The Pensions (Northern Ireland) Order 1995

• Citation: S.I. 1995/3213 (N.I.)
• Sections: 156

Section 1 Title and commencement

(1) This Order may be cited as the Pensions (Northern Ireland) Order 1995.

(2) Subject to the following provisions, this Order comes into operation on such day or days as the Department may by order appoint .

(3) The following provisions come into operation on the expiration of two days from the day on which this Order is made—

(a) Part III, subject to Schedule 2,

(b) Article 163,

and any repeal in Schedule 5 for which there is a note comes into operation in accordance with that note.

(4) Article 162 and the repeal in Schedule 5, Part IV, in the Matrimonial Causes (Northern Ireland) Order 1978 come into operation on such day or days as the Lord Chancellor may by order appoint.

(5) Without prejudice to Article 166(3), the power to make an order under this Article includes power—

(a) to make such transitional adaptations or modifications—

(i) of the provisions brought into operation by the order, or

(ii) in connection with those provisions, or any provision of this Order, or the Pension Schemes Act, then in force, or

(b) to make such savings for the effect of any of the repealed provisions of the Pension Schemes Act, or those provisions as adapted or modified by the order,

as appear to the Department expedient, including different adaptations or modifications for different periods.

Section 2 Interpretation

(1) The Interpretation Act (Northern Ireland) 1954 applies to Article 1 and the following provisions of this Order as it applies to a Measure of the Northern Ireland Assembly.

(2) In this Order—

“the Administration Act” means the Social Security Administration (Northern Ireland) Act 1992 ;

“the Contributions and Benefits Act” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992 ;

“the Department” means the Department of Health and Social Services;

“enactment” includes any statutory provision (as defined by section 1 of the Interpretation Act (Northern Ireland) 1954);

“occupational pension scheme” and “personal pension scheme” have the meaning given by section 1 of the Pension Schemes Act;

“the Pension Schemes Act” means the Pension Schemes (Northern Ireland) Act 1993 ;

“regulations” means regulations made by the Department or any other Northern Ireland department, as the context may require.

(3) In the application of section 24(1) of the Interpretation Act (Northern Ireland) 1954 (service of documents by post by registering them) for the purposes of this Order, omit “registering”.

(4) Subject to the provisions of this Order, expressions used in this Order and in the Pension Schemes Act have the same meaning in this Order as in that Act.

Section 3 Prohibition orders

(1) The Authority may by order prohibit a person from being a trustee of—

(a) a particular trust scheme,

(b) a particular description of trust schemes, or

(c) trust schemes in general,

if they are satisfied that he is not a fit and proper person to be a trustee of the scheme or schemes to which the order relates.

(2) Where a prohibition order is made under paragraph (1) against a person in respect of one or more schemes of which he is a trustee, the order has the effect of removing him.

(3) The Authority may, on the application of any person prohibited under this Article, by order revoke the order either generally or in relation to a particular scheme or description of schemes.

(4) An application under paragraph (3) may not be made—

(a) during the period within which the determination to exercise the power to make the prohibition order may be referred to a tribunal under Article 91(3) or 94(7) of the Pensions (Northern Ireland) Order 2005, and

(b) if the determination is so referred, until the reference, and any appeal against the determination of the tribunal concerned , has been finally disposed of.

(5) A revocation made at any time under this Article cannot affect anything done before that time.

(6) The Authority must prepare and publish a statement of the policies they intend to adopt in relation to the exercise of their powers under this Article.

(7) The Authority may revise any statement published under paragraph (6) and must publish any revised statement.

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 3A Prohibition orders: directors of corporate trustees etc.

(1) A company is prohibited from being a trustee of a trust scheme at any time when an individual who is a director of the company is prohibited from being a trustee of the scheme by an order under Article 3.

(2) Where a company which is a trustee of a trust scheme becomes prohibited under paragraph (1) in relation to the scheme, that paragraph has the effect of removing the company as a trustee.

(3) The Authority may, on the application of a company, give notice in writing to the applicant waiving the prohibition under paragraph (1)—

(a) in relation to an individual against whom an order under Article 3 has been made, and

(b) either generally or in relation to a particular scheme or particular description of schemes.

(4) A notice may be given under paragraph (3) only if the Authority is satisfied that the applicant would be a fit and proper person to be a trustee of the scheme or schemes to which the notice relates despite the individual being, or even if the individual were to become, a director of the applicant.

(5) A notice given at any time under paragraph (3) cannot affect anything done before that time.

(6) An application under paragraph (3) may not be made—

(a) during the period within which the determination to exercise the power to make the order against the individual may be referred to the Tribunal under Article 91(3) or 94(7) of the Pensions (Northern Ireland) Order 2005 (whether by a company which became prohibited under paragraph (1) on the making of the order or by another person), and

(b) if the determination is so referred, until the reference, and any appeal against the Tribunal's determination, has been finally disposed of.

(7) The Authority must prepare and publish a statement of the policies they intend to adopt in relation to the exercise of their powers under this Article.

(8) The Authority may revise any statement published under paragraph (7) and must publish any revised statement.

(9) References in this Article to an order under Article 3 are to an order under that Article made on or after the date on which section45(2) of the Pensions Act (Northern Ireland) 2015 comes fully into operation.

Section 4 Suspension orders

(1) The Authority may by order suspend a trustee of a trust scheme—

(a) pending consideration being given to the making of an order against him under Article 3(1),

(aa) pending consideration being given to the institution of proceedings against him for an offence involving dishonesty or deception,

(b) where proceedings have been instituted against him for an offence involving dishonesty or deception and have not been concluded,

(c) where a petition has been presented to the court for an order adjudging him bankrupt, or for the sequestration of his estate, and proceedings on the petition have not been concluded or an application has been made by him for a debt relief order (under Part 7A of the Insolvency (Northern Ireland) Order 1989) and the application has not been determined ,

(d) where the trustee is a company, if a petition for the winding up of the company has been presented to the court and proceedings on the petition have not been concluded,

(e) where an application has been made to the court for a disqualification order against him under the Company Directors Disqualification (Northern Ireland) Order 2002 or for such an order under any corresponding enactment for the time being in force in Great Britain and proceedings on the application have not been concluded, or

(f) where the trustee is a company and, if any director were a trustee, the Authority would have power to suspend him under sub-paragraph (aa), (b), (c) or (e).

(2) An order under paragraph (1)—

(a) if made by virtue of sub-paragraph (a) or (aa) or, in a case where the Authority would have power to suspend a director under sub-paragraph (aa), by virtue of sub-paragraph (f) , has effect for an initial period not exceeding twelve months, and

(b) in any other case, has effect until the proceedings in question are concluded or, in the case of an application for a debt relief order, the application is determined ;

but the Authority may by order extend the initial period referred to in sub-paragraph (a) for a further period of twelve months, and any order suspending a person under paragraph (1) ceases to have effect in relation to a trust scheme if an order is made against that person under Article 3(1) in relation to that scheme .

(3) An order under paragraph (1) has the effect of prohibiting the person suspended, during the period of his suspension, from exercising any functions as trustee of any trust scheme to which the order applies; and the order may apply to a particular trust scheme, a particular description of trust schemes or trust schemes in general.

(4) An order under paragraph (1) may be made on one of the grounds in sub-paragraphs (b) to (e) whether or not the proceedings were instituted, petition presented or application made (as the case may be) before or after the coming into operation of that paragraph.

(5) The Authority may, on the application of any person suspended under paragraph (1), by order revoke the order, either generally or in relation to a particular scheme or a particular description of schemes; but a revocation made at any time cannot affect anything done before that time.

(5A) An application under paragraph (5) may not be made—

(a) during the period within which the determination to exercise the power to make an order under paragraph (1) may be referred to a tribunal under Article 91(3) or 94(7) of the Pensions (Northern Ireland) Order 2005, and

(b) if the determination is so referred, until the reference, and any appeal against the determination of the tribunal concerned , has been finally disposed of.

(6) An order under this Article may make provision as respects the period of the trustee's suspension for matters arising out of it, and in particular for enabling any person to execute any instrument in his name or otherwise act for him and for adjusting any rules governing the proceedings of the trustees to take account of the reduction in the number capable of acting.

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 6 Removal or suspension of trustees: consequences

(1) A person who purports to act as trustee of a trust scheme while prohibited from being a trustee of the scheme under Article 3 or 3A or suspended in relation to the scheme under Article 4 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.

(2) An offence under paragraph (1) 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 paragraph by reference to any period of time following the preceding conviction of the offence.

(3) Things done by a person purporting to act as trustee of a trust scheme while prohibited from being a trustee of the scheme under Article 3 or 3A or suspended in relation to the scheme under Article 4 are not invalid merely because of that prohibition or suspension.

(4) Nothing in Article 3 , 3A or 4 or this Article affects the liability of any person for things done, or omitted to be done, by him while purporting to act as trustee of a trust scheme.

Section 7 Appointment of trustees

(1) Where a trustee of a trust scheme is removed by an order under Article 3, by Article 3A or . . . by reason of his disqualification, the Authority may by order appoint another trustee in his place.

(2) Where a trustee appointed under paragraph (1) is appointed to replace a trustee appointed under Article 23(1) , Articles 22 to 26 shall apply to the replacement trustee as they apply to a trustee appointed under Article 23(1) .

(3) The Authority may also by order appoint a trustee of a trust scheme where they are satisfied that it is reasonable to do so in order—

(a) to secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the scheme,

(b) to secure that the number of trustees is sufficient for the proper administration of the scheme, . . .

(c) to secure the proper use or application of the assets of the scheme.

, or

(d) otherwise to protect the interests of the generality of the members of the scheme.

Para. (4) rep. by 2005 NI 1

(5) The power to appoint a trustee by an order under this Article includes power by such an order—

(a) to determine the appropriate number of trustees for the proper administration of the scheme,

(b) to require a trustee appointed by the order to be paid fees and expenses out of the scheme's resources,

(c) to provide for the removal or replacement of such a trustee.

(5A) An application may be made to the Authority in relation to a trust scheme by—

(a) the trustees of the scheme,

(b) the employer, or

(c) any member of the scheme,

for the appointment of a trustee of the scheme under paragraph (3)(a) or (c).

(6) Regulations may make provision about the descriptions of persons who may or may not be appointed trustees under this Article.

Section 8 Appointment of trustees: consequences

(1) An order under Article 7 appointing a trustee may provide for any fees and expenses of trustees appointed under the order to be paid—

(a) by the employer,

(b) out of the resources of the scheme, or

(c) partly by the employer and partly out of those resources.

(2) Such an order may also provide that an amount equal to the amount (if any) paid out of the resources of the scheme by virtue of paragraph (1)(b) or (c) is to be treated for all purposes as a debt due from the employer to the trustees of the scheme.

(3) Subject to paragraph (4), a trustee appointed under Article 7 shall, unless he is the independent trustee and Article 22 applies in relation to the scheme, have the same powers and duties as the other trustees.

(4) An order under Article 7 may make provision—

(a) for restricting the powers or duties of a trustee so appointed, . . .

(b) for powers or duties to be exercisable by a trustee so appointed to the exclusion of other trustees.

Section 9 Removal and appointment of trustees: property

Where the Authority have power under this Part to appoint or remove a trustee or a trustee is removed under Article 3A , they may exercise by order the same jurisdiction and powers as are exercisable by the High Court for vesting any property in, or transferring any property to, trustees in consequence of the appointment or of the removal.

Section 10 Civil penalties

(1) Where the Authority are satisfied that by reason of any act or omission this Article applies to any person, they may by notice in writing require him to pay, within a prescribed period, a penalty in respect of that act or omission not exceeding the maximum amount.

(2) In this Article, “the maximum amount” means—

(a) £5,000 in the case of an individual and £50,000 in any other case, or

(b) such lower amount as may be prescribed in the case of an individual or in any other case,

and the Department may by order amend sub-paragraph (a) by substituting higher amounts for the amounts for the time being specified in that sub-paragraph.

(3) Regulations made by virtue of this Part may provide for any person who has contravened any provision of such regulations to pay, within a prescribed period, a penalty under this Article not exceeding an amount specified in the regulations; and the regulations must specify different amounts in the case of individuals from those specified in other cases and any amount so specified may not exceed the amount for the time being specified in the case of individuals or, as the case may be, others in paragraph (2)(a).

(4) An order made under paragraph (2) or regulations made by virtue of paragraph (3) do not affect the amount of any penalty recoverable under this Article by reason of an act or omission occurring before the order or, as the case may be, regulations are made.

(5) Where—

(a) apart from this paragraph, a penalty under this Article is recoverable from a body corporate by reason of any act or omission of the body . . . , and

(b) the act or omission was done with the consent or connivance of, or is attributable to any neglect on the part of, any persons mentioned in paragraph (6),

this Article applies to each of those persons who consented to or connived in the act or omission or to whose neglect the act or omission was attributable.

(6) The persons referred to in paragraph (5)(b) are—

(a) any director, manager, secretary, or other similar officer of the body corporate, or a person purporting to act in any such capacity, and

(b) where the affairs of the body corporate are managed by its members, any member in connection with his functions of management.

(7) Where the Authority requires any person to pay a penalty by virtue of paragraph (5), they may not also require the body corporate in question to pay a penalty in respect of the same act or omission.

(8) A penalty under this Article is recoverable by the Authority.

(8A) Any penalty recoverable under this Article shall, if a county court so orders, be enforceable as if it were payable under an order of that court.

(9) The Authority must pay to the Department any penalty recovered under this Article.

(10) The Authority may not require a person to pay a penalty under this Article in respect of an act or omission if the Authority have issued a notice to the person under Article 83A of the Pensions (Northern Ireland) Order 2005 (financial penalties) in respect of the same act or omission.

Section 11 Powers to wind up schemes

(1) Subject to paragraphs (2) to (7), the Authority may by order direct or authorise an occupational pension scheme to be wound up if they are satisfied that—

(a) the scheme, or any part of it, ought to be replaced by a different scheme,

(b) the scheme is no longer required, or

(c) it is necessary in order to protect the interests of the generality of the members of the scheme that it be wound up.

(2) The Authority may not make an order under this Article on either of the grounds referred to in paragraph (1)(a) or (b) unless they are satisfied that the winding up of the scheme—

(a) cannot be achieved otherwise than by means of such an order, or

(b) can only be achieved in accordance with a procedure which—

(i) is liable to be unduly complex or protracted, or

(ii) involves the obtaining of consents which cannot be obtained, or can only be obtained with undue delay or difficulty,

and that it is reasonable in all the circumstances to make the order.

Para. (3) rep. by 2005 NI 1

(3A) The Authority may, during an assessment period (within the meaning of Article 116 of the Pensions (Northern Ireland) Order 2005 (meaning of “assessment period” for the purposes of Part III of that Order)) in relation to an occupational pension scheme, by order direct the scheme to be wound up if they are satisfied that it is necessary to do so in order—

(a) to ensure that the scheme's protected liabilities do not exceed its assets, or

(b) if those liabilities do exceed its assets, to keep the excess to a minimum.

(3B) In paragraph (3A)—

(a) “protected liabilities” has the meaning given by Article 115 of the Pensions (Northern Ireland) Order 2005, and

(b) references to the assets of the scheme are references to those assets excluding any assets representing the value of any rights in respect of money purchase benefits (within the meaning of that Order) under the scheme.

(4) An order under this Article authorising a scheme to be wound up must include such directions with respect to the manner and timing of the winding up as the Authority think appropriate having regard to the purposes of the order. This paragraph is subject to Articles 24, 119 and 198 of the Pensions (Northern Ireland) Order 2005 (winding up order made when freezing order has effect in relation to scheme or during assessment period under Part III of that Order).

(5) The winding up of a scheme in pursuance of an order of the Authority under this Article is as effective in law as if it had been made under powers conferred by or under the scheme.

(6) An order under this Article may be made and complied with in relation to a scheme—

(a) in spite of any enactment or rule of law, or any rule of the scheme, which would otherwise operate to prevent the winding up, or

(b) except for the purpose of the Authority determining whether they are satisfied as mentioned in paragraph (2), without regard to any such enactment, rule of law or rule of the scheme as would otherwise require, or might otherwise be taken to require, the implementation of any procedure or the obtaining of any consent, with a view to the winding up.

(6A) Paragraph (6) does not have effect to authorise the Authority to make an order as mentioned in sub-paragraph (a) or (b) of that paragraph, if their doing so would be unlawful as a result of section 6(1) of the Human Rights Act 1998 (unlawful for public authority to act in contravention of a Convention right).

(7) In the case of a public service pension scheme—

(a) an order under paragraph (1) directing or authorising the scheme to be wound up may only be made on the grounds referred to in sub-paragraph (c), and

(b) such an order may, as the Authority think appropriate, adapt, amend or repeal any enactment in which the scheme is contained or under which it is made.

Section 12 Powers to wind up public service schemes

(1) The appropriate authority may by order direct a public service pension scheme to be wound up if they are satisfied that—

(a) the scheme, or any part of it, ought to be replaced by a different scheme, or

(b) the scheme is no longer required.

(2) Paragraph (2) of Article 11 applies for the purposes of this Article as it applies for the purposes of that, but as if references to the Authority were to the appropriate authority.

(3) In this Article, “the appropriate authority”, in relation to a scheme, means such Minister of the Crown or government department as may be designated by the Treasury or the Department of Finance and Personnel as having responsibility for the particular scheme.

(4) An order under this Article must include such directions with respect to the manner and timing of the winding up as the appropriate authority thinks appropriate.

(5) Such an order may, as the appropriate authority thinks appropriate, adapt, amend or repeal any enactment in which the scheme is contained or under which it is made.

Section 14 Restitution

If, on the application of the Authority, the High Court is satisfied—

(a) that a power to make a payment, or distribute any assets, to the employer, has been exercised in contravention of Article 37, 76 or 77, or

(b) that any act or omission of the trustees or managers of an occupational pension scheme was in contravention of Article 40,

the Court may order the employer and any other person who appears to the Court to have been knowingly concerned in the contravention to take such steps as the Court may direct for restoring the parties to the position in which they were before the payment or distribution was made, or the act or omission occurred.

Section 15 Directions

(1) The Authority may, where in the case of any trust scheme the employer fails to comply with any requirement included in regulations by virtue of Article 49(5), direct the trustees to make arrangements for the payment to the members of the benefit to which the requirement relates.

(2) The Authority may—

(a) where in the case of any trust scheme an annual report is published, direct the trustees to include a statement prepared by the Authority in the report, and

(b) in the case of any trust scheme, direct the trustees to send to the members a copy of a statement prepared by the Authority.

(3) A direction under this Article must be given in writing.

(4) Where a direction under this Article is not complied with, Article 10 applies to any trustee who has failed to take all such steps as are reasonable to secure compliance.

Section 16 Requirement for member-nominated trustees

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Section 17 Exceptions

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Section 18 Corporate trustees: member-nominated directors

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Section 19 Corporate trustees: exceptions

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Section 20 Selection, and eligibility, of member-nominated trustees and directors

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Section 21 Member-nominated trustees and directors: supplementary

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Section 22 Circumstances in which following provisions apply

(1) This Article applies in relation to a trust scheme—

(a) if a person (referred to in this Article and Articles 23 to 26 as “the practitioner”) begins to act as an insolvency practitioner in relation to a company which, or an individual who, is the employer in relation to the scheme, or

(b) if the official receiver becomes—

(i) the liquidator or provisional liquidator of a company which is the employer in relation to the scheme, . . .

(ia) the interim receiver of the property of a person who is the employer in relation to the scheme, or

(ii) the receiver and the manager, or the trustee, of the estate of a bankrupt who is the employer in relation to the scheme.

(2) Where this Article applies in relation to a scheme by virtue of paragraph (1) , it ceases to do so—

(a) if some person other than the employer mentioned in paragraph (1) becomes the employer, or

(b) if at any time neither the practitioner nor the official receiver is acting in relation to the employer;

but this paragraph does not affect the application of this Article in relation to the scheme on any subsequent occasion when the conditions specified in paragraph (1)(a) or (b) are satisfied in relation to it.

(2A) To the extent that it does not already apply by virtue of paragraph (1), this Article also applies in relation to a trust scheme—

(a) at any time during an assessment period (within the meaning of Article 116 of the Pensions (Northern Ireland) Order 2005) in relation to the scheme, and

(b) at any time, not within sub-paragraph (a), when the scheme is authorised under Article 137 of that Order (closed schemes) to continue as a closed scheme.

(2B) The responsible person must, as soon as reasonably practicable, give notice of an event within paragraph (2C) to—

(a) the Authority,

(b) the Board of the Pension Protection Fund, and

(c) the trustees of the scheme.

(2C) The events are—

(a) the practitioner beginning to act as mentioned in paragraph (1)(a), if immediately before he does so this Article does not apply in relation to the scheme;

(b) the practitioner ceasing to so act, if immediately after he does so this Article does not apply in relation to the scheme;

(c) the official receiver beginning to act in a capacity mentioned in paragraph (1)(b)(i), (ia) or (ii), if immediately before he does so this Article does not apply in relation to the scheme;

(d) the official receiver ceasing to act in such a capacity, if immediately after he does so this Article does not apply in relation to the scheme.

(2D) For the purposes of paragraph (2B) “the responsible person” means—

(a) in the case of an event within paragraph (2C)(a) or (b), the practitioner, and

(b) in the case of an event within paragraph (2C)(c) or (d), the official receiver.

(2E) Regulations may require prescribed persons in prescribed circumstances where this Article begins or ceases to apply in relation to a trust scheme by virtue of paragraph (2A) to give a notice to that effect to—

(a) the Authority,

(b) the Board of the Pension Protection Fund, and

(c) the trustees of the scheme.

(2F) A notice under paragraph (2B), or under regulations under paragraph (2E), must be in writing and contain such information as may be prescribed.

(3) In this Article and Articles 23 to 26

“acting as an insolvency practitioner” and “official receiver” shall be construed in accordance with Articles 3 and 2 of the Insolvency (Northern Ireland) Order 1989, “bankrupt” has the meaning given by Article 9 of the Insolvency (Northern Ireland) Order 1989 ,

“company” means a company as defined in section 1(1) of the Companies Act 2006 or a company which may be wound up under Part VI of the Insolvency (Northern Ireland) Order 1989 (unregistered companies).

Section 23 Power to appoint independent trustees

(1) While Article 22 applies in relation to a trust scheme, the Authority may by order appoint as a trustee of the scheme a person who—

(a) is an independent person in relation to the scheme, and

(b) is registered in the register maintained by the Authority in accordance with regulations under paragraph (4).

(2) In relation to a particular trust scheme, no more than one trustee may at any time be an independent trustee appointed under paragraph (1).

(3) For the purposes of this Article a person is independent in relation to a trust scheme only if—

(a) he has no interest in the assets of the employer or of the scheme otherwise than as trustee of the scheme,

(b) he is neither connected with, nor an associate of—

(i) the employer,

(ii) any person for the time being acting as an insolvency practitioner in relation to the employer, or

(iii) the official receiver acting in any of the capacities mentioned in Article 22(1)(b) in relation to the employer, and

(c) he satisfies any prescribed requirements;

and any reference in this Part to an independent trustee is to be construed accordingly.

(4) Regulations must provide for the Authority to compile and maintain a register of persons who satisfy the prescribed conditions for registration.

(5) Regulations under paragraph (4) may provide—

(a) for copies of the register or of extracts from it to be provided to prescribed persons in prescribed circumstances;

(b) for the inspection of the register by prescribed persons in prescribed circumstances.

(6) The circumstances which may be prescribed under paragraph (5)(a) or (b) include the payment by the person to whom the copy is to be provided, or by whom the register is to be inspected, of such reasonable fee as may be determined by the Authority.

(7) This Article is without prejudice to the powers conferred by Article 7.

Section 25 Appointment and powers of independent trustees: further provisions

(1) If, immediately before the appointment of an independent trustee under Article 23(1) , there is no trustee of the scheme other than the employer, the employer shall cease to be a trustee upon the appointment of the independent trustee.

(2) While Article 22 applies in relation to a scheme and there is an independent trustee of the scheme appointed under Article 23(1)

(a) any power vested in the trustees of the scheme and exercisable at their discretion may be exercised only by the independent trustee, and

(b) any power—

(i) which the scheme confers on the employer (otherwise than as trustee of the scheme), and

(ii) which is exercisable by him at his discretion but only as trustee of the power,

may be exercised only by the independent trustee,

. . .

(3) While Article 22 applies in relation to a scheme and there is an independent trustee of the scheme appointed under Article 23(1), the independent trustee may not be removed from being a trustee by virtue only of any provision of the scheme.

(4) If a trustee appointed under Article 23(1) ceases to be an independent person (within the meaning of Article 23(3)) , then—

(a) he must as soon as reasonably practicable give written notice of that fact to the Authority, and

(b) subject to paragraph (5), he shall cease to be a trustee of the scheme.

(5) If, in a case where paragraph (4) applies, there is no other trustee of the scheme than the former independent trustee, he shall not cease by virtue of that paragraph to be a trustee until such time as another trustee is appointed.

(5A) Article 10 applies to any person who, without reasonable excuse, fails to comply with paragraph (4)(a).

(6) An order under Article 23(1) may provide for any fees and expenses of the trustee appointed under the order to be paid—

(a) by the employer,

(b) out of the resources of the scheme, or

(c) partly by the employer and partly out of those resources.

(7) Such an order may also provide that an amount equal to the amount (if any) paid out of the resources of the scheme by virtue of paragraph (6)(b) or (c) is to be treated for all purposes as a debt due from the employer to the trustees of the scheme.

(8) Where, by virtue of paragraph (6)(b) or (c), an order makes provision for any fees or expenses of the trustee appointed under the order to be paid out of the resources of the scheme, the trustee is entitled to be so paid in priority to all other claims falling to be met out of the scheme's resources.

Section 26 Insolvency practitioner or official receiver to give information to trustees

(1) Not withstanding anything in Article 133 of the Insolvency (Northern Ireland) Order 1989 (court orders for inspection, etc.), while Article 22 applies in relation to a scheme by virtue of paragraph (1) of that Article , the practitioner or official receiver must provide the trustees of the scheme, as soon as practicable after the receipt of a request, with any information which the trustees may reasonably require for the purposes of the scheme.

(2) Any expenses incurred by the practitioner or official receiver in complying with a request under paragraph (1) are recoverable by him as part of the expenses incurred by him in discharge of his duties.

(3) The practitioner or official receiver is not required under paragraph (1) to take any action which involves expenses that cannot be so recovered, unless the trustees of the scheme undertake to meet them.

Section 27 Trustee not to be auditor or actuary of the scheme

(1) A trustee of a trust scheme, and any person who is connected with, or an associate of, such a trustee, is ineligible to act as an auditor or actuary of the scheme.

(2) Paragraph (1) does not make a person who is a director, partner or employee of a firm of actuaries ineligible to act as an actuary of a trust scheme merely because another director, partner or employee of the firm is a trustee of the scheme.

(3) Paragraph (1) does not make a person who falls within a prescribed class or description ineligible to act as an auditor or actuary of a trust scheme.

(4) A person must not act as an auditor or actuary of a trust scheme if he is ineligible under this Article to do so.

(5) In this Article and Article 28 references to a trustee of a trust scheme do not include—

(a) a trustee, or

(b) a trustee of a scheme,

falling within a prescribed class or description.

Section 28 Article 27: consequences

(1) Any person who acts as an auditor or actuary of a trust scheme in contravention of Article 27(4) 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 imprisonment or a fine, or both.

(2) An offence under paragraph (1) 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 paragraph by reference to any period of time following the preceding conviction of the offence.

(3) Acts done as an auditor or actuary of a trust scheme by a person who is ineligible under Article 27 to do so are not invalid merely because of that fact.

Para. (4) rep. by 2005 NI 1

Section 29 Persons disqualified for being trustees

(1) Subject to paragraph (5), a person is disqualified for being a trustee of any trust scheme if—

(a) he has been convicted of any offence involving dishonesty or deception,

(b) he has been adjudged bankrupt or sequestration of his estate has been awarded and (in either case) he has not been discharged or he is the subject of a bankruptcy restrictions order ,

(ba) a moratorium period under a debt relief order (under Part 7A of the Insolvency (Northern Ireland) Order 1989) applies in relation to him or he is the subject of a debt relief restrictions order under Schedule 2ZB of the Insolvency (Northern Ireland) Order 1989,

(c) where the person is a company, if any director of the company is disqualified under this Article,

(d) where the person is a Scottish partnership, if any partner is disqualified under this Article,

(e) he has made an arrangement or a composition contract with, or granted a trust deed for the behoof of, his creditors and has not been discharged in respect of it, or

(f) he is subject to a disqualification order or disqualification undertaking under the Company Directors Disqualification (Northern Ireland) Order 2002 or to such an order or undertaking under any corresponding enactment for the time being in force in Great Britain.

(2) In paragraph (1)—

(a) sub-paragraph (a) applies whether the conviction occurred before or after the coming into operation of that paragraph, but does not apply in relation to any conviction which is a spent conviction for the purposes of the Rehabilitation of Offenders (Northern Ireland) Order 1978 ,

(b) sub-paragraph (b) applies whether the adjudication of bankruptcy or the sequestration or the making of the bankruptcy restrictions order occurred before or after the coming into operation of that paragraph,

(c) sub-paragraph (e) applies whether the arrangement or composition contract was made, or the trust deed was granted, before or after the coming into operation of that paragraph, and

(d) sub-paragraph (f) applies in relation to orders made before or after the coming into operation of that paragraph.

Paras. (3) & (4) rep. by 2005 NI 1

(5) The Authority may, on the application of any person disqualified under this Article—

(a) give notice in writing to him waiving his disqualification,

Sub-para. (b) rep. by 2005 NI 1

either generally or in relation to a particular scheme or particular description of schemes.

(6) A notice given . . . at any time by virtue of paragraph (5) cannot affect anything done before that time.

Section 30 Persons disqualified: consequences

(1) Where a person who is a trustee of a trust scheme becomes disqualified under Article 29 in relation to the scheme, his becoming so disqualified has the effect of removing him as a trustee.

(2) Where—

(a) a trustee of a trust scheme becomes disqualified under Article 29, . . .

Sub-para. (b) rep. by 2005 NI 1

the Authority may exercise by order the same jurisdiction and powers as are exercisable by the High Court for vesting any property in, or transferring any property to, the trustees.

(3) A person who purports to act as a trustee of a trust scheme while he is disqualified under Article 29 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.

(4) An offence under paragraph (3) 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 paragraph by reference to any period of time following the preceding conviction of the offence.

(5) Things done by a person disqualified under Article 29 while purporting to act as trustee or a trust scheme are not invalid merely because of that disqualification.

(6) Nothing in Article 29 or this Article affects the liability of any person for things done, or omitted to be done, by him while purporting to act as trustee of a trust scheme.

Paras. (7) & (8) rep. by 2005 NI 1

Section 32 Decisions by majority

(1) Decisions of the trustees of a trust scheme may, unless the scheme provides otherwise, be taken by agreement of a majority of the trustees.

(2) Where decisions of the trustees of a trust scheme may be taken by agreement of a majority of the trustees—

(a) the trustees may, unless the scheme provides otherwise, by a determination under this paragraph require not less than the number of trustees specified in the determination to be present when any decision is so taken, and

(b) notice of any occasions at which decisions may be so taken must, unless the occasion falls within a prescribed class or description, be given to each trustee to whom it is reasonably practicable to give such notice.

(3) Notice under paragraph (2)(b) must be given in a prescribed manner and not later than the beginning of a prescribed period.

(4) This Article is subject to Articles 8(4)(b) and 25(2) and Article 218(6) of the Pensions (Northern Ireland) Order 2005 .

(5) If paragraph (2)(b) is not complied with, Article 10 applies to any trustee who has failed to take all such steps as are reasonable to secure compliance.

Section 33 Investment powers: duty of care

(1) Liability for breach of an obligation under any rule of law to take care or exercise skill in the performance of any investment functions, where the function is exercisable—

(a) by a trustee of a trust scheme, or

(b) by a person to whom the function has been delegated under Article 34,

cannot be excluded or restricted by an instrument or agreement.

(2) In this Article, references to excluding or restricting liability include—

(a) making the liability or its enforcement subject to restrictive or onerous conditions,

(b) excluding or restricting any right or remedy in respect of the liability, or subjecting a person to any prejudice in consequence of his pursuing any such right or remedy, or

(c) excluding or restricting rules of evidence or procedure.

(3) This Article does not apply—

(a) to a scheme falling within any prescribed class or description, or

(b) to any prescribed description of exclusion or restriction.

Section 34 Power of investment and delegation

(1) The trustees of a trust scheme have, subject to Article 36(1) and to any restriction imposed by the scheme, the same power to make an investment of any kind as if they were absolutely entitled to the assets of the scheme.

(2) Any discretion of the trustees of a trust scheme to make any decision about investments—

(a) may be delegated by or on behalf of the trustees to a fund manager to whom paragraph (3) applies to be exercised in accordance with Article 36, but

(b) may not otherwise be delegated except under section 26 of the Trustee Act (Northern Ireland) 1958 (delegation of trusts for period not exceeding 12 months) or paragraph (5).

(3) This paragraph applies to a fund manager who, in relation to the investments, may take the decisions in question without contravening the prohibition imposed by section 19 of the Financial Services and Markets Act 2000 (prohibition on carrying on regulated activities unless authorised or exempt).

(4) The trustees are not responsible for the act or default of any fund manager in the exercise of any discretion delegated to him under paragraph (2)(a) if they have taken all such steps as are reasonable to satisfy themselves or the person who made the delegation on their behalf has taken all such steps as are reasonable to satisfy himself—

(a) that the fund manager has the appropriate knowledge and experience for managing the investments of the scheme, and

(b) that he is carrying out his work competently and complying with Article 36.

(5) Subject to any restriction imposed by a trust scheme—

(a) the trustees may authorise two or more of their number to exercise on their behalf any discretion to make any decision about investments, and

(b) any such discretion may, where giving effect to the decision would not constitute "the carrying on, in the United Kingdom, of a regulated activity (within the meaning of the Financial Services and Markets Act 2000) , be delegated by or on behalf of the trustees to a fund manager to whom paragraph (3) does not apply to be exercised in accordance with Article 36;

but in either case the trustees are liable for any acts or defaults in the exercise of the discretion if they would be so liable if they were the acts or defaults of the trustees as a whole.

(6) Article 33 does not prevent the exclusion or restriction of any liability of the trustees of a trust scheme for the acts or defaults of a fund manager in the exercise of a discretion delegated to him under paragraph (5)(b) where the trustees have taken all such steps as are reasonable to satisfy themselves, or the person who made the delegation on their behalf has taken all such steps as are reasonable to satisfy himself—

(a) that the fund manager has the appropriate knowledge and experience for managing the investments of the scheme, and

(b) that he is carrying out his work competently and complying with Article 36;

and paragraph (2) of Article 33 applies for the purposes of this paragraph as it applies for the purposes of that Article.

(7) The provisions of this Article override any restriction inconsistent with the provisions imposed by any rule of law or by or under any enactment, other than an enactment contained in, or made under, this Part or the Pension Schemes Act.

Section 35 Investment principles

(1) The trustees of a trust scheme must secure—

(a) that a statement of investment principles is prepared and maintained for the scheme, and

(b) that the statement is reviewed at such intervals, and on such occasions, as may be prescribed and, if necessary, revised.

(2) In this Article “statement of investment principles”, in relation to a trust scheme, means a written statement of the investment principles governing decisions about investments for the purposes of the scheme.

(3) Before preparing or revising a statement of investment principles, the trustees of a trust scheme must comply with any prescribed requirements.

(4) A statement of investment principles must be in the prescribed form and cover, amongst other things, the prescribed matters.

(5) Neither a trust scheme nor a statement of investment principles may impose restrictions (however expressed) on any power to make investments by reference to the consent of the employer.

(6) If in the case of a trust scheme—

(a) a statement of investment principles has not been prepared, is not being maintained or has not been reviewed or revised, as required by this Article, or

(b) the trustees have not complied with the obligation imposed on them by paragraph (3),

Article 10 applies to any trustee who has failed to take all reasonable steps to secure compliance.

(7) Regulations may provide that this Article is not to apply to any scheme which is of a prescribed description.

Section 36 Choosing investments

(1) The trustees of a trust scheme must exercise their powers of investment in accordance with regulations and in accordance with paragraphs (3) and (4), and any fund manager to whom any discretion has been delegated under Article 34 must exercise the discretion in accordance with regulations.

(1A) Regulations under paragraph (1) may, in particular—

(a) specify criteria to be applied in choosing investments, and

(b) require diversification of investments.

Para. (2) rep. by 2005 NI 1

(3) Before investing in any manner (other than in a manner mentioned in Part I of Schedule 1 to the Trustee Investments Act 1961 ) the trustees must obtain and consider proper advice on the question whether the investment is satisfactory having regard to the requirements of regulations under paragraph (1), so far as relating to the suitability of investments, and to the principles contained in the statement under Article 35.

(4) Trustees relating 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 paragraph (3), and

(b) obtain and consider such advice accordingly.

(5) The trustees, or the fund manager to whom any discretion has been delegated under Article 34, must exercise their powers of investment with a view to giving effect to the principles contained in the statement under Article 35, so far as reasonably practicable.

(6) For the purposes of this Article, “proper advice” means—

(a) if the giving of the advice constitutes the carrying on, in the United Kingdom, of a regulated activity (within the meaning of the Financial Services and Markets Act 2000), advice given by a person who may give it without contravening the prohibition imposed by section 19 of that Act (prohibition on carrying on regulated activities unless authorised or exempt);

(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 paragraph (3) or (4) unless the advice was given or has subsequently been confirmed in writing.

(8) If the trustees of a trust scheme—

(a) fail to comply with regulations under paragraph (1), or

(b) do not obtain and consider advice in accordance with this Article,

Article 10 applies to any trustee who has failed to take all reasonable steps to secure compliance.

(9) Regulations may exclude the application of any of the preceding provisions of this Article to any scheme which is of a prescribed description.

Section 36A Restriction on borrowing by trustees

Regulations may prohibit the trustees of a trust scheme, or the fund manager to whom any discretion has been delegated under Article 34, from borrowing money or acting as a guarantor, except in prescribed cases.

Section 37 Payment of surplus to employer

(1) This Article applies to a trust scheme if—

(a) apart from this Article power is conferred on the employer or any other person to make payments to the employer out of funds held for the purposes of the scheme, and

(b) the scheme is not being wound up.

(1A) But this Article does not apply in the case of any of the payments listed in paragraphs (c) to (f) of section 175 of the Finance Act 2004 (authorised employer payments other than public service scheme payments or authorised surplus payments).

(2) Where the power referred to in paragraph (1)(a) is conferred by the scheme on a person other than the trustees—

(a) it cannot be exercised by that person but may instead be exercised by the trustees, and

(b) 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 paragraph (1)(a) may only be exercised if—

(a) the trustees have obtained a written valuation of the scheme's assets and liabilities prepared and signed by a prescribed person,

(b) there is a certificate in force—

(i) stating that in the opinion of that person the prescribed requirements are met as at the date by reference to which the assets are valued and the liabilities are calculated, and

(ii) specifying what in the opinion of that person is the maximum amount of payment that may be made to the employer,

(c) the payment does not exceed the maximum amount specified in the certificate,

(d) the trustees are satisfied that it is in the interests of the members that the power is exercised in the manner proposed,

(e) where the power is conferred by the scheme on the employer, the employer has asked for the power to be exercised, or consented to its being exercised, in the manner proposed,

(f) there is no freezing order in force in relation to the scheme under Article 19 of the Pensions (Northern Ireland) Order 2005, and

(g) notice of the proposal to exercise the power has been given, in accordance with prescribed requirements, to the members of the scheme.

(4) Provision may be made by regulations as to—

(a) the requirements (which may be alternative requirements) that must be met, in relation to any proposed payment to the employer out of funds held for the purposes of a scheme, with respect to the value of the scheme's assets and the amount of its liabilities,

(b) the assets and liabilities to be taken into account for that purpose and the manner in which their value or amount is to be determined, calculated and verified,

(c) the maximum amount of the payment that may be made to the employer, having regard to the value of the scheme's assets and the amount of its liabilities,

(d) the giving of a certificate as to the matters mentioned in sub-paragraphs (a) and (c), and

(e) the period for which such a certificate is to be in force.

(5) The trustees must also comply with any other prescribed requirements in connection with the making of a payment under this Article.

(6) If the trustees—

(a) purport to exercise the power referred to in paragraph (1)(a) without complying with the requirements of this Article, or

(b) fail to comply with any requirement of regulations under paragraph (5),

Article 10 applies to any of them who has failed to take all reasonable steps to secure compliance.

(7) If a person other than the trustees purports to exercise the power referred to in paragraph (1)(a), Article 10 applies to him.

(8) Regulations may provide that in prescribed circumstances this Article does not apply, or applies with prescribed modifications, to schemes of a prescribed description.

Section 38 Power to defer winding up

(1) If, apart from this Article, the rules of a trust scheme would require the scheme to be wound up, the trustees may determine

(a) that the scheme is not for the time being to be wound up but that no new members are to be admitted to it, or

(b) that the scheme is not for the time being to be wound up but that no new members, except pension credit members, are to be admitted to it.

.

(2) Where the trustees make a determination under paragraph (1), this may also determine—

(a) that no further contributions are to be paid towards the scheme (other than those due to be paid before the determination is made) , or

(b) that no . . . benefits are to accrue to, or in respect of, members of the scheme;

. . . .

(2A) Paragraph (2) does not authorise the trustees to determine—

(a) where there are accrued rights or pension credit rights to any benefit, that the benefit is not to be increased, or

(b) where the power conferred by that paragraph is exercisable by virtue of a determination under paragraph (1)(b), that members of the scheme may not acquire pension credit rights under it.

(3) This Article does not apply to—

(a) a money purchase scheme, or

(b) a scheme falling within a prescribed class or description.

(4) This Article also does not apply in relation to a trust scheme where the trustees are required to wind up, or continue the winding up of, the scheme under Article 138(1) of the Pensions (Northern Ireland) Order 2005 (requirement to wind up certain schemes with sufficient assets to meet protected liabilities).

Section 39 Exercise of powers by member trustees

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.

Section 40 Restriction on employer-related investments

(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 Article—

“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,

Definition rep. by SI 2001/3649

(2A) In the definition of “employer-related investments” in paragraph (2), “securities” means—

(a) shares,

(b) instruments creating or acknowledging indebtedness,

(c) instruments giving entitlements to investments,

(d) certificates representing securities.

(2B) Paragraph (2A) must be read with—

(a) section 22 of the Financial Services and Markets Act 2000,

(b) any relevant order made under that section, and

(c) Schedule 2 to that Act.

(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 Article 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 paragraph (1) is not complied with, Article 10 applies 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 paragraph (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.

Section 41 Provision of documents for members

(1) Regulations may require the trustees or managers of an occupational pension scheme—

(a) to obtain at prescribed times the documents mentioned in paragraph (2), and

(b) to make copies of them, and of the documents mentioned in paragraph (3), available to the persons mentioned in paragraph (4).

(2) The documents referred to in paragraph (1)(a) are—

(a) the accounts audited by the auditor of the scheme,

(b) the auditor's statement about contributions under the scheme,

Sub-para. (c) rep. by 2005 NI 1

(3) The documents referred to in paragraph (1)(b) are—

(a) any statement of funding principles prepared or revised under Article 202 of the Pensions (Northern Ireland) Order 2005,

(b) any valuation or report prepared by the actuary under Article 203 of that Order,

(c) any certificate given by the actuary under Article 204 or 206 of that Order.

(4) The persons referred to in paragraph (1)(b) are—

(a) members and prospective members of the scheme,

(b) spouses or civil partners 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 provide for—

(a) prescribed persons,

(b) persons with prescribed qualifications or experience, or

(c) persons approved by the Department,

to act for the purposes of paragraph (2) instead of scheme auditors or actuaries.

(5A) Regulations may impose duties on the trustees or managers of an occupational pension scheme to disclose information to, and make documents available to, a person acting under paragraph (5).

(5B) If any duty imposed under paragraph (5A) is not complied with, Article 10 applies to any trustee, and to any manager, who has failed to take all such steps as are reasonable to secure compliance.

(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 paragraph (4)(d) and may make provision as to the form and content of any such document as is referred to in paragraph (2).

Section 41A Climate change risk

(1) Regulations may impose requirements on the trustees or managers of an occupational pension scheme of a prescribed description with a view to securing that there is effective governance of the scheme with respect to the effects of climate change.

(2) The effects of climate change in relation to which provision may be made under paragraph (1) include, in particular—

(a) risks arising from steps taken because of climate change (whether by governments or otherwise), and

(b) opportunities relating to climate change.

(3) The requirements which may be imposed by the regulations include, in particular, requirements about—

(a) reviewing the exposure of the scheme to risks of a prescribed description;

(b) assessing the assets of the scheme in a prescribed manner;

(c) determining, reviewing and (if necessary) revising a strategy for managing the scheme's exposure to risks of a prescribed description;

(d) determining, reviewing and (if necessary) revising targets relating to the scheme's exposure to risks of a prescribed description;

(e) measuring performance against such targets;

(f) preparing documents containing information of a prescribed description.

(4) Regulations under paragraph (3)(b) may, in particular, require—

(a) that assets are assessed by reference to their exposure to risks of a prescribed description, and

(b) that an assessment includes determining the contribution of the assets of the scheme to climate change.

(5) The regulations may require the trustees or managers of the scheme to take into account—

(a) different ways in which the climate might change, and

(b) different steps that might be taken because of climate change.

(6) Regulations under paragraph (5) may require the trustees or managers of the scheme to adopt prescribed assumptions as to future events, including assumptions about—

(a) the steps that might be taken for the purpose of achieving the Paris Agreement goal or other climate change goal, or

(b) the achievement of the Paris Agreement goal or other climate change goal.

(7) In complying with requirements imposed by the regulations, a trustee or manager must have regard to guidance prepared from time to time by the Department.

(8) In this Article “ the Paris Agreement goal ” means the goal of holding the increase in the average global temperature to well below 2°C above pre-industrial levels referred to in Article 2(1)(a) of the agreement done at Paris on 12 December 2015.

Section 41B Climate change risk: publication of information

(1) Regulations may require the trustees or managers of an occupational pension scheme of a prescribed description to publish information of a prescribed description relating to the effects of climate change on the scheme (which may include information about matters to which regulations under Article 41A may relate).

(2) Regulations under paragraph (1) may, among other things—

(a) require the trustees or managers to publish a document of a prescribed description;

(b) require information or a document to be made available free of charge;

(c) require information or a document to be provided in a form that is or by means that are prescribed or of a prescribed description.

(3) In complying with requirements imposed by the regulations, a trustee or manager must have regard to guidance prepared from time to time by the Department.

Section 41C Articles 41A and 41B: compliance

(1) Regulations may make provision with a view to ensuring compliance with a provision of regulations under Article 41A or 41B.

(2) The regulations may in particular—

(a) provide for the Authority to issue a notice (a “compliance notice”) to a person with a view to ensuring the person's compliance with a provision of regulations under Article 41A or 41B;

(b) provide for the Authority to issue a notice (a “third party compliance notice”) to a person with a view to ensuring another person's compliance with a provision of regulations under Article 41A or 41B;

(c) provide for the Authority to issue a notice (a “penalty notice”) imposing a penalty on a person where the Authority are of the opinion that the person—

(i) has failed to comply with a compliance notice or third party compliance notice, or

(ii) has contravened a provision of regulations under Article 41A or 41B;

(d) provide for the making of a reference to the First-tier Tribunal or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty;

(e) confer other functions on the Authority.

(3) The regulations may make provision for determining the amount, or the maximum amount, of a penalty in respect of a failure or contravention.

(4) But the amount of a penalty imposed under the regulations in respect of a failure or contravention must not exceed—

(a) £5,000, in the case of an individual, and

(b) £50,000, in any other case.

(5) In this Article “First-tier Tribunal” and “Upper Tribunal” mean those tribunals established under section 3 of the Tribunals, Courts and Enforcement Act 2007.

Section 47 Professional advisers

(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 . . . there shall be an individual or a firm appointed by or on behalf of the trustees or managers as fund manager.

(2A) References in this Article to investments must be read with—

(a) section 22 of the Financial Services and Markets Act 2000;

(b) any relevant order under that section; and

(c) Schedule 2 to that Act.

(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,

Article 10 applies to any trustee, and 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 paragraph (3)(a),

are referred to as “professional advisers”.

(5) This Article does not apply to an occupational pension scheme falling within a prescribed class or description and regulations may—

(a) make exceptions to paragraphs (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 paragraph (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 Article to be appointed but the appointment has not been made, or not been made in accordance with any requirements imposed under this Article, Article 10 applies to any trustee, and 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, 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 paragraph (9)(a), Article 10 applies to him.

(11) If in the case of an occupational pension scheme any duty imposed under paragraph (9)(b) is not complied with, Article 10 applies to any trustee, and to any manager, who has failed to take all such steps as are reasonable to secure compliance.

Section 49 Other responsibilities of trustees, employers, etc.

(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 with a deposit-taker .

Para. (1A) rep. by SI 2001/3649

(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 paragraph (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 with a deposit-taker and 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 paragraph (1) or (2) are not complied with, Article 10 applies 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 paragraph (3) or (5), Article 10 applies to him.

(8) Where 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, the amount deducted is to be paid, within a prescribed period, to the trustees or managers of the scheme.

(8A) “Deposit taker” means—

(a) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits;

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) the Bank of England ...

(d) the National Savings Bank; or

(e) a municipal bank, that is to say a company which was, immediately before the repeal of the Banking Act 1987, exempted from the prohibition in section 3 of that Act by virtue of section 4(1) of, and paragraph 4 of Schedule 2 to, that Act.

(8B) Paragraph (8A) must be read with—

(a) section 22 of the Financial Services and Markets Act 2000;

(b) any relevant order under that section; and

(c) Schedule 2 to that Act.

(9) If in any case there is a failure to comply with paragraph (8)—

(a) Article 10 applies to the employer; and

(b) if the trustees or managers have reasonable cause to believe that the failure is likely to be of material significance in the exercise by the Authority of any of their functions, they must, except in prescribed circumstances, give notice of the failure to the Authority and the member within a reasonable period after the end of the prescribed period under paragraph (8).

(10) If in any case paragraph (9)(b) is not complied with—

Sub-para. (a) rep. by 2005 NI 1

(b) Article 10 applies to any trustee or manager who has failed to take all reasonable steps to secure compliance .

(11) If any person is knowingly concerned in the fraudulent evasion of the obligation imposed by paragraph (8) in any case, he is guilty of an offence.

(12) A person guilty of an offence under paragraph (11) is liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum; and

(b) on conviction on indictment, to imprisonment for a term not exceeding seven years or a fine or both.

(13) A person shall not be required by virtue of paragraph (9)(a) to pay a penalty under Article 10 in respect of a failure if in respect of that failure he has been—

(a) required to pay a penalty under that Article by virtue of Article 5(7) of the Welfare Reform and Pensions (Northern Ireland) Order 1999 (failures in respect of stakeholder pensions), or

(b) convicted of an offence under paragraph (11).

Section 49A Record of winding-up decisions

(1) Except in so far as regulations otherwise provide, the trustees or managers of an occupational pension scheme shall keep written records of—

(a) any determination for the winding-up of the scheme in accordance with its rules,

(b) decisions as to the time from which steps for the purposes of the winding-up of the scheme are to be taken,

(c) determinations under Article 38,

(d) determinations in accordance with the rules of the scheme to postpone the commencement of a winding-up of the scheme.

(2) For the purpose of this Article—

(a) the determinations and decisions of which written records must be kept under this Article include determinations and decisions by persons who—

(i) are not trustees or managers of a scheme, but

(ii) are entitled, in accordance with the rules of a scheme, to make a determination for its winding-up, and

(b) regulations may, in relation to such determinations or decisions as are mentioned in sub-paragraph (a), impose obligations to keep written records on the persons making the determinations or decisions (as well as, or instead of, on the trustees or managers).

(3) Regulations may provide for the form and content of any records that are required to be kept under this Article.

Para. (4) rep. by 2005 NI 1

(5) Article 10 applies to any trustee or manager of a scheme who fails to take all such steps as are reasonable to secure compliance by the trustees or managers of that scheme with those obligations.

Section 50 Requirement for dispute resolution arrangements

(1) The trustees or managers of an occupational pension scheme must secure that dispute resolution arrangements complying with the requirements of this Article are made and implemented.

(2) Dispute resolution arrangements are arrangements for the resolution of pension disputes.

(3) For this purpose a pension dispute is a dispute which—

(a) is between—

(i) the trustees or managers of a scheme, and

(ii) one or more persons with an interest in the scheme (see Article 50A),

(b) is about matters relating to the scheme, and

(c) is not an exempted dispute (see paragraph (9)).

(4) The dispute resolution arrangements must provide a procedure—

(a) for any of the parties to the dispute mentioned in paragraph (3)(a)(ii) to make an application for a decision to be taken on the matters in dispute ( “an application for the resolution of a pension dispute”), and

(b) for the trustees or managers to take that decision.

(4A) The dispute resolution arrangements may make provision for securing that an application for the resolution of a pension dispute may not be made to the trustees or managers unless—

(a) the matters in dispute have been previously referred to a person of a description specified in the arrangements (“the specified person”) in order for him to consider those matters, and

(b) the specified person has given his decision on those matters,

and for enabling the specified person's decision to be confirmed or replaced by the decision taken by the trustees or managers on the application, after reconsidering those matters.

(5) Where an application for the resolution of a pension dispute is made in accordance with the dispute resolution arrangements, the trustees or managers must—

(a) take the decision required on the matters in dispute within a reasonable period of the receipt of the application by them, and

(b) notify the applicant of the decision within a reasonable period of it having been taken.

(5A) In a case where a reference is made to the specified person in accordance with provision made under paragraph (4A), paragraph (5) applies in relation to the specified person as it applies in relation to the trustees or managers in a case where an application for the resolution of a pension dispute is made to them.

(6) The procedure provided for by the dispute resolution arrangements in pursuance of paragraph ( 4 ) must include the provision required by Article 50B.

(7) Dispute resolution arrangements under paragraph (1) must, in the case of existing schemes, have effect on and after the date of the coming into operation of this Article in relation to applications made on or after that date.

(8) This Article does not apply in relation to an occupational pension scheme if—

(a) every member of the scheme is a trustee of the scheme,

(b) the scheme has no more than one member, or

(c) the scheme is of a prescribed description.

(9) For the purposes of this Article a dispute is an exempted dispute if—

(a) proceedings in respect of it have been commenced in any court or tribunal,

(b) the Pensions Ombudsman has commenced an investigation in respect of it as a result of a complaint made or a dispute referred to him, or

(c) it is of a prescribed description.

(10) If, in the case of an occupational pension scheme, the dispute resolution arrangements required by this Article to be made—

(a) have not been made, or

(b) are not being implemented,

Article 10 applies to any of the trustees or managers who have failed to take all reasonable steps to secure that such arrangements are made or implemented.

Section 50A Meaning of “person with an interest in the scheme”

(1) For the purposes of Article 50 a person is a person with an interest in an occupational pension scheme if—

(a) he is a member of the scheme,

(b) he is a widow, widower, surviving civil partner or surviving dependant of a deceased member of the scheme,

(c) he is a surviving non-dependant beneficiary of a deceased member of the scheme,

(d) he is a prospective member of the scheme,

(e) he has ceased to be within any of the categories of persons referred to in sub-paragraphs (a) to (d), or

(f) he claims to be such a person as is mentioned in sub-paragraphs (a) to (e) and the dispute relates to whether he is such a person.

(2) In paragraph (1)(c) a “non-dependant beneficiary”, in relation to a deceased member of an occupational pension scheme, means a person who, on the death of the member, is entitled to the payment of benefits under the scheme.

(3) In paragraph (1)(d) a “prospective member” means any person who, under the terms of his contract of service or the rules of the scheme—

(a) is able, at his own option, to become a member of the scheme,

(b) will become so able if he continues in the same employment for a sufficiently long period,

(c) will be admitted to the scheme automatically unless he makes an election not to become a member, or

(d) may be admitted to it subject to the consent of his employer.

Section 50B The dispute resolution procedure

(1) The procedure provided for by the dispute resolution arrangements in pursuance of Article 50 (4)must (in accordance with Article 50(6)) include the following provision.

(2) The procedure must provide that an application for the resolution of a pension dispute under Article 50(4) may be made or continued on behalf of a person who is a party to the dispute mentioned in Article 50(3)(a)(ii)—

(a) where the person dies, by his personal representative,

(b) where the person is a minor or is otherwise incapable of acting for himself, by a member of his family or some other person suitable to represent him, and

(c) in any other case, by a representative nominated by him.

(3) The procedure—

(a) must include provision requiring an application to which paragraph (3A) applies to be made by the end of such reasonable period as is specified;

(b) may include provision about the time limits for making such other applications for the resolution of pension disputes as are specified.

(3A) This paragraph applies to—

(a) any application by a person with an interest in a scheme as mentioned in Article 50A(1)(e), and

(b) any application by a person with an interest in a scheme as mentioned in Article 50A(1)(f) who is claiming to be such a person as is mentioned in Article 50A(1)(e).

(4) The procedure must include provision about—

(a) the manner in which an application for the resolution of a pension dispute is to be made,

(b) the particulars which must be included in such an application, and

(c) the manner in which any decisions required in relation to such an application are to be reached and given.

(4A) The provision made under paragraph (4)(c) may include provision for decisions of the trustees or managers to be taken on their behalf by one or more of their number.

(5) The procedure must provide that if, after an application for the resolution of a pension dispute has been made, the dispute becomes an exempted dispute within the meaning of Article 50(9)(a) or (b), the resolution of the dispute under the procedure ceases.

Section 51 Annual increase in rate of pension

(1) Subject to paragraphs (6) and (7) , this Article applies to a pension under an occupational pension scheme if—

(a) the scheme—

(i) is a registered pension scheme under section 153 of the Finance Act 2004, and

(ii) is not a public service pension scheme, and

(iii) in the case where the pension becomes a pension in payment on or after the commencement day, is not a money purchase scheme, and

(b) the whole, or any part of, the pension is attributable—

(i) to pensionable service on or after 6 April 1997 , or

(ii) in the case of money purchase benefits where the pension is in payment before the commencement day, to payments in respect of employment carried on on or after 6 April 1997 , and

(c) apart from this Article—

(i) the annual rate of the pension, or

(ii) if only part of the pension is attributable as described in sub-paragraph (b), so much of the annual rate as is attributable to that part,

would not be increased each year by at least the appropriate percentage of that rate.

(1A) Where a pension scheme is divided into sections, each section that is a collective money purchase scheme for the purposes of Part 2 of the Pension Schemes Act 2021 (see section 52(2)(b) of that Act) is to be treated for the purposes of this Article as a separate occupational pension scheme which is a money purchase scheme.

(2) Subject to Articles 51A and 52 , where a pension to which this Article applies, or any part of it, is attributable to pensionable service on or after 6 April 1997 or, in the case of money purchase benefits where the pension is in payment before the commencement day , to payments in respect of employment carried on or after 6 April 1997 —

(a) the annual rate of the pension, or

(b) if only part of the pension is attributable to pensionable service or, as the case may be, to payments in respect of employment carried on on or after 6 April 1997 , so much of the annual rate as is attributable to that part,

must be increased annually by at least the appropriate percentage.

(3) Paragraph (2) does not apply to the annual rate of a pension under an occupational pension scheme, or to a part of that rate, if under the rules of the scheme the rate or part is for the time being being increased at intervals of not more than 12 months by at least the relevant percentage.

(4) For the purposes of paragraph (3) the relevant percentage is—

(a) the percentage increase in the consumer prices index for the reference period, being a period determined, in relation to each periodic increase, under the rules, or

(b) if lower, the default percentage for that period.

(4ZA) Paragraph (2) does not apply to the annual rate of a pension under an occupational pension scheme, or to a part of that rate, if paragraph (4ZB) applies to the rate or part.

(4ZB) Subject to paragraph (4ZD), this paragraph applies to the rate or part if, under the rules of the scheme, the rate or part is for the time being being increased, and since the relevant time has always been increased, at intervals of not more than 12 months by at least—

(a) the percentage increase in the retail prices index for the reference period, being a period determined, in relation to each periodic increase, under the rules, or

(b) if lower, the default percentage for that period.

(4ZC) In paragraph (4ZB) “ the relevant time ” means—

(a) the beginning of 2011 or, if later, the time when the pension became a pension in payment, or

(b) if the pension was transferred to the scheme from another occupational pension scheme as a pension in payment after the beginning of 2011, the time of the transfer.

(4ZD) If the pension was transferred to the scheme as mentioned in paragraph (4ZC)(b), paragraph (4ZB) does not apply to the rate or part unless, immediately before the transfer, paragraph (4ZB) (read with this paragraph if relevant) applied to the rate or part by reference to the scheme from which the pension was transferred (or would have applied had paragraph (4ZB) been in operation immediately before the transfer).

(4ZE) If only part of the pension is attributable to pensionable service or, as the case may be, to payments in respect of employment carried on on or after 6 April 1997 , in paragraphs (3) to (4ZD) references to the annual rate of the pension are references to so much of that rate as is attributable to that part.

(4ZF) For the purposes of paragraphs (4) and (4ZB) the default percentage for a period is the percentage for that period which corresponds to—

(a) in the case of a category X pension, 5% per annum, and

(b) in the case of a category Y pension, 2.5% per annum.

(4ZG) In paragraphs (4) and (4ZB)—

“ consumer prices index ” means—

the general index of consumer prices (for all items) published by the Statistics Board, or

where that index is not published for a month, any substituted index or figures published by the Board;

“ retail prices index ” means—

the general index of retail prices (for all items) published by the Statistics Board, or

where that index is not published for a month, any substituted index or figures published by the Board.

(4A) For the purposes of this Article, a pension is a category X pension if it is—

(a) a pension which became a pension in payment before the commencement day, or

(b) a pension—

(i) which becomes a pension in payment on or after the commencement day, and

(ii) the whole of which is attributable to pensionable service before that day.

(4B) For the purposes of this Article, a pension is a category Y pension if it is a pension—

(a) which becomes a pension in payment on or after the commencement day, and

(b) the whole of which is attributable to pensionable service on or after the commencement day.

(4C) For the purposes of applying this Article in the case of a pension—

(a) which becomes a pension in payment on or after the commencement day,

(b) part of which is attributable to pensionable service before the commencement day, and

(c) part of which is attributable to pensionable service on or after that day,

each of those parts of the pension is to be treated as if it were a separate pension.

(5) Regulations may provide that any of the provisions of this Article apply in relation to a pension as if so much of it as would not otherwise be attributable to pensionable service or to payments in respect of employment were attributable to pensionable service or, as the case may be, payments in respect of employment—

(a) before 6 April 1997 or the commencement day ,

(b) on or after that day, or

(c) partly before and partly on or after that day.

(6) This Article does not apply to any pension or part of a pension which is attributable (directly or indirectly) to a pension credit or which, in the opinion of the trustees or managers, is derived from the payment by any member of the scheme of voluntary contributions.

(7) This Article does not apply to any pension (or part of a pension) under a relevant occupational pension scheme which—

(a) is a cash balance benefit (see Article 51ZB), and

(b) first comes into payment on or after the day on which section 21 of the Pensions Act (Northern Ireland) 2012 comes into operation.

(8) An occupational pension scheme is a “relevant occupational pension scheme” if—

(a) it has not, at any time on or after 6 April 1997, been a salary related contracted-out scheme (see section 3B of the Pension Schemes Act), or

(b) it has, at any time on or after 6 April 1997, been a salary related contracted-out scheme but no person is entitled to receive, or has accrued rights to, benefits under the scheme attributable to a period on or after that day when it was such a scheme.

Section 51A Restriction on increase where annuity tied to investments

(1) No increase under Article 51 is required to be made, at any time on or after the relevant date, of so much of any pension under a money purchase scheme as—

(a) is payable by way of an annuity the amount of which for any year after the first year of payment is determined (whether under the terms of the scheme or under the terms of the annuity contract in pursuance of which it is payable) by reference to fluctuations in the value of, or the return from, particular investments, and

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) satisfies such other conditions (if any) as may be prescribed.

(2) For the purposes of this Article it shall be immaterial whether the annuity in question is payable out of the funds of the scheme in question or under an annuity contract entered into for the purposes of the scheme.

(3) In this Article “the relevant date” means the date appointed for the coming into operation of section 47 of the Child Support, Pensions and Social Security Act (Northern Ireland) 2000.