Explanatory note

These Regulations amend the Occupational Pension Schemes (Contracting-out) Regulations 1996 (S.I. 1996/1172) (“the 1996 Regulations”). They make provision in relation to salary-related occupational pension schemes which meet the reference scheme test (“the test”). Persons can contract out of the State Additional Pension into such a scheme.

The Board for Actuarial Standards is withdrawing Guidance Note 28: Retirement Benefit Schemes – Adequacy of Benefits for Contracting-out (“GN28”). GN28 contains detailed guidance for actuaries on the test. In order for an occupational pension scheme to meet the test, an actuary must be satisfied that the pension rights under the scheme are broadly equal to (or better than) the minimum rights referred to in the test. Actuaries are required by the 1996 Regulations to follow the guidance in GN28.

As a result of the withdrawal of GN28, these Regulations insert the guidance for actuaries into the 1996 Regulations.

Regulation 2 inserts some of the guidance into the 1996 Regulations. It also inserts a requirement for actuaries to comply with any relevant standards issued by the Board for Actuarial Standards. The Schedule inserts the majority of the guidance into the 1996 Regulations.

A full impact assessment has not been published for this instrument as it has only a negligible regulatory impact on the private sector and civil society organisations.