Explanatory note

These Regulations are made principally under Articles 3, 4, 5 and 9 of the Welfare Reform and Pensions (Northern Ireland) Order 1999 (“the 1999 Order”), and other provisions listed in Schedule 1 to the Regulations, to make provision in connection with stakeholder pension schemes introduced by Part II of that Order. Apart from Part IV (which provides for the obligations of employers), the Regulations come into operation on 1st October 2000.

Part I of the Regulations is concerned with citation, commencement and interpretation, and Part II with the conditions applying to stakeholder pension schemes. Regulation 2 provides for the manner of establishment of a stakeholder pension scheme which is not established under a trust. Regulations 3, 4 and 5 specify the requirements with which the instruments establishing a stakeholder pension scheme must comply, especially as respects their provision about membership of the scheme, its assets and the transfer of members' rights on winding-up. Regulation 3 applies in the case of all such schemes, regulation 4 in the case of schemes established under a trust, and regulation 5 in the case of schemes not established under a trust. Regulations 6 and 7 are concerned with the manner in which the rights of members under a stakeholder pension scheme are to be discharged when the scheme winds up.

Regulations 8 to 12, 15, 16, 18 and 19 provide for the requirements which must be complied with by a pension scheme as a condition of its being a stakeholder pension scheme, and are concerned in particular with such matters as the investment of funds, (regulations 8 to 10 and 15), reporting obligations, including declarations to be made by trustees and managers, and statements by auditors and accountants, in connection with the scheme (regulations 11 and 12), the provision by schemes of services apart from the management of funds (regulation 16), the provision of information to members (regulation 18) and the obligations of trustees (regulation 19).

Regulations 13 and 14 provide for the circumstances in which payments and credits to the scheme, returns on investments and members' rights under the scheme may be used for purposes other than the provision of benefits for members, and in particular for defraying administrative expenses, charges, etc. Regulation 17 makes provision for the minimum level of contributions to stakeholder pension schemes and the circumstances in which trustees or managers may refuse contributions.

Part III of the Regulations is concerned with the registration of stakeholder pension schemes, especially as respects the persons who may apply for registration of schemes not established under trusts, and access to the register (regulations 20 and 21).

Part IV of the Regulations, which comes into force on 8th October 2001, makes provision in connection with the duty of employers to facilitate access to stakeholder pension schemes, and in particular for the circumstances in which employers are exempt from those requirements (regulation 22), for the deduction of contributions to such schemes from employees' remuneration (regulation 24) and for the disclosure of information to employees about such deductions (regulation 25).

Part V of the Regulations makes textual amendments to regulations made under the Pension Schemes (Northern Ireland) Act 1993 and the Pensions (Northern Ireland) Order 1995 (“the 1995 Order”) in consequence of the introduction of stakeholder pension schemes, and applies to those stakeholder pension schemes which are not occupational pension schemes the provisions of Regulations specified in Schedule 2 as if they were occupational pension schemes.

As these Regulations, in so far as they are made under Part II of the 1995 Order, make in relation to Northern Ireland only provision corresponding to provision contained in regulations made by the Secretary of State for Social Security in relation to Great Britain, the requirement for consultation does not apply by virtue of Article 117(2)(e) of the 1995 Order.

The Welfare Reform and Pensions (1999 Order) (Commencement No. 3) Order (Northern Ireland) 2000 (S.R. 2000 No. 133 (C. 5)) provides for the coming into operation of the enabling provisions of the 1999 Order under which these Regulations are made as follows—

Article 3(1)(b), (2), (3), (4), (5) and (7) and Article 4(2), (4) and (7) in so far as not already in operation on 1st October 2000.

Article 5(1), (3)(b), (5) and (9) in so far as not already in operation on 8th October 2001.

Article 9(2), partially, on 1st October 2000, and in so far as not already in operation on 8th October 2001.

An assessment of the cost to business of the introduction of stakeholder pension schemes under Part II of the 1999 Order and these Regulations is detailed in a Regulatory Impact Assessment, copies of which have been laid in the Business Office and the Library of the Northern Ireland Assembly. Copies of the Assessment are available from the Department for Social Development, Social Security Policy and Legislation Division, Room D3, Castle Buildings, Stormont, Upper Newtownards Road, Belfast BT4 3SQ.