CHANGES AFTER THE CERTIFICATE HAS BEEN ISSUED Minor variations

22B.93 Minor variations are changes which do not alter the categories or description of the employees covered by the contracting-out certificate. For example, if there is a change to:

• the name of an employer, or

• the scheme name,

the scheme administrator should notify Inland Revenue SPSS (Nottingham) by submitting form SHP 200, together with the appropriate Deed in the case of a change of scheme name, within three months of the effective date of change. (A notification received outside the three month period may be accepted at the discretion of the Board of Inland Revenue).

Full election action as in paragraph 22.52–22B.59 is not required in relation to minor variations.

Major variations All types

22B.94 All major variations detailed in paragraphs 22.96–22B.102 require full election action as in paragraphs 22.35–22.41, including either:

• the issue of a notice of intention and consultation with independent trade union(s) (see paragraphs 22.52–22.58); or

• the issue of a notice of explanation (see paragraph 22.59).

A change to the effective date of contracting-out

22B.95 This type of change must be notified to Inland Revenue SPSS (Nottingham) on form SHP 105 within three months of the effective date of change. However, an election received outside the three month period may be accepted at the discretion of the Board of Inland Revenue.

If the new effective date of contracting out is earlier than the original one, the employer must also confirm that the scheme’s provisions allow for contracting out to commence from the earlier date, and that the contracting-out conditions have been satisfied from that date. This is included in the statement the applicant has to sign on form SHP 105. The effective date of contracting out cannot however predate the date from which the scheme is tax approved.

Changes to the categories of employment covered by the certificate

22B.96 This type of change must be notified to Inland Revenue SPSS (Nottingham) on form SHP 105 within three months of the effective date of change. However, an election received outside the three month period may be accepted at the discretion of the Board of Inland Revenue.

An employer can elect that certain employments are to be excluded from the coverage of a contracting-out certificate. A category of employment must be clearly identifiable, for example, an employer might choose to contract out clerical staff, but not sales staff. Employees in a category of employment excluded in this way must, from the date of exclusion, cease to be eligible to join or contribute to the stakeholder pension scheme.

Change of principal employer

22B.97 The principal employer in a scheme may be any employer whether or not they are the holding company in the scheme or are contracted out by reference to the scheme (but if the principal employer is not contracted out by reference to the scheme, its employees must not be eligible to contribute to the scheme). Where there is a change of principal employer, form SHP 201 must be submitted, along with a copy of the appropriate Deed.

22B.98 If the whole of the business and employees of the existing principal employer are taken over by a new principal employer, the continuity provision may apply (see paragraph 22.122). If so, no change is needed to the contracting-out certificate(s).

22B.99 If the contracting-out certificate(s) is/are unaffected by the change, for example, the principal employer and a participating employer swap roles but each retain their contracting-out certificate, form SHP 105 should be appropriately completed to contain a statement confirming that the certificate is unchanged.

22B.100 If the contracting-out certificate(s) is/are affected by the change: for example, a new employer is contracting out by reference to the scheme and replacing the existing principal employer: a full election for the issue of a certificate (paragraphs 22.52–22.59) must be made by the new principal employer.

Adding a subsidiary to the schedule of a holding company certificate

22B.101 This type of change must be notified to Inland Revenue SPSS (Nottingham) on form SHP 105 within three months of the effective date of change. However, an election received outside the three month period may be accepted at the discretion of the Board of Inland Revenue.

Both the subsidiary and the holding company must be corporate bodies. All categories of employee of any of the employers to be covered by the holding company certificate who are eligible to contribute to the scheme must be included as categories of employment on the certificate.

Deleting a subsidiary from the schedule to a holding company certificate

22B.102 This type of change must be notified to Inland Revenue SPSS (Nottingham) on form SHP 105 within three months of the effective date of change. However, an election received after the three month period may be accepted at the discretion of the Board of Inland Revenue.

The deleted employer’s employees must immediately cease to be eligible members of the scheme and must not contribute to the scheme from the date of deletion.

Temporary arrangements: sale of subsidiary

22B.103 Where a subsidiary employer named on a schedule to a holding company contracting-out certificate is sold, it may remain in the scheme for a period of temporary participation until

alternative arrangements are made. The subsidiary may continue to be named on the schedule to the holding company’s contracting-out certificate, subject to the following conditions:

• the ex-subsidiary continues to be an employer subject to the rules of the scheme (or one of the other definitions of “subsidiary” of Regulation 12(2) c) of the Occupational Pension Schemes (Contracting-out) Regulations 1996 is satisfied) and

• Inland Revenue SPSS (Nottingham) agrees that the ex-subsidiary may retain temporary membership of the scheme.

When the alternative pension arrangements have been made, the holding company must elect to delete the subsidiary employer from the contracting-out certificate using form SHP 105. Notices of intention should be issued to the employees. The employees of the ex-subsidiary must cease to be eligible to contribute to the scheme once their employer has been deleted from the contracting-out certificate.

Temporary arrangements: sale of part of a business

22B.104 Where part of the business of an employer named on the schedule to a holding company contracting-out certificate is sold, the employees in that part of the business may, subject to Inland Revenue SPSS (Nottingham)’s approval, continue to be contracted out by reference to the scheme for a temporary period until alternative arrangements are made. This may be done by varying the holding company’s schedule (see paragraph 22.106) or by the issue of a separate contracting-out certificate for the acquiring employer (see paragraph 22.108).

22B.105 If the sold part of the business:

• either:

- continues to be an employer subject to the rules of the scheme, or

- satisfies one of the other definitions of “subsidiary” in Regulation 12 of the Occupational Pension Schemes (Contracting-out) Regulations 1996; and

• wishes to be named on the schedule to the holding company’s contracting-out certificate,

the holding company should elect to vary its contracting-out certificate to add the sold part of the business to the schedule.

A notice of explanation should be issued to the employees of the sold part of the business.

22B.106 At the end of the period of temporary participation, the holding company should elect to vary its contracting-out certificate, to delete the acquiring employer from the schedule.

A notice of intention will be required, in accordance with Regulation 9 of the Occupational Pension Schemes (Contracting-out) Regulations 1996. Employees of the acquiring employer which is being deleted from the schedule must cease to be eligible to contribute to the scheme.

22B.107 The sold part of the business should elect for its own certificate to participate in the scheme on a temporary basis if either:

• the definition of subsidiary in Regulation 12 of the Occupational Pension Schemes (Contracting-out) Regulations 1996 is not satisfied, or

• it does not wish to be named on the schedule to the holding company’s contracting-out certificate.

A notice of explanation would be appropriate.

22B.108 At the end of the period of temporary participation, the sold part of the business should issue notices of intention and elect to surrender its contracting-out certificate. Its employees must

cease to be eligible to contribute to the scheme from the date of surrender.

22B.109 If the employer changes as a result of the sale of the part of the business, the contents of Regulation 43(5) of the Occupational Pension Schemes (Contracting-out) Regulations 1996 should be noted. The employees may be treated as continuing to contract out through the new employer if certain conditions are satisfied.

Employer in receivership

22B.110 When Inland Revenue SPSS (Nottingham) have been informed that a receiver has been appointed, they will need to establish whether the scheme will continue to contract out. Inland Revenue SPSS (Nottingham) will contact the Life Office or the scheme administrator to find out.

If the employer which is in receivership is the only employer in the scheme but the scheme is to continue, and remain contracted-out, the employer must continue to make minimum payments.

If the employer in receivership is the only one participating in the scheme and the scheme is to cease to contract out, an election must be made to surrender the employer’s contracting-out certificate. Inland Revenue SPSS (Nottingham) will then contact the receiver and the Life Office to inform them that the scheme must be wound up and removed from the stakeholder pension

scheme register.

If there is more than one employer participating in the scheme, any participating employer which goes into receivership may surrender its contracting-out certificate if it is no longer to contract out through the scheme. The scheme may however continue for any remaining employers who wish to continue contracting out through that scheme.

Employer in liquidation

22B.111 When Inland Revenue SPSS (Nottingham) are informed that an employer is in

liquidation, they will contact the liquidator to obtain more information. Where the scheme is for a single employer, Inland Revenue SPSS (Nottingham) will need to establish the date from which the scheme ceased to contract out. An election must be made to surrender the employer’s

contracting-out certificate, where possible.

Where it is not possible for the liquidator to submit an election to surrender the contracting-out certificate, the liquidator must advise Inland Revenue SPSS (Nottingham) of the date from which the contracting-out certificate should be cancelled. This will be either the date of insolvency, or the date the last minimum payment covered. Inland Revenue SPSS (Nottingham) will then cancel the employer’s contracting-out certificate. The scheme must be wound up and Opra will remove it from the stakeholder pension scheme register.

If more than one employer participates in the scheme and at least one of the employers is not in liquidation and wishes to carry on contracting out through the scheme, the scheme may continue providing the contracting-out certificate of the employer in liquidation is surrendered, as above.

Industry-wide scheme: participating employer

22B.112 If a participating employer ceases to meet any contracting-out requirement, the scheme administrator must notify Inland Revenue SPSS (Nottingham) who will then consider cancelling the participating employer’s contracting-out certificate. If the certificate is cancelled the scheme

administrator is responsible for notifying terminations to NI Services to Pensions Industry, formerly COEG. The employees of the participating employer whose certificate has been cancelled must cease to be eligible to contribute to the scheme.

Other changes

22B.113 Any other changes to the COMPSHP contracting-out certificate should be notified to Inland Revenue SPSS (Nottingham) in writing, within three months of the effective date of change.

However, an election received outside the three month period may be accepted at the discretion of

the Board of Inland Revenue.

The periodic return system: holding companies only

22B.114 Employers with a holding company contracting-out certificate participate in a periodic return system on a voluntary basis. The system provides for the notification of changes to holding company contracting-out certificates to be supplied annually, instead of as and when the changes occur. An employer may, however, choose instead to notify any changes as they occur by

submitting the appropriate election forms.

The periodic return is issued on an annual basis, based on the date of contracting out.

22B.115 The following changes may be notified on the periodic return form:

• the addition or deletion of employers from the schedule in issue to the holding company,

• a change of scheme name,

• a change of name of the principal employer and/or the participating employer(s),

• the appointment of a new principal employer. Additional information and documentation is also required as detailed in paragraph 22.120–22.121.

22B.116 The Inland Revenue’s Employer Compliance Officers are aware that as a result of the periodic return system there may be periods during which a contracting-out certificate does not reflect the true contracting-out position in the scheme.

Action by Inland Revenue

22B.117 If the contracting-out conditions are satisfied, Inland Revenue SPSS (Nottingham) will issue a revised contracting-out certificate/schedule to the employer and, unless the employer has indicated otherwise, a copy will be sent to the scheme administrator.

The employer should retain the existing certificate/schedule for future reference and ensure that they mark it “replaced by certificate/schedule issued on ... [date]”.