall satisfy the funding standard if, in the opinion of the actuary and having regard to the rules of the scheme and its governing law (including the rules of the scheme and the provisions of its governing law respecting the order of priority accorded to the liabilities of the scheme upon a winding up), the resources of the scheme at the effective date of the actuarial funding certificate would have been sufficient, if the scheme had been wound up on that date, to provide for -

(i)       the liabilities of the scheme consisting of:-

(A)     Irish benefits in the course of payment to which paragraph 1 of the Third Schedule to the Act relates (the “paragraph 1 Irish benefits”),

(B)     Irish benefits, other than paragraph 1 Irish benefits, which consist of additional benefits secured or granted under the scheme on behalf of the member concerned by way of additional voluntary contributions or a transfer of rights from another pension arrangement to which paragraph 2 of the Third Schedule to the Act relates (the “paragraph 2 Irish Benefits”),

(C)     Irish benefits, other than paragraph 1 Irish benefits and paragraph 2 Irish benefits, payable in respect of reckonable service completed after the commencement of Part III of the Act to which paragraph 3 of the Third Schedule to the Act relates (the “paragraph 3 Irish benefits”), and

(D)     the specified percentage of any Irish benefits, other than paragraph 1 Irish benefits, paragraph 2 Irish benefits and paragraph 3 Irish benefits, payable in respect of reckonable service completed prior to such commencement to which paragraph 4 of the Third Schedule to the Act relates (the “paragraph 4 Irish benefits”), and

(ii)      the estimated expenses of administering the winding up of the scheme,

(b)     notwithstanding section 45 of the Act, the specified percentage in respect of the scheme shall be determined as follows:-

(i)       the actuary shall determine the percentages, if any, of the paragraph 4 Irish benefits that, in his opinion, could have been provided at the effective date of the first actuarial funding certificate in relation to the scheme from the resources of the scheme if:-

(A)     the scheme had been wound up on that date, and

(B)     the resources of the scheme were applied in discharging its liabilities in accordance with the rules of the scheme and its governing law (including the rules of the scheme and the provisions of its governing law respecting the order of priority accorded to the liabilities of the scheme upon a winding up);

(ii)      in determining the percentage referred to in subparagraph (i), the actuary may in any case determine different percentages for each category of membership in the rules of the scheme concerned;

(iii)     the first actuarial funding certificate in relation to the scheme shall, in respect of the paragraph 4 Irish benefits, state percentages for each category of membership to which, pursuant to subparagraph (ii), different percentages apply (in this article referred to as “the certified percentage”), being the lesser of;

(A)     the percentage determined by the actuary pursuant to subparagraphs (i) and (ii), and

(B)     100 per cent; and

(iv)     the specified percentage shall be:-

(A)     where an actuarial funding certificate relates to an effective date not more than 10 years after the commencement of Part IV, the certified percentage, and

(B)     where an actuarial funding certificate relates to an effective date more than 10 years after such commencement and on such commencement the scheme concerned was a funded scheme, 100 per cent,

(c)     section 46 of the Act shall apply to the scheme with and subject to the following modifications:-

(i)      section 46(1)(b) shall not apply to the scheme, and

(ii)      notwithstanding section 46(2), in determining the benefits to be paid on the winding up of the scheme the actuary need not comply with section 48 of the Act,

(d)     section 48 of the Act shall not apply to the scheme,

(e)      references in section 50 of the Act to members shall be construed as references to Irish members, and references to benefits shall be construed as references to Irish benefits, and

(f)      notwithstanding article 4(1) of the Funding Standard Regulations, for the purposes of section 42 of the Act:-

(i)       an actuarial funding certificate in respect of the scheme shall, if it is the first actuarial funding certificate and if the scheme came into operation prior to 1 July 1991, be in the form set out in Schedule A to these Regulations, or in a form substantially to the like effect, and

(ii)      an actuarial funding certificate in respect of the scheme shall, in every other case, be in the form set out in Schedule B to these Regulations or in a form substantially to the like effect.

(2) Part IV of, and the Third Schedule to, the Act shall apply to a qualifying UK scheme with and subject to the modification that, notwithstanding section 41, sections 42, 43, 44, 45, 46, 47, 48, 49 and 50, the Third Schedule to the Act and the Funding Standard Regulations shall not apply to a qualifying UK scheme.

Application of Part V of the Act

8. (1) Part V of the Act shall not apply to a non-qualifying UK scheme so long as:-

(a)     the trustees of the scheme comply with the requirements of the law by which it is governed as to the provision of reports, accounts and valuations and the disclosure of information concerning the scheme to beneficiaries, prospective beneficiaries and the trade unions representing them, and

(b)     whenever, in accordance with the law by which the scheme is governed, a copy of an annual report of the scheme or a document of the like nature is furnished to:-

(i)       an Irish member or a prospective Irish member,

(ii)      the spouse of an Irish member or a prospective Irish member,

(iii)     a person within the application of the scheme and qualifying or prospectively qualifying for its benefits as an Irish member or the spouse or dependant of an Irish member, or

(iv)    an authorised trade union representing Irish members,

there is also furnished a copy of the latest actuarial funding certificate (if any) prepared under section 42 of the Act.

(2)  Part V of the Act shall apply to a qualifying UK scheme with and subject to the modifications that:-

(a)     Sections 55 and 56 of the Act and the Disclosure Regulations shall not apply, and

(b)     the trustees of a qualifying UK scheme shall:-

(i)       In relation to any person who is an Irish member on the date on which these Regulations come into force, notify that person in writing as soon as possible within 12 months from that date that the scheme is a qualifying UK scheme and that the scheme is exempt from the regulatory requirements listed in Schedule C to these Regulations, and

(ii)      in relation to any person who becomes an Irish member after that date, notify the person within 2 months of his becoming an Irish member that the scheme is exempt from the regulatory requirements listed in Schedule C to these Regulations.

Application of Part VI of the Act

9.       Part VI of the Act shall apply to a qualifying UK scheme with and subject to the modification that sections 61, 61A and 62 and the Occupational Pension Schemes (Member Participation in the Selection of Persons for Appointment as Trustees) (No. 3) Regulations, 1996 ( S.I. No. 376 of 1996 ) shall not apply to a qualifying UK scheme.

Amendment of S.I. No. 325 of 1991

10.      The Registration Regulations are amended by:

(a)     the insertion of the following article after article 3:-

“4.(1) The trustees of a qualifying UK scheme shall notify the Board, in such a form provided or approved by it, not later than -

(a)      in case the scheme commenced to be a qualifying UK scheme before the commencement of the Occupational Pension Schemes (External Schemes) (United Kingdom) Regulations, 2000, 12 months after the commencement of those regulations, and

(b)      in case the scheme commenced to be a qualifying UK scheme on or after the commencement of the Occupational Pension Schemes (External Schemes) (United Kingdom) Regulations, 2000, 12 months after the scheme commenced to be a qualifying UK scheme,

that the scheme is a qualifying UK scheme within the meaning of those regulations.

(2)     Where, after the commencement of the Occupational Pension Schemes (External Schemes) (United Kingdom) Regulations, 2000, a scheme ceases to be a qualifying UK scheme, the trustees of the scheme shall notify the Board of that fact, in a form provided or approved by it, within 12 months of such cessation or within such shorter period as the Board may decide.”, and

(b)     the insertion of the following definition in article 2, after the definition of “qualifying Irish scheme”,

““qualifying UK scheme” has the meaning assigned to it in the Occupational Pension Schemes (External Schemes) (United Kingdom) Regulations, 2000”

Service of Information and Documents

11.     Any

(a)     information or documentation which these Regulations require the trustees of a scheme to give, notify or furnish, or

(b)     request for information or for a document to be given, notified or furnished in pursuance of these Regulations,

to any person (other than an authorised trade union) who is not employed in relevant employment shall, unless otherwise agreed with that person, be given, notified or furnished by ordinary post at the last address known to the trustees.

SCHEDULE A

FIRST ACTUARIAL FUNDING CERTIFICATE FOR A UK SCHEME

THE 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 the rules of the scheme and its governing law and 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 the Occupational Pension Schemes (External Schemes) (United Kingdom) Regulations, 2000, (the External Schemes (UK) Regulations):-

(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 Article 7(1)(a)(i) of the External Schemes (UK) Regulations, and

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

I therefore certify that as at the effective date of this certificate the scheme ^* satisfies/does not satisfy the funding standard provided for in Article 7(1)(a) of the External Schemes (UK) Regulations.

Name of Actuary's Employer/Firm:  __________________________________________________

SCHEDULE B

ACTUARIAL FUNDING CERTIFICATE FOR A UK SCHEME

THE 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 the rules of the scheme and its governing law and 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 Article 7(1)(a)(i) of the Occupational Pension Schemes (External Schemes) (United Kingdom) Regulations, 2000 (the External Schemes (UK) Regulations), and

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

I therefore certify that as at the effective date of this certificate the scheme ^* satisfies/does not satisfy the funding standard provided for in Article 7(1)(a) of the External Schemes (UK) Regulations.

Name of Actuary's Employer/Firm:     _________________________________________________

SCHEDULE C

Legislation from which qualifying UK schemes are exempt.

EXPLANATORY NOTE

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

These regulations have the effect of exempting qualifying United Kingdom (U.K.) schemes with Irish members from certain Irish regulatory requirements - disclosure, funding standard, fees and other provisions.

Essentially, the intent of the regulations is to ensure that schemes with members in the UK and Ireland are not subject to two different sets of regulatory requirements, while maintaining an adequate level of protection for the members.

The regulations have been drafted to address concern expressed, prior to the coming into effect of the U.K. Pensions Act, 1995 (in April 1997), in respect of a number of dual approved schemes (some based in Ireland but with members in the U.K. and others based in the U.K. but with members in Ireland) that those schemes might be subject to the legislation of both countries, which could cause difficulties where legislative requirements differ.

Corresponding Great Britain and Northern Ireland regulations have been drafted. The regulations will come into effect in both Ireland and the UK on December 31, 2000.

^* Delete whichever is not applicable

^* Delete whichever is not applicable

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^* Delete whichever is not applicable