RPSM02300040 - Scheme administrator pages: Registering a pension scheme with HMRC: what is a pension scheme? Meaning of "occupational pension scheme"

Meaning of "occupational pension scheme"

A special category of pension scheme is defined in section 150(5) of the Finance Act 2004 (FA 2004).

An occupational pension scheme is a pension scheme

• established by an employer or employers
• that provides benefits to/in respect of any or all of the employees of that employer and/or any other employer
• that may or may not also provide benefits to/in respect of any other persons who are not employees of any of the employers concerned.

The FA 2004 legislation imposes restrictions and conditions on an occupational pension scheme which are necessary because of the close relationship between the pension scheme and the sponsoring employer. When a pension scheme is established by a financial institution, other parties such as an employer or an individual are not usually able to access scheme funds, so fewer restrictions and conditions are imposed on these schemes.