Hogan Lovells

Key Dates

The Pension Schemes Bill received Royal Assent on 27 April 2017 to become the Pension Schemes Act 2017.  

Section 41 (power to override contract terms) came into force on 27 April 2017.


Summary

In addition to provisions concerning master trusts, the Pension Schemes Act 2017 also contains an amendment to paragraph 6 of schedule 18 to the Pensions Act 2014, to permit regulations to override terms in a "relevant contract".  A relevant contract is defined as a contract between the trustees or managers of a "relevant scheme" and a service provider in relation to the scheme. 

A relevant scheme is defined in regulations to be an occupational pension scheme which provides money purchase benefits (or, where a scheme provides money purchase and non-money purchase benefits, the scheme so far as it relates to those benefits), except for executive pension plans or certain small schemes.  Schedule 18 of the 2014 Act already enables regulations to override provisions of a relevant scheme.

At Third Reading of the Bill in the House of Commons, the Under-Secretary of State for Pensions (Richard Harrington) explained that the government intends to use the provision, along with existing powers, to make regulations to cap early exit charges and ban member-borne commission in some occupational pension schemes.



Date Accessed: 03/12/2021