Section 23A — Pensions Act 2008: Alternative quality requirements for UK defined benefits schemes

Alternative quality requirements for UK defined benefits schemes 23A 1 The Secretary of State may by regulations provide that a defined benefits scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if any one or more of the following is satisfied—

a the scheme is of a prescribed description and satisfies the quality requirement under section 20 in relation to that jobholder;

b the cost of providing the benefits accruing for or in respect of the relevant members over a relevant period would require contributions to be made of a total amount equal to at least a prescribed percentage of the members' total relevant earnings over that period;

c in the case of each of at least 90% of the relevant members, the cost of providing the benefits accruing for or in respect of the member over a relevant period would require contributions to be made of a total amount equal to at least a prescribed percentage of the member's total relevant earnings over that period.

2 For this purpose— “ contributions ” means contributions to the scheme by, or on behalf or in respect of, a relevant member; “ relevant earnings ” means earnings of a prescribed description; “ relevant members ” means members of the scheme of a prescribed description; “ relevant period ” means a period specified in or determined in accordance with the regulations.

3 A percentage prescribed under subsection (1)(b) or (c) must be at least 8%.

4 Regulations under subsection (1)(b) or (c) may make provision—

a about how to calculate whether the requirement is satisfied, including provision requiring the calculation to be made in accordance with prescribed methods or assumptions;

b requiring benefits of a prescribed description to be disregarded in determining whether the requirement is satisfied;

c that a scheme only satisfies the requirement if the scheme actuary certifies that it does; and for this purpose “scheme actuary” has the prescribed meaning.

5 Section 13(3) (meaning of “earnings”) applies for the purposes of this section as it applies for the purposes of that section.

6 The Secretary of State must from time to time review any regulations in force under subsection (1).

7 A review must be carried out—

a during 2017, and b after that, no more than three years after the completion of the previous review.