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Pension Schemes And The Pensions Act 1995
The content of this page is based on our understanding of how pensions worked before A-Day, the 6 April 2006, and is provided for reference only.
The Pensions Act 1995 introduced a major strengthening of the legal framework for pension schemes. The act has far reaching implications for Trustees of Occupational Pensions Schemes. This guide covers the main requirements under the Pensions Act 1995 for Defined Benefit Schemes, Money Purchase Schemes, Executive Pension Plans, Small Self-Administered Pension Schemes, Death-in-service only schemes and Group Personal Pensions/Personal Pensions.
| Requirement | Defined Benefit Scheme | Group Money Purchase & EPP (over 1 life) | EPP (1 Life) | SSAS | DIS only scheme | GPP & PP |
|---|---|---|---|---|---|---|
| Member Nominated Trustees | (More than 1 member) |
4 | X | X | X | X |
| Internal dispute resolution (Not req'd for 1 member schemes or where all members are trustees) | 4 | 4 | X | 4 | 4 | X |
| Audited accounts | 4 (More than 1 member) |
| X | 4 Not req'd for 1 member schemes where all members are trustees and decisions are unanimous | X | X |
| Disclosure | 4 | 4 | X | 4 | X | X |
| Scheme Actuary | 4 (More than 1 member) | X | X |
| X | X |
| Auditor | 4 (More than 1 member) | Not required where scheme is insured earmarked, and all members are trustees, and decisions are unanimous. | X | 4 | X | X |
| Fund Manager | 4 Only required if scheme has more than 1 member unless scheme is wholly insured. |
4
Not req'd for wholly insured schemes | X | 4 Not required if all members are trustees and there is a majority agreement on investment decisions. | X | X |
| Trustees Bank Account | 4 | 4 | 4 | 4 | 4 | X |
| Statement Of Investment Principals | 4 Not Required if wholly insured or scheme has 1 member. | 4 As per Defined Benefit Scheme | 4 As per Defined Benefit Scheme | 4 Not req'd where all members are trustees. Investment decisions must be agreed by majority and documented. Not req'd for one member SSAS. | X | X |
| Compensation Scheme | 4 | 4 | X | 4 Not req'd for 1 member SSAS | X | X |
| Record Keeping | 4 (If scheme has more than one member) | 4 | X | 4 As for Defined Benefit Scheme | X | X |
| Payment Schedule | X | 4 Not required where all members are trustees and the scheme rules require trustees decisions to be unanimous | X |
Not req'd for earmarked schemes where all members are trustees and the scheme rules require trustees decisions to be unanimous | X | X |
| Schedule of contributions | (If more than 1 member) | X | X | X | X | X |
| Minimum Funding Requirement | 4 | X | X | X | X | X |
| Contracting out | 4 | 4 | 4 | 4 | X | 4 |
| Whistle blowing | 4 | 4 | 4 | 4 | 4 | 4 |
| LPI | 4 see note | X | X | X | X |
X |
| Divorce | 4 | 4 | 4 | 4 | 4 | 4 |
Note - Only applies to pensions accrued between 5/4/97 and 5/4/05. Pensions accrued and coming into payment after 5/4/05 must increase in line with RPI up to a maximum of 2.5% p.a.
The information given is based on our interpretation of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Independent advice must be obtained regarding the effect on a specific scheme.
Updated 29 January 2004
Published 27 February 2003
For professional advisers only
