Citation and commencement

1.  These Regulations may be cited as the Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2014 and come into force on 1st April 2014.

Amendment of the Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010

2.  (1)  The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010(2) are amended as follows.

(2) In regulation 32I(1) (contributions under alternative requirements during transitional periods) omit ", but not for the purposes of regulation 32G,".

(3) In regulation 36 (certain schemes providing average salary benefits excluded from being qualifying schemes)-

(a)in paragraph (1) for "paragraph (3)" substitute "paragraphs (2A) and (3)";

(b)after paragraph (2) insert-

"(2A) Paragraph (1) does not apply to a scheme with the feature specified in paragraph (2)(b) if-

(a)the funding of the scheme is based on the assumption that accrued benefits would be revalued at or above the minimum rate; and

(b)such funding is provided for in the scheme's statement of funding principles under section 223 of the Pensions Act 2004(3) (statement of funding principles) or, if the scheme is not required to have such a statement, in an equivalent statement of the scheme's funding plan."; and

(c)for paragraphs (4) and (5) substitute-

"(4) For the purposes of this regulation, the minimum rate on a revaluation of accrued benefits is either-

(a)where a scheme is a scheme established under section 1 of the 2013 Act (schemes for persons in public service) or is a new public body pension scheme as defined in section 30(5) of the 2013 Act (new public body pension schemes), an annual increase or decrease by the relevant percentage for the year by reference to which the revaluation is made; or

(b)in any other case, an annual increase by whichever is the lesser or the least of-

(i)the percentage increase in the retail prices index for the year by reference to which the revaluation is made;

(ii)the percentage increase in the general level of prices for the year by reference to which the revaluation is made; and

(iii)2.5%.

(5) In this regulation-

"the 2013 Act" means the Public Service Pensions Act 2013(4);

"general level of prices" means the general level of prices in Great Britain determined in such manner as the Secretary of State thinks fit;

"relevant percentage" means-

"retail prices index" means-

"Treasury order" has the meaning given in section 37 of the 2013 Act (general interpretation).".

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend regulations 32I and 36 of the Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010 (S.I. 2010/772).

Paragraph (2) of regulation 2 amends regulation 32I (contributions under alternative requirements during transitional periods) so as to provide that the modification to the alternative requirements during the transitional periods under regulation 32I applies to hybrid schemes that satisfy the alternative requirements under regulation 32G.

Paragraph (3) of regulation 2 amends regulation 36 (circumstances in which a scheme is not a qualifying scheme). Sub-paragraph (b) inserts a new paragraph (2A) into regulation 36. This provides that an average salary scheme which requires benefits to be revalued at less than the minimum rate is not prevented from being a qualifying scheme if both the scheme's funding and statement of funding principles (or equivalent) assume that revaluation will be at or above the minimum rate. Sub-paragraph (a) makes a consequential amendment to regulation 36(1). Sub-paragraph (c) substitutes regulation 36(4) and (5). New regulation 36(4) provides that the minimum rate is, where the scheme is a scheme established under section 1 of the Public Service Pensions Act 2013 (c.25) ("the 2013 Act") or is a new public body pension scheme as defined in section 30(5) of the 2013 Act, the relevant percentage specified in the Treasury order under section 9(2) of the 2013 Act or, in any other case, whichever is the least or lesser of the retail prices index, the general level of prices and 2.5%. New regulation 36(5) provides definitions.

A full impact assessment has not been produced for this instrument as it has no direct impact on businesses, the public sector or civil society organisations.