The Pensions Act 2004 is an Act

Act of Parliament

An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...

 of the Parliament of the United Kingdom

Parliament of the United Kingdom

The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom, British Crown dependencies and British overseas territories, located in London...

 to improve the running of pension schemes.

Background

In the years following the introduction of the Pensions Act 1995

Pensions Act 1995

The Pensions Act 1995 is a piece of United Kingdom legislation to improve the running of pension schemes.-Background:Following the death of Robert Maxwell it became clear that he had embezzled a large amount of money from the pension fund of Mirror Group Newspapers...

, it was widely perceived that it was failing to offer the protection to pension scheme members that had been anticipated. The Occupational Pensions Regulatory Authority was perceived as being reactive, didactic and uncommercial. The minimum funding requirement

Minimum funding requirement

The Minimum Funding Requirement was a part of United Kingdom legislation in the Pensions Act 1995, and was introduced on 6 April 1997. The Pensions Act 2004 abolishes the MFR replaces it with new "statutory funding objective"; this came into force on 30 December 2005 for all pension schemes with...

 had not prevented some pension schemes winding up with insufficient assets to secure their liabilities, amid considerable publicity. There was strong political pressure to establish a guarantee fund similar to the American Pension Benefit Guaranty Corporation

Pension Benefit Guaranty Corporation

The Pension Benefit Guaranty Corporation is an independent agency of the United States government that was created by the Employee Retirement Income Security Act of 1974 to encourage the continuation and maintenance of voluntary private defined benefit pension plans, provide timely and...

. Much of the regulation was perceived to be unnecessarily restrictive. Te Pensions Act 2004 was written to try to fix that.

Overview

The main features of the Act include:

• The abolition of the Occupational Pensions Regulatory Authority and its replacement by the Pensions Regulator
  The Pensions Regulator
  The Pensions Regulator is a non-departmental public body which holds the position of the regulator of work-based pension schemes in the UK. Created under the Pensions Act 2004, the regulator replaced the Occupational Pensions Regulatory Authority from 6 April 2005and has wider powers and a new...
  
  , with wider powers to intervene of its own volition;
• New powers for the Pensions Regulator to intervene where employers, directors and majority shareholders were perceived to be avoiding their responsibilities to pension schemes and where employers were insufficiently resourced to support the pension scheme;
• New notification requirements;
• The establishment of the Pension Protection Fund
  Pension Protection Fund
  The Board of the Pension Protection Fund is a Statutory Fund in the United Kingdom. It was created under the Pensions Act 2004. The Board of the PPF is a Statutory Corporation responsible for managing the Fund and for making payments to members....
  
   to provide benefits for pension scheme members where a pension scheme had gone into winding-up with insufficient resources to fund scheme benefits and no employer to make good the underfunding;
• The abolition of the minimum funding requirement and its replacement with scheme-specific funding requirements;
• Modification of the protections for existing pension scheme benefits and of the requirements for pension schemes to have member nominated trustees.

Contents

• Part 1, The Pensions Regulator, ss 1-106
• Part 2, The Board of the Pension Protection Fund
  Pension Protection Fund
  The Board of the Pension Protection Fund is a Statutory Fund in the United Kingdom. It was created under the Pensions Act 2004. The Board of the PPF is a Statutory Corporation responsible for managing the Fund and for making payments to members....
  
  , ss 107-220
• Part 3, Scheme Funding ss 221-233
• Part 4, Financial Planning for Retirement, ss 234-238
• Part 5, Occupational and Personal Pension Schemes: Miscellaneous Provisions, ss 239-285
• Part 6, Financial Assistance Scheme for Members of Certain Pension Schemes, s 286
• Part 7, Cross-border Activities within European Union, ss 287-295
• Part 8, State Pensions, s 296-299
• Part 9, Miscellaneous and Supplementary, ss 300-325

Schedules

• Schedule 1, The Pensions Regulator
• Schedule 2, The reserved regulatory functions
• Schedule 3, Restricted information held by the Regulator: certain permitted disclosures to facilitate exercise of functions
• Schedule 4, The Pensions Regulator Tribunal
• Schedule 5, The Board of the Pension Protection Fund
• Schedule 6, Transfer of property, rights and liabilities to the Board
• Schedule 7, Pension compensation provisions
• Schedule 8, Restricted information held by the Board: certain permitted disclosures to facilitate exercise of functions
• Schedule 9, Reviewable matters
• Schedule 10, Use and supply of information: private pensions policy and retirement planning
• Schedule 11, Deferral of retirement pensions and shared additional pensions
• Schedule 12, Minor and consequential amendments
• Schedule 13, Repeals and revocations

External links

• Association of Member-Directed Pension Schemes (AMPS) - The principal body for discussing changes involved in the area of pension planning.