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Section 161 Effect of Board assuming responsibility for a schemeC1C2C3

United Kingdom

I1(1)

Where a transfer notice is given to the trustees or managers of an eligible scheme, the Board assumes responsibility for the scheme in accordance with this Chapter.

(2)

The effect of the Board assuming responsibility for a scheme is that—

(a)

the property, rights and liabilities of the scheme are transferred to the Board, without further assurance, with effect from the time the trustees or managers receive the transfer notice,

(b)

the trustees or managers of the scheme are discharged from their pension obligations from that time, and

I2(c)

from that time the Board is responsible for securing that compensation is (and has been) paid in accordance with the pension compensation provisions,

and, accordingly, the scheme is to be treated as having been wound up immediately after that time.

(3)

In subsection (2)(a) the reference to liabilities of the scheme does not include any liability to, or in respect of, any member of the scheme, other than—

(a)

liabilities in respect of money purchase benefits, and

I3(b)

such other liabilities as may be prescribed.

(4)

In subsection (2)(b) “pension obligations” in relation to the trustees or managers of the scheme means—

(a)

their obligations to provide pensions or other benefits to or in respect of persons (including any obligation to provide guaranteed minimum pensions within the meaning of the Pension Schemes Act 1993 (c. 48)), and

(b)

their obligations to administer the scheme in accordance with the scheme rules and this or any other enactment.

I4(5)

Schedule 6 makes provision in respect of the transfer of the property, rights and liabilities of a scheme under subsection (2)(a).

(6)

Regulations may make further provision regarding such transfers.

(7)

Without prejudice to the generality of subsection (6), regulations may authorise the Board to modify a term of a relevant contract of insurance if—

(a)

any rights or liabilities under the contract are transferred to the Board by virtue of subsection (2)(a), and

(b)

as a result of the transfer, the Board is required, by reason of that term, to pay a specified amount or specified amounts to a specified person who, immediately before the time mentioned in subsection (2)(a), was a member of the scheme or a person entitled to benefits in respect of such a member.

(8)

In subsection (7)—

  • “relevant contract of insurance” means a contract of insurance which—

    1. (a)

      is entered with a view to securing the whole or part of the scheme’s liability for—

      1. (i)

        any pension or other benefit payable to or in respect of one particular person whose entitlement to payment of a pension or other benefit has arisen, and

      2. (ii)

        any benefit which will be payable in respect of that person on his death, and

    2. (b)

      is a contract—

      1. (i)

        which may not be surrendered, or

      2. (ii)

        in respect of which the amount payable on surrender does not exceed the liability secured;

  • “specified” means specified in, or determined in accordance with, the contract of insurance.

Annotations

Modifications

C1

Pt. 2 modified (8.3.2005 for specified purposes, 6.4.2005 in so far as not already in force) by The Pension Protection Fund (Partially Guaranteed Schemes) (Modification) Regulations 2005 (S.I. 2005/277), regs. 1(1), 2-11

C2

Pt. 2 modified in part (9.3.2005 for specified purposes, 1.4.2005 for specified purposes, 6.4.2005 in so far as not already in force (except ch. 4)) by The Pension Protection Fund (Multi-employer Schemes) (Modification) Regulations 2005 (S.I. 2005/441), regs. 1, 2-60, 71, 72

C3

Pt. 2 applied in part (with modifications) (20.7.2005 for specified purposes, 1.9.2005 for specified purposes, 5.12.2005 for specified purposes) by The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986), regs. 1(1), 4, Sch. 1

Commencement

I1

S. 161(1)(2)(a)(b)(3)(a)(4)(6)-(8) in force at 1.1.2006 for specified purposes and 6.4.2006 in so far as not already in force by S.I. 2005/3331, art. 2(5), Sch. Pt. 5

I2

S. 161(2)(c) in force at 6.4.2005 by S.I. 2005/275, art. 2(7), Sch. Pt. 7

I3

S. 161(3)(b) in force at 25.6.2014 by S.I. 2014/1636, art. 2

I4

S. 161(5) in force at 6.4.2006 by S.I. 2005/3331, art. 2(6), Sch. Pt. 6

Notes on Part 2

Modifications

C1

Pt. 2 modified in part (9.3.2005 for specified purposes, 1.4.2005 for specified purposes, 6.4.2005 in so far as not already in force (except Ch. 4)) by The Pension Protection Fund (Multi-employer Schemes) (Modification) Regulations 2005 (S.I. 2005/441), regs. 1, 2-60, 71, 72 (as amended (23.7.2012) by The Pension Protection Fund (Miscellaneous Amendments) Regulations 2012 (S.I. 2012/1688), regs. 1(2), 2(1)-(19); (24.1.2013) by The Pension Protection Fund (Miscellaneous Amendments) (No. 2) Regulations 2012 (S.I. 2012/3083), regs. 1(2)(b), 2 (with reg. 10))

C2

Pt. 2 applied in part (with modifications) (20.7.2005 for specified purposes, 1.9.2005 for specified purposes, 5.12.2005 for specified purposes) by The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986), regs. 1(1), 4, Sch. 1 (as amended (17.7.2008) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 (S.I. 2008/1903), regs. 1, 5(2), 13; (10.7.2009) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009 (S.I. 2009/1851), regs. 1, 5, 18; (2.4.2010) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010 (S.I. 2010/1149), regs. 1, 5, 15)

C3

Pt. 2 modified (8.3.2005 for specified purposes, 6.4.2005 in so far as not already in force) by The Pension Protection Fund (Partially Guaranteed Schemes) (Modification) Regulations 2005 (S.I. 2005/277), regs. 1(1), 2-11 (as amended (8.3.2010) by The Pension Protection Fund and Occupational Pension Schemes (Miscellaneous Amendments) Regulations 2010 (S.I. 2010/196), regs. 1, 2(3)-(5); (30.4.2013) by The Pension Protection Fund, Occupational and Personal Pension Schemes (Miscellaneous Amendments) Regulations 2013 (S.I. 2013/627), regs. 1(1), 8(4)(5))

C4

Pt. 2 applied in part (24.7.2014) by The Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014 (S.I. 2014/1711), regs. 1(1), 42(1), 53, 57 (with regs. 6, 41, 44(1), 47(1), 69(2), 72(1), 76(1)); coming into force immediately after s. 29 of 2011 c. 19 - see S.I. 2014/1683, art. 2