The Occupational Pension Schemes (Investment) (Amendment) Regulations 2010 (the Amendment Regulations) were laid before Parliament on 2 September 2010. They introduce technical changes to the Occupational Pension Schemes (Investment) Regulations 2005 (the Investment Regulations) that are necessary to ensure compliance with Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003 (the IORP Footnote 1) Directive). Article 18(1)(f) of that Directive imposes a 5 per cent limit on the amount of resources an occupational pension scheme can invest in the sponsoring employer.
The Investment Regulations already impose this restriction in most circumstances, but they provide an exception for investments by the operator of a collective investment scheme, and a transitional provision which allows certain schemes to retain employer-related investments in excess of the 5 per cent limit required by the IORP Directive.
Both the exception and the transitional provision rely on Article 22 of the IORP Directive which permits Member States to postpone until 23 September 2010 the application of Article 18(1)(f) to occupational pension schemes operating in their territory. From that date, in order for the Investment Regulations to be EU compliant, it is necessary to revoke the exception for collective investment schemes and the transitional provision which allows certain schemes to hold investment in excess of 5 per cent; which is what the changes introduced in the Amendment Regulations will do.
The changes being made to the Investment Regulations are:
the exception for operators of collective investment schemes set out in regulation 13(7) is revoked; and
the transitional provision allowing certain schemes to retain employer-related investments in excess of the 5 per cent limit set out in regulation 14(1)(b is revoked.
Notes for Editors:
The amendments in this instrument were originally included in the draft Occupational, Personal and Stakeholder Pensions (Miscellaneous Amendments) Regulations 2009 (which became S.I.2009/615), but were removed following certain responses to the consultation conducted in relation to those Regulations. This was in order that further consideration could be given to whether or not the IORP Directive could be transposed differently to that proposed in the consultation. Because of this, the legal position was considered further and this made it clear that that the changes being introduced in this instrument are necessary in order to correctly transpose the IORP Directive.
Electronic copies of the Occupational Pension Schemes (Investment) (Amendment) Regulations can be obtained from the Office of Public Sector Information at http://www.opsi.gov.uk/. Paper copies can be obtained from The Stationary Office: through their online bookshop http://www.tsoshop.co.uk/bookstore.asp; or by calling 0870 600 5522
Institutions for Occupational Retirement Provision