The Pension Schemes (Voluntary Contributions Requirements and Voluntary and Compulsory Membership) Regulations 1987

Exceptions to section 12(1)

2.—(1) Section 12(1) (voluntary contributions requirements) shall not apply to the rules of any public service pension scheme unless it is an exempt approved scheme for the purposes of section 21 of the Finance Act 1970(1).

(2) Section 12(1) shall not apply to the rules of any personal pension scheme in so far as it is comprised in an annuity contract made before 4th January 1988.

(3) Section 12(1)(a) and (b) shall not apply to the rules of any scheme in so far as they relate to the payment by a member of any sum as voluntary contributions where that payment would not qualify for relief from tax in accordance with section 21(4) or 22(2) of the Finance Act 1970(2).

(4) Section 12(1)(a) and (b) shall not apply to the rules of any scheme in so far as they provide that a member of the scheme must give the trustees or managers of the scheme notice, of a period not exceeding 12 months, of his intention to pay voluntary contributions at a specified rate or to vary that rate.

(5) Section 12(1)(a) and (b) shall not apply to the rules of any personal pension scheme in so far as they relate to a member whose rights under the scheme derive only from one or more transfer payments.

(6) Section 12(1)(a) and (b) shall not apply to the rules of any occupational pension scheme (“the first scheme”) in so far as they relate to a member—

(a) in respect of whose current pensionable service the scheme will provide benefit only on his death; or

(b) whose pensionable service either has not begun or has terminated; or

(c) who is either within one year of reaching, or has reached, normal pension age; or

(d) who is, or is eligible to become, a member of at least one other occupational pension scheme which applies to the same employment as the first scheme and which—

(i) if he is a member of it, complies in relation to him, or, if he is not a member of it, would comply in relation to him if he were, with the voluntary contributions requirements, and

(ii) is not a scheme which, if he is a member of it, falls in relation to him, or, if he is not a member of it, would fall in relation to him if he were, to be regarded as a scheme excepted from the application of section 12(1)(a) and (b) by virtue of paragraph (1), (2), (5) or (6)(a), (b) or (c) of this regulation.

(7) Section 12(1)(b) shall not apply to the rules of any scheme in so far as they impose, or allow any person to impose, a lower limit on the payment by a member of voluntary contributions in respect of any tax year if that lower limit is not higher than the amount specified in paragraph (8) of this regulation.

(8) The amount last mentioned in paragraph (7) of this regulation is 0.5 per cent. of the member’s earnings in that tax year, or, if it is greater, 3 times the lower earnings limit (within the meaning of section 1 of the Social Security Pensions Act 1975(3) for that tax year.

(9) In paragraph (8) of this regulation, “member’s earnings” means—

(a) in the case of a member of a personal pension scheme, his earnings attributable to his employment as an employed earner; or

(b) in the case of a member of an occupational pension scheme, his earnings attributable to his relevant employment,

in respect of which secondary Class 1 contributions are payable.

(10) Section 12(1)(b) shall not apply to the rules of any scheme in so far as they impose, or allow any person to impose, an upper limit on the payment by a member of voluntary contributions which is equivalent to the maximum amount which, ignoring any remuneration in kind, could be paid in any period without prejudicing the qualification of the scheme for tax-exemption or tax-approval.

(11) Section 12(1)(c) and (d) shall not apply to the rules of any scheme in relation to a member’s voluntary contributions to the extent that those contributions are paid under an agreement—

(a) which was made before the date on which section 12 came into force; and

(b) which has not, since that date, been varied.

(12) Section 12(1)(d)(ii) shall not apply to the rules of any scheme to the extent that the additional benefits provided in accordance with them are money purchase benefits.

(1)

1970 c. 24; section 21(6) was repealed by the Finance Act 1971 (c. 68), sections 56(3) and 69(7) and Schedule 14, Part IV; section 21(10) and (11) was repealed by the Finance Act 1971, section 69(7) and Schedule 14, Part I.

(2)

Section 22(2) was amended by the Finance Act 1972 (c. 41), section 74(3).

(3)

Section 1(2) was amended by section 74(6) of the Social Security Act 1986.