The Stakeholder Pension Schemes (Amendment) Regulations 2005
| Jurisdiction | UK Non-devolved |
| Citation | SI 2005/577 |
| Year | 2005 |
2005 No. 577
PENSIONS
The Stakeholder Pension Schemes (Amendment) Regulations 2005
Made 9th March 2005
Laid before Parliament 14th March 2005
Coming into force 6th April 2005
The Secretary of State for Work and Pensions, in exercise of the powers conferred upon him by sections 1(1)(b) and (5), 8(1) and 83(4) and (6) of the Welfare Reform and Pensions Act 19991and all other powers enabling him in that behalf, hereby makes the following Regulations:
Citation, commencement and interpretation
1.—(1) These Regulations may be cited as the Stakeholder Pension Schemes (Amendment) Regulations 2005 and shall come into force on 6th April 2005.
(2) In these Regulations, a reference to a numbered regulation is to the regulation bearing that number in the Stakeholder Pension Schemes Regulations 20002.
Amendment of provisions relating to interpretation
2.—(1) Regulation 1 (citation, commencement and interpretation) shall be amended as follows.
(2) In paragraph (3)—
(a)
(a) for the definition of “dilution levy” substitute—
““dilution levy” has the meaning given by the FSA Handbook;”;
(b)
(b) after the definition of “dilution levy” insert—
““the FSA Handbook” means the handbook made by the Financial Services Authority under section 153 of the Financial Services and Markets Act 20003;”;
(c)
(c) after the definition of “insurer” insert—
““lifestyling” has the meaning given by regulation 10A(5);”;
(d)
(d) omit the definition of “investment trust”, and
(e)
(e) in the definition of “securities”, omit the words “but does not include shares in an investment trust”.
(3) For paragraph (4) substitute—
“4 Where these Regulations provide for the trustees or manager of a scheme to notify or give notice to a member of the scheme (including notice to be given in writing), or to provide, furnish or make available to a member any statement or declaration, the Regulations shall be taken to include provision for sending the notification, notice, statement or declaration electronically to an electronic address notified by the member for that purpose, and references to sending it by whatever means to a member’s last known address shall be taken to include sending it electronically to his last known electronic address.
4A In paragraph (4), “member” includes “beneficiary”.”.
(4) Omit paragraph (8).
Amendment of provisions relating to winding-up
3.—(1) Regulation 6 (procedure for discharging rights on winding-up) shall be amended as follows.
(2) In paragraph (5)—
(a)
(a) after “paragraph (4)”, omit “(a) or (b)”, and
(b)
(b) in sub-paragraph (a), before “that” insert “where sub-paragraph (a) or (b) of paragraph (4) applies,”.
(3) In paragraph (6)—
(a)
(a) omit sub-paragraph (b), and
(b)
(b) in sub-paragraph (c)—
(i) after “paragraph (4)”, omit “(a) or (b)”, and
(ii) for “in the terms set out in”, substitute “in accordance with”.
Amendment of provisions relating to investments
4.—(1) Regulation 8 (requirement applying to all stakeholder pension schemes as regards investments) shall be amended as follows.
(2) In both paragraph (4) and paragraph (5), for “have scheme assets that are represented by” substitute “directly hold, for the purposes of the scheme,”.
New provisions relating to investments
5. The following regulations shall be inserted after regulation 10—
“Requirement as regards the investment strategy for members nearing retirement
10A.—(1) Subject to regulation 10B, for the purposes of section 1(1)(b) it shall be a condition of a scheme being a stakeholder pension scheme that the requirements of this regulation are complied with.
(2) Except in so far as paragraph (3) and regulation 10C provide otherwise, the trustees or manager of a scheme shall make the rights of a member under the scheme subject to lifestyling if the member has made no choice as regards any investment made under the scheme on his behalf.
(3) Paragraph (2) does not apply in relation to the rights of a person who became a member of the scheme before 6th April 2005 unless he requests that his rights should be made subject to lifestyling, in response to the notification provided for in regulation 10D(3).
(4) Where the amount representing the value of a member’s rights is divided into different tranches, in respect of which different retirement dates are specified, paragraph (2) applies separately in relation to the member’s rights regarding each tranche.
(5) In these Regulations, “lifestyling” means the process, applied from the relevant date and continuing until the member’s retirement date, by which an investment strategy is adopted by the trustees or manager which aims progressively to reduce the potential for significant variation in the value of the member’s rights caused by market conditions from time to time.
(6) In paragraph (5), “the relevant date” means a date chosen by the trustees or manager, which is at least five years before the member’s retirement date, or which is—
(a)
(a) in the case of a member who joins the scheme less than five years before his retirement date, as soon as is reasonably practicable after he becomes a member, and
(b)
(b) in the case of a member whose retirement date is varied so as to become a date less than five years before the date of the variation, as soon as is reasonably practicable after the date of the variation.
Exclusion of regulation 10A in relation to a scheme
10B.—(1) If, before 6th April 2005, the trustees or manager of a scheme resolved that no new member should be admitted to the scheme on or after that date—
(a)
(a) regulation 10A shall not apply to the scheme, and
(b)
(b) it shall be a condition of the scheme being a stakeholder pension scheme that no new member is admitted.
(2) Sub-paragraphs (a) and (b) of paragraph (1) shall cease to apply to a scheme if a resolution of the kind specified in that paragraph is revoked by a further resolution of the trustees or manager of the scheme on or after 6th April 2005.
Transitional provisions relating to regulation 10A
10C. If, before 6th April 2005, the Occupational Pensions Regulatory Authority received a letter from the trustees or manager of a scheme stating the intention—
(a) to establish, by 6th April 2006, arrangements to make the rights of any person who—
(i) becomes a member of the scheme on or after 6th April 2005 and before 6th April 2006, and
(ii) has made no choice as regards any investment made under the scheme on his behalf,
subject to lifestyling, and
(b) to establish, by 6th October 2007, arrangements to make the rights of any person who—
(i) became a member of the scheme before 6th April 2005, and
(ii) has requested that his rights should be made subject to lifestyling, in response to the notification provided for in regulation 10D(3),
subject to lifestyling,regulation 10A(2) does not apply in relation to the rights of a person of the kind described in sub-paragraph (a) until 6th April 2006, or in relation to the rights of a person of the kind described in sub-paragraph (b) until 6th October 2007.
Notification requirements connected with regulations 10A and 10B
10D.—(1) For the purposes of section 1(1)(b) it shall be a condition of a scheme being a stakeholder pension scheme that the requirements of this regulation are complied with.
(2) The trustees or manager of the scheme shall notify the Pensions Regulator of any resolution of the kind specified in regulation 10B(1) by 4th July 2005, and of any resolution of the kind specified in regulation 10B(2) within three months after the date of the resolution.
(3) If regulation 10A applies to the scheme, the trustees or manager shall notify every member of the scheme—
(a)
(a) who became a member before 6th April 2005;
(b)
(b) who has made no choice as regards any investment made under the scheme on his behalf, and
(c)
(c) whose rights are not already subject to lifestyling,
in accordance with paragraph (4).
(4) The notification provided for in paragraph (3) must—
(a)
(a) inform the member—
(i) of the purpose of lifestyling, and the manner in which it is provided for under the scheme;
(ii) of the potential advantages and disadvantages to the member of applying lifestyling to his rights, and
(iii) that his rights will be made subject to lifestyling if he so requests, and
(b)
(b) be given before 6th April 2007, or, in a case where regulation 10A applies to the scheme by virtue of a resolution under regulation 10B(2), within two years of the date of that resolution.
(5) If, by virtue of a resolution of the kind specified in regulation 10B(1), regulation 10A does not apply to the scheme, the trustees or manager shall notify every member of the scheme who has made no choice as regards any investment made under the scheme on his behalf in accordance with paragraph (6).
(6) The notification provided for in paragraph (5) must—
(a)
(a) inform the member—
(i) of the purpose of lifestyling, and the fact that it is not provided for under the scheme, and
(ii) that, if he so requests, his rights under the scheme can be transferred to another stakeholder pension scheme of his choice under which lifestying is provided for, and
(b)
(b) be given before 6th April 2007.
(7) At least four months, but no more than two years, before applying lifestyling to the rights of a member whose rights are subject to lifestyling (or, where this is not reasonably practicable, as soon before applying lifestyling as is reasonably practicable), the trustees or manager shall notify the member of the fact that his rights are subject to lifestyling and of the date from which lifestyling will be applied.
Changes notified by members
10E. Where—
(a) the rights of a member of a scheme have been made subject to lifestyling;
(b) the application of lifestyling to...
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