S.I. No. 276/2002 - Pensions (Amendment) Act, 2002 (Part 1 and Sections 6, 9 To 12, 15 To 28, 30 To 36, 40, 44, 50 To 55 and 59) (Commencement) Order, 2002

1. This Order may be cited as the Pensions (Amendment) Act, 2002 (Part 1 and Sections 6, 9 to 12, 15 to 28, 30 to 36, 40, 44, 50 to 55 and 59) (Commencement) Order, 2002.

Commencement.

2.

Part 1

and

Sections 6

,

9 to 12

,

15 to 28

,

30 to 36

,

40

,

44

,

50 to 55

and

59

of the

Pensions (Amendment) Act, 2002

(No. 18 of 2002), shall come into operation on 1 June 2002.

GIVEN

under the Official Seal of the Minister for Social,

Community and Family Affairs, this 1st day of JUNE 2002.

DERMOT AHERN

Minister for Social, Community and Family Affairs

EXPLANATORY NOTE

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

This order provides for the commencement of certain provisions of the

Pensions (Amendment) Act, 2002

as follows

Part 1 (Sections 1 and 2)

contains the usual provisions for short title, construction and definitions.

Section 6

inserts new definitions in connection with the new provisions of the Act.

Section 9

extends the exchange of information provisions to include PRSAs and to allow exchange of information with supervisory authorities inside and outside the State.

Section 10

allows the regulation of sectionalised schemes, and allows each section of such schemes to be regulated as a single scheme. In addition, it provides for Regulations in relation to pension matters covered by the

Protection of Employees (Part-Time Work) Act 2001

.

Section 11

provides that Regulations may exempt pension schemes set up for the staff of North/South Implementation Bodies from any or all of the requirements of the Pensions Act as these schemes will be administered in Northern Ireland.

Section 12

allows the professional guidance of the Society of Actuaries in Ireland to be underpinned by regulations.

Section 15

amends the title of Part III to reflect the new requirement for schemes to provide a minimum value of contributory retirement benefit.

Section 16

inserts new definitions relating to minimum value of contributory retirement benefit.

Section 17

reduces the qualifying period for preserved benefit from 5 to 2 years to apply to those leaving service after 1 June 2002.

Sections 18 and 19

provide in relation to defined benefit and defined contribution schemes for the extension of the preservation requirements to include pre 1991 service where the member leaves service after 1 June 2002 with an entitlement to a preserved benefit within the new vesting rule.

Section 20

extends the prohibition of refunds to cover pre 1 January 1991 contributions in the case of scheme members leaving after 1 June 2002 who qualify for a preserved benefit within the new vesting rule.

Section 21

provides for the application of the revaluation requirements to preserved benefit in respect of pre and post 1991 service.

Section 22

makes a number of changes to the legislation governing transfer payments. It gives a member of an occupational pensions scheme who is entitled to a preserved benefit the right to direct the trustees of the scheme to make a transfer payment in respect of his preserved benefit to a PRSA in certain circumstances as set out in tax provisions or to an unfunded scheme (as well as to a funded scheme). It also allows for regulations permitting the transfer payments to pension arrangements outside the State. It allows for transfer values to be adjusted to reflect the funding condition of the scheme making the transfer, to ensure that those taking transfers are not advantaged over those remaining within the scheme, and provides for adherence to the Society of Actuaries in Ireland guidance notes or other guidance specified in regulations in the calculation of transfer values.

Section 23

provides for a minimum value of contributory retirement benefit for members of contributory defined benefit schemes retiring after 1 June 2002.

Section 24

ensures that any provisions of an occupational pension scheme relating to forfeiture and lien are disregarded for the purposes of minimum contributory retirement benefit, as well as preserved benefit.

Section 25

allows the Minister, as respects particular schemes or classes of scheme, to exclude or modify the provisions of the Act relating to the minimum value of contributory retirement benefit, as well as the provisions relating to preservation.

Section 26

allows schemes to provide benefits more valuable than the minimum contributory retirement benefit, as well as benefits more valuable than preserved benefit. In addition, it implements EU Council Directive 98/49/EC (known as the Mobility Directive) by requiring that benefit as described in that section be provided on a non discriminatory basis as between members who leave service because they have gone to another Member State and members who leave for another reason.

Section 27

provides for benefits from defined contribution schemes, as well as defined benefit schemes, to be secured following wind-up of the schemes by transfer payments regardless of the terms of the scheme concerned. It also allows the Minister to make regulations in the case of a scheme winding up removing the existing obligations in relation to the funding standard and the production of an annual report, actuarial valuation and audited accounts.

Section 28

provides for a new certified percentage to apply to actuarial funding certificates (AFCs), having an effective date after 1 June 2002, and allows for regulations to prescribe the content as well as the form of AFCs.

Section 30

amends the list of liabilities which must be funded for a scheme to comply with the Minimum Funding Standard, to reflect mainly the extension of the preservation/revaluation provisions.

Section 31

creates a new specified percentage regime for actuarial funding certificates in respect of certain new preserved benefits, which will run from 1 June 2002 to 1 June 2012.

Section 32

updates a reference to the

Taxes Consolidation Act, 1997

and reflects the revised “specified percentage” requirement for actuarial funding certificates.

Section 33

preserves the existing order of priorities for schemes which wind up on or before 1 June 2002, introduces a revised order of priorities for schemes which wind up after 1 June 2002 to provide that benefits secured by Additional Voluntary Contributions (AVCs) rank first in the new order of priority and to take account of the new preservation and funding requirements, and amends a subsection dealing with transfer payments on wind up; and provides for the treatment of surplus where a scheme is wound up after 1 June 2002.

Section 34

updates a reference to the

Taxes Consolidation Act, 1997

in the section dealing with Funding Proposals.

Section 35

inserts a new title to Part V in connection with the remittance of contributions by employers.

Section 36

provides for the extension of the Minister's power to require disclosure. The amendment will, in particular, facilitate the making of regulations to prescribe the information to be furnished by employers in cases where there is a change in terms of employment which may lead to a reduction in pension entitlement. This is to ensure that the relevant information is supplied to each person affected. It will also facilitate the making of regulations requiring the disclosure of commissions, charges, etc. in connection with the scheme.

Section 40

extends the provision facilitating the modification of Part V in respect of specified schemes or categories of schemes.

Section 44

allows regulations to exclude multi-employer schemes from the provisions of the Act relating to the selection of trustees.

Section 50

increases the size of the Pensions Board from 14 to 16 persons by the addition of a representative of consumer interests and a representative of pensioner interests.

Section 51

inserts a new title to the Second Schedule in connection with the minimum value of contributory retirement benefit.

Section 52

sets out the distinct elements of preserved benefit to be calculated in the case of a defined benefit scheme and the formulae to be used to calculate preserved benefit in respect of both pre 1991 and post 1991 service.

Section 53

confines the anti-franking provision to persons who leave service before 1 June 2002. (Such persons cannot have their revalued preserved benefit funded by a reduction in unpreserved benefit). For persons leaving service after 1 June 2002, all benefits will be preserved and cannot be reduced.

Section 54

sets out the formula to be used in calculating the minimum value of contributory retirement benefit.

Section 55

reflects the changes to treatment of pre 1991 service and provides for the funding of the new preserved benefits.

Section 59

provides for the continuance of instruments.

The Minister for Social, Community and Family Affairs, in exercise of the powers conferred on him by

section 1

of the

Pensions (Amendment) Act, 2002

(No. 18 of 2002), hereby orders as follows

Citation.