S.I. No 262 of 2000

Occupational Pension Schemes (Preservation of Benefits) (Amendment) Regulations, 2000.

The Minister for Social, Community and Family Affairs, in exercise of the powers conferred on him by sections 5, 37 and 38 of the Pensions Act, 1990 (No. 25 of 1990) , hereby makes the following Regulations:-

Citation and Commencement

1. (1)       These Regulations may be cited as the Occupational Pension Schemes (Preservation of Benefits) (Amendment) Regulations, 2000.

(2)       These Regulations, the Occupational Pension Schemes (Preservation of Benefits) Regulations, 1992 ( S.I. No. 445 of 1992 ) and the Occupational Pension Schemes (Preservation of Benefits) (Special Calculations) Regulations, 1993 ( S.I. No. 217 of 1993 ) shall be construed together as one and may be cited together as the Occupational Pension Schemes (Preservation of Benefits) Regulations, 1992 to 2000.

2.             In these Regulations -

“the Special Calculations Regulations” means the Occupational Pension Schemes (Preservation of Benefits) (Special Calculations) Regulations, 1993 ( S.I. No. 217 of 1993 ).

Termination of Employment

3.             Article 4 of the Occupational Pension Schemes (Preservation of Benefits) Regulations, 1992 is hereby amended by the substitution for that article of the following article;

“4.           For the purposes of section 37(3) of the Act -

(a)  A member's service in relevant employment shall be treated as not terminated where -

(i)       in the case of a centralised scheme a member's employment terminates and after a period of less than one month following such termination (or such longer period as the trustees of the scheme so decide in accordance with the rules of the scheme) he commences in the relevant employment of a different employer participating in the same scheme, or

(ii)     a member's employment terminates and after a period of less than one month following such termination (or such longer period as the trustees of the scheme so decide in accordance with the rules of the scheme) he commences in the relevant employment of an affiliated employer and he commences membership of a scheme of the new employer which scheme has received a transfer of monies in respect of benefits accrued by the member in the former scheme such transfer to be of an amount not less that the amount to which the member would have been entitled under section 34(2) of the Act but for this article 4(a), or

(iii)     in the case of a change of ownership of the employer or of the business of the employer a member's employment terminates and after a period of less than one month following such termination (or such longer period as the trustees of the scheme so decide in accordance with the rules of the scheme) he commences in the relevant employment of the new employer and resumes membership of the same scheme or he commences membership of a scheme of the new employer which scheme has received a transfer of monies in respect of benefits accrued by the member in the former scheme such transfer to be of an amount not less that the amount to which the member would have been entitled under section 34(2) of the Act but for this article 4(a).

(b)  A member's service in relevant employment shall be treated as terminated where -

(i)       subject to the provisions of article 4(a)(i), in the case of a centralised scheme a member's employment terminates and after a period of one month or more following such termination he commences in the relevant employment of a different employer participating in the same scheme, or

(ii)     subject to the provisions of article 4(a)(ii), a member's employment terminates and after a period of one month or more following such termination he commences in the relevant employment of an affiliated employer and he commences membership of a scheme of the new employer, or

(iii)    subject to the provisions of article 4(a)(iii), in the case of a change of ownership of the employer or of the business of the employer a member's employment terminates and after a period of one month or more following such termination he commences in the relevant employment of the new employer and resumes membership of the same scheme or he commences membership of a scheme of the new employer.”

Reckonable Service

4.             Article 5 of the Occupational Pension Schemes (Preservation of Benefits) Regulations, 1992 is hereby amended by the substitution for that article of the following article;

“5.(1) Where a member's service in relevant employment is treated as not terminated under article 4(a):-

(a)   then notwithstanding that there shall actually have been a change of employer the member shall be treated for the purposes of the Special Calculations Regulations as being in the same employment, and

(b)   the period of the member's reckonable service prior to the termination of employment shall be treated as a period of reckonable service in the relevant employment of the new employer.

5.(2) Where a member's service in relevant employment is treated as terminated under article 4(b) the period of the member's service prior to the termination of employment shall not be treated as a period of reckonable service in the relevant employment of the new employer.”

Persons entitled to make an application.

5.     Article 10 of the Occupational Pension Schemes (Preservation of Benefits) Regulations, 1992 is hereby amended by the substitution for sub-articles (a) and (b) of the following sub-articles;

“(a)   an agent to the scheme,

(b)   an authorised trade union representing a member or members of the scheme, and

(c)   an authorised trade union representing a prospective member or prospective members of the scheme.”

EXPLANATORY NOTE

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

The Occupational Pension Schemes (Preservation of Benefits) Regulations, 1992 ( SI No. 445 of 1992 ) (“the Preservation Regulations”) provide for matters to do with the preservation of benefits, including whether a person's service in relevant employment must be treated as terminated or not terminated in certain circumstances (Article 4). A member of an occupational pension scheme who satisfies the specified qualifying condition in this respect is entitled to a preserved benefit if his or her service in relevant employment terminates, otherwise from on death but before normal pensionable age.

The Preservation Regulations also prescribe categories of persons entitled to apply to the Pensions Board for determinations under certain parts of the Act (Article 10).

A number of difficulties with respect to Articles 4 and 5 of the Preservation Regulations have been identified. Those articles deal specifically with the question of whether or not a member's service in relevant employment is treated as terminated or not in cases where there is a change in employer but not of scheme, in circumstances arising out of a compulsory sale/take-over of the employer or where a member transfers to a company within the same group of companies. However, they do not deal with situations were there is also a change of scheme in such circumstances. In these situations, the question of whether there has been a termination of relevant employment is dependent on whether the member's employment has “ceased”. The answer to this question is not always clear cut.

To clarify the position, Article 4 has been amended to provide that in a situation where a member changes both employment and scheme in circumstances arising out of an a compulsory sale/take-over or where a member transfers to a company within the same group of companies, this will not be treated as a termination of “relevant employment” if the member transfers into the new scheme and a transfer amount not less than the amount specified in the Regulations is paid to that scheme in respect of the member's accrued benefit.

Consistent with the provisions of the existing Regulations, termination of relevant employment will occur if commencement in the new employment/scheme does not occur within a specified period after termination of the first employment.

Amendments consequential to the amendments to Article 4 are also required in respect of Article 5 of the Preservation Regulations.

The amending Regulations further provide that where under Article 4 a member's employment is not treated as terminated the Occupational Pension Schemes (Preservation of Benefits) (Special Calculations) Regulations, 1993 will apply.

Article 10 of the Preservation Regulations extends the categories of person specified in section 38 of the Act as entitled to make applications to the Pensions Board for determinations under sections 38, 53, 58, 64A and 75 of the Pensions Act. The categories specified in Article 10 of the Preservation Regulations are, currently: -

(a)     the agent to the scheme; and

(b)     an authorised trade union representing a member or members of the scheme,

Under the amendment to Article 10: -

•            (a) has been amended to read “an agent to the scheme”; and

•            an additional category “an authorised trade union representing a prospective member or members of the scheme” has been added. (Currently, authorised trade unions representing members only are entitled to make application.)