Section 28A — Pensions Act 2008: MSDA approval: relevant Master Trusts

MSDA approval: relevant Master Trusts 28A 1 For the purposes of Condition 1 of section 20(1A), the Regulatory Authority (“ the Authority ”) may approve a relevant Master Trust (“the RMT”) in respect of a main scale default arrangement if the Authority determines that—

a the RMT meets the scale requirement by reference to the main scale default arrangement, and b any other prescribed conditions are met.

2 The RMT meets the scale requirement by reference to a main scale default arrangement if the sum of the values mentioned in paragraphs (a) to (c) of subsection (4) is equal to or greater than the minimum amount.

3 In this section “ the minimum amount ” means £25 billion.

4 Subject to subsection (7), those values are—

a the total value of assets of the RMT which—

i represent accrued rights of members of that scheme, ii are held subject to the main scale default arrangement, and iii are managed under a common investment strategy;

b if one or more relevant Master Trusts are connected with the RMT, the total value of assets of those schemes that—

i represent accrued rights of members of those schemes, ii are held subject to the main scale default arrangement, and iii are managed under the investment strategy mentioned in paragraph (a)(iii);

c if one or more group personal pension schemes are connected with the RMT, the total value of assets of those schemes that—

i represent accrued rights of members of those schemes, ii are held subject to the main scale default arrangement, and iii are managed under the investment strategy mentioned in paragraph (a)(iii).

5 A reference in subsection (4) to a relevant Master Trust or a group personal pension scheme being “connected” with the RMT is to a relevant Master Trust or a group personal pension scheme having a prescribed connection with the RMT.

6 Regulations under subsection (5) may, for example, provide—

a that a relevant Master Trust is connected with the RMT only if it has the same scheme funder or scheme strategist as the RMT, or b that a group personal pension scheme is connected with the RMT only if its provider is also the scheme funder or scheme strategist of the RMT.

7 Regulations may make provision about amounts that are to be excluded or adjusted in calculating the total value under subsection (4)(a) to (c).

8 Regulations may make provision about—

a how the satisfaction of criteria relevant to the meeting of the scale requirement is to be evidenced;

b what it means for assets of a pension scheme to be managed under a “ common investment strategy ” (including in particular provision defining that expression by reference to whether or how far the assets relating to each member of the scheme are allocated in the same proportion to the same investments).

9 Regulations may make provision about how the value of assets is to be determined for the purposes of subsections (2) and (4).

10 Regulations may make provision—

a as to a time limit within which the Authority must decide an application for approval;

b as to procedures in connection with approvals or where an approval has been given;

c about the withdrawal of approvals including conditions for, and procedures in connection with, withdrawals;

d for the Authority’s decision on the application, or on a decision to withdraw approval, to be referred to the Upper Tribunal;

e for the Authority to maintain and publish a list of relevant Master Trusts that are approved under this section.

11 Regulations under subsection (10)(c) may in particular make provision—

a about steps, including communications with a relevant Master Trust, that the Authority must take before deciding to withdraw an approval;

b setting a minimum period that must elapse between a notification that approval is to be withdrawn and the withdrawal of the approval;

c where the Authority has given notice to the trustees or managers of a relevant Master Trust that the approval (under this section) of that scheme is likely to be withdrawn and any other prescribed conditions are met, requiring the trustees or managers to—

i act in relation to the scheme as if its approval has been withdrawn, and ii take steps for ensuring that persons (such as employers) who may be affected in the event of the relevant Master Trust’s losing that approval are promptly informed if such a loss should occur;

d permitting the Authority to impose, on a person who fails to comply with a requirement under paragraph (c), a penalty determined in accordance with the regulations that does not exceed £100,000;

e providing for the making of a reference to the First-tier Tribunal or Upper Tribunal in respect of the issue of a penalty notice or the amount of a penalty.

12 Before making regulations under this section the Secretary of State must consult such persons as the Secretary of State considers appropriate.

13 In this section “ main scale default arrangement ” means an arrangement—

a that is used for the purposes of one or more pension schemes, and b subject to which assets of any one of those schemes must under the rules of the scheme be held, or may under those rules be held, if the member of the scheme to whom the assets relate does not make a choice as to the arrangement subject to which the assets are to be held.