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25 1990

PENSIONS ACT, 1990

PART IV

Funding Standard

Interpretation (Part IV).

40. —In this Part and the Third Schedule , except where the context otherwise requires—

an actuarial funding certificate” has the meaning assigned to it in section 42 ;

the effective date” has the meaning assigned to it in section 42 ;

funding proposal” has the meaning assigned to it in section 49 ;

funding standard” shall be construed in accordance with section 44 ;

relevant scheme” means a scheme to which this Part applies by virtue of section 41 ;

certified percentage” means a percentage specified for the purposes of section 45 (4);

specified percentage” has the meaning assigned to it by section 44 .

Application (Part IV).

41. —Subject to section 52 , this Part shall apply to any scheme other than a defined contribution scheme.

Actuarial funding certificate.

42. —(1) The trustees of a relevant scheme shall, from time to time in accordance with section 43 , submit to the Board a certificate, in this Part and the Third Schedule referred to as “an actuarial funding certificate”.

(2) The trustees of a relevant scheme shall cause actuarial funding certificates to be prepared by an actuary who shall certify therein that as at the date, in this Part referred to as “the effective date”, on which the liabilities and resources of the scheme are calculated for the purposes of section 44 either—

(a) the scheme satisfies the funding standard provided for in section 44 , or

(b) the scheme does not satisfy the funding standard.

(3) In the case of a relevant scheme which commenced before the commencement of this Part, the first actuarial funding certificate submitted in accordance with section 43 shall also state the certified percentage in relation to the scheme.

(4) An actuarial funding certificate shall be in such form as may be prescribed.

Effective dates for actuarial funding certificates.

43. —(1) The first actuarial funding certificate shall have an effective date—

(a) in the case of a relevant scheme which commenced before the commencement of this Part, not later than 3 years after such commencement, and

(b) in the case of a relevant scheme which commenced on or after such commencement, not later than 3½ years after the commencement of the scheme,

and a subsequent actuarial funding certificate shall have an effective date not later than 3½ years after the effective date of the immediately preceding certificate.

(2) Unless otherwise prescribed, an actuarial funding certificate shall be submitted to the Board by the trustees of the scheme within 9 months of the effective date of the certificate.

Provisions relating to funding standard.

44. —Subject to the subsequent provisions of this Part, a relevant scheme shall be deemed to have satisfied the funding standard if, in the opinion of the actuary, the resources of the scheme at the effective date of the actuarial funding certificate would have been sufficient, if the scheme had been wound up on that date, to provide for—

(a) the liabilities of the scheme consisting of—

(i) benefits in the course of payment to which paragraph 1 of the Third Schedule relates,

(ii) benefits, other than those referred to in subparagraph (i), which consist of additional benefits secured or granted under the scheme on behalf of the member concerned by way of additional voluntary contributions or a transfer of rights from another scheme to which paragraph 2 of the Third Schedule relates,

(iii) benefits, other than those referred to in subparagraphs (i) and (ii), payable in respect of reckonable service completed after the commencement of this Part to which paragraph 3 of the Third Schedule relates, and

(iv) the percentage (in this Part referred to as the “specified percentage”) of any benefits, other than those referred to in subparagraphs (i) and (ii), payable in respect of reckonable service completed prior to such commencement to which paragraph 4 of the Third Schedule relates, and

(b) the estimated expenses of administering the winding up of the scheme.

Provisions relating to schemes commencing before commencement of this Part.

45. —(1) This section applies to relevant schemes that came into operation before the commencement of this Part.

(2) The actuary shall determine the percentage, if any, of the benefits under a scheme to which paragraph 4 of the Third Schedule relates that, in his opinion, could have been provided at the effective date of the first actuarial funding certificate in relation to the scheme from the resources of the scheme if—

(a) the scheme had been wound up on that date, and

(b) (i) the liabilities of the scheme for benefits under the scheme specified in subparagraphs (i), (ii) and (iii), of subsection (a) of section 44 , and

(ii) the estimated expenses of administering a winding up,

had already been discharged from resources of the scheme.

(3) In determining the percentage referred to in subsection (2), the actuary shall have regard to the order of priority accorded to each category of membership in the rules of the scheme concerned respecting a winding up thereof but only in so far as they apply to the benefits to which the said paragraph 4 relates and the actuary may determine a different percentage for each such category of membership.

(4) The first actuarial funding certificate in relation to a scheme shall state a percentage for each category of membership to which, pursuant to subsection (3), a different percentage applies (in this Part referred to as “the certified percentage”), being the lesser of—

(a) the percentage determined by the actuary pursuant to subsections (2) and (3), and

(b) 100 per cent.

(5) For the purposes of this Part—

(a) where an actuarial funding certificate relates to an effective date not more than 10 years after the commencement of this Part, the specified percentage shall be the certified percentage,

(b) where an actuarial funding certificate relates to an effective date more than 10 years after such commencement and on such commencement the scheme concerned was a funded scheme, the specified percentage shall be 100 per cent.

Matters to which actuary is to have regard.

46. —(1) In completing an actuarial funding certificate, the actuary shall, in addition to complying with the other relevant provisions of this Part, have regard to such financial or other assumptions as he considers to be appropriate on the effective date of the certificate.

(2) In determining the benefits to be paid on the winding up of a relevant scheme, the actuary shall, in addition to complying with section 48 , have regard to such financial or other assumptions as he considers to be appropriate.

Limitations on calculation of resources of relevant scheme.

47. —In respect of any calculation made for the purposes of this Part, the resources of a relevant scheme on any date to which such calculation relates shall exclude investments in excess of a prescribed percentage within a prescribed class or description of investments.

Priorities on winding up of relevant scheme.

48. —Notwithstanding anything contained in the rules of a relevant scheme that is being wound up, the resources of the scheme being wound up shall be applied on the winding up to secure—

(a) firstly, the continued payment of the benefits specified in paragraph 1 of the Third Schedule to or in respect of those persons who, at the date of the winding up, were in receipt of such benefits, and

(b) secondly, the benefits specified in paragraphs 2 and 3 of the Third Schedule to or in respect of those members of the scheme who, at the date of the winding up, were within the categories referred to in those paragraphs,

before discharging any other liabilities of the scheme:

Provided, however, that the expenses, fees and costs of the winding up of the scheme shall be payable in priority to any other claims on the scheme.

Funding proposal.

49. —(1) Where, in accordance with the provisions of section 43 , the trustees of a scheme submit an actuarial funding certificate which certifies that at the effective date of the certificate the scheme does not satisfy the funding standard, they shall submit to the Board a proposal (in this Part referred to as a “funding proposal”) in accordance with the provisions of this section.

(2) A funding proposal shall—

(a) contain a proposal designed to ensure that, in the opinion of the actuary, the scheme could reasonably be expected to satisfy the funding standard at the effective date of the next actuarial funding certificate,

(b) be certified by the actuary as meeting the requirements of paragraph (a),

(c) be signed by or on behalf of the employer signifying agreement to the proposal, and

(d) such funding proposal shall be submitted by the trustees of the scheme with the actuarial funding certificate to which it relates.

(3) The Board may, where it considers it necessary or appropriate in any individual case, modify the requirements of subsection (2) in respect of the scheme or schemes to which that case relates in such circumstances and on such terms as it considers appropriate.

Direction by Board to trustees.

50. —(1) The Board may, by notice in writing, direct the trustees of a scheme to take such measures as may be necessary to reduce, in respect of members of the scheme then in relevant employment, the benefits which would be payable to or in respect of them from the scheme where—

(a) the trustees of the scheme fail to submit an actuarial funding certificate within the period specified in section 43 , or

(b) the actuarial funding certificate certifies that the scheme does not satisfy the funding standard and the trustees of the scheme have not submitted a funding proposal in accordance with section 49 .

(2) The reduction in benefits under subsection (1) shall be such that the scheme would, in the opinion of the actuary concerned, satisfy the funding standard in accordance with section 44 immediately following the reduction.

(3) Where the Board gives a direction under subsection (1), the trustees of the scheme shall—

(a) notify the members of the scheme of the reduction in benefits within a period of 2 months, or such longer period as the Board considers appropriate,

(b) within a further period of one month, submit to the Board—

(i) details of the reduction in benefits including copies of the notifications issued to members of the scheme, and

(ii) an actuarial funding certificate certifying that at the effective date, being the date of the reduction in benefits, the scheme satisfies the funding standard.

Qualification for appointment as actuary of scheme.

51. —(1) A person shall not be qualified for appointment as actuary for the purposes of this Act to a scheme—

(a) unless he possesses the prescribed qualifications, or

(b) if he is a member of a class of persons standing prescribed for the time being for the purposes of this section.

(2) A person shall not act as actuary to a particular scheme at a time when he is disqualified under this Act for appointment to that office and, if an actuary of a scheme becomes so disqualified during his term of office as such actuary, he shall thereupon vacate his office and give notice in writing to the trustees of the scheme that he has vacated his office by reason of such disqualification.

Exclusion from and modification of Part IV and Third Schedule .

52. —(1) Where the Minister considers that some or all of the benefits under specified schemes or categories of schemes are, or may be, paid in whole or in part out of moneys provided from the Central Fund or moneys provided by the Oireachtas, he may by regulations made with the consent of the Minister for Finance exclude those schemes or categories of schemes from the application of this Part and the Third Schedule .

(2) Where the Minister considers that—

(a) it would be unreasonable, having regard to their nature, character and resources and the methods by which benefits payable under them are funded, and

(b) it would be contrary to the interests of their members,

to require specified schemes or categories of schemes to comply fully with specified provisions of this Part and the Third Schedule , he may by regulations made with the consent of the Minister for Finance provide that those provisions shall apply in relation to those schemes or categories of schemes with specified modifications, being modifications that, in the opinion of the Minister, are reasonable and do not materially alter those provisions.

Conflict between Part IV and schemes.

53. —(1) The provisions of this Part and of any regulations made thereunder shall override any rule of a scheme to the extent that that rule conflicts with those provisions.

(2) Any question as to—

(a) whether any provision of this Part (including any such provision as modified by regulations), any regulation made thereunder or the Third Schedule conflicts with any rule of a scheme, or

(b) whether a scheme is a defined benefit scheme or a defined contribution scheme for the purposes of this Part,

shall be determined by the Board on application to it in writing in that behalf by a person who, in relation to the scheme, corresponds to a person mentioned in section 38 (3) in relation to a scheme mentioned therein.

(3) An appeal to the High Court on a point of law from a determination of the Board, under subsection (2) in relation to a scheme, may be brought by the person who made, or a person who was entitled to make, the application concerned under subsection (2).