Explanatory note
(This note is not part of the Regulations)
These Regulations restrict the proportion of the resources of an occupational pension scheme that may be invested in employer-related investments.
Regulation 1 defines “member”, “pensionable service” and “scheme” for the purposes of regulations 2 to 5.
Regulation 2 provides that the restriction on investment in employer-related investments in regulation 3 shall, subject to certain exceptions, apply to those occupational pension schemes which are—
approved by the Inland Revenue or subject to an application for such approval; or
exempt from tax by reason of being a superannuation fund approved before 6th April 1980.
Regulation 3 provides that the proportion of a scheme’s resources that may at any time be invested in employer-related investments must not exceed 5 per cent.
By regulation 4 that limit does not apply to employer-related investments—
in bank or building society accounts;
of additional voluntary contributions provided that the member has agreed in writing; and
in policies of insurance issued in respect of persons who have agreed in writing.
Regulation 5 provides that any employer-related investments which exceed the limit prescribed by regulation 3 on 9th March 1992 may, subject to certain time limits, be retained.
Regulation 6 requires trustees of schemes to include in their annual report information on any employer-related investments of the scheme.
The Report of the Occupational Pensions Board on the draft of these Regulations which was referred to them, together with a statement by the Secretary of State showing that these Regulations give effect to the Board’s recommendations, is contained in Command Paper No. 1805, published by Her Majesty’s Stationery Office.