(This archived guidance relates to HMRC discretionary
practice before the 6th April 2006. For current guidance on
Registered Pension Schemes see the Registered Pension Schemes
Manual)
The origins of the Occupational Pensions Board go back to
1958, when the Government proposed legislation for an earnings
related supplement to the basic state pension. This new "Graduated
Pension" scheme started in 1961. Employers operating suitable
occupational schemes were given the choice to opt out of the state
graduated scheme, provided certain conditions were met. The
Government were aware that some form of control was needed to
ensure that employers' schemes were indeed suitable for exemption.
Accordingly a Government office was created called "The Office of
the Registrar of Non-participating Employments" (RONPE).
State Earnings-Related Pension Scheme (SERPS)
The Graduated Pension scheme was wound up in 1975, but a new
State Earnings- Related Pension Scheme (SERPS) had been approved by
Parliament in 1973. This also required the conditions for
contracting-out of the state scheme to be controlled. The
Occupational Pensions Board (OPB) was formally appointed on 5
September 1973 and, in effect, replaced RONPE. The 1973 provisions
were shelved by the Government in May 1974 before they became
operative, but the Pensions Act 1975 introduced fresh
earnings-related pension provisions, with an option to
contract-out, which came into effect on 6 April 1978.
The OPB's responsibilities were twofold. On the one hand it
was to protect employees contracted-out of the State Earnings
Related Pension Scheme (SERPS), by ensuring that pension benefits
in salary-related schemes were not less than would be payable under
SERPS; on the other, to protect the State's interests in
underwriting a minimum level of benefit provided by such schemes.
Today, in addition, the OPB exercises certain controls on
contracted-out money purchase pension schemes and "appropriate"
personal pension schemes, runs the Pensions Registry and makes
grants to approved bodies. These new grant-giving powers were first
exercised to finance the development of the Occupational Pensions
Advisory Service (OPAS).
The OPB's involvement in occupational pensions, though
largely concerned with arrangements for contracting-out of the
state scheme, also extends to the enforcement of disclosure of
information to scheme members, to advising schemes of the extent to
which their rules comply with overriding legislation, (for example
revaluation of deferred pensions, transfer values), and to advising
schemes about requirements which do not override scheme rules such
as preservation of benefits for early leavers and the provision of
facilities for paying voluntary contributions. In addition the
Board has the power to assist schemes to modify their rules where
they have no power or a limited power of amendment.
Under the 1973 Act, the OPB also "have such advisory or other
functions as may be conferred on them by the Secretary of State in
respect of occupational pension schemes …".
