PSI3.1 - Introduction: The Occupational Pensions Board (OPB) - Brief History And Duties Of The Occupational Pensions Board


(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 …".