Regulation 2 Arrangements relating to multi-employer schemes and shared liability arrangements

(1)

A ring-fenced body must make arrangements to ensure that on or after the specified date it meets the requirements in paragraphs (2), (5) and (6).

(2)

A ring-fenced body must not be an employer in respect of a multi-employer scheme unless either of the conditions in paragraphs (3) or (4) is satisfied.

(3)

Condition A is that the only other employers in respect of that scheme are—

(a)

wholly-owned subsidiaries of the ring-fenced body;

(b)

other ring-fenced bodies in the same group as the ring-fenced body; or

(c)

wholly-owned subsidiaries of another ring-fenced body which is in the same group as the ring-fenced body and is an employer in respect of that scheme.

(4)

Condition B is that the scheme is a segregated scheme, and—

(a)

the ring-fenced body is the only employer in respect of its section of the scheme; or

(b)

the only other employers in respect of that section are—

(i)

wholly-owned subsidiaries of the ring-fenced body;

(ii)

other ring-fenced bodies in the same group as the ring-fenced body; or

(iii)

wholly-owned subsidiaries of another ring-fenced body which is in the same group as the ring-fenced body and is an employer in respect of that section.

(5)

A ring-fenced body must not continue to be, or become, a party to an arrangement under which it is liable for the whole or any part of the pension liabilities of a wholly-owned subsidiary of another ring-fenced body in the same group, unless the liabilities in question relate to a multi-employer scheme in respect of which—

(a)

both ring-fenced bodies are employers; and

(b)

Condition A or Condition B is satisfied.

(6)

A ring-fenced body must not continue to be, or become, a party to a shared liability arrangement.

(7)

Where—

(a)

a ring-fenced body, at the date section 142G of FSMA first applies to it, is party to a shared liability arrangement; and

(b)

one or more of the other parties to that arrangement refuses to release the ring-fenced body from it, or will only grant release on terms which the ring-fenced body cannot reasonably be expected to meet,

the ring-fenced body may apply to the court for an order under regulation 5(1).

(8)

A ring-fenced body which continues to be a party to a shared liability arrangement after the specified date is not to be taken to have contravened the requirement in paragraph (6) if—

(a)

the ring-fenced body has made an application to the court under paragraph (7), and either—

(i)

that application is still pending before the court; or

(ii)

an order made under regulation 5(1) has not come into force; or

(b)

the other party to the shared liability arrangement is a company incorporated outside the United Kingdom, and—

(i)

the arrangement was entered into before the day on which these Regulations come into force; and

(ii)

the ring-fenced body has used its best endeavours to obtain its release from the arrangement.

(9)

Paragraph (6) does not apply in relation to any liability or obligation imposed by the Pensions Regulator in the exercise of its powers under section 38, 43 or 47 of the Pensions Act 2004^f1 or Article 34, 39 or 43 of the Pensions (Northern Ireland) Order 2005^f2.

(10)

In this regulation “specified date”, in relation to a ring-fenced body, means—

(a)

1st January 2026; or

(b)

if later, the day immediately after the last day of the period of five years beginning with the day on which the body becomes a ring-fenced body.

Annotations

Footnotes

f1: 2004 c.35. Section 38 was amended by the Pensions Act 2008 (c.30), paragraphs 2(1), 7 and 8(2) of Schedule 9 and Part 6 of Schedule 11 and the Pensions Act 2011 (c.19), section 26(1) to (3). Section 43 was amended by the Pensions Act 2011, section 26(4) to (6).
f2: S.I. 2005/255 (N.I. 1). Article 34 was amended by the Pensions (No. 2) Act (Northern Ireland) 2008 (c. 13 (N.I.)), paragraphs 2(1), 7 and 8(1) of Schedule 8 and Part 5 of Schedule 10 and the Pensions Act (Northern Ireland) 2012 (c. 3 (N.I.)), section 24(1) to (3). Article 39 was amended by the Pensions Act (Northern Ireland) 2012, section 24(4) to (6).