(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 section “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 section, or
(b) the trustees have not complied with the obligation imposed on them by subsection (3),
section 10 applies to any trustee who has failed to take all reasonable steps to secure compliance.
(7) Regulations may provide that this section is not to apply to any scheme which is of a prescribed description.
(1) The trustees of a trust scheme must exercise their powers of investment in accordance with regulations and in accordance with subsections (3) and (4), and any fund manager to whom any discretion has been delegated under section 34 must exercise the discretion in accordance with regulations.
(1A) Regulations under subsection (1) may, in particular—
(a) specify criteria to be applied in choosing investments, and
(b) require diversification of investments.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(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 subsection (1), so far as relating to the suitability of investments, and to the principles contained in the statement under section 35.
(4) Trustees retaining any investment must—
(a) determine at what intervals the circumstances, and in particular the nature of the investment, make it desirable to obtain such advice as is mentioned in subsection (3), and
(b) obtain and consider such advice accordingly.
(5) The trustees, or the fund manager to whom any discretion has been delegated under section 34, must exercise their powers of investment with a view to giving effect to the principles contained in the statement under section 35, so far as reasonably practicable.
(6) For the purposes of this section “proper advice” means—
(a) 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 subsection (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 subsection (1), or
(b) do not obtain and consider advice in accordance with this section,
section 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 section to any scheme which is of a prescribed description.
Regulations may prohibit the trustees of a trust scheme, or the fund manager to whom any discretion has been delegated under section 34, from borrowing money or acting as a guarantor, except in prescribed cases.
36B Power to modify scheme in relation to payment of surplus to employer
(1) The trustees of a trust scheme may by resolution modify the scheme in accordance with subsection (2) or (3).
(2) Where no power is conferred on any person to make payments to the employer out of funds held for the purposes of the scheme, the resolution may confer a power to do so on the trustees, subject to any restrictions specified in the resolution.
(3) Where a power is exercisable by the trustees (whether or not by virtue of subsection (2)) to make payments to the employer out of funds held for the purposes of the scheme, the resolution may remove or relax any restriction imposed by the scheme on the exercise of the power.
(4) This section does not apply to a scheme that is being wound up.
(5) Any power to distribute assets to the employer on a winding up is to be disregarded for the purposes of subsections (2) and (3); and a resolution under subsection (2) may not confer such a power.
(6) The reference in subsection (3) to a restriction imposed by the scheme includes a restriction imposed by virtue of a resolution under section 251 of the Pensions Act 2004 (which was repealed by section 9(2) of the Pension Schemes Act 2026) or this section.
(7) Regulations may provide that this section does not apply, or applies with prescribed modifications, in prescribed circumstances or to schemes of a prescribed description.
(8) See also section 37 (which limits the circumstances in which a power to make payments of surplus may be exercised).
(1) This section applies to a trust scheme if—
(a) apart from this section 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 section 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 subsection (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.
(2A) The power referred to in subsection (1)(a) may be exercised only so far as permitted by, and only in accordance with, regulations.
(2B) Regulations must be made under subsection (2A)—
(a) prohibiting the making of a payment unless an actuary of a prescribed description (“the relevant actuary”) is satisfied that prescribed conditions are met in relation to the value of the scheme’s assets and the amount of its liabilities,
(b) making provision about the basis (or bases) on which the value of the scheme’s assets and the amount of its liabilities are to be determined for that purpose,
(c) requiring the relevant actuary to give a certificate before a payment is made, and
(d) requiring members of the scheme to be notified in relation to a payment before it is made.
(2C) The provision that may be made by regulations under subsection (2A) includes provision—
(a) about other conditions that must be met in order for the making of a payment to be permitted;
(b) about the giving of certificates by the relevant actuary, including about the form and content of a certificate;
(c) prohibiting the making of a payment without the employer’s consent;
(d) in relation to a superfund scheme (within the meaning of Part 3 of the Pension Schemes Act 2026)—
(i) prohibiting the making of a payment in all circumstances;
(ii) prohibiting the making of a payment without the Authority’s consent.
(2D) The power referred to in subsection (1)(a) may not be exercised if there is a freezing order in force in relation to the scheme under section 23 of the Pensions Act 2004.
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) The trustees must also comply with any other prescribed requirements in connection with the making of a payment under this section.
(6) If the trustees—
(a) purport to exercise the power referred to in subsection (1)(a) without complying with subsection (2A), or
(b) fail to comply with any requirement of regulations under subsection (5),
section 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 subsection (1)(a), section 10 applies to him.
(8) Regulations may provide that ... this section does not apply, or applies with prescribed modifications, in prescribed circumstances or to schemes of a prescribed description.
(1) If, apart from this section, 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 subsection (1), they 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) Subsection (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 subsection is exercisable by virtue of a determination under subsection (1)(b), that members of the scheme may not acquire pension credit rights under it.
(3) This section does not apply to—
(a) a money purchase scheme, or
(b) a scheme falling within a prescribed class or description.
(4) This section 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 section 154(1) of the Pensions Act 2004 (requirement to wind up certain schemes with sufficient assets to meet protected liabilities).
No rule of law that a trustee may not exercise the powers vested in him so as to give rise to a conflict between his personal interest and his duties to the beneficiaries shall apply to a trustee of a trust scheme, who is also a member of the scheme, exercising the powers vested in him in any manner, merely because their exercise in that manner benefits, or may benefit, him as a member of the scheme.
(1) The trustees or managers of an occupational pension scheme must secure that the scheme complies with any prescribed restrictions with respect to the proportion of its resources that may at any time be invested in, or in any description of, employer-related investments.
(2) In this section—
“employer-related investments” means—
shares or other securities issued by the employer or by any person who is connected with, or an associate of, the employer,
land which is occupied or used by, or subject to a lease in favour of, the employer or any such person,
property (other than land) which is used for the purposes of any business carried on by the employer or any such person,
loans to the employer or any such person, and
other prescribed investments,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2A) In the definition of “employer-related investments” in subsection (2) “securities” means—
(a) shares,
(b) instruments creating or acknowledging indebtedness,
(c) instruments giving entitlements to investments,
(d) certificates representing securities.
(2B) Subsection (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 section as loans made to that person by the trustees or managers, and
(b) resources of the scheme shall be regarded as invested accordingly.
(4) If in the case of a trust scheme subsection (1) is not complied with, section 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 subsection (1), any trustee or manager who agreed in the determination to make the investment is guilty of an offence and liable—
(a) on summary conviction, to a fine not exceeding the statutory maximum, and
(b) on conviction on indictment, to a fine or imprisonment, or both.
(1) Regulations may require the trustees or managers of an occupational pension scheme—
(a) to obtain at prescribed times the documents mentioned in subsection (2), and
(b) to make copies of them, and of the documents mentioned in subsection (3), available to the persons mentioned in subsection (4).
(2) The documents referred to in subsection (1)(a) are—
(a) the accounts audited by the auditor of the scheme,
(b) the auditor’s statement about contributions under the scheme,
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) The documents referred to in subsection (1)(b) are—
(a) any statement of funding principles prepared or revised under section 223 of the Pensions Act 2004,
(b) any valuation or report prepared by the actuary under section 224 of that Act,
(c) any certificate given by the actuary under section 225 or 227 of that Act.
(4) The persons referred to in subsection (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 Secretary of State,
to act for the purposes of subsection (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 subsection (5).
(5B) If any duty imposed under subsection (5A) is not complied with, section 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 employment tribunal any question whether an organisation is such a trade union as is mentioned in subsection (4)(d) and may make provision as to the form and content of any such document as is referred to in subsection (2).
(1) 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 subsection (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 subsection (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 subsection (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 Secretary of State.
(8) In this section “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.
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 section 41A may relate).
(2) Regulations under subsection (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 Secretary of State.
(1) Regulations may make provision with a view to ensuring compliance with a provision of regulations under section 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 section 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 section 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 section 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.
(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 section 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,
section 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 subsection (3)(a),
are referred to as “professional advisers”.
(5) This section does not apply to an occupational pension scheme falling within a prescribed class or description and regulations may—
(a) make exceptions to subsections (1) to (3),
(b) specify the qualifications and experience, or approval, required for appointment as a professional adviser.
(6) Regulations may make provision as to—
(a) the manner in which professional advisers may be appointed and removed,
(b) the terms on which professional advisers may be appointed (including the manner in which the professional advisers may resign).
(7) Subject to regulations made by virtue of subsection (6), professional advisers shall be appointed on such terms as the trustees or managers may determine.
(8) If in the case of an occupational pension scheme an auditor, actuary or fund manager is required under this section to be appointed but the appointment has not been made, or not been made in accordance with any requirements imposed under this section, section 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, the scheme’s professional advisers.
(10) If in the case of an occupational pension scheme a person fails to comply with any duty imposed under subsection (9)(a), section 10 applies to him.
(11) If in the case of an occupational pension scheme any duty imposed under subsection (9)(b) is not complied with, section 10 applies to any trustee, and to any manager, who has failed to take all such steps as are reasonable to secure compliance.
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.
(1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) Regulations may require the trustees of any trust scheme to keep—
(a) records of their meetings (including meetings of any of their number), and
(b) books and records relating to any prescribed transaction.
(3) Regulations may, in the case of any trust scheme, require the employer, and any prescribed person acting in connection with the scheme, to keep books and records relating to any prescribed transaction.
(4) Regulations may require books or records kept under subsection (2) or (3) to be kept in a prescribed form and manner and for a prescribed period.
(5) Regulations must, in cases where payments of benefit to members of trust schemes are made by the employer, require the employer to make into a separate account kept by him with a deposit-taker any payments of benefit which have not been made to the members within any prescribed period.
(6) If in the case of any trust scheme any requirements imposed by or under subsection (1) or (2) are not complied with, section 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 subsection (3) or (5), section 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 4A 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) Paragraphs (a) and (b) of subsection (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 subsection (8)—
(a) section 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 subsection (8).
(10) If in any case subsection (9)(b) is not complied with—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) section 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 subsection (8) in any case, he is guilty of an offence.
(12) A person guilty of an offence under subsection (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 subsection (9)(a) above to pay a penalty under section 10 in respect of a failure if in respect of that failure he has been—
(a) required to pay a penalty under that section by virtue of section 3(7) of the Welfare Reform and Pensions Act 1999 (failures in respect of stakeholder pensions), or
(b) convicted of an offence under subsection (11) above.
(1) Except 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 section 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 section—
(a) the determinations and decisions of which written records must be kept under this section 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 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 section.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) Section 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.
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 section 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 section 50A),
(b) is about matters relating to the scheme, and
(c) is not an exempted dispute (see subsection (9)).
(4) The dispute resolution arrangements must provide a procedure—
(a) for any of the parties to the dispute mentioned in subsection (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 subsection (4A), subsection (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 subsection (4) must include the provision required by section 50B.
(7) Dispute resolution arrangements under subsection (1) must, in the case of existing schemes, have effect on and after the date of commencement of this section in relation to applications made on or after that date.
(8) This section 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 section 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 section to be made—
(a) have not been made, or
(b) are not being implemented,
section 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.
50A Meaning of “person with an interest in the scheme”
(1) For the purposes of section 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 paragraphs (a) to (d), or
(f) he claims to be such a person as is mentioned in paragraphs (a) to (e) and the dispute relates to whether he is such a person.
(2) In subsection (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 subsection (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.
(1) The procedure provided for by the dispute resolution arrangements in pursuance of section 50(4) must (in accordance with section 50(6)) include the following provision.
(2) The procedure must provide that an application for the resolution of a pension dispute under section 50(4) may be made or continued on behalf of a person who is a party to the dispute mentioned in section 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 subsection (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 subsection applies to—
(a) any application by a person with an interest in a scheme as mentioned in section 50A(1)(e), and
(b) any application by a person with an interest in a scheme as mentioned in section 50A(1)(f) who is claiming to be such a person as is mentioned in section 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 subsection (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 section 50(9)(a) or (b), the resolution of the dispute under the procedure ceases.
(1) Subject to subsections (6) and (7) this section 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 section—
(i) the annual rate of the pension, or
(ii) if only part of the pension is attributable as described in 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 1 of the Pension Schemes Act 2021 (see section 1(2)(b) of that Act) is to be treated for the purposes of this section as a separate occupational pension scheme which is a money purchase scheme.
(2) Subject to sections 51A and 52, where a pension to which this section 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 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) Subsection (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 twelve months by at least the relevant percentage.
(4) For the purposes of subsection (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) Subsection (2) does not apply to the annual rate of a pension under an occupational pension scheme, or to a part of that rate, if subsection (4ZB) applies to the rate or part.
(4ZB) Subject to subsection (4ZD), this subsection 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 twelve 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 subsection (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 subsection (4ZC)(b), subsection (4ZB) does not apply to the rate or part unless, immediately before the transfer, subsection (4ZB) (read with this subsection if relevant) applied to the rate or part by reference to the scheme from which the pension was transferred (or would have applied had subsection (4ZB) been in force 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 subsections (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 subsections (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 subsections (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 section, 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 section, 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 section 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 section 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 section 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 section 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 section 51ZB), and
(b) first comes into payment on or after the day on which section 21 of the Pensions Act 2011 comes into force.
(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 7B of the Pension Schemes Act 1993), 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.
(1) For the purposes of section 51(1)(c) and (2), “the appropriate percentage” in relation to an increase in the whole or part of the annual rate of a pension—
(a) in the case of a category X pension, means the higher revaluation percentage for the latest revaluation period specified in the order under paragraph 2 of Schedule 3 to the Pension Schemes Act 1993 (revaluation of accrued pension benefits) which is in force at the time of the increase, and
(b) in the case of a category Y pension, means the lower revaluation percentage for that period.
(2) In this section “the higher revaluation percentage”, “the lower revaluation percentage” and “the revaluation period” have the same meaning as in paragraph 2 of Schedule 3 to the Pension Schemes Act 1993.
(1) For the purposes of section 51(7)(a), a pension provided to or in respect of a member of an occupational pension scheme is a “cash balance benefit” if conditions 1 and 2 are met.
(2) Condition 1 is that the rate of the pension is calculated by reference to a sum of money (“the available sum”) which is available under the scheme for the provision of benefits to or in respect of the member.
(3) Condition 2 is that under the scheme—
(a) there is a promise about the amount of the available sum, but
(b) there is no promise about the rate or amount of the benefits to be provided.
(4) The promise mentioned in subsection (3)(a) includes in particular a promise about the change in the value of, or the return from, payments made under the scheme by the member or by any other person in respect of the member.
(5) The promise mentioned in subsection (3)(b) includes a promise that—
(a) the amount of the available sum will be sufficient to provide benefits of a particular rate or amount;
(b) the rate or amount of a benefit will represent a particular proportion of the available sum.
(6) But a pension is not prevented from being a cash balance benefit merely because under the scheme there is a promise that—
(a) the rate or amount of a benefit payable in respect of a deceased member will be a particular proportion of the rate or amount of a benefit which was (or would have been) payable to the member;
(b) the amount of a lump sum payable to a member, or in respect of a deceased member, will represent a particular proportion of the available sum.
51A Restriction on increase where annuity tied to investments.
(1) No increase under section 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 section 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 section “the relevant date” means the date appointed for the coming into force of section 51 of the Child Support, Pensions and Social Security Act 2000.
52 Restriction on increase where member is under 55.
(1) Subject to subsection (2), no increase under section 51 is required to be paid to or for a member of a scheme whose pension is in payment but who has not attained the age of 55 at the time when the increase takes effect.
(2) Subsection (1) does not apply if the member—
(a) is permanently incapacitated by mental or physical infirmity from engaging in regular full-time employment, or
(b) has retired on account of mental or physical infirmity from the employment in respect of which, or on retirement from which, the pension is payable.
(3) The rules of a scheme may provide that if, in a case where a pension has been paid to or for a member under the age of 55 at an increased rate in consequence of subsection (2), the member—
(a) ceases to suffer from the infirmity in question before he attains the age of 55, but
(b) continues to be entitled to the pension,
any increases subsequently taking effect under section 51 in the annual rate of the pension shall not be paid or shall not be paid in full.
(4) In any case where—
(a) by virtue only of subsection (1) or (3), increases are not paid to or for a member or are not paid in full, but
(b) the member attains the age of 55 or, in a case falling within subsection (3), again satisfies the condition set out in subsection (2)(a) or (b),
his pension shall then become payable at the annual rate at which it would have been payable apart from subsection (1) or (3).
53 Effect of increases above the statutory requirement.
(1) Where in any tax year the trustees or managers of an occupational pension scheme make an increase in a person’s pension, not being an increase required by section 109 of the Pension Schemes Act 1993 or section 51 of this Act, they may deduct the amount of the increase from any increase which, but for this subsection, they would be required to make under either of those sections in the next tax year.
(2) Where in any tax year the trustees or managers of such a scheme make an increase in a person’s pension and part of the increase is not required by section 109 of the Pension Schemes Act 1993 or section 51 of this Act, they may deduct that part of the increase from any increase which, but for this subsection, they would be required to make under either of those sections in the next tax year.
(3) Where by virtue of subsection (1) or (2) any pensions are not required to be increased in pursuance of section 109 of the Pension Schemes Act 1993 or section 51 of this Act, or not by the full amount that they otherwise would be, their amount shall be calculated for any purpose as if they had been increased in pursuance of the section in question or, as the case may be, by that full amount.
(3A) In subsections (1) and (2), the references to a person’s pension do not include any pension which is attributable (directly or indirectly) to a pension credit.
(4) In section 110 of the Pension Schemes Act 1993 (resources for annual increase of guaranteed minimum pension)—
(a) subsections (2) to (4) are omitted, and
(b) in subsection (1), for “subsection (2) or (3)” there is substituted “ section 53 of the Pensions Act 1995 ”.
(1) The first increase required by section 51 in the rate of a pension must take effect not later than the first anniversary of the date on which the pension is first paid; and subsequent increases must take effect at intervals of not more than twelve months.
(2) Where the first such increase is to take effect on a date when the pension has been in payment for a period of less than twelve months, the increase must be of an amount at least equal to one twelfth of the amount of the increase so required (apart from this subsection) for each complete month in that period.
(3) In sections 51 to 53 and this section—
“annual rate”, in relation to a pension, means the annual rate of the pension, as previously increased under the rules of the scheme or under section 51,
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“the commencement day” means the day appointed for the coming into force of section 278 of the Pensions Act 2004 (amendments to section 51),
“pension”, in relation to a scheme, means any pension in payment under the scheme and includes an annuity.
In section 109 of the Pension Schemes Act 1993 (annual increase of guaranteed minimum pensions)—
(a) in subsection (2) (increase in rate of that part of guaranteed minimum pension attributable to earnings factors for tax year 1988-89 and subsequent tax years) for “the tax year 1988-89 and subsequent tax years” there is substituted “ the tax years in the relevant period ”, and
(b) after subsection (3) there is inserted—
(3A) The relevant period is the period—
(a) beginning with the tax year 1988-89, and
(b) ending with the last tax year that begins before the principal appointed day for the purposes of Part III of the Pensions Act 1995
.