Modification of subsisting rights code laid before Parliament

The Pensions Regulator's code of practice on the modification of subsisting rights has been laid before Parliament.

• Code of practice on the modification of subsisting rights laid before Parliament
• Gives guidance on how to comply with new requirements
• Legislation gives more flexibility to modify scheme rules while also protecting members

This code explains that, under the Pensions Act 2004, changes cannot be made to scheme rules without the consent of scheme members or an actuarial equivalence certificate – depending on the type of modification.

The code of practice gives guidance on:

• to which schemes and types of modification the legislation applies;
• trustees' duties and responsibilities; and
• the Pensions Regulator's expectations and powers to intervene.

The Pensions Regulator head of policy and guidance Sue Rivas said: “The new requirements give more flexibility to modify scheme rules, giving the opportunity to realise cost savings, while also safeguarding members' rights”.

To view the code of practice visit: http://www.thepensionsregulator.gov.uk/doc-library/codes.aspx 

1. The Pensions Regulator's code of practice was laid before Parliament on 7 November 2006. There will be a period of 40 days at the end of which, if no representations are made, the code will be brought into force.
2. Codes of practice are not statements of the law. However they do have evidential value, meaning they will be taken into account by the Determinations Panel, a court or tribunal where relevant. Although the code may not be the final version it does contain the Pensions Regulator's expectations which have been accepted by the Department for Work and Pensions. Therefore, trustees and employers can be confident they can start to act in accordance with the guidance contained in the code.
3. The Pensions Regulator is the regulator of work-based pensions in the UK, with wide-ranging and flexible powers under the Pensions Act 2004.
4. The powers of the Pensions Regulator include the ability to:
5. • declare a scheme modification void;
   • collect more detailed scheme information;
   • issue improvement notices and third party notices, enabling the regulator to ensure problems are put right;
   • freeze a scheme that is at risk, while the regulator investigates; and
   • prohibit trustees who are judged not fit and proper to carry out their duties.
   • The Pensions Act 2004 also imposes a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator.

• Andrew Winstone 01273 627752
• Amy Balchin 01273 627207
• Out of hours 01273 648496
• amediarelations@thepensionsregulator.gov.uk
• http://www.thepensionsregulator.gov.uk/

Non-press enquiries:

Customer support 0870 6063636
customersupport@thepensionsregulator.gov.uk