Social Welfare and Pensions Act 2005

Funding standard.

31

31.—The Principal Act is amended—

( a) in section 41 (as amended by section 27 of the Act of 2002), by substituting the following for subsection (2):

“(2) Notwithstanding subsection (1)—

( a) this Part shall apply to a defined contribution scheme which is paying benefits to members where those benefits are not secured under a policy or policies of assurance,

( b) subsections (1) and (2) of section 48 shall apply to any scheme other than a defined contribution scheme, and

( c) subsections (3) and (4) of section 48 shall apply to every scheme.”,

( b) in section 43—

(i) in subsection (1) (as amended by section 29 of the Act of 2002):

(I) by substituting “and, subject to subsection (1A), a subsequent” for “and a subsequent”,

(II) in paragraph ( b), by inserting “and” after “the scheme,”, and

(III) by inserting the following after paragraph ( b):

“( c) in the case of a scheme to which this Part applies by virtue of the amendment effected by section 32(a) of the Social Welfare and Pensions Act 2005 , not later than 1 January 2007.”,

and

(ii) by inserting the following after subsection (1):

“(1A) Where, in accordance with subsection (1), an actuarial funding certificate, having an effective date after 22 September 2005, has been prepared, any subsequent actuarial funding certificate shall have an effective date not later than 3 years after the effective date of the immediately preceding certificate.”,

( c) in section 49—

(i) by inserting the following after subsection (2):

“(2A) Regulations under this section may require the actuary, in certifying a funding proposal under subsection (2) or the failure of the scheme to satisfy the funding standard in accordance with subsection (3), to comply with any applicable professional guidance issued by the Society of Actuaries in Ireland and specified in the regulations or with any other applicable guidance issued by any other person (including the Minister) and specified in the regulations.”,

and

(ii) by substituting the following for subsection (3) (as amended by section 24 of the Social Welfare (Miscellaneous Provisions) Act 2003 ):

“(3) Subject to Regulations under this section, the Board, on application to it in that behalf by the trustees of a scheme, may, in relation to the scheme, in the circumstances and on the terms that it considers appropriate, for the purposes of subsection (2)( a), specify a date later than the effective date of the next actuarial funding certificate where the actuary concerned certifies that the failure of the scheme to satisfy the funding standard relates wholly or mainly to either or both of the following—

( a) the assets of the scheme being less than expected where—

(i) this is due to the performance of relevant markets in relation to investments made with the resources of the scheme and that the performance of those markets in relation to those investments is not inconsistent with the performance generally of relevant markets for investment in the same period, and

(ii) having regard to the performance generally of relevant markets for investment, the Board considers that specifying a later date is necessary or appropriate and not contrary to the interests of the members of the scheme,

or

( b) the liabilities of the scheme being greater than expected where—

(i) this is due to such factors and circumstances as shall be prescribed, and

(ii) the Board considers that specifying a later date is necessary or appropriate and not contrary to the interests of members of the scheme.

(3A) The Board, on application to it in that behalf by the trustees of a scheme, may, in relation to the scheme, in the circumstances and on the terms that it considers appropriate, modify the requirements of paragraphs ( b), ( c) or ( d) of subsection (2) where—

( a) administrative difficulties have arisen from circumstances outside the control of the trustees of the scheme or schemes,

( b) the modification does not materially alter those paragraphs, and

( c) the Board considers the modification necessary or appropriate and that it is not contrary to the interests of the members of the scheme.”,

( d) in section 56, by inserting the following after subsection (2):

“(2A) The trustees of a defined contribution scheme shall cause the liabilities of the scheme to be valued in such manner and at such times as may be prescribed.”,

and

( e) by inserting the following after section 59F (inserted by section 43 of the Act of 2002):

“Trustee consent for early retirement.

59G.—In the case of a defined benefit scheme the rules of which include an early retirement rule, notwithstanding the terms of that rule, if the actuary advises the trustees that he is reasonably satisfied that, if the actuary were to prepare an actuarial funding certificate under section 42 having an effective date of the day on which any member's immediate retirement benefit by virtue of that early retirement rule is expected to commence, the actuary would not certify that the scheme satisfies the funding standard provided for in section 44, the member's right to the immediate retirement benefit by virtue of that early retirement rule is subject to the consent of the trustees of the scheme.”.