Actuarial certificate meaning

THIS PRACTICE NOTE APPLIES IN RELATION TO SCHEMES THAT WERE CONTRACTED-OUT SALARY-RELATED (COSR) SCHEMES BEFORE 6 APRIL 2016 Salary-related contracting-out, also known as defined benefit (DB) contracting-out, ended on 6 April 2016. Consequently, schemes that were contracted-out salary-related (COSR) immediately beforehand no longer held that status from that date. However, any contracted-out benefits earned on a salary-related basis during periods of contracted-out employment still remain. This Practice Note outlines the statutory requirements that applied to COSR schemes prior to 6 April 2016. For details of the DB contracting-out requirements relevant 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 Before abolition, the contracting-out requirements for COSR schemes were set out, among other sources, in: Pt III of the Pension Schemes Act 1993 (PSA 1993), and the Occupational Pension Schemes (Contracting out) Regulations, SI 1996/1172 (the Contracting-out Regs) ...

What is certification and when is it required? Certification is the process used to decide whether a pension scheme meets the test scheme standard for auto-enrolment purposes. For defined benefit schemes (or the defined benefit part of hybrid schemes), an employer may take one of the following approaches: confirm that the scheme (or the defined benefit element of a hybrid scheme) meets the test scheme standard for its enrolment duties; or pass responsibility for certifying the scheme to the actuary in particular circumstances There are also specific situations in which the actuary is required to certify the scheme. For more detail on the test scheme standard for defined benefit schemes, see ‘Defined benefit occupational pension schemes’ in Practice Note: Auto-enrolment—what types of scheme may be used? Note that, for auto-enrolment only, hybrid schemes are those that are neither wholly money purchase nor wholly defined benefit. They usually include elements of both, and, depending on the scheme design, they may have to...

FORTHCOMING DEVELOPMENT : The key provisions of the Pension Schemes (Conversion of Guaranteed Minimum Pensions) Act 2022 will commence on a day still to be designated. Regulations to be made under the Act will cover (i) requirements for survivor benefits following conversion, and (ii) the scenarios in which employer consent is unnecessary or where another person’s approval will instead be required. Separately, the government’s 2019 guidance on using the GMP conversion legislation is expected to be updated to reflect recent developments, including measures in the 2022 Act. For further information, see: Pension Schemes (Conversion of Guaranteed Minimum Pensions) Bill Hansard: Pension Schemes (Conversion of Guaranteed Minimum Pensions) Bill, Volume 820: debated on Friday 25 March 2022 Hansard: Pension Schemes (Conversion of Guaranteed Minimum Pensions) Bill, Volume 821: debated on Wednesday 27 April 2022 This Practice Note outlines and comments on the process to be followed where trustees of an occupational pension scheme with guaranteed minimum pension (GMP) liabilities wish to convert...