The Occupational and Personal Pension Schemes (Levy) Regulations 1997

Contents

1Citation, commencement and interpretation#

(1)These Regulations may be cited as the Occupational and Personal Pension Schemes (Levy) Regulations 1997 and shall come into force on 1st April 1997.

(2)In these Regulations—

(3)These Regulations do not apply to any scheme which is a Republic of Ireland scheme within the meaning of the Occupational Pension Schemes (Republic of Ireland Schemes Exemption) Regulations 2000.

2The general levy#

(1)Subject to paragraph (4A), for the purpose of meeting expenditure under section 6, Part X and section 174 of the 1993 Act ^note and of the Regulatory Authorityin connection with their functions in relation to occupational pension schemes, the trustees of every registrable occupational pension scheme shall be liable to pay a levy to the Secretary of State.

(2)Subject to paragraph (4A), for the purpose of meeting expenditure under section 6, Part X and section 174 of the 1993 Actand of the Regulatory Authority in connection with their functions in relation to personal pension schemes, the trustees of every registrable personal pension scheme shall be liable to pay a levy to the Secretary of State.

(3)In these Regulations, the levy payable to the Secretary of State by a registrable scheme under paragraph (1) or (2) above shall be referred to as “the general levy".

(4)Subject to paragraph (4A), the general levy shall be payable in respect of each registration year.

(4A)No levy shall be payable under paragraph (1) or (2) above in relation to a scheme in respect of any registration year—

(a)in which that scheme becomes a registrable scheme; or

(b)which immediately follows a registration year in which that scheme became a registrable scheme.

(5)Subject to regulation 8, where, during a registration year, a schemeto which paragraph (1) or (2) above applies—

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)ceases to be a registrable scheme; or

(c)is wound up,

the general levy shall nevertheless be payable in full for that year.

3Amount of the general levy#

(1)The amount of the general levy payable in respect of each registration year shall be determined by reference to the total membership of a scheme.

(2)For the purposes of paragraph (1), the general levy shall—

(a)in the case of a registrable occupational pension scheme,except one which is approved under section 591(2)(h) of the Income and Corporation Taxes Act 1988 (discretionary approval), be calculated in accordance with Part I of the Schedule; and

(b)in the case of a registrable personal pension scheme,or a registrable occupational pension scheme which is approved under section 591(2)(h) of that Act, be calculated in accordance with Part II of the Schedule.

4Payment of the general levy#

(1)The general levy shall be remitted to the Registrar who shall collect the same on behalf of the Secretary of State.

(2)The general levy shall^note... be payable in advance at the beginning of each registration year and no additional levy or refund shall be payable in respect of any change taking place during that year.

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5The compensation levy#

(1)Subject to paragraph (1A), for the purpose of meeting the expenditure of the Compensation Board, the trustees of every registrable occupational pension scheme established by trust, except a scheme to which regulation 3(2)(b) above applies, shall, in respect of each registration year, be liable to pay a levy to the Compensation Board.

(1A)No levy shall be payable under paragraph (1) above in relation to a scheme in respect of any registration year—

(a)in which that scheme becomes a registrable scheme; or

(b)which immediately follows a registration year in which that scheme became a registrable scheme.

(2)In these Regulations, the levy payable to the Compensation Board shall be referred to as “the compensation levy".

(3)Paragraph (1) above shall not apply in the case of—

(a)any occupational pension scheme referred to in paragraph (1)(d) to (g) of regulation 2 of the Occupational Pension Schemes (Pensions Compensation Provisions) Regulations 1997 ^note (schemes to which the compensation provisions in sections 81 to 85 of the 1995 Act do not apply); and

(b)any occupational pension scheme in respect of which the employer cannot become insolvent within the meaning given by section 123 of the 1993 Act (interpretation of Chapter II of Part VII of the 1993 Act).

(4)Subject to paragraph (3) above and to regulation 8, where, during a registration year, a scheme to which regulation 5(1) applies—

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)ceases to be a registrable scheme; or

(c)is wound up,

the compensation levy shall nevertheless be payable in full for that year.

6Amount of the compensation levy#

(1)The amount of the compensation levy payable in respect of each registration year shall be determined by reference to the total membership of a scheme.

(2)The amount of the compensation levy payable per member in respect of each registration year shall not exceed the amount specified in Part III of the Schedule.

(3)The Compensation Board shall secure that arrangements are made and implemented for giving notice in writing to the trustees of schemes to which regulation 5(1) applies of the amount of the compensation levy payable per member and that reasonable steps are taken to ascertain the address to which such notice should be sent.

7Payment of the compensation levy#

(1)The compensation levy shall^note... be payable in advance at the beginning of each registration year and no additional levy or refund shall be payable in respect of any change taking place during that year.

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8Waiver of the general levy and the compensation levy#

(1)In the case of schemes to which regulations 2(1) and 5(1) apply, payment of the general levy or the compensation levy shall be waived where the trustees confirm in writing to the Registrar that—

(a)there is no employer or the employer is insolvent; and

(b)in the case of a scheme under which all the benefits that may be provided (other than death benefits) are money purchase benefits, there are insufficient unallocated assets in the scheme to meet its levy liabilities in full; or

(c)in the case of a scheme to which sections 56 to 60 of the 1995 Act (the minimum funding requirement) apply and in respect of which there has been an actuarial valuation of the scheme’s assets in accordance with section 57 of that Act (valuation and certification of assets and liabilities), the value of the scheme’s assets is less than 100 per cent. of its liabilities; or

(d)in the case of a scheme to which sections 56 to 60 of the 1995 Act apply and in respect of which there has been no actuarial valuation of the scheme’s assets in accordance with section 57 of that Act, the amount by which the scheme’s assets exceed its liabilities, in accordance with the last actuarial valuation of the scheme’s assets under regulation 8 of the Occupational Pension Schemes (Disclosure of Information) Regulations 1986 ^note, is less than the total amount of its levy liabilities.

(2)In this regulation, “insolvent" has the meaning given by section 123 of the 1993 Act (interpretation of Chapter II of Part VII of the 1993 Act).

9Multi-employer schemes#

(1)Where a registrable occupational pension scheme in relation to which there is more than one employer is divided into two or more sections and the provisions of the scheme are such that—

(a)different sections of the scheme apply to different employers or groups of employers (whether or not more than one section applies to any particular employer or groups including any particular employer);

(b)contributions payable to the scheme by an employer, or by a member in employment under that employer, are allocated to that employer’s section (or, if more than one section applies to the employer, to the section which is appropriate in respect of the employment in question); and

(c)a specified part or proportion of the assets of the scheme is attributable to each section and cannot be used for the purposes of any other section,

these Regulations shall apply as if each section of the scheme were a separate scheme.

(2)Where—

(a)a scheme which has been such a scheme as is mentioned in paragraph (1) above is divided into two or more sections some or all of which apply only to members who are not in pensionable service under the section; and

(b)the provisions of the scheme have not been amended so as to prevent the conditions mentioned in paragraph (1)(a) to (c) above being satisfied in relation to two or more sections; but

(c)those conditions have ceased to be satisfied in relation to one or more sections (whether before or after 1st April 1997) by reason only of there being no members in pensionable service under the section and no contributions which are to be allocated to it,

these Regulations shall apply as if the section in relation to which those conditions have ceased to be satisfied were a separate scheme.

(3)For the purposes of paragraphs (1) and (2), there shall be disregarded any provisions of the scheme by virtue of which contributions or transfers of assets may be made to make provision for death benefits; and where those paragraphs apply and those contributions or transfers are made to a section (“the death benefits section"), the assets of which may only be applied for the provision of death benefits, the death benefits section shall also be treated as if it were a separate scheme for the purposes of these Regulations.

(4)For the purposes of paragraphs (1) to (3), there shall be disregarded any provisions of the scheme by virtue of which, on the winding up of the scheme or a section, assets attributable to one section may be used for the purposes of another section.

10Avoidance of duplication of payments#

Where, but for this regulation, the general levy or, as the case may be, the compensation levy would be payable in respect of the same registrable scheme under both these Regulations and any equivalent provision which has effect in Northern Ireland, that levy shall only be payable under these Regulations where the address of the scheme is in Great Britain.

11Modification of section 75 of the 1995 Act#

Section 75 of the 1995 Act (deficiencies in the assets) shall apply in the case of schemes which are money purchase schemes with the following modifications—

(a)for subsection (1) substitute—“1 If, in the case of a scheme which is a money purchase scheme, the value at the applicable time of the unallocated assets of the scheme is less than an amount payable by way of levy under section 175 of the Pension Schemes Act 1993, then an amount equal to the difference shall be treated as a debt due from the employer to the trustees or managers of the scheme.”

(b)omit subsection (2);

(c)for subsection (3) substitute—“3 In this section—“applicable time", in relation to an amount payable by way of levy, means the time when the levy first becomes payable to the Secretary of State or, as the case may be, the Compensation Board or such later time as the trustees or managers may agree with the employer;“employer" means—a in relation to an occupational pension scheme in which there are members in pensionable service, the employer of persons in the description or category of employment to which the scheme relates; andb in relation to an occupational pension scheme which is a frozen scheme, the person who was the employer of persons in the description or category of employment to which the scheme related immediately before the occurrence of the event after which the scheme became a frozen scheme;“frozen scheme" means a registrable scheme under which benefits continue to be payable to existing members and to which—a no new members may be admitted;b no further contributions are payable by or in respect of existing members; andc no further benefits accrue to existing members although benefits which have already accrued to them may be increased; and“registrable scheme" means an occupational or a personal pension scheme—a which—i is established in the United Kingdom; orii has a place at which its management is conducted in the United Kingdom and has a representative appointed to carry out the functions of a trustee in the United Kingdom; andb which—i is a scheme in respect of which a person has applied for, or received, the approval of the Board of Inland Revenue for the purposes of section 590 or section 591 (other than subsection (2)(g)) of the Income and Corporation Taxes Act 1988 (conditions for approval of retirement benefit schemes and discretionary approval), or for the purposes of Chapter IV of Part XIV of that Act (personal pension schemes); orii is a scheme which is a public service pension scheme; andc which—i has more than one member; andii provides benefits which are not solely payable on the death of a member,^note...“unallocated assets", in the case of a money purchase scheme, means any assets of the scheme which have not been specifically allocated for the provision of benefits to or in respect of members (whether generally or individually).”

(d)omit subsection (4);

(e)for subsection (5) substitute—“5 The value at the applicable time of the unallocated assets shall be taken to be the value as certified in a statement by the scheme auditor.”

(f)omit subsections (6), (9) and (10).

12Transitional provision#

Where the trustees of an occupational or a personal pension scheme which became a registrable scheme before 1st April 1997 have not paid in full the amount of the levy for which they are liable under the previous Regulations, they shall be liable under these Regulations to pay that amount by 30th June 1997.

13Penalties#

Where any person fails, without reasonable cause, to comply with the requirement to pay a levy under regulation 2, 5 or 12 of these Regulations, the Regulatory Authority may require that person to pay, within 28 days, a penalty which shall—

(a)in the case of an individual, not exceed £1,000; and

(b)in any other case, not exceed £10,000.

14Revocation and saving#

(1)The previous Regulations are hereby revoked.

(2)Anything done under, or by virtue of, any regulation revoked by these Regulations, if it could have been done under, or for the purpose of the corresponding provision of these Regulations, shall be deemed to have been done under or by virtue of the corresponding provision of these Regulations and anything begun under, or by virtue of, any such regulation may be continued under these Regulations as if begun under these Regulations.