Q&As

If a defined contribution (DC) pension scheme is wound up and members are transferred to another DC scheme, can the receiving scheme maintain the original charges of the transferring scheme for the members transferred but keep the charges of original members the same under the Occupational Pension Schemes (Charges and Governance) Regulations 2015, SI 2015/879?

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Published on LexisPSL on 20/09/2017

The following Pensions Q&A provides comprehensive and up to date legal information covering:

  • If a defined contribution (DC) pension scheme is wound up and members are transferred to another DC scheme, can the receiving scheme maintain the original charges of the transferring scheme for the members transferred but keep the charges of original members the same under the Occupational Pension Schemes (Charges and Governance) Regulations 2015, SI 2015/879?

If a defined contribution (DC) pension scheme is wound up and members are transferred to another DC scheme, can the receiving scheme maintain the original charges of the transferring scheme for the members transferred but keep the charges of original members the same under the Occupational Pension Schemes (Charges and Governance) Regulations 2015, SI 2015/879?

This Q&A assumes that the pension schemes concerned are defined contribution schemes.

Regulation 5 of the Occupational Pension Schemes (Charges and Governance) Regulations 2015, SI 2015/879 (SI 2015/879, reg 5) contains a prohibition on charge structures other than single or combination charge structures.

A single charge structure is defined under SI 2015/879, reg 5(2) as a structure which imposes an existing rights charge on the member, ie a charge calculated solely by reference to the value of the member's rights under the scheme.

Conversely, under SI 2015/879, reg 5(3), a combination charge structure is one which imposes a combination of:

  1. an existing rights charge on the member, and

  2. another type of charge (either a flat fee or a charge calculated as a percentage of the value of the member’s contributions)

The government’s

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