Social Welfare and Pensions Act 2011
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Regulatory Own Funds Schemes. |
35.— The Principal Act is amended by inserting the following new Part after Part IVA (inserted by section 42 of the Social Welfare and Pensions Act 2010 ): | |
“PART IVB | ||
REGULATORY OWN FUNDS SCHEMES | ||
Interpretation. | ||
53E.— In this Part, except where the context otherwise requires— | ||
‘biometric risks’ means risks linked to death, disability and longevity; | ||
‘funding standard liabilities’ in relation to a regulatory own funds scheme which is a relevant scheme, means on any date the aggregate of the liabilities and estimated expenses referred to in section 44, calculated as if the actuary had prepared an actuarial funding certificate having that date as the effective date and as if the percentage referred to in section 44(a)(v) was 100 per cent; | ||
‘regulatory own funds certification date’ shall be construed in accordance with subsection (2) of section 53J; | ||
‘regulatory own funds notification date’ shall be construed in accordance with subsection (2) of section 53K; | ||
‘regulatory own funds proposal’ has the meaning assigned to it by section 53L; | ||
‘regulatory own funds requirement’ means the requirement to hold additional resources under section 53H, and references in this Part to ‘satisfying’ the regulatory own funds requirement mean that the regulatory own funds scheme or the regulatory own funds trust RAC holds sufficient additional resources to at least satisfy that requirement; | ||
‘regulatory own funds scheme’ means a relevant scheme where the relevant scheme and not any sponsoring undertaking to whom the relevant scheme relates— | ||
(a) underwrites any liability to cover against biometric risks, | ||
(b) guarantees a given investment performance, or | ||
(c) guarantees a given level of benefits; | ||
‘regulatory own funds trust RAC’ means a trust RAC which— | ||
(a) underwrites any liability to cover against biometric risks, | ||
(b) guarantees a given investment performance, or | ||
(c) guarantees a given level of benefits; | ||
‘regulatory own funds trust RAC technical provisions certificate’ means a certificate prepared by an actuary certifying if, in the opinion of the actuary, the resources of the regulatory own funds trust RAC at the effective date of the certificate would have been sufficient to satisfy the technical provisions requirement, if the regulatory own funds trust RAC had been wound up on that date; | ||
‘technical provisions’ means— | ||
(a) in relation to a regulatory own funds scheme on any date the regulatory own funds scheme’s funding standard liabilities, | ||
(b) in relation to a regulatory own funds trust RAC on any date, were the regulatory own funds trust RAC to be wound up on that date, the sum of the value of the liabilities of the regulatory own funds trust RAC to provide benefits in accordance with the rules of the trust RAC and the estimated expenses of administering the winding up of the trust RAC calculated in accordance with any applicable guidance specified in regulations; | ||
‘technical provisions certification date’ means the effective date as construed in accordance with section 53G; | ||
‘technical provisions requirement’ means in relation to a regulatory own funds trust RAC, the requirement to hold resources to provide for the technical provisions, and references in this Part to ‘satisfying’ the technical provisions requirement mean that the regulatory own funds trust RAC holds sufficient resources to at least satisfy that requirement; | ||
‘undertaking’ has the meaning assigned to it by the Insurance Act 1989 . | ||
Application. | ||
53F.— This Part applies to a regulatory own funds scheme and a regulatory own funds trust RAC other than— | ||
(a) a scheme which the Minister has by regulations made under section 52 excluded from the application of Part IV, | ||
(b) a scheme which is a statutory scheme to which section 776 of the Taxes Consolidation Act 1997 applies and where benefits are paid in whole or in part out of moneys provided from the Central Fund or moneys provided by the Oireachtas and the rules of which provide that an appeal may be made to a Minister of the Government, | ||
(c) a scheme or trust RAC the winding up of which has commenced, | ||
(d) a one-member arrangement, | ||
(e) a scheme or trust RAC the only benefits under which are payable in respect of the death of a member where those benefits are fully secured under a policy or policies of assurance with one or more than one undertaking. | ||
Regulatory own funds trust RAC technical provisions certificate. | ||
53G.— (1) Subject to section 53M, the trustees of a regulatory own funds trust RAC shall cause the technical provisions and the technical provisions requirement for a regulatory own funds trust RAC to be calculated by an actuary and a regulatory own funds trust RAC technical provisions certificate to be prepared and submitted to the Board and the first such certificate shall have an effective date of: | ||
(a) in the case of a trust RAC which on 23 September 2010 was a regulatory own funds trust RAC, not later than 6 months after the date on which Chapter 2 of Part 4 of the Social Welfare and Pensions Act 2011 comes into operation; | ||
(b) in the case of a trust RAC which commences after 23 September 2010 and which from the trust RAC’s commencement is a regulatory own funds trust RAC— | ||
(i) not later than 4 weeks after the date of commencement of the trust RAC, or | ||
(ii) not later than 4 weeks after the date on which Chapter 2 of Part 4 of the Social Welfare and Pensions Act 2011 comes into operation, | ||
whichever is the later, | ||
(c) in the case of a trust RAC which at its commencement was not a regulatory own funds trust RAC but becomes a regulatory own funds trust RAC after 23 September 2010— | ||
(i) not later than 4 weeks after the date on which the trust RAC becomes a regulatory own funds trust RAC, or | ||
(ii) not later than 4 weeks after the date on which Chapter 2 of Part 4 of the Social Welfare and Pensions Act 2011 comes into operation, | ||
whichever is the later. | ||
(2) While a trust RAC remains a regulatory own funds trust RAC each subsequent regulatory own funds trust RAC technical provisions certificate submitted after the appropriate effective date referred to in subsection (1) shall have an effective date of not later than one year after the effective date of the immediately preceding certificate. | ||
(3) Subject to section 53M, a regulatory own funds trust RAC technical provisions certificate required under subsection (1) or (2) shall be submitted to the Board by the trustees of the regulatory own funds trust RAC within 3 months of the effective date of the certificate. | ||
(4) The regulatory own funds trust RAC technical provisions certificate shall be in such form and contain such information and particulars as the Minister may from time to time prescribe. | ||
(5) The Minister may by regulations require an actuary when calculating the technical provisions of a regulatory own funds trust RAC to comply with the applicable professional guidance issued by the Society of Actuaries in Ireland and specified in the regulations or with any other guidance prescribed by the Minister. | ||
Requirement to hold additional resources. | ||
53H.— (1) A regulatory own funds scheme and a regulatory own funds trust RAC shall hold on a permanent basis— | ||
(a) sufficient resources to satisfy the technical provisions of the regulatory own funds scheme or the technical provisions requirement of the regulatory own funds trust RAC, as appropriate, and | ||
(b) additional resources over and above the resources referred to in paragraph (a) to serve as a safety capital to absorb any discrepancies between the anticipated and actual expenses and profits of the regulatory own funds scheme or the regulatory own funds trust RAC. | ||
(2) The additional resources required under paragraph (b) of subsection (1) shall be the amount of the regulatory own funds requirement referred to in section 53I, free of all foreseeable liabilities. | ||
(3) The trustees of a regulatory own funds scheme or regulatory own funds trust RAC shall take all reasonable steps to ensure that the regulatory own funds scheme or regulatory own funds trust RAC complies with the requirements of this section. | ||
Amount of regulatory own funds requirement. | ||
53I.— (1) The amount of the regulatory own funds requirement is the aggregate of— | ||
(a) subject to subsection (3), a percentage which shall be prescribed and which shall be not less than 4 per cent of the technical provisions of the regulatory own funds scheme or the regulatory own funds trust RAC; and | ||
(b) a percentage which shall be prescribed and which shall be not less than 0.3 per cent of the capital at risk for the members of, or other persons entitled to benefits under, the regulatory own funds scheme or regulatory own funds trust RAC in respect of which the capital at risk is not a negative figure and where the capital at risk is as calculated in accordance with subsection (2). | ||
(2) For the purposes of paragraph (b) of subsection (1) ‘capital at risk’ means— | ||
(a) to the extent that the benefit payable on death or disability of a member or other person entitled to benefits under the regulatory own funds scheme or regulatory own funds trust RAC comprises a lump sum benefit, the amount of that lump sum benefit on death or disability, and | ||
(b) to the extent that the benefit payable on death or disability of a member or other person entitled to benefits under the regulatory own funds scheme or regulatory own funds trust RAC comprises the purchase of an annuity, the payment of a sum by instalments or any other kind of periodical payments, the current value of that benefit calculated in a manner which is consistent with the determination of the regulatory own funds scheme’s or regulatory own funds trust RAC’s technical provisions, | ||
less the regulatory own funds scheme’s or regulatory own funds trust RAC’s technical provisions in relation to those persons. | ||
(3) The Minister may prescribe that the percentage for the purposes of paragraph (a) of subsection (1) shall be increased to such greater percentage not exceeding 50 per cent, as he or she may decide of the technical provisions of the regulatory own funds scheme or the regulatory own funds trust RAC if and to the extent that the resources of the regulatory own funds scheme or the regulatory own funds trust RAC are invested in assets other than— | ||
(a) securities issued under section 54(1) of the Finance Act 1970 and known as bonds, | ||
(b) securities issued under the laws of a Member State (other than the State) that correspond to securities referred to in paragraph (a), or | ||
(c) cash deposits with one or more credit institutions, and | ||
the proportion of the technical provisions of the regulatory own funds scheme or the regulatory own funds trust RAC to which such increased percentage shall be applied shall be calculated in accordance with the formula— | ||
A x B/C | ||
where— | ||
A is the amount of the technical provisions of the regulatory own funds scheme or the regulatory own funds trust RAC, | ||
B is the amount of the resources of the regulatory own funds scheme or the regulatory own funds trust RAC invested in assets other than those referred to in paragraph (a), (b) or (c), and | ||
C is the amount of the resources of the regulatory own funds scheme or the regulatory own funds trust RAC. | ||
(4) In respect of any calculation to be made for the purposes of this Part, the resources of a regulatory own funds scheme or a regulatory own funds trust RAC shall exclude investments in excess of such a percentage as may be prescribed by the Minister, within such a class or description of investments as may be prescribed by the Minister. | ||
Certification of regulatory own funds requirement. | ||
53J.— (1) Subject to section 53M, the trustees of a regulatory own funds scheme or regulatory own funds trust RAC shall, from time to time in accordance with this section, cause a certificate, in this Part referred to as a ‘regulatory own funds certificate’, to be prepared by an actuary who shall certify therein that as at the regulatory own funds certification date— | ||
(a) the regulatory own funds scheme or regulatory own funds trust RAC satisfies the regulatory own funds requirement, or | ||
(b) the regulatory own funds scheme or regulatory own funds trust RAC does not satisfy the regulatory own funds requirement. | ||
(2) Subject to section 53M, the regulatory own funds certification date for— | ||
(a) a relevant scheme which is a regulatory own funds scheme shall be the same as the effective date of the actuarial funding certificate prepared for the regulatory own funds scheme under subsection (1B) or (1C) of section 43, or | ||
(b) a regulatory own funds trust RAC shall be the same as the effective date of the regulatory own funds trust RAC technical provisions certificate prepared for the regulatory own funds trust RAC under section 53G. | ||
(3) The trustees of a regulatory own funds scheme and a regulatory own funds trust RAC shall submit the regulatory own funds certificate to the Board within 3 months of the regulatory own funds certification date. | ||
(4) The Minister may by regulations prescribe the form and content of a regulatory own funds certificate. | ||
(5) The Minister may by regulations require an actuary when completing a regulatory own funds certificate, to comply with the applicable professional guidance issued by the Society of Actuaries in Ireland and specified in the regulations or with any other guidance prescribed by the Minister. | ||
Notification of regulatory own funds status. | ||
53K.— (1) Subject to section 53N, the trustees of a scheme or trust RAC which becomes a regulatory own funds scheme or a regulatory own funds trust RAC shall so notify the Board on or before the regulatory own funds notification date. | ||
(2) Subject to section 53N, the regulatory own funds notification date shall be: | ||
(a) in the case of a relevant scheme or trust RAC which on 23 September 2010 was a regulatory own funds scheme or a regulatory own funds trust RAC, not later than 6 months after the date on which Chapter 2 of Part 4 of the Social Welfare and Pensions Act 2011 comes into operation; | ||
(b) in the case of a relevant scheme or trust RAC which commences after 23 September 2010 and which from the relevant scheme’s or trust RAC’s commencement is a regulatory own funds scheme or regulatory own funds trust RAC— | ||
(i) not later than 4 weeks after the date of commencement of the relevant scheme or trust RAC, or | ||
(ii) not later than 4 weeks after the date on which Chapter 2 of Part 4 of the Social Welfare and Pensions Act 2011 comes into operation, | ||
whichever is the later; | ||
(c) in the case of a relevant scheme or trust RAC which at its commencement was not a regulatory own funds scheme or regulatory own funds trust RAC but becomes a regulatory own funds scheme or regulatory own funds trust RAC after 23 September 2010— | ||
(i) not later than 4 weeks after the date on which the scheme or trust RAC becomes a regulatory own funds scheme or a regulatory own funds trust RAC, or | ||
(ii) not later than 4 weeks after the date on which Chapter 2 of Part 4 of the Social Welfare and Pensions Act 2011 comes into operation, | ||
whichever is the later. | ||
Failure to satisfy funding standard, technical provisions requirement or regulatory own funds requirement. | ||
53L.— (1) Where— | ||
(a) (i) in accordance with section 43, the trustees of a regulatory own funds scheme submit an actuarial funding certificate which certifies that at the effective date of the certificate the regulatory own funds scheme does not satisfy the funding standard, or | ||
(ii) in accordance with section 53G, the trustees of a regulatory own funds trust RAC submit a regulatory own funds trust RAC technical provisions certificate which certifies that at the effective date of the certificate the regulatory own funds trust RAC does not satisfy the technical provisions requirement, | ||
or | ||
(b) in accordance with section 53J or 53M, the trustees of a regulatory own funds scheme or regulatory own funds trust RAC submit a regulatory own funds certificate which certifies that at the regulatory own funds certification date the regulatory own funds scheme or regulatory own funds trust RAC does not satisfy the regulatory own funds requirement, | ||
they shall submit to the Board a proposal (in this Part referred to as a ‘regulatory own funds proposal’) in accordance with this section. | ||
(2) A regulatory own funds proposal shall contain a proposal designed to ensure the regulatory own funds scheme or regulatory own funds trust RAC satisfies— | ||
(a) (i) where paragraph (a)(i) of subsection (1) applies, the funding standard within 2 years of the effective date of the actuarial funding certificate referred to in that paragraph, or | ||
(ii) where paragraph (a)(ii) of subsection (1) applies, the technical provisions requirement within 2 years of the effective date of the regulatory own funds trust RAC technical provisions certificate referred to in that paragraph, | ||
and | ||
(b) where paragraph (b) of subsection (1) applies, the regulatory own funds requirement within 2 years of the regulatory own funds certification date applicable to the certificate referred to in that paragraph. | ||
(3) A regulatory own funds proposal shall be submitted to the Board by the trustees within 4 months of the regulatory own funds certification date applicable to the certificate referred to in paragraph (b) of subsection (1). | ||
(4) If the Board is satisfied that a regulatory own funds proposal submitted in accordance with subsection (3) is likely to enable the regulatory own funds scheme or regulatory own funds trust RAC to satisfy: | ||
(a) (i) where paragraph (a)(i) of subsection (1) applies, the funding standard, or | ||
(ii) where paragraph (a)(ii) of subsection (1) applies, the technical provisions requirement, | ||
and | ||
(b) where paragraph (b) of subsection (1) applies, the regulatory own funds requirement, | ||
within 2 years of the regulatory own funds certification date applicable to the certificate referred to in paragraph (b) of subsection (1), it shall approve the regulatory own funds proposal or, if it is not so satisfied, it shall reject the regulatory own funds proposal. | ||
(5) Where the trustees of a regulatory own funds scheme or a regulatory own funds trust RAC— | ||
(a) do not submit a regulatory own funds certificate within 3 months of the regulatory own funds certification date, | ||
(b) do not submit a regulatory own funds proposal under subsection (1), | ||
(c) do not submit a regulatory own funds proposal within the period referred to in subsection (3), | ||
(d) submit a regulatory own funds proposal which is rejected by the Board under subsection (4), or | ||
(e) submit a regulatory own funds proposal which is approved by the Board but the regulatory own funds scheme or the regulatory own funds trust RAC does not, within 2 years of the regulatory own funds certification date applicable to the certificate referred to in subsection (1), satisfy the funding standard or the technical provisions requirement (as applicable) and the regulatory own funds requirement, | ||
the Board may by notice in writing direct the trustees in accordance with subsection (6). | ||
(6) Where subsection (5) applies, and notwithstanding anything contained in the rules of the regulatory own funds scheme or the regulatory own funds trust RAC the Board may direct the trustees— | ||
(a) to wind-up the regulatory own funds scheme or the regulatory own funds trust RAC with effect from such date and subject to such conditions as the Board may consider appropriate, and | ||
(b) to take, by such date as the Board may specify, such one or more of the measures specified in subsection (7) as the Board considers appropriate in the circumstances, either indefinitely or for a specified period. | ||
(7) The following measures are specified for the purposes of paragraph (b) of subsection (6): | ||
(a) to cease or modify future accrual of benefits, | ||
(b) to cease to accept further contributions from or in respect of members, | ||
(c) to refrain from making investments of a specified class, | ||
(d) to— | ||
(i) maintain funds, or | ||
(ii) effect insurance of a value, | ||
equal to the whole or a specified portion of the regulatory own funds scheme’s liabilities. | ||
(8) Where the trustees fail to take the measure or measures specified by the Board under subsection (6)(b) by such date as the Board has specified, the Board may direct the trustees to wind-up the regulatory own funds scheme or the regulatory own funds trust RAC with effect from such date and subject to such conditions as the Board may consider appropriate. | ||
(9) An appeal to the High Court on a point of law from a direction of the Board under subsection (6) or (8) may be brought by the trustees of the regulatory own funds scheme or the regulatory own funds trust RAC within 21 days of the date of the direction of the Board. | ||
Supervisory regulatory own funds certificate. | ||
53M.— The Board, whenever it considers appropriate, may by notice in writing to the trustees of a regulatory own funds scheme or a regulatory own funds trust RAC, require the trustees to submit to the Board within the period specified in the notice an actuarial funding certificate or a regulatory own funds trust RAC technical provisions certificate, and a regulatory own funds certificate having— | ||
(a) in the case of an actuarial funding certificate or a regulatory own funds trust RAC technical provisions certificate such an effective date as is specified in the notice, and | ||
(b) in the case of a regulatory own funds certificate, such a regulatory own funds certification date as is specified in the notice. | ||
De facto regulatory own funds scheme or regulatory own funds trust RAC. | ||
53N.— (1) If at any time it appears to the Board that a scheme or trust RAC is a scheme or trust RAC to which this Part applies but that the trustees of the scheme or the trust RAC have not made the notification required to be made under and in accordance with section 53K, the Board may by notice in writing to the trustees of the scheme or the trust RAC determine that the scheme or trust RAC is a regulatory own funds scheme or a regulatory own funds trust RAC with effect from the date specified in the notice. | ||
(2) Where the Board determines that a scheme or a trust RAC is a regulatory own funds scheme or a regulatory own funds trust RAC and gives written notice of such determination to the trustees of the regulatory own funds scheme or the regulatory own funds trust RAC pursuant to subsection (1), the regulatory own funds notification date for that scheme or trust RAC shall be the date falling 4 weeks after the date specified in the notice referred to in subsection (1). | ||
(3) An appeal to the High Court on a point of law from a determination of the Board under subsection (1) may be brought by the trustees of the regulatory own funds scheme or the regulatory own funds trust RAC within 21 days after the date of determination of the Board.”. |