Section 28B — Pensions Act 2008: MSDA approval: group personal pension scheme

MSDA approval: group personal pension scheme 28B 1 The Regulatory Authority (“ the Authority ”) may, for the purposes of the Condition in section 26(7A), approve a group personal pension scheme (“the GPP”) in respect of a main scale default arrangement if the Authority determines that—

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

2 The GPP 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 subsections (5) and (6), those values are—

a the total value of assets of the GPP which—

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

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

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

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

6 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).

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

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

9 Regulations under subsection (8) may, for example, provide—

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

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 an approval, 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 group personal pension schemes that are approved under this section.

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

a about steps, including communications with a group personal pension scheme, that the Authority must take before deciding to withdraw an approval;

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

c where the Authority has given notice to the provider of the GPP that its approval is likely to be withdrawn and any other prescribed conditions are met, requiring the provider 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 GPP 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.