Commentary on Sections Categories of pension scheme Section 239: Categories of pension scheme
868.Subsection (3) of this section substitutes the definitions of “occupational pension scheme” and “personal pension scheme” in section 1 of the Pension Schemes Act 1993.
869.The new definition of an “occupational pension scheme” defines such a scheme as one that provides benefits for people with service in employment (or self-employment) described in the scheme rules and which may also provide benefits to members who are not in that kind of employment (or self-employment). An occupational pension scheme for this purpose is one that has its main administration in the UK or outside the European Union. (A scheme whose main administration is in another EU Member State will be regulated primarily by the authorities in that state, but see Part 7 of the Act.) For a scheme to be an occupational pension scheme, at least one of the persons establishing the scheme must be within new section 1(2) of the Pension Schemes Act 1993. The new definition of an “occupational pension scheme” also includes a pension scheme that is prescribed in regulations or that is of a kind prescribed in regulations.
870.A “personal pension scheme” is defined as a pension scheme (see new section 1(5)) which is not an occupational pension scheme and which is established by a person within section 154 of the Finance Act 2004 (the persons by whom registered pension schemes may be established). That section says that a pension scheme may be registered for tax purposes only if it is an occupational pension scheme for tax purposes or has been established by a person listed in subsection (1) of that section. The persons listed include insurance companies, manages of unit trust schemes, banks and building societies.
871.Subsection (4) inserts new subsections (2) to (6) into section 1 of the Pension Schemes Act 1993. The effect of new subsection (2) is that for a scheme to be an occupational pension scheme, at least one of the persons establishing it must be an employer, employee or self-employed person or a representative of employers, employees or self-employed people. One effect of new subsection (3) is that a pension scheme established for paid office-holders by the person who pays them can be an occupational pension scheme. New subsection (4) provides that an occupational pension scheme may cater for more than one kind of employment (or self-employment). New subsection (5) defines a pension scheme for the purposes of section 1 of the Pensions Schemes Act 1993 (Categories of pension schemes) as one which provides benefits on retirement, on having reached a particular age or on termination of service. New subsection (6) allows the definition of personal pension scheme to be amended if the list in section 154 of the Finance Act 2004 (the persons by whom registered pension schemes may be established) of persons who may provide such schemes is itself amended by order under that section.