Office of Public Sector Information
PART I continued
(1) The trustees of a trust scheme must exercise their powers of investment in accordance with subsections (2) to (4) and any fund manager to whom any discretion has been delegated under section 34 must exercise the discretion in accordance with subsection (2).
(2) The trustees or fund manager must have regard—
(a) to the need for diversification of investments, in so far as appropriate to the circumstances of the scheme, and
(b) to the suitability to the scheme of investments of the description of investment proposed and of the investment proposed as an investment of that description.
(3) Before investing in any manner (other than in a manner mentioned in Part I of Schedule 1 to the [1961 c. 62.] Trustee Investments Act 1961) the trustees must obtain and consider proper advice on the question whether the investment is satisfactory having regard to the matters mentioned in subsection (2) and the principles contained in the statement under section 35.
(4) Trustees retaining any investment must—
(a) determine at what intervals the circumstances, and in particular the nature of the investment, make it desirable to obtain such advice as is mentioned in subsection (3), and
(b) obtain and consider such advice accordingly.
(5) The trustees, or the fund manager to whom any discretion has been delegated under section 34, must exercise their powers of investment with a view to giving effect to the principles contained in the statement under section 35, so far as reasonably practicable.
(6) For the purposes of this section “proper advice” means—
(a) where giving the advice constitutes carrying on investment business in the United Kingdom (within the meaning of the [1986 c. 60.] Financial Services Act 1986), advice—
(i) given by a person authorised under Chapter III of Part I of that Act,
(ii) given by a person exempted under Chapter IV of that Part who, in giving the advice, is acting in the course of the business in respect of which he is exempt,
(iii) given by a person where, by virtue of paragraph 27 of Schedule 1 to that Act, paragraph 15 of that Schedule does not apply to giving the advice, or
(iv) given by a person who, by virtue of regulation 5 of the [S.I. 1992/3218.] Banking Coordination (Second Council Directive) Regulations 1992, may give the advice though not authorised as mentioned in sub-paragraph (i) above.
(b) in any other case, the advice of a person who is reasonably believed by the trustees to be qualified by his ability in and practical experience of financial matters and to have the appropriate knowledge and experience of the management of the investments of trust schemes.
(7) Trustees shall not be treated as having complied with subsection (3) or (4) unless the advice was given or has subsequently been confirmed in writing.
(8) If the trustees of a trust scheme do not obtain and consider advice in accordance with this section, sections 3 and 10 apply to any trustee who has failed to take all such steps as are reasonable to secure compliance.
(1) This section applies to a trust scheme if—
(a) apart from this section, power is conferred on any person (including the employer) to make payments to the employer out of funds which are held for the purposes of the scheme,
(b) the scheme is one to which Schedule 22 to the Taxes Act 1988 (reduction of pension fund surpluses in certain exempt approved schemes) applies, and
(c) the scheme is not being wound up.
(2) Where the power referred to in subsection (1)(a) is conferred by the scheme on a person other than the trustees, it cannot be exercised by that person but may be exercised instead by the trustees; and any restriction imposed by the scheme on the exercise of the power shall, so far as capable of doing so, apply to its exercise by the trustees.
(3) The power referred to in subsection (1)(a) cannot be exercised unless the requirements of subsection (4) and (in prescribed circumstances) (5), and any prescribed requirements, are satisfied.
(4) The requirements of this subsection are that—
(a) the power is exercised in pursuance of proposals approved under paragraph 6(1) of Schedule 22 to the Taxes Act 1988,
(b) the trustees are satisfied that it is in the interests of the members that the power be exercised in the manner so proposed,
(c) where the power is conferred by the scheme on the employer, the employer has asked for the power to be exercised, or consented to it being exercised, in the manner so proposed,
(d) the annual rates of the pensions under the scheme which commence or have commenced are increased by the appropriate percentage, and
(e) notice has been given in accordance with prescribed requirements to the members of the scheme of the proposal to exercise the power.
(5) The requirements of this subsection are that the Authority are of the opinion that—
(a) any requirements prescribed by virtue of subsection (3) are satisfied, and
(b) the requirements of subsection (4) are satisfied.
(6) In subsection (4)—
(a) “annual rate” and “appropriate percentage” have the same meaning as in section 54, and
(b) “pension” does not include—
(i) any guaranteed minimum pension (as defined in section 8(2) of the [1993 c. 48.] Pension Schemes Act 1993) or any increase in such a pension under section 109 of that Act, or
(ii) any money purchase benefit (as defined in section 181(1) of that Act).
(7) This section does not apply to any payment to which, by virtue of section 601(3) of the Taxes Act 1988, section 601(2) of that Act does not apply.
(8) If, where this section applies to any trust scheme, the trustees purport to exercise the power referred to in subsection (1)(a) by making a payment to which this section applies without complying with the requirements of this section, sections 3 and 10 apply to any trustee who has failed to take all such steps as are reasonable to secure compliance.
(9) If, where this section applies to any trust scheme, any person, other than the trustees, purports to exercise the power referred to in subsection (1)(a) by making a payment to which this section applies, section 10 applies to him.
(10) Regulations may provide that, in prescribed circumstances, this section does not apply to schemes falling within a prescribed class or description, or applies to them with prescribed modifications.
(1) If, apart from this section, the rules of a trust scheme would require the scheme to be wound up, the trustees may determine that the scheme is not for the time being to be wound up but that no new members are to be admitted to the scheme.
(2) Where the trustees make a determination under subsection (1), they may also determine—
(a) that no further contributions are to be paid towards the scheme, or
(b) that no new benefits are to accrue to, or in respect of, members of the scheme;
but this subsection does not authorise the trustees to determine, where there are accrued rights to any benefit, that the benefit is not to be increased.
(3) This section does not apply to—
(a) a money purchase scheme, or
(b) a scheme falling within a prescribed class or description.
No rule of law that a trustee may not exercise the powers vested in him so as to give rise to a conflict between his personal interest and his duties to the beneficiaries shall apply to a trustee of a trust scheme, who is also a member of the scheme, exercising the powers vested in him in any manner, merely because their exercise in that manner benefits, or may benefit, him as a member of the scheme.
(1) The trustees or managers of an occupational pension scheme must secure that the scheme complies with any prescribed restrictions with respect to the proportion of its resources that may at any time be invested in, or in any description of, employer-related investments.
(2) In this section—
“employer-related investments” means—
shares or other securities issued by the employer or by any person who is connected with, or an associate of, the employer,
land which is occupied or used by, or subject to a lease in favour of, the employer or any such person,
property (other than land) which is used for the purposes of any business carried on by the employer or any such person,
loans to the employer or any such person, and
other prescribed investments,
“securities” means any asset, right or interest falling within paragraph 1, 2, 4 or 5 of Schedule 1 to the [1986 c. 60.] Financial Services Act 1986.
(3) To the extent (if any) that sums due and payable by a person to the trustees or managers of an occupational pension scheme remain unpaid—
(a) they shall be regarded for the purposes of this section as loans made to that person by the trustees or managers, and
(b) resources of the scheme shall be regarded as invested accordingly.
(4) If in the case of a trust scheme subsection (1) is not complied with, sections 3 and 10 apply to any trustee who fails to take all such steps as are reasonable to secure compliance.
(5) If any resources of an occupational pension scheme are invested in contravention of subsection (1), any trustee or manager who agreed in the determination to make the investment is guilty of an offence and liable—
(a) on summary conviction, to a fine not exceeding the statutory maximum, and
(b) on conviction on indictment, to a fine or imprisonment, or both.
(1) Regulations may require the trustees or managers of an occupational pension scheme—
(a) to obtain at prescribed times the documents mentioned in subsection (2), and
(b) to make copies of them, and of the documents mentioned in subsection (3), available to the persons mentioned in subsection (4).
(2) The documents referred to in subsection (1)(a) are—
(a) the accounts audited by the auditor of the scheme,
(b) the auditor’s statement about contributions under the scheme,
(c) a valuation by the actuary of the assets and liabilities of the scheme, and a statement by the actuary concerning such aspects of the valuation as may be prescribed.
(3) The documents referred to in subsection (1)(b) are—
(a) any valuation, or certificate, prepared under section 57 or 58 by the actuary of the scheme,
(b) any report prepared by the trustees or managers under section 59(3).
(4) The persons referred to in subsection (1)(b) are—
(a) members and prospective members of the scheme,
(b) spouses of members and of prospective members,
(c) persons within the application of the scheme and qualifying or prospectively qualifying for its benefits,
(d) independent trade unions recognised to any extent for the purposes of collective bargaining in relation to members and prospective members of the scheme.
(5) Regulations may in the case of occupational pension schemes to which section 47 does not apply—
(a) prescribe the persons who may act as auditors or actuaries for the purposes of subsection (2), or
(b) provide that the persons who may so act shall be—
(i) persons with prescribed professional qualifications or experience, or
(ii) persons approved by the Secretary of State.
(6) Regulations shall make provision for referring to an industrial tribunal any question whether an organisation is such a trade union as is mentioned in subsection (4)(d) and may make provision as to the form and content of any such document as is referred to in subsection (2).
(1) The employer in relation to a trust scheme must permit any employee of his who is a trustee of the scheme to take time off during his working hours for the purpose of—
(a) performing any of his duties as such a trustee, or
(b) undergoing training relevant to the performance of those duties.
(2) The amount of time off which an employee is to be permitted to take under this section and the purposes for which, the occasions on which and any conditions subject to which time off may be so taken are those that are reasonable in all the circumstances having regard in particular to—
(a) how much time off is required for the performance of the duties of a trustee of the scheme and the undergoing of relevant training, and how much time off is required for performing the particular duty or, as the case may be, for undergoing the particular training, and
(b) the circumstances of the employer’s business and the effect of the employee’s absence on the running of that business.
(3) An employee may present a complaint to an industrial tribunal that his employer has failed to permit him to take time off as required by this section.
(4) For the purposes of this section, the working hours of an employee are any time when in accordance with his contract of employment he is required to be at work.
(1) An employer who permits an employee to take time off under section 42 must pay him for the time taken off pursuant to the permission.
(2) Where the employee’s remuneration for the work he would ordinarily have been doing during that time does not vary with the amount of work done, he must be paid as if he had worked at that work for the whole of that time.
(3) Where the employee’s remuneration for the work he would ordinarily have been doing during that time varies with the amount of work done, he must be paid an amount calculated by reference to the average hourly earnings for that work.
(4) The average hourly earnings mentioned in subsection (3) are those of the employee concerned or, if no fair estimate can be made of those earnings, the average hourly earnings for work of that description of persons in comparable employment with the same employer or, if there are no such persons, a figure of average hourly earnings which is reasonable in the circumstances.
(5) A right to be paid an amount under this section does not affect any right of an employee in relation to remuneration under his contract of employment, but—
(a) any contractual remuneration paid to an employee in respect of a period of time off to which this section applies shall go towards discharging any liability of the employer under this section in respect of that period, and
(b) any payment under this section in respect of a period shall go towards discharging any liability of the employer to pay contractual remuneration in respect of that period.
(6) An employee may present a complaint to an industrial tribunal that his employer has failed to pay him in accordance with this section.
An industrial tribunal must not consider a complaint under section 42 or 43 unless it is presented to the tribunal—
(a) within three months of the date when the failure occurred, or
(b) where the tribunal is satisfied that it was not reasonably practicable for the complaint to be presented within that period, within such further period as the tribunal considers reasonable.
(1) Where the tribunal finds a complaint under section 42 is well-founded, it must make a declaration to that effect and may make an award of compensation to be paid by the employer to the employee.
(2) The amount of the compensation shall be such as the tribunal considers just and equitable in all the circumstances having regard to the employer’s default in failing to permit time off to be taken by the employee and to any loss sustained by the employee which is attributable to the matters complained of.
(3) Where on a complaint under section 43 the tribunal finds that the employer has failed to pay the employee in accordance with that section, it must order him to pay the amount which it finds to be due.
(4) The remedy of an employee for infringement of the rights conferred on him by section 42 or 43 is by way of complaint to an industrial tribunal in accordance with this Part, and not otherwise.
(1) Subject to subsection (2), an employee has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that, being a trustee of a trust scheme which relates to his employment, the employee performed (or proposed to perform) any functions as such a trustee.
(2) Subsection (1) does not apply where the detriment in question amounts to dismissal, except where an employee is dismissed in circumstances in which, by virtue of section 142 of the [1978 c. 44.] EmploymentProtection (Consolidation) Act 1978 (“the 1978 Act”), section 54 of that Act does not apply to the dismissal.
(3) Sections 22B and 22C of the 1978 Act (which relate to proceedings brought by an employee on the grounds that he has been subjected to a detriment in contravention of section 22A of that Act) shall have effect as if the reference in section 22B(1) to section 22A included a reference to subsection (1).
(4) In the following provisions of the 1978 Act—
(a) section 129 (remedy for infringement of certain rights),
(b) section 141(2) (employee ordinarily working outside Great Britain), and
(c) section 150 and Schedule 12 (death of employee or employer),
any reference to Part II of that Act includes a reference to subsection (1).
(5) The dismissal of an employee by an employer shall be regarded for the purposes of Part V of the 1978 Act as unfair if the reason (or, if more than one, the principal reason) for it is that, being a trustee of a trust scheme which relates to his employment, the employee performed (or proposed to perform) any functions as such a trustee.
(6) Where the reason or the principal reason for which an employee was selected for dismissal was that he was redundant, but it is shown—
(a) that the circumstances constituting the redundancy applied equally to one or more other employees in the same undertaking who held positions similar to that held by him and who have not been dismissed by the employer, and
(b) that the reason (or, if more than one, the principal reason) for which he was selected for dismissal was that specified in subsection (5),
then, for the purposes of Part V of the 1978 Act, the dismissal shall be regarded as unfair.
(7) Section 54 of the 1978 Act (right of employee not to be unfairly dismissed) applies to a dismissal regarded as unfair by virtue of subsection (5) or (6) regardless of the period for which the employee has been employed and of his age; and accordingly section 64(1) of that Act (which provides a qualifying period and an upper age limit) does not apply to such a dismissal.
(8) Any provision in an agreement (whether a contract of employment or not) shall be void in so far as it purports—
(a) to exclude or limit the operation of any provision of this section, or
(b) to preclude any person from presenting a complaint to an industrial tribunal by virtue of any provision of this section.
(9) Subsection (8) does not apply to an agreement to refrain from presenting or continuing with a complaint where—
(a) a conciliation officer has taken action under section 133(2) or (3) of the 1978 Act (general provisions as to conciliation) or under section 134(1), (2) or (3) (conciliation in case of unfair dismissal) of that Act, or
(b) the conditions regulating compromise agreements under the 1978 Act (as set out in section 140(3) of that Act) are satisfied in relation to the agreement.
(10) In this section, “dismissal” has the same meaning as in Part V of the 1978 Act.
(11) Section 153 of the 1978 Act (general interpretation) has effect for the purposes of this section as it has effect for the purposes of that Act.
(1) For every occupational pension scheme there shall be—
(a) an individual, or a firm, appointed by the trustees or managers as auditor (referred to in this Part, in relation to the scheme, as “the auditor”), and
(b) an individual appointed by the trustees or managers as actuary (referred to in this Part, in relation to the scheme, as “the actuary”).
(2) For every occupational pension scheme the assets of which consist of or include investments (within the meaning of the [1986 c. 60.] Financial Services Act 1986) there shall be an individual or a firm appointed by or on behalf of the trustees or managers as fund manager.
(3) If in the case of an occupational pension scheme any person—
(a) is appointed otherwise than by the trustees or managers as legal adviser or to exercise any prescribed functions in relation to the scheme, or
(b) is appointed otherwise than by or on behalf of the trustees or managers as a fund manager,
sections 3 and 10 apply to any trustee, and section 10 applies to any manager, who in exercising any of his functions places reliance on the skill or judgement of that person.
(4) In this Part, in relation to an occupational pension scheme—
(a) the auditor, actuary and legal adviser appointed by the trustees or managers,
(b) any fund manager appointed by or on behalf of the trustees or managers, and
(c) any person appointed by the trustees or managers to exercise any of the functions referred to in subsection (3)(a),
are referred to as “professional advisers”.
(5) This section does not apply to an occupational pension scheme falling within a prescribed class or description and regulations may—
(a) make exceptions to subsections (1) to (3),
(b) specify the qualifications and experience, or approval, required for appointment as a professional adviser.
(6) Regulations may make provision as to—
(a) the manner in which professional advisers may be appointed and removed,
(b) the terms on which professional advisers may be appointed (including the manner in which the professional advisers may resign).
(7) Subject to regulations made by virtue of subsection (6), professional advisers shall be appointed on such terms as the trustees or managers may determine.
(8) If in the case of an occupational pension scheme an auditor, actuary or fund manager is required under this section to be appointed but the appointment has not been made, or not been made in accordance with any requirements imposed under this section, sections 3 and 10 apply to any trustee, and section 10 applies to any manager, who has failed to take all such steps as are reasonable to secure compliance.
(9) Regulations may in the case of occupational pension schemes—
(a) impose duties on any person who is or has been the employer, and on any person who acts as auditor or actuary to such a person, to disclose information to the trustees or managers and to the scheme’s professional advisers,
(b) impose duties on the trustees or managers to disclose information to, and make documents available to, the scheme’s professional advisers.
(10) If in the case of an occupational pension scheme a person fails to comply with any duty imposed under subsection (9)(a), section 10 applies to him.
(11) If in the case of an occupational pension scheme any duty imposed under subsection (9)(b) is not complied with, sections 3 and 10 apply to any trustee, and section 10 applies to any manager, who has failed to take all such steps as are reasonable to secure compliance.
(1) If the auditor or actuary of any occupational pension scheme has reasonable cause to believe that—
(a) any duty relevant to the administration of the scheme imposed by any enactment or rule of law on the trustees or managers, the employer, any professional adviser or any prescribed person acting in connection with the scheme has not been or is not being complied with, and
(b) the failure to comply is likely to be of material significance in the exercise by the Authority of any of their functions,
he must immediately give a written report of the matter to the Authority.
(2) The auditor or actuary of any occupational pension scheme must, in any prescribed circumstances, immediately give a written report of any prescribed matter to the Authority.
(3) No duty to which the auditor or actuary of any occupational pension scheme is subject shall be regarded as contravened merely because of any information or opinion contained in a written report under this section.
(4) If in the case of any occupational pension scheme any professional adviser (other than the auditor or actuary), any trustee or manager or any person involved in the administration of the scheme has reasonable cause to believe as mentioned in paragraphs (a) and (b) of subsection (1), he may give a report of the matter to the Authority.
(5) In the case of any such scheme, no duty to which any such adviser, trustee or manager or other person is subject shall be regarded as contravened merely because of any information or opinion contained in a report under this section; but this subsection does not apply to any information disclosed in such a report by the legal adviser of an occupational pension scheme if he would be entitled to refuse to produce a document containing the information in any proceedings in any court on the grounds that it was the subject of legal professional privilege or, in Scotland, that it contained a confidential communication made by or to an advocate or solicitor in that capacity.
(6) Subsections (1) to (5) apply to any occupational pension scheme to which section 47 applies.
(7) Section 10 applies to any auditor or actuary who fails to comply with subsection (1) or (2).
(8) If it appears to the Authority that an auditor or actuary has failed to comply with subsection (1) or (2), the Authority may by order disqualify him for being the auditor or, as the case may be, actuary of any occupational pension scheme specified in the order.
(9) An order under subsection (8) may specify the scheme to which the failure relates, all schemes falling within any class or description of occupational pension scheme or all occupational pension schemes.
(10) The Authority may, on the application of any person disqualified under this section who satisfies the Authority that he will in future comply with those subsections, by order revoke the order disqualifying him; but a revocation made at any time cannot affect anything done before that time.
(11) An auditor or actuary of an occupational pension scheme who becomes disqualified under this section shall, while he is so disqualified, cease to be auditor or, as the case may be, actuary of any scheme specified in the order disqualifying him.
(12) A person who, while he is disqualified under this section, purports to act as auditor or actuary of an occupational pension scheme specified in the order disqualifying him is guilty of an offence and liable—
(a) on summary conviction, to a fine not exceeding the statutory maximum, and
(b) on conviction on indictment, to a fine or imprisonment, or both.
(13) An offence under subsection (12) may be charged by reference to any day or longer period of time; and a person may be convicted of a second or subsequent offence under that subsection by reference to any period of time following the preceding conviction of the offence.
(1) The trustees of any trust scheme must, except in any prescribed circumstances, keep any money received by them in a separate account kept by them at an institution authorised under the [1987 c. 22.] Banking Act 1987.
(2) Regulations may require the trustees of any trust scheme to keep—
(a) records of their meetings (including meetings of any of their number), and
(b) books and records relating to any prescribed transaction.
(3) Regulations may, in the case of any trust scheme, require the employer, and any prescribed person acting in connection with the scheme, to keep books and records relating to any prescribed transaction.
(4) Regulations may require books or records kept under subsection (2) or (3) to be kept in a prescribed form and manner and for a prescribed period.
(5) Regulations must, in cases where payments of benefit to members of trust schemes are made by the employer, require the employer to make into a separate account kept by him at an institution authorised under the Banking Act 1987 any payments of benefit which have not been made to the members within any prescribed period.
(6) If in the case of any trust scheme any requirements imposed by or under subsection (1) or (2) are not complied with, sections 3 and 10 apply to any trustee who has failed to take all such steps as are reasonable to secure compliance.
(7) If in the case of any trust scheme any person fails to comply with any requirement imposed under subsection (3) or (5), section 10 applies to him.
(8) Where—
(a) on making a payment of any earnings in respect of any employment there is deducted any amount corresponding to any contribution payable on behalf of an active member of an occupational pension scheme, and
(b) the amount deducted is not, within a prescribed period, paid to the trustees or managers of the scheme and there is no reasonable excuse for the failure to do so,
the employer is guilty of an offence and liable, on summary conviction, to a fine not exceeding the statutory maximum and, on conviction on indictment, to imprisonment, or a fine, or both.
(1) The trustees or managers of an occupational pension scheme must secure that such arrangements as are required by or under this section for the resolution of disagreements between prescribed persons about matters in relation to the scheme are made and implemented.
(2) The arrangements must—
(a) provide for a person, on the application of a complainant of a prescribed description, to give a decision on such a disagreement, and
(b) require the trustees or managers, on the application of such a complainant following a decision given in accordance with paragraph (a), to reconsider the matter in question and confirm the decision or give a new decision in its place.
(3) Regulations may make provision about—
(a) applications for decisions under such arrangements, and
(b) the procedure for reaching and giving such decisions,
including the times by which applications are to be made and decisions given.
(4) Applications and decisions under subsection (2) must be in writing.
(5) Arrangements under subsection (1) must, in the case of existing schemes, have effect as from the commencement of this section.
(6) If, in the case of any occupational pension scheme, such arrangements as are required by this section to be made have not been made, or are not being implemented, section 10 applies to any of the trustees or managers who have failed to take all such steps as are reasonable to secure that such arrangements are made or implemented.
(7) This section does not apply to a scheme of a prescribed description and subsection (1) does not apply to prescribed matters in relation to the scheme.
Pensions Act 1995