Commentary on Sections Summary Reconsideration of closed schemes Section 157: Applications and notifications where closed schemes have insufficient assets
541.This section sets out the requirements that apply when trustees or managers of a closed scheme become aware (probably as a result of a valuation under section 156) that the scheme no longer has sufficient assets to meet its protected liabilities (see section 131).
542.Subsection (1) states that when the trustees or managers of a closed scheme become aware that the scheme’s assets are less than the protected liabilities, they must make an application to the Board for it to assume responsibility for the scheme. This must be done before the end of a period to be set out in regulations. (Once again references to assets here do not include assets relating to money purchase schemes.) The Board must give a copy of any application it receives to the Regulator.
543.Subsection (3) provides that the Regulator must issue a notice to the Board if at any time it becomes aware that a scheme’s assets are less than its protected liabilities. Subsection (4) provides for the Board to issue a notice to the scheme trustees or managers when it receives notification from the Regulator.
544.Subsections (5) and (6) are aimed at preventing both an application under subsection (1) and a notice under subsection (3) being given in respect of the same set of facts.
545.Subsection (7) provides for regulations to state the format and information to be provided in notices and applications under this section. Subsection (8) states that civil penalties (section 10 of the Pensions Act 1995 (civil penalties)) apply if a trustee or manager of a scheme fails to take all reasonable steps to ensure compliance with subsection (1).