Today’s update on pensions regs brings you news of the anxiously-awaited Indexation Regs, the Levies Regs, and another six SIs concerning the PPF (notably the entry rules) and the Pensions Regulator.

(1) The Personal and Occupational Pension Schemes (Indexation and Disclosure of Information) (Miscellaneous Amendments) Regulations 2005 (SI 2005/704), laid today, were anticipated by the DWP consultation response reported on this page last week. We shall be looking particularly closely at the implications for transfers made on or after 6 April 2005.

Significant changes have been made from the draft regs. It appears that, contrary to expectations, DC providers will have to track different parts of the pension pot (ie pre- and post-97 protected rights, and non-protected rights) in case of subsequent transfer to a salary-related scheme. The regs come into force just two weeks from today, on 6 April 2005. This exceptionally short notice period is bound to be controversial as it will create considerable difficulty for providers who have to comply.

(2) The Occupational Pension Schemes (Levies) Regulations 2005 (SI 2005/842), also laid today and also emerging from a consultation with the industry, confirms the initial levy for the year to 31 March 2006 is to be £15 for each active or pensioner member and £5 per deferred member. The regs also specify the administration levy, which varies according to the size of the scheme from £12 per member for a SSAS to £0.74 per member for a large scheme with over 10,000 members. The PPF Ombudsman levy is not payable for this first year of the levies (ending 31 March 2006). The regs come into force on 1 April 2005.

(3) The Pension Protection Fund (Entry Rules) Regulations 2005 (SI 2005/590) have not been a subject of prior consultation. Laid on 10 March but published only today, this 34-page SI starts by specifying in Reg 2 which schemes are not eligible (under s.126(1)(b) of the Pensions Act 2004) for the PPF. As might have been expected, this list of exclusions is lengthy and covers over 3 pages. Reg 2 comes into force on 1 April and the rest on 6 April 2005.

(4) The Pension Protection Fund (PPF Ombudsman) Order 2005 (SI 2005/824) has been approved by both Houses of Parliament having been previously laid in draft and comes into force on 6 April 2005. It provides for remuneration, compensation, pension, allowances and reimbursement for the PPF Ombudsman or a Deputy; for staff, facilities and delegation of functions; and a general power to obtain information but restrictions on its disclosure.

(5) The Pension Protection Fund (Pension Compensation Cap) Order 2005 (SI 2005/825), laid under Sch 7 para 26(7) Pensions Act 2004, and also coming into force on 6 April 2005, sets the Cap at £27,777.78. Members below normal pension age at the assessment date who are eligible for compensation (not in relation to an ill health or survivor’s pension) will get 90% of their benefits, subject to the compensation cap; 90% of £27,777,78 is £25,000.

All the above SIs were published today on the HMSO website. Yesterday the following appeared:

(6) The Pensions Regulator (Freezing Orders and Consequential Amendments) Regulations 2005 (SI 2005/686) has benefited from a short informal consultation exercise early in the New Year: the result shows greater precision as well as being shorn of some drafting errors. Coming into force on 6 April 2005, the regs amend section 99(2) of the Pension Schemes Act 1993 (as amended by Sch 6 paras 2 and 6(a) of the Pensions Act 1995) and the Transfer Values Regs to take account of the fact that if a freezing order containing a relevant direction is or has been in effect, it may be impossible to abide by time limits for granting guaranteed statements of entitlement, and extend the time limits where appropriate. Freezing orders (Pensions Act 2004 ss. 23 - 31), which may last for up to 6 months, may be made by the Regulator as a less drastic option to winding up a scheme which is at risk.

(7) The Pensions Regulator Tribunal (Legal Assistance Scheme) Regulations 2005 (SI 2005/781), a public consultation draft of which appeared on the Department for Constitutional Affairs (DCA) website early in February, specify how the Legal Assistance Scheme will work to fund legal assistance for individuals who have referred matters to the Tribunal and are deemed eligible. The regs mirror equivalent provisions used in the Financial Services and Markets Tribunal, and come into force on 15 April 2005.