The transitional period introduced in The Registered Pension Schemes (Modification of the Rules of Existing Schemes) Regulations of 2006 and 2009 that:
will end on 5 April 2011. Any registered pension scheme which relies on this transitional period to apply the pre April 2006 limits, or because their scheme rules currently require HMRC approval for any changes, will need to ensure they have amended their scheme rules accordingly by 5 April 2011.
Before the introduction of the simplified pensions tax regime on 6 April 2006 ('A Day'), the pension tax rules required pension schemes to apply certain limits and other conditions. For example, occupational pension schemes had limits on benefits and contributions (and had to limit pensionable salary to the Earnings Cap for joiners after June 1989). These requirements stopped in 2006.
To help the pensions industry with the transition into the new pensions tax regime, the Registered Pension Schemes (Modification of the Rules of Existing Schemes) Regulations 2006 (SI2006/364) allowed schemes to continue to apply the pre April 2006 limits, without having to take any explicit action, for a limited transitional period until 5 April 2011. In addition the regulations also gave some other powers (for example the ability for trustees to collect any 'lifetime allowance charge' from member's benefits where it falls due, and in relation to unauthorised payments).
Before 'A Day' all pension schemes had to be approved formally by HMRC in order to receive tax privileges. Any amendments made to the scheme rules of an approved pension scheme also required HMRC approval in order for the scheme to maintain tax privileged status. Because of this, many approved pension schemes had written into their rules that those rules could not be amended without the approval of HMRC.
From 'A Day' the requirement for approval by HMRC was removed. Since then pension schemes have had to register with HMRC to obtain tax privileges. Schemes which were tax approved under the previous pension tax regime have automatically been treated as registered pension schemes since 'A Day' without the need to formally register (unless they opted out).
To help the pensions industry with the transition into the new pensions tax regime, and in particular those schemes whose rules still required HMRC to give approval for all scheme rule changes, a transitional period was introduced through SI2009/3055 - The Registered Pension Schemes (Modification of the Rules of Existing Schemes) Regulations 2009. This allowed pension schemes to make changes to scheme rules without the need for HMRC approval for an interim/transitional period, regardless of any requirement in their scheme rules.
The transitional period in both the 2006 and 2009 regulations has effect on or after 'A Day' and runs until the earlier of either:
DWP’s consequential regulation (Regulation 6 of the Occupational Pension Schemes (Modification of Schemes) Regulations 2006 (SI2006/759) (Modification Regulations)) to allow trustees of a trust scheme to modify the scheme by resolution for the purpose of achieving the same effect as HMRC’s 2006 regulations will also end on 5 April 2011. 'However, the consequential regulation in Regulation 6A of the Modification Regulations is not linked to a transitional period so is open-ended. 'This allows trustees of a trust scheme to alter a power of amendment in the scheme rules by resolution so as to remove a requirement for approval for changes by HMRC and to modify the scheme so as to remove a requirement in the rules for consent where there is no power of amendment for such a change.
