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GLOSSARY

Actuarial certificate definition

Published by a LexisNexis Pensions expert

What does Actuarial certificate mean?

A certificate signed by the actuary in certain circumstances, for example to certify that actuarial equivalence requirements have been met as a result of an amendment to a scheme, to confirm there is a surplus, to confirm details of a bulk transfer or to confirm the conditions of the reference scheme test are met.

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Bulk transfers between occupational pension schemes—checklist

Bulk transfers between occupational pension schemes—checklist This Checklist summarises the key steps to follow when carrying out a bulk transfer of a group of members from one occupational pension scheme to another. Details of the laws and regulations relating to the making of such transfers are set out in Practice Note: Bulk transfers between occupational pension schemes—an introduction. Planning of bulk transfer • Trustees of the transferring and receiving schemes should satisfy themselves that the making of the bulk transfer in the form contemplated is, in their respective opinions, in the interest of their respective beneficiaries. • Consider whether bulk transfer would have adverse tax consequences for transferring members (eg potential loss of tax protections). • Reach ‘in principle’ agreement between trustees and employers of both transferring and receiving schemes on pursuing bulk transfer exercise. • Review governing provisions of both transferring and receiving schemes to confirm transfer of assets, liabilities and members can be made. Amend provisions if necessary and possible. • Check whether schemes’ benefit structures are compatible....

Pension scheme mergers—checklist

Pension scheme mergers—checklist Planning of merger • Reach “in principle” agreement between trustees and employers of both transferring and receiving schemes on pursuing merger exercise. • Review governing provisions of both transferring and receiving schemes to confirm transfer of assets, liabilities and members can be made. Amend provisions if necessary and possible. • Check whether schemes’ benefit structures are compatible. • Check whether contracted-out status of either scheme poses a problem. • Review respective funding positions of schemes and obtain actuarial advice. Check whether employer top-up payment required. • Agree how receiving scheme is to treat transferred past service rights (eg under separate section). • Agree nature of future pension provision, taking account of potential employment law issues. • Check whether member consent or consultation required. • Agree timetable for merger. Implementation of merger • Carry out consultation exercise if required by statute (SI 2006/349). • To minimise likelihood of successful challenge under employment law, consider seeking consent from transferring members in respect of: ◦ transfer of accrued rights (even...

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Pension scheme mergers—considerations for employers and trustees

Pension scheme mergers—considerations for employers and trustees THIS PRACTICE NOTE ONLY APPLIES TO DEFINED BENEFIT OCCUPATIONAL PENSION SCHEMES For employers who operate more than one defined benefit occupational pension scheme within the same group of employers, the merging of their schemes so as to produce a single larger pension scheme offers a number of potential advantages, including: • administrative cost and time savings • potentially greater investment opportunities due to the creation of a single larger pension fund, and • simpler communication procedures between employers, trustees and members Mergers can, however, also present legal and technical difficulties. Nature of merger A merger generally involves the bulk transfer of assets, liabilities and members from one or more transferring schemes to a receiving scheme. Where a merger exercise is combined with a partial buy-out exercise, in which the pension rights of a particular class of members are bought out with an insurance company, similar considerations may arise in relation to the merger/buy-out exercise as for a 'pure merger'....

DB contracting-out before 6 April 2016 [Archived]

DB contracting-out before 6 April 2016 [Archived] THIS PRACTICE NOTE APPLIES IN RELATION TO SCHEMES THAT WERE CONTRACTED-OUT SALARY-RELATED (COSR) SCHEMES BEFORE 6 APRIL 2016 Contracting-out on a salary-related basis (also known as defined benefit (DB) contracting-out) was abolished on 6 April 2016. Schemes that were contracted-out salary-related (COSR) schemes immediately before that date therefore ceased to be so on that date. However any contracted-out benefits accrued on a salary-related basis during periods of contracted-out employment continue to exist. This Practice Note covers the statutory requirements that were applicable to COSR schemes before 6 April 2016. For information on the DB contracting-out requirements applicable to former COSR schemes on and from 6 April 2016, see Practice Note: Legal regime applicable to Section 9(2B) rights and GMPs from 6 April 2016. Legislative framework before 6 April 2016 Pre-abolition, the various contracting-out requirements in respect of COSR schemes were set out, among other things, in: • Pt III of the Pension Schemes Act 1993 (PSA 1993), and •...

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