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18 2002

PENSIONS (AMENDMENT) ACT, 2002

Chapter 4

Amendments to Part IV of Principal Act

Amendment of section 41 of Principal Act.

27. —Section 41 of the Principal Act is amended:

(a) by the substitution in paragraph (b) of subsection (1) of “1993, or” for “1993.”;

(b) by the insertion after paragraph (b) of subsection (1) of the following paragraph:

“(c) to such extent as may be prescribed, a scheme the winding up of which has commenced.”; and

(c) by the substitution for subsection (2) of the following subsection:

“(2) Notwithstanding subsection (1)—

(a) subsections (1) and (2) of section 48 shall apply to any scheme other than a defined contribution scheme, and

(b) subsections (3) and (4) of section 48 shall apply to every scheme.”.

Amendment of section 42 of Principal Act.

28. —Section 42 of the Principal Act is amended—

(a) in subsection (3)—

(i) by the substitution for “the commencement of this Part” of “1 June 2002”; and

(ii) by the insertion after “section 43” of “having an effective date after 1 June 2002”;

and

(b) by the substitution for subsection (4) of the following subsection:

“(4) Regulations under this section may—

(a) prescribe the form and content of an actuarial funding certificate, and

(b) require the actuary, in completing an actuarial funding certificate, to comply with the applicable professional guidance issued by the Society of Actuaries in Ireland and specified in the regulations or with any other applicable guidance issued by any other person (including the Minister) and specified in the regulations.”.

Amendment of section 43 of Principal Act.

29. —Section 43 of the Principal Act is amended—

(a) in subsection (1) by—

(i) the substitution for paragraph (a) of the following paragraph:

“(a) in the case of a relevant scheme which commenced before 1 January 1991, not later than 1 January 1994, and”;

and

(ii) the substitution in paragraph (b) for “such commencement” of “1 January 1991”;

(b) by the insertion in subsection (2) after “prescribed” of “and except in the case provided for in subsection (3)”; and

(c) by the insertion after subsection (2) of the following—

“(3) If an annual report prepared under subsection (1) of section 55—

(a) does not contain the statement by an actuary required under subsection (3) or (4) of that section, as appropriate, or

(b) contains the statement by an actuary required under that subsection (3) but the actuary does not state therein that he is reasonably satisfied that, if he were to prepare under section 42 an actuarial funding certificate having an effective date of the last day of the period to which the annual report relates, he would certify that the scheme satisfies the funding standard provided for in section 44, or

(c) contains the statement by an actuary required under that subsection (4) but the actuary does not state therein that he is reasonably satisfied that the scheme will satisfy the funding standard at the effective date of the next actuarial funding certificate,

then, in each case, the trustees of the scheme shall submit an actuarial funding certificate to the Board within twelve months of the last day of the period to which the annual report relates and such a certificate shall have an effective date not earlier than the last day of the period to which the annual report relates.”.

Amendment of section 44 of Principal Act.

30. —Section 44 of the Principal Act is amended in paragraph (a) by the substitution for subparagraphs (i) to (iv) of the following subparagraphs:

“(i) additional benefits secured or granted by way of additional voluntary contributions or a transfer of rights from another scheme to which paragraph 2 of the Third Schedule relates to the extent that the rights to which the transfer relates were originally secured or granted by way of additional voluntary contributions,

(ii) benefits in the course of payment to which paragraph 1 of the Third Schedule relates,

(iii) benefits, other than those referred to in subparagraphs (i) and (ii), which consist of a transfer of rights from another scheme to which paragraph 2 of the Third Schedule relates,

(iv) benefits, other than those referred to in subparagraphs (i), (ii) and (iii), to which paragraphs 3 and 4 of the Third Schedule relate, and

(v) the percentage (in this Part referred to as the ‘specified percentage’) of any benefits, other than those referred to in subparagraphs (i), (ii) and (iii), to which paragraph 5 of the Third Schedule relates.”.

Amendment of section 45 of Principal Act.

31. —The following section is substituted for section 45 of the Principal Act:

“Provisions relating to schemes commencing before 1 June 2002.

45.—(1) This section applies to relevant schemes that came into operation before 1 June 2002.

(2) The actuary shall determine the percentage, if any, of the benefits under a scheme to which paragraph 5 of the Third Schedule relates that, in his opinion, could have been provided at the effective date of the first actuarial funding certificate having an effective date after 1 June 2002 in relation to the scheme from the resources of the scheme if—

(a) the scheme had been wound up on that date, and

(b) (i) the liabilities of the scheme for benefits under the scheme specified in subparagraphs (i), (ii), (iii) and (iv) of paragraph (a) of section 44, and

(ii) the estimated expenses of administering a winding up,

had already been discharged from resources of the scheme.

(3) The first actuarial funding certificate having an effective date after 1 June 2002 in relation to a scheme shall state a percentage (in this Part referred to as ‘the certified percentage’), being the lesser of—

(a) the percentage determined by the actuary pursuant to subsection (2), and

(b) 100 per cent.

(4) For the purposes of this Part—

(a) where an actuarial funding certificate relates to an effective date not later than 1 June 2002, the specified percentage shall be 0 per cent,

(b) where an actuarial funding certificate relates to an effective date after 1 June 2002 but not later than 1 June 2012, the specified percentage shall be the certified percentage,

(c) where an actuarial funding certificate relates to an effective date after 1 June 2012 and on 1 June 2002 the scheme concerned was a funded scheme, the specified percentage shall be 100 per cent.”.

Amendment of section 46(1) of Principal Act.

32. —Section 46(1) of the Principal Act is amended in paragraph (b)—

(a) by the substitution in subparagraph (ii) for “Chapter II of Part I of the Finance Act, 1972 ” of “Chapter 1 of Part 30 of the Taxes Consolidation Act, 1997 ”;

(b) by the substitution for “(i), (ii) and (iii)” of “(i), (ii), (iii) and (iv)”; and

(c) by the substitution for “44(a)(iv)” of “44(a)(v)”.

Amendment of section 48 of Principal Act.

33. —The following section is substituted for section 48 of the Principal Act:

“Priorities on winding up of relevant scheme.

48.—(1) In applying the resources of a relevant scheme which has been wound up after 1 January 1997, the trustees shall discharge the liabilities of the scheme for the following benefits in the following order—

(a) where the scheme is wound up on or before 1 June 2002—

(i) firstly, the benefits specified in paragraph 1 of the Third Schedule to or in respect of those persons, who, at the date of the winding up, were within the categories referred to in that paragraph, to the extent that they are not already discharged, and

(ii) secondly, the benefits specified in paragraphs 2 and 3 of the Third Schedule to or in respect of those members of the scheme who, at the date of the winding up, were within the categories referred to in those paragraphs, to the extent that they are not already discharged,

before discharging the liabilities of the scheme for other benefits, and

(b) where the scheme is wound up after 1 June 2002—

(i) firstly, all additional benefits secured or granted by way of additional voluntary contributions or a transfer of rights from another scheme to which paragraph 2 of the Third Schedule relates to the extent that the rights to which the transfer relates were originally secured or granted by way of additional voluntary contributions,

(ii) secondly, the benefits specified in paragraph 1 of the Third Schedule to or in respect of those persons, who, at the date of the winding up, were within the categories referred to in that paragraph, to the extent that they are not already discharged, and

(iii) thirdly, the benefits specified in paragraphs 2, 3 and 4 of the Third Schedule to or in respect of those members of the scheme who, at the date of the winding up, were within the categories referred to in those paragraphs, to the extent that they are not already discharged,

before discharging the liabilities of the scheme for other benefits.

(2) If, after discharging the liabilities of a scheme to which subsection (1)(b) applies for the benefits specified in that subsection and any other benefits arising under the rules of the scheme, any resources of the scheme remain, then, before returning any part of the resources of the scheme to the employer, the trustees shall, to the extent that they have not already done so, provide out of the resources of the scheme for revaluation of the benefits specified in paragraph 4 of the Third Schedule, calculated in accordance with section 33 as though these benefits were specified in paragraphs 2 and 3 of the Third Schedule.

(3) In applying the resources of a relevant scheme which has been wound up, the trustees may discharge, notwithstanding anything contained in the rules of the scheme and without the consent of the member concerned, the liability of the scheme for benefits payable to or in respect of any member by—

(a) making a payment to another funded scheme which provides or is capable of providing long service benefit and of which he is a member or a prospective member, or

(b) the making of one or more payments under policies or contracts of assurance that are effected on behalf of the member with one or more undertakings (within the meaning of the Insurance Act, 1989 ) and that are approved by the Revenue Commissioners under Chapter 1 of Part 30 of the Taxes Consolidation Act, 1997 , which policies or contracts of assurance shall not be deemed to be an occupational pension scheme for the purposes of this Act, or

(c) where so prescribed, and in accordance with such conditions as may be prescribed, the making of a payment to the trustees, custodians, managers or administrators of an arrangement for the provision of retirement benefits established within the State, not being an arrangement of the kind mentioned in paragraphs (a) or (b),

of an aggregate amount not less than the actuarial value of the benefits payable on the winding up under the rules of the scheme, subject always to subsections (1) and (2).

(4) Nothing in this section requires liabilities for benefits to be discharged before liabilities for expenses, fees and costs associated with the winding up of the scheme.”.

Amendment of section 49(4) of Principal Act.

34. —Section 49(4) of the Principal Act is amended by the substitution for “Chapter II of Part I of the Finance Act, 1972 ” of “Chapter 1 of Part 30 of the Taxes Consolidation Act, 1997 ”.