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The Financial Assistance Scheme Regulations 2005

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Statutory Instruments

2005 No. 1986

PENSIONS

The Financial Assistance Scheme Regulations 2005

Made

19th July 2005

Coming into force in accordance with regulation 1

M1Whereas a draft of this instrument was laid before Parliament in accordance with section 316(2)(n) of the Pensions Act 2004 and approved by resolution of each House of Parliament;

Now, therefore, the Secretary of State for Work and Pensions, in exercise of the powers conferred upon him by sections 286, 315(2) and 318(1), (4)(a) and (5) of that Act M2, and of all other powers enabling him in that behalf, hereby makes the following Regulations:

Modifications etc. (not altering text)

Marginal Citations

M2Section 286 is modified in relation to multi-employer schemes by S.I.2005/441. Section 318(1) is cited because of the meaning ascribed to the words “modifications”, “prescribed” and “regulations”.

PART 1 U.K.GENERAL

Citation, commencement and extentU.K.

1.—(1) These Regulations may be cited as the Financial Assistance Scheme Regulations 2005 and shall come into force—

(a)for the purposes of this regulation, regulation 4 and paragraphs 4, 5, 15 and 16 of Schedule 1 in so far as they relate to regulation 4, for the purpose only of the making of regulations, on the day after the day on which these Regulations are made;

(b)in so far as these Regulations apply in relation to civil partnerships, on 5th December 2005; and

(c)for all other purposes, on 1st September 2005.

(2) These Regulations extend to Northern Ireland.

InterpretationU.K.

2.—(1) In these Regulations—

M3“the Act” means the Pensions Act 2004 and references to a numbered section are, unless the context otherwise requires, to a section of the Act;

M4“the Northern Ireland Order” means the Pensions (Northern Ireland) Order 2005 and references to a numbered Article are, unless the context otherwise requires, to an Article of that Order;

M5“the 1993 Act” means the Pension Schemes Act 1993;

M6“the 1995 Act” means the Pensions Act 1995;

M7“the FSMA” means the Financial Services and Markets Act 2000 ;

M8“the ICTA” means the Income and Corporation Taxes Act 1988;

[F1“the FAS Information and Payments Regulations” means the Financial Assistance Scheme (Provision of Information and Administration of Payments) Regulations 2005;]

“the Commissioners of HMRC” means the Commissioners of Her Majesty's Revenue and Customs;

“annual payment” means the amount payable to a beneficiary in respect of each year determined in accordance with regulation 17 [F2or 17C] and Schedule 2;

“beneficiary” means a qualifying member or, after his death, his survivor [F3and surviving dependants];

F4...

[F5“employment” means any trade, business, profession, office or vocation;]

[F6“ill health payment” means the amount payable to a beneficiary in respect of each year determined in accordance with regulation 17A and Schedule 2A;]

[F7“indexation date” means—

(a)

the 1st January next falling after a beneficiary first becomes entitled to an annual payment or an ill health payment; and

(b)

each subsequent 1st January during that beneficiary’s lifetime;]

“initial payment” means a payment made to a beneficiary in accordance with regulation 18;

[F8“interim ill health payment” means a payment made to a beneficiary in accordance with regulation 17B;]

[F8“interim pension” has the meaning given in paragraph 2 of Schedule 2 as modified by paragraph 10 of that Schedule;]

[F9“multi-employer scheme” means an occupational pension scheme in relation to which there is or has been—

(a)

a principal employer and at least one employer (who is not the principal employer in relation to that scheme); or

(b)

more than one employer,

at the same time;]

[F10“partner” means a person of either sex who was not married to, or in a civil partnership with, the qualifying member but who was living with that member—

(a)

as if that person and the qualifying member were husband and wife; or

(b)

in the case of two adults of the same sex, as if they were civil partners,

and, for the purposes of these Regulations, two adults of the same sex are to be regarded as living together as civil partners if they would have been regarded as living together as husband and wife were they instead two adults of the opposite sex;]

[F10“pension credit member” has the meaning given by section 124(1) of the 1995 Act;]

F11...

[F12“principal employer” has the meaning given in regulation 12(6)]

[F13“qualifying course” means a full time educational or vocational course at a recognised educational establishment where in pursuit of that course, the time spent receiving instruction or tuition, undertaking supervised study, examination or practical work or taking part in any exercise, experiment or project for which provision is made in the curriculum of the course exceeds 12 hours per week in normal term time, and shall include any gaps between the ending of one course and the commencement of another, where the person is enrolled on and commences the latter course;]

“qualifying member” shall be construed in accordance with regulation 15;

“qualifying pension scheme” shall be construed in accordance with regulation 9;

[F14“relevant public authority” has the meaning given in section 307(4) or, as the case may be, Article 280(4);]

“scheme manager” shall be construed in accordance with regulation 5;

[F15“shared initial payment” means a payment which is not an initial payment and which is the amount payable to a survivor of a qualifying member who was a party to a polygamous marriage in accordance with regulation 18(4B) and paragraph 5(6A) of Schedule 2;]

[F15“surviving dependant” shall be construed in accordance with regulation 16B;]

[F16“survivor” shall be construed in accordance with regulation 16A;]

M9“tax approved scheme” means a scheme which is approved or was formerly approved under section 590 (conditions for approval of retirement benefit schemes) or 591 (discretionary approval) of the ICTA or in respect of which an application for such approval has been duly made but has not been determined;

“trustees or managers” shall be construed in accordance with the definition in section 124(1) of the 1995 Act,

and other expressions have the meaning given to them in the Act or, as the case may be, in the Northern Ireland Order.

[F17(1A) In these Regulations, “normal retirement age” means, subject to paragraph (1B), in relation to a member of an occupational pension scheme, the age specified in the rules of that scheme at which that member will normally retire.

[F18(1AB) In paragraph (1A), “the rules of that scheme” means the rules of the occupational pension scheme on the date on which benefits ceased to accrue to that member.]

(1B) Where the normal retirement age—

(a)determined in accordance with paragraph (1A) is—

(i)more than 65, that age shall be 65;

(ii)less than 60, that age shall be 60 except for the purposes of paragraph 2(3)(a) of Schedule 2;

(b)cannot be determined in accordance with paragraph (1A) from the rules of the qualifying pension scheme, that age shall be such age as the scheme manager shall determine having regard to the rules of that scheme and to such other information as [F19it] considers relevant.]

(2) References in these Regulations to provisions of the 1993 Act, the 1995 Act, the Welfare Reform and Pensions Act 1999 M10 and to the Social Security Contributions and Benefits Act 1992 M11 include references to the provisions in force in Northern Ireland corresponding to those provisions.

(3) In these Regulations, “insurance company” means—

(a)a person who has permission under Part 4 of the FSMA to effect or carry out contracts of long-term insurance; or

(b)an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to that Act (certain direct insurance undertakings) which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to effect or carry out contracts of long-term insurance,

and in this paragraph, “contracts of long-term insurance” means contracts which fall within Part 2 of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001M12.

(4) Paragraph (3) shall be read with—

(a)section 22 of the FSMA (regulated activities);

(b)any relevant order under that section; and

(c)Schedule 2 to that Act.

F20(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F20(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) [F21Subject to [F22paragraphs (8) and (8A)], in these Regulations,] “appointed representative” means—

(a)a person whose name, address and appointment by a beneficiary or by a person who believes himself to be a beneficiary (“[F23possible] beneficiary”) for the purposes of—

(i)notifying the scheme manager of the details prescribed in regulation 14(1) and (3); or

(ii)receiving payments made under these Regulations,

have been notified to the scheme manager in a document signed by the beneficiary or [F23possible] beneficiary in question or by his legal representative and whose appointment has been consented to by the scheme manager; or

(b)where a beneficiary or a [F23possible] beneficiary—

(i)dies; or

(ii)is otherwise incapable of acting for himself,

and there is no person appointed under sub-paragraph (a) in respect of that beneficiary or [F23possible] beneficiary, a person who has been appointed by the scheme manager to act as the beneficiary's or the [F23possible] beneficiary's representative for the purposes of these Regulations.

[F24(8) If a beneficiary or a possible beneficiary appoints a person under sub-paragraph (a) of paragraph (7), and then—

(a)dies, or

(b)becomes otherwise incapable of acting for himself,

the person appointed under sub-paragraph (a) of that paragraph is deemed to have been appointed under sub-paragraph (b) of that paragraph.

[F25(8A) Subject to paragraph (8B), where a beneficiary or a possible beneficiary is a child aged less than 18, the scheme manager may regard—

(a)a parent of the child;

(b)a person with parental responsibility within the meaning of section 3 of the Children Act 1989 in relation to the child;

(c)a person with parental responsibility or parental rights under the Children (Scotland) Act 1995 in relation to the child; or

(d)a person with parental responsibility within the meaning of Article 6 of the Children (Northern Ireland) Order 1995 in relation to the child,

as the appointed representative of that child.

(8B) Where—

(a)no person referred to in paragraph (8A)(a) to (d) is known to the scheme manager, the scheme manager may appoint a person to act as the appointed representative of a child;

(b)more than one person referred to in paragraph (8A)(a) to (d) wishes to act as the child’s representative for the purposes of these Regulations, the scheme manager may appoint one of those persons as the appointed representative of that child.]

(9) For the purposes of these Regulations, a person is “terminally ill” at any time if at that time he suffers from a progressive disease and his death, in consequence of that disease, can reasonably be expected within six months.]

[F26(10) For the purposes of these Regulations, a qualifying member who has died was “a party to a polygamous marriage” if, immediately before the member died, the member—

(a)was a party to a marriage entered into under a law which permits polygamy; and

(b)had more than one spouse.]

Textual Amendments

Modifications etc. (not altering text)

Marginal Citations

M3The Act is modified in its application to partially guaranteed pension schemes by S.I.2005/277, in its application to multi-employer schemes by S.I. 2005/441 and in its application to hybrid schemes by S.I.2005/449.

M4S.I.2005/255 (N.I.1). The Northern Ireland Order is modified in its application to partially guaranteed pension schemes by S.R.2005/55, in its application to hybrid schemes by S.R.2005/84 and in its application to multi-employer schemes by S.R.2005/91.

M9Sections 590 and 591 are amended by the Finance Act 1988 (c. 39), section 35 and Schedule 3, the Finance Act 1989 (c. 26), sections 75 and 187 and Schedules 6 and 17, the Finance Act 1991 (c. 31), sections 34, 36 and 123 and Schedule 19, the Finance Act 1994 (c. 9), section 107, the Finance Act 1995 (c. 4), section 59 and the Finance Act 1999 (c. 16), section 79 and Schedule 10.

Commencement of winding upU.K.

3.—(1) For the purposes of these Regulations, the time when an occupational pension scheme begins to be wound up shall be determined in accordance with this regulation.

(2) Subject to paragraphs (3) to (6), where the rules of the scheme require or permit the scheme to be wound up and the scheme is wound up under those rules, the scheme begins to be wound up—

(a)either—

(i)at such time as the rules provide that it does so; or

(ii)if the rules make no provision as to that time, at such time as the trustees or managers determine that the scheme shall begin to be wound up; or

(b)as soon as there are no members who are in pensionable service under the scheme,

whichever is the later.

(3) Where the rules of the scheme require or permit the scheme to be wound up but the trustees or managers determine in pursuance of section 38 of the 1995 Act M13 or otherwise that the scheme is not to be wound up for the time being, then for the purposes of paragraph (2), in so far as any provision made by the rules of the scheme as to the time when it begins to be wound up is inconsistent with the trustees' or managers' determination, that provision shall be disregarded.

(4) Where under the rules of the scheme, any person other than the trustees or managers may determine that the scheme is to be wound up, or is not to be wound up for the time being, then the references in paragraphs (2)(a)(ii) and (3) to the trustees' or managers' determination shall be taken, in a case where the winding up begins or is deferred by virtue of that other person's determination, as a reference to his determination.

(5) Paragraph (4) applies where such power is vested in the trustees or managers jointly with another person, or in some but not all of the trustees, as it applies where such a power is vested only in a person other than the trustees or managers.

(6) Where—

(a)the scheme manager is satisfied that the scheme began to wind up during the period prescribed in regulation 9(1)(b); but

(b)the exact date on which the scheme began to wind up cannot be determined,

the scheme begins to be wound up on such date, within that period, as the scheme manager determines.

(7) Where—

(a)a scheme is wound up in pursuance—

(i)of an order by the Determinations Panel on behalf of the Regulator under section 11 of the 1995 Act M14 (see section 9); or

(ii)of an order of a court; and

(b)the order makes provision as to the time at which the scheme is to begin to be wound up,

the scheme begins to be wound up at the time specified in the order or, if none is so specified, the date on which the order takes effect.

Marginal Citations

M13Section 38 is amended by the Welfare Reform and Pensions Act 1999, Schedule 12, paragraph 50.

M14Section 11 is amended by section 22 of the Act.

Application of Parts 1 and 2 of the ActU.K.

4.—(1) The provisions of Parts 1 and 2 of the Act specified in paragraph (2) apply for the purposes of these Regulations with the modifications prescribed in Schedule 1.

(2) The specified provisions are—

(a)section 68 (power for the Regulator to collect information relevant to the Board of the Pension Protection Fund);

(b)section 85 (power to enable the Regulator to disclose restricted information to the Board);

[F27(ba)section 113 (investment of funds);]

[F27(bb)section 114 (investment principles);

(bc)section 115 (borrowing);

(bd)section 117 (administration levy);

(be)section 119 (annual reports to Secretary of State);

(bf)section 134 (directions);]

(c)section 168 (administration of compensation payable by the Board);

(d)sections 190 to 204 (except section 202) (information gathering powers of the Board and provisions relating to disclosure of information by the Board); F28...

[F29(da)Schedule 5 (the Board of the Pension Protection Fund); and]

(e)Schedule 8 (permitted disclosures by the Board to facilitate exercise of functions).

(3) Subject to paragraph (5), the provisions of Parts 1 and 2 of the Act which are applied by paragraph (1), shall apply to Northern Ireland for the purposes of these Regulations, with the prescribed modifications, as if those provisions extended to Northern Ireland.

(4) Section 88(4) shall also apply to Northern Ireland for the purposes of these Regulations as if that provision extended to Northern Ireland.

(5) Sections 197 to 201 and 203 shall apply to Northern Ireland only in so far as they relate to disclosure or provision of information—

(a)by or to the scheme manager;

(b)by any person who receives information directly or indirectly from the scheme manager;

(c)by any person for the purpose of enabling or assisting the scheme manager to exercise [F30its] functions; and

(d)by trustees or managers of occupational pension schemes in respect of matters relating to these Regulations.

(6) In so far as this regulation extends provisions to Northern Ireland—

(a)a person may not be required under or by virtue of those provisions to produce, disclose or permit the inspection of protected items within the meaning given in section 311(2) to (4); and

(b)if a person claims a lien on a document, its production under any provision made by, or by virtue of, those provisions, does not affect the lien.

Textual Amendments

PART 2U.K.ESTABLISHMENT OF THE FINANCIAL ASSISTANCE SCHEME

Scheme managerU.K.

5.—(1) The financial assistance scheme established by these Regulations shall be managed by the [F31Board of the Pension Protection Fund].

[F32(2) References in these Regulations to the scheme manager are to the Board of the Pension Protection Fund acting in its capacity as manager of the financial assistance scheme.]

[F32(3) The Secretary of State shall pay a grant to the scheme manager in connection with its functions conferred by these Regulations.

(4) The scheme manager may not use the grant paid by the Secretary of State in accordance with paragraph (3) to make any payments which are required to be made to any beneficiary in accordance with these Regulations.]

Textual Amendments

Functions of the Board of the Pension Protection Fund in relation to the financial assistance schemeU.K.

F335A.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F34Financial and other arrangements to enable or assist the Board of the Pension Protection Fund to carry out its functions in relation to the financial assistance scheme]U.K.

[F346.—(1) The Secretary of State—

(a)shall make available such amounts as are necessary to enable—

(i)the scheme manager; or

(ii)a person with whom the scheme manager has made arrangements under paragraph 18 of Schedule 5 to the Act (as modified by Schedule 1 to these Regulations) to pay instalments of payments to beneficiaries,

to make any payments which are required to be made in accordance with these Regulations; and

(b)may make such arrangements as the Secretary of State considers appropriate to enable or assist the scheme manager to carry out its functions in relation to the financial assistance scheme.

(2) The arrangements in paragraph (1)(b) may, in particular, include the determination of any actuarial factor which is to be applied by the scheme manager when determining the amount of any payment in accordance with Schedule 2 or 2A.]

Textual Amendments

[F34Use of informationU.K.

6A.—(1) Information held by the Secretary of State or the Department for Social Development in Northern Ireland for the purposes of any of their functions relating to social security or the financial assistance scheme may be disclosed to—

(a)the scheme manager; or

(b)to a person with whom the scheme manager has made arrangements under paragraph 18 of Schedule 5 to the Act (as modified by Schedule 1 to these Regulations) and who is authorised by the scheme manager to receive and use such information,

for any use connected with, or incidental to, the exercise of the scheme manager’s functions relating to the financial assistance scheme.

(2) Information obtained by the scheme manager, or a person referred to in paragraph (1)(b), in the exercise of the scheme manager’s functions in relation to the financial assistance scheme—

(a)may be disclosed to the Secretary of State or the Department for Social Development in Northern Ireland in any case in which disclosure is for the purpose of enabling or assisting the scheme manager to exercise its functions; and

(b)shall be disclosed to the Secretary of State or the Department for Social Development in Northern Ireland on request by the Secretary of State or, as the case may be, that Department in any case in which disclosure is for the purpose of enabling or assisting the Secretary of State or, as the case may be, the Department to exercise their functions relating to the financial assistance scheme.]

Textual Amendments

Annual reportsU.K.

F357.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

DelegationU.K.

F368.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

PART 3U.K.QUALIFYING PENSION SCHEMES

Qualifying pension schemesU.K.

9.—(1) An occupational pension scheme shall be a qualifying pension scheme for the purposes of these Regulations where—

(a)immediately before the time when the scheme began to wind up, it was neither a money purchase scheme nor a scheme of a description prescribed in regulation 10;

(b)[F37except where paragraph (1B) applies,] the scheme began to wind up during the period beginning on 1st January 1997 and ending on 5th April 2005;

[F38(c)either—

(i)the employer in relation to that scheme satisfies the condition in regulation 11;

(ii)in relation to a multi-employer scheme, the condition in regulation 12 is satisfied;

(iii)in relation to a scheme which is not a multi-employer scheme and which began to wind up before 6th April 1997, the condition in regulation 12A(1) is satisfied;

(iv)in relation to a multi-employer scheme which began to wind up before 6th April 1997, the condition in regulation 12B(1) or (2) is satisfied;

(v)in relation to a scheme which is not a multi-employer scheme and which began to wind up on or after 6th April 1997 but before 11th June 2003, the condition in regulation 12A(2) is satisfied; or

(vi)in relation to a multi-employer scheme which began to wind up on or after 6th April 1997, the condition in regulation 12B(3) or (4) is satisfied;]

[F39(ca)[F40where paragraph (i) or (ii) of sub-paragraph (c) applies,] there was, in the opinion of the scheme manager, a relevant link between the commencement of the winding up of the scheme and the fact that the relevant condition mentioned in [F41those paragraphs] is satisfied; and]

(d)the details prescribed in regulation 14 have been notified to the scheme manager by a person, in the form and manner and before the date prescribed in that regulation.

[F42(1A) The relevant link mentioned in paragraph (1)(ca) is deemed to be established in relation to any employer in respect of which the relevant condition mentioned in paragraph (1)(c) is satisfied before 1st January 2009.]

[F43(1B) This paragraph applies where—

(a)the scheme began to wind up during the period beginning on 6th April 2005 and ending on 22nd December 2008;

(b)paragraph (i) or (ii) of paragraph (1)(c) applies by virtue of an insolvency event which occurred before 6th April 2005; and

(c)there has not been an insolvency event in relation to the relevant employer which would be a qualifying insolvency event for the purposes of section 127 or Article 111 (duty to assume responsibility for schemes following insolvency event) if the scheme were an eligible scheme.

(1C) In paragraph (1B)—

“eligible scheme” has the meaning given in section 126 or, as the case may be, Article 110 (eligible schemes);

“relevant employer” means the employer in relation to the scheme or, in relation to a multi-employer scheme, any employer or employers in relation to the scheme.]

(2) The following shall be treated as separate schemes for the purposes of these Regulations—

(a)in relation to an occupational pension scheme which is not a tax approved scheme but contains one or more sections which, by virtue of section 611(3) of the ICTA M15 (definition of “retirement benefits scheme”), are treated by the Commissioners of HMRC as a tax approved scheme, those sections which are so treated;

(b)sections of sectionalised multi-employer schemes as defined for the purposes of regulation 12,

and references in these Regulations to schemes shall be construed accordingly.

Textual Amendments

Marginal Citations

M15Section 611(3) is amended by the Finance Act 1999, section 79 and Schedule 10 and by the Finance Act 2000 (c. 17), section 61 and Schedule 13.

Other schemes which are not qualifying pension schemesU.K.

10.  The following are descriptions of schemes for the purposes of regulation 9(1)(a)—

(a)a public service pension scheme under the provisions of which there is no requirement for assets related to the intended rate or amount of benefit under the scheme to be set aside in advance (disregarding requirements relating to additional voluntary contributions);

(b)a scheme which is made under section 7 of the Superannuation Act 1972 M16 or under Article 9 of the Superannuation (Northern Ireland) Order 1972 M17 (superannuation of persons employed in local government service etc.) and provides pensions to persons employed in local government service;

(c)a scheme which is made under section 2 of the Parliamentary and Other Pensions Act 1987 M18 (power to provide for pensions for Members of the House of Commons etc.);

(d)a scheme which is established under section 48 of the Northern Ireland Act 1998 M19 (pensions of members), or which was established under Part 2 of the Ministerial Salaries and Members' Pensions Act (Northern Ireland) 1965 M20 or Article 3 of the Assembly Pensions (Northern Ireland) Order 1976 M21;

(e)a scheme in respect of which a relevant public authority has given a guarantee or made any other arrangements for the purposes of securing that the assets of the scheme are sufficient to meet its liabilities;

(f)a scheme which provides relevant benefits within the meaning of section 612(1) of the ICTA but which is neither a tax approved scheme nor a relevant statutory scheme within the meaning of section 611A of that Act M22 (definition of “relevant statutory scheme”);

(g)a scheme—

(i)which has been categorised before 18th April 2005, by the Commissioners of Inland Revenue, and on or after that date, by the Commissioners of HMRC, for the purposes of its approval as a centralised scheme for non-associated employers;

(ii)which is not contracted-out in accordance with section 9 of the 1993 Act M23; and

(iii)under the provisions of which the only benefits that may be provided on or after retirement (other than money purchase benefits derived from the payment of voluntary contributions by any person) are lump sum benefits which are not calculated by reference to a member's salary;

(h)a scheme—

(i)the only benefits provided by which (other than money purchase benefits) are death benefits; and

(ii)under the provisions of which no member has accrued rights (other than rights to money purchase benefits);

(i)a scheme with such a superannuation fund as is mentioned in section 615(6) of the ICTA M24 (exemption from tax in respect of certain pensions);

(j)a scheme which does not have its main place of administration registered in the United Kingdom;

(k)a scheme with fewer than two members;

[F44(l)a scheme with fewer than 12 members where all the members are trustees of the scheme and either—

(i)the provisions of the scheme provide that any decision made by the trustees is made by the unanimous agreement of the trustees who are members of the scheme; or

(ii)the scheme has a trustee who is independent in relation to the scheme for the purposes of section 23 of the 1995 Act (power to appoint independent trustees) and is registered in the register maintained by the Pensions Regulator in accordance with regulations made under subsection (4) of that section;]

[F44(m)a scheme with fewer than 12 members where all the members are directors of a company which is the sole trustee of the scheme and either—

(i)the provisions of the scheme provide that any decision made by the company in its capacity as trustee is made by the unanimous agreement of the directors of that company who are members of the scheme; or

(ii)one of the directors of the company is independent in relation to the scheme for the purposes of section 23 of the 1995 Act and is registered in the register maintained by the Pensions Regulator in accordance with regulations made under subsection (4) of that section.]

Textual Amendments

Marginal Citations

M22Section 611A is inserted by the Finance Act 1989 (c. 26), section 75 and Schedule 6, paragraph 15 and amended by the Finance Act 1999, section 52(1) and Schedule 5, paragraph 5.

M23Section 9 is amended by the 1995 Act, section 136(3) and (4), Schedule 5, paragraphs 21 and 24 and by the Social Security Contributions (Transfer of Functions) Act 1999 (c. 2), Schedule 1, paragraph 35.

M24Section 615(6) has effect in relation to trust based occupational pension schemes established in respect of persons wholly employed in a trade or undertaking outside of the United Kingdom. It was amended by the Finance Act 1999, section 79 and Schedule 10.

Condition to be satisfied by employerU.K.

11.—(1) The condition to be satisfied by the employer for the purposes of [F45regulation 9(1)(c)(i)], where the scheme is not a multi-employer scheme, is that an insolvency event has occurred in relation to the employer F46....

(2) The reference to the employer in paragraph (1)—

(a)[F47is to the] person who employed persons in the description or category of employment to which the scheme relates or related immediately before the time when the scheme began to wind up; or

(b)where the scheme had no active members immediately before the time it began to wind up, [F47is to the] person who employed persons in the description or category of employment to which the scheme relates or related immediately before the time at which the scheme ceased to have any active members.

Textual Amendments

Condition to be satisfied: multi-employer schemesU.K.

12.—(1) In relation to a section of a sectionalised multi-employer scheme, the condition to be satisfied for the purposes of [F48regulation 9(1)(c)(ii)] is that an insolvency event has occurred F49...—

[F50(a)in relation to the principal employer in that section; or

(b)where either there is no principal employer in that section or, where the principal employer is not an employer, there has been no insolvency event in relation to such a principal employer in that section—

(i)in relation to the employer in that section; or

(ii)where there is more than one employer in that section, in relation to all the employers in that section.]

(2) In relation to a multi-employer scheme which is not a sectionalised multi-employer scheme, the condition to be satisfied for the purposes of [F48regulation 9(1)(c)(ii)] is that an insolvency event has occurred F49...—

(a)in relation to the principal employer; or

[F51(b)where either there is no principal employer or, where the principal employer is not an employer, there has been no insolvency event in relation to such a principal employer—

(i)in relation to the employer; or

(ii)where there is more than one employer, in relation to all the employers.]

(3) The references to the employer [F52(other than in the phrase “principal employer”)] in paragraph (1) F53...—

(a)[F54include every person] who employed persons in the description or category of employment to which the section of the scheme relates or related immediately before the time when the scheme began to wind up; or

(b)where the scheme had no active members immediately before the time it began to wind up, to the person who was the employer of persons in the description or category of employment to which the section of the scheme relates or related immediately before the time when the scheme ceased to have any active members in relation to that section.

(4) The references to the employer [F52(other than in the phrase “principal employer”)] in paragraph(2)F53...—

(a)[F54include every person] who employed persons in the description or category of employment to which the scheme relates or related immediately before the time when the scheme began to wind up; or

(b)where the scheme had no active members immediately before the time it began to wind up, to the person who was the employer of persons in the description or category of employment to which the scheme relates or related immediately before the time when the scheme ceased to have any active members in relation to it.

(5) The references to the principal employer [F55(who may or may not be an employer within the meaning of paragraph (3) or (4)) in paragraphs (1)] and (2) are to [F56the person] who was the principal employer immediately before the time when the scheme began to wind up.

(6) In this regulation—

“principal employer” means [F56the person] who—

(a)

is the principal employer for the purposes of the scheme, or of a section of a sectionalised multi-employer scheme, in accordance with the rules of the occupational pension scheme; or

(b)

has power to act on behalf of all the employers in the scheme, or in a section of a sectionalised multi-employer scheme, in relation to the rules of that scheme;

“sectionalised multi-employer scheme” means a multi-employer scheme which is divided into two or more sections and the provisions of the scheme are such that—

(a)

different sections of the scheme apply or applied to different employers or groups of employers (whether or not more than one section applies or applied to any particular employer or groups including any particular employer);

(b)

any contributions payable or paid to the scheme by an employer, or by a member in employment under that employer, are allocated to that employer's section (or if more than one section applies or applied to the employer, to the section which is, or was, appropriate in respect of the employment in question); and

(c)

a specified part or proportion of the assets of the scheme is, or was, attributable to each section of the scheme and cannot or could not be used for the purpose of any other section of the scheme.

Textual Amendments

[F57Employer-related conditionU.K.

12A.—(1) The condition to be satisfied for the purposes of regulation 9(1)(c)(iii) is that the employer discharged the debt due under section 144 of the 1993 Act or that no debt was due under that section when the scheme began to wind up.

(2) The condition to be satisfied for the purposes of regulation 9(1)(c)(v) is that the employer discharged the debt due under section 75 of the 1995 Act or that no debt was due under that section when the scheme began to wind up.

(3) The scheme manager may treat the condition in paragraph (1) or (2) as being satisfied where—

(a)[F58it] is satisfied that an appropriate proportion of the debt was discharged or is likely to be discharged; and

(b)in [F59its] opinion, it was reasonable that the debt due under section 144 of the 1993 Act, or section 75 of the 1995 Act as appropriate, has not been discharged.

(4) In this regulation the reference to the employer shall be interpreted in accordance with regulation 11(2).

Textual Amendments

Employer-related condition: multi-employer schemesU.K.

12B.—(1) In relation to a section of a sectionalised multi-employer scheme, the condition to be satisfied for the purposes of regulation 9(1)(c)(iv) is that—

(a)the debt due under section 144 of the 1993 Act was discharged by all the employers in that section of the scheme; or

(b)no debt was due under that section of that Act when the scheme began to wind up.

(2) In relation to a multi-employer scheme which is not a sectionalised multi-employer scheme, the condition to be satisfied for the purposes of regulation 9(1)(c)(iv) is that—

(a)the debt due under section 144 of the 1993 Act was discharged by all the employers to which the scheme relates; or

(b)no debt was due under that section of that Act when the scheme began to wind up.

(3) In relation to a section of a sectionalised multi-employer scheme, the condition to be satisfied for the purposes of regulation 9(1)(c)(vi) is that—

(a)the debt due under section 75 of the 1995 Act was discharged by all the employers in that section of the scheme; or

(b)no debt was due under that section of that Act when the scheme began to wind up.

(4) In relation to a multi-employer scheme which is not a sectionalised multi-employer scheme, the condition to be satisfied for the purposes of regulation 9(1)(c)(vi) is that—

(a)the debt due under section 75 of the 1995 Act was discharged by all the employers to which the scheme relates; or

(b)no debt was due under that section of that Act when the scheme began to wind up.

(5) The scheme manager may treat any condition in paragraphs (1) to (4) as being satisfied where—

(a)[F60it] is satisfied that an appropriate proportion of the debt was, or is likely to be, discharged; and

(b)in [F61its] opinion, it was reasonable that the debt due under section 144 of the 1993 Act, or section 75 of the 1995 Act as appropriate, or a proportion of that debt has not been discharged.

(6) In this regulation—

(a)the references to the employer in paragraphs (1) and (3) shall be interpreted in accordance with regulation 12(3);

(b)the references to the employer in paragraphs (2) and (4) shall be interpreted in accordance with regulation 12(4); and

(c)“sectionalised multi-employer scheme” has the meaning given by regulation 12(6).]

Textual Amendments

Insolvency eventsU.K.

13.—(1) “Insolvency event” shall, for the purposes of regulations 11 and 12, be interpreted in accordance with—

(a)section 121(2) to (4) (other than subsection (3)(f) of that section); or

(b)Article 105(2) to (4) and (12) (other than paragraph (3)(f) of that Article),

and the following provisions of this regulation.

(2) Where the employer in relation to an occupational pension scheme is a person specified in paragraph (3), an insolvency event shall be treated as having occurred in relation to that employer for the purposes of regulations 11 and 12 where the scheme manager is satisfied that—

(a)that employer was unlikely to continue as a going concern; and

F62(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The persons specified in this paragraph are—

(a)a public body—

(i)in relation to which it is not possible for an insolvency event within the meaning of section 121 or Article 105 to occur; and

(ii)which is not the employer in relation to an occupational pension scheme in respect of which a relevant public authority has either—

(aa)given a guarantee in relation to any part of the scheme, any benefits payable under the scheme or any member of the scheme; or

(bb)made any other arrangements for the purposes of securing that the assets of the scheme are sufficient to meet any part of its liabilities;

(b)a charity (as construed in accordance with the Charities Act 1993 M25 or the Charities Act (Northern Ireland) 1964 M26) which is not a company or other body corporate; or

(c)a trade union within the meaning given in section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992 M27 or in Article 3(1) of the Industrial Relations (Northern Ireland) Order 1992 M28 in relation to which it is not possible for an insolvency event within the meaning of section 121 or Article 105 to occur.

[F63(3A) Where the scheme manager is satisfied that the employer in relation to an occupational pension scheme is unlikely to continue as a going concern, the scheme manager may treat an insolvency event as having occurred in relation to that employer for the purposes of regulations 11 and 12 where [F64it] is satisfied that F65... all of the following circumstances applied to that employer—

(a)no insolvency event referred to elsewhere in this regulation has occurred or is likely to occur in relation to the employer;

(b)the value of the assets of the employer is less than the amount of its liabilities, taking into account its contingent and prospective liabilities; and

(c)the employer is unable to pay its debts as they fall due or have fallen due.]

(4) An insolvency event also occurs for the purposes of regulations 11 and 12 where any of the following events occur F66...—

(a)in relation to a company—

(i)where an administration order is made—

(aa)by the court in relation to the company under, or by virtue of any enactment which applies, Part 2 of the 1986 Act (administration orders) (with or without modification); or

(bb)by the High Court in relation to the company under, or by virtue of any statutory provision which applies, Part 3 of the Insolvency (Northern Ireland) Order (administration orders) (with or without modification);

(ii)where a resolution is passed for a voluntary winding up of the company with a declaration of solvency under section 89 of the 1986 Act or under Article 75 of the Insolvency (Northern Ireland) Order; or

(iii)where notice is published in the Gazette that the company has been struck off the register pursuant to section 652 or 652A of the Companies Act 1985 M29 or Article 603 or 603A of the Companies (Northern Ireland) Order 1986M30;

(b)in relation to a relevant body, where—

(i)any of the events referred to—

(aa)in section 121(3) occurs in relation to that body by virtue of the application (with or without modification) of any provision of the 1986 Act or by or under any other enactment; or

(bb)in Article 105(3) M31 (insolvency events) occurs in relation to that body by virtue of the application (with or without modification) of any provision of the Insolvency (Northern Ireland) Order or by or under any other statutory provision; or

(ii)an administration order is made by the court in respect of the relevant body by virtue of any enactment which applies Part 2 of the 1986 Act or Part 3 of the Insolvency (Northern Ireland) Order (with or without modification);

(c)in relation to a limited liability partnership, where notice has been published in the Gazette that the partnership has been struck off the register pursuant to section 652 or 652A of the Companies Act 1985 M32 or Article 603 or 603A of the Companies (Northern Ireland) Order 1986M33;

(d)in relation to a building society, where there is dissolution by consent of the members under section 87 of the Building Societies Act 1986 M34 (dissolution by consent);

(e)in relation to a friendly society, where there is dissolution by consent of the members under section 20 of the Friendly Societies Act 1992 M35 (dissolution by consent); and

(f)in relation to an industrial and provident society, where there is dissolution by consent of the members under section 58 of the Industrial and Provident Societies Act 1965 M36 or section 67 of the Industrial and Provident Societies Act (Northern Ireland) 1969 M37 (instrument of dissolution).

[F67(4A) An insolvency event also occurs for the purposes of regulations 11 and 12 where the scheme manager is satisfied that F66...—

(a)an event has occurred in any jurisdiction outside the United Kingdom, in relation to an employer, that substantially corresponds to any event referred to in—

(i)section 121(2) to (4) (other than subsection (3)(f) of that section),

(ii)Article 105(2) to (4) and (12) (other than paragraph (3)(f) of that Article), and

(iii)paragraph (4) of this regulation; and

(b)that employer is unlikely to continue as a going concern.]

[F68(4B) The scheme manager may also, for the purposes of regulations 11 and 12, treat an insolvency event as having occurred in relation to the employer in relation to an occupational pension scheme where—

(a)the trustees of such a scheme entered into a binding agreement, with the employer against whom it arose, to compromise the debt that arose under section 75 of the 1995 Act, and

(b)the scheme manager is satisfied that had that agreement not been entered into—

(i)the value of that employer’s assets would have been less than the amount of its liabilities, taking into account its contingent and prospective liabilities, or

(ii)the employer would have been unable to pay its debts as they fell due.]

(5) In this regulation, a reference to Part 2 of the 1986 Act (administration orders) shall, in so far as it relates to a company or society listed in section 249(1) of the Enterprise Act 2002 M38 (special administration regimes), have effect as if it referred to Part 2 of the 1986 Act as it had effect immediately before the coming into force of section 248 of the Enterprise Act 2002 (replacement of Part 2 of the 1986 Act).

(6) In this regulation—

“the 1986 Act” means the Insolvency Act 1986 M39;

“the Insolvency (Northern Ireland) Order” means the Insolvency (Northern Ireland) Order 1989 M40;

“administration order” means an order whereby the management of the company or relevant body, as the case may be, is placed in the hands of a person appointed by the court or, in Northern Ireland, by the High Court;

[F69“employer” includes a person who is a principal employer for the purposes of regulation 12;]

“the Gazette” means, in respect of companies or limited liability partnerships registered—

(a)

in England and Wales, the London Gazette;

(b)

in Scotland, the Edinburgh Gazette; or

(c)

in Northern Ireland, the Belfast Gazette;

“public body” means a government department or any non-departmental public body established by—

(a)

in relation to Great Britain, an Act of Parliament or by a statutory instrument made under an Act of Parliament to perform functions conferred on it under, or by virtue of, that Act or instrument or any other Act or instrument;

(b)

in relation to Northern Ireland, a statutory provision to perform functions conferred on it under that statutory provision or any other such statutory provision;

“relevant body” means—

(a)

a credit union within the meaning given in section 31(1) of the Credit Unions Act 1979 M41 or Article 2(2) of the Credit Unions (Northern Ireland) Order 1985 M42 (interpretation);

(b)

a limited liability partnership within the meaning given in section 57(6) or Article 53(6) (partnerships and limited liability partnerships);

(c)

a building society within the meaning given in section 119 of the Building Societies Act 1986 (interpretation);

(d)

a person who has permission to act under Part 4 of the FSMA (permission to carry out regulated activities);

(e)

the society of Lloyd's and Lloyd's members who have permission under Part 19 of the FSMA (Lloyd's);

(f)

a friendly society within the meaning given in the Friendly Societies Act 1992; or

(g)

a society which is registered as an industrial and provident society under the Industrial and Provident Societies Act 1965 or under the Industrial and Provident Societies Act (Northern Ireland) 1969;

“statutory provision” has the meaning given in section 1(f) of the Interpretation Act (Northern Ireland) 1954 M43.

Textual Amendments

Marginal Citations

M291985 c. 6. Section 652A is inserted by the Deregulation and Contracting Out Act 1994 (c. 40), section 13(1) and Schedule 5, paragraph 2.

M30S.I.1986/1032 (N.I.6). Article 603A is inserted by the Deregulation and Contracting Out Act 1994, section 13(2) and Schedule 6, paragraph 2.

M31See also Article 105(12).

M32Sections 652 and 652A are applied to limited liability partnerships by the Limited Liability Partnerships Regulations 2001 (S.I.2001/1090).

M33Articles 603 and 603A are applied to limited liability partnerships by the Limited Liability Partnerships Regulations (Northern Ireland) 2004 (S.R.2004/307).

Notification of detailsU.K.

14.—(1) Where an occupational pension scheme is winding up, the prescribed details for the purposes of regulation 9(1)(d) are—

(a)the name of the scheme;

(b)the pension scheme registration number which is allocated to that scheme in the register;

(c)the name (and if there has been a change of name, the previous name) and address of any employer of earners in employment to which the scheme relates or has related;

(d)the name and address of at least one trustee of the scheme.

(2) The persons who may supply the details in paragraph (1) are—

(a)any trustee of the scheme including a trustee appointed by the Regulator under section 7 or 23(1) of the 1995 Act M44;

(b)a member of the scheme or his appointed representative;

(c)a surviving spouse or civil partner of a member of the scheme who has died; or

(d)any professional adviser in relation to the scheme.

(3) Where an occupational pension scheme has wound up, the prescribed details for the purposes of regulation 9(1)(d) are—

(a)the name of the scheme; and

(b)the name (and if there has been a change of name, the previous name) and address of any employer of earners in employment to which the scheme related.

(4) The persons who may supply the details in paragraph (3) are—

(a)a former trustee or manager of the scheme;

(b)a former member of the scheme or his appointed representative;

(c)a surviving [F70partner] spouse or civil partner of a former member of the scheme who has died;

(d)any former professional adviser in relation to the scheme; or

(e)any insurance company which is paying annuities to former members of that scheme.

(5) The details in paragraphs (1) and (3) must—

(a)be notified in writing; and

(b)have been notified to the scheme manager—

(i)no earlier than 1st September 2005; but

(ii)by no later than 28th February 2006 or by no later than such later date by which the scheme manager has indicated that [F71it] may accept notification of those details in the case of any particular scheme.

Textual Amendments

Marginal Citations

M44Section 7 is amended by the Act, Schedule 12, paragraph 36. Section 23 is substituted by section 36(3) of the Act.

[F72Working with qualifying pension schemesU.K.

14A.—(1) The scheme manager may manage, or make arrangements in relation to the management of, the transfer of any property, rights and liabilities of qualifying pension schemes which have not been fully wound up.

(2) The power conferred by paragraph (1) includes, but is not limited to—

(a)the preparation of plans or other similar preparatory documentation;

(b)undertaking work calculated to assist in ensuring any transfer is carried out effectively and efficiently;

(c)undertaking work to assess the effect of any action taken in relation to qualifying pension schemes; and

(d)the inspection, examination and auditing of data or other information relating to qualifying pension schemes.

Textual Amendments

Payments in relation to administration or other costsU.K.

14B.—(1) Where the scheme manager is satisfied that—

(a)the trustees or managers of a qualifying pension scheme are not able to pay or meet administration or other costs which have been incurred or which are likely to be incurred in relation to that scheme from the assets of the scheme; and

(b)paying or meeting those administration or other costs is necessary in order to—

(i)assist the scheme in winding-up;

(ii)keep any reduction in the scheme’s assets to a minimum; or

(iii)increase the scheme’s assets,

the scheme manager may, on an application by the trustees or managers, pay to them such amounts as it considers appropriate for the purpose of enabling the trustees or managers to pay or meet those costs.

(2) The scheme manager may make a payment under paragraph (1) on such terms as the scheme manager thinks fit.]

Textual Amendments

PART 4U.K.QUALIFYING MEMBERS

Qualifying membersU.K.

15.—(1) A member or a former member of a qualifying pension scheme is a qualifying member of that scheme for the purposes of these Regulations where—

(a)he is a member of the scheme in respect of whom that scheme's pension liabilities are unlikely to be satisfied in full because the scheme has insufficient assets; F73...

(b)he had ceased to be a member of the scheme and in respect of whom that scheme's pension liabilities were not satisfied in full, at the time he ceased to be a member, because the scheme had insufficient assets[F74; or

(c)he died before the date of the coming into force of these Regulations, but would have satisfied the condition in either sub-paragraph (a) or (b)]

and the conditions in [F75paragraphs (2) and (3)] are satisfied in relation to that member or former member[F76, or would have been satisfied where sub-paragraph (c) applies].

(2) The condition in this paragraph is that the member or former member must have an accrued right to a benefit under the scheme.

(3) The condition in this paragraph is that the member or former member—

(a)was a member of the qualifying pension scheme immediately before the scheme began to wind up; or

(b)was not a member of the scheme at that time but became a pension credit member of the scheme on or after the day on which the scheme began to wind up.

F77(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) [F78Except for the purposes of regulations 17A and 17B,] a person who is not a member or a former member of a qualifying pension scheme is to be regarded as a qualifying member of such a scheme for the purposes of these Regulations where—

(a)he was entitled to a present payment from a qualifying pension scheme immediately before the scheme began to wind up;

(b)that payment was attributable to the pensionable service of a former member of that scheme who has died;

(c)the scheme's pension liabilities in respect of that person are unlikely to be satisfied in full because the scheme has insufficient assets; F79...

F79(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F80Qualifying members for the purposes of section 286AU.K.

15A.—(1) A member or a former member of a qualifying pension scheme is a qualifying member of that scheme for the purposes of section 286A (restriction on purchase of annuities) where the conditions in paragraphs (2) and (3) are satisfied.

(2) The condition in this paragraph is that the member or former member has an accrued right to a benefit under the scheme.

(3) The condition in this paragraph is that the member or former member—

(a)was a member of the qualifying pension scheme immediately before the scheme began to wind up; or

(b)was not a member of the scheme at that time but became a pension credit member of the scheme on or after the day on which the scheme began to wind up.]

Textual Amendments

Insufficient assetsU.K.

16.—(1) A scheme has or had insufficient assets for the purposes of regulation 15 if—

(a)in relation to a scheme which is winding up, at any time during the period beginning immediately before the scheme began to wind up and ending immediately before the liabilities of the scheme were discharged; or

(b)in relation to a scheme which has wound up, immediately before the liabilities of the scheme were discharged,

the assets of the scheme are, or were, insufficient to satisfy in full the liabilities of the scheme.

(2) The liabilities of the scheme which are to be taken into account for the purposes of paragraph (1) are the liabilities of the scheme estimated by reference to the scheme rules but disregarding—

(a)any provision of the scheme rules which limits the amount of its liabilities by reference to the amount of its assets; and

(b)any liabilities in respect of money purchase benefits.

(3) The amount or value of the liabilities referred to in paragraph (2) must be estimated on the assumption that the liabilities will be, or have been, discharged by the purchase of annuities of the kind described in section 74(3)(c) of the 1995 Act (discharge of liabilities: annuity purchase).

(4) The liabilities of the scheme which are to be taken into account under paragraph (2) include all expenses (except the cost of the annuities referred to in paragraph (3)) which—

(a)in the opinion of the trustees or managers of the scheme, are likely to be incurred in connection with the winding up of the scheme; or

(b)in the case of a wound up scheme, were so incurred.

[F81SurvivorsU.K.

16A.—(1) Subject to paragraphs (2) and (3), a person is a survivor of a qualifying member who has died where that person is the qualifying member’s widow, widower or surviving civil partner.

(2) Where the conditions in paragraph (4) are satisfied—

(a)the qualifying member’s surviving partner is a survivor of that qualifying member; and

(b)where the qualifying member leaves a widow, widower or surviving civil partner, that widow, widower or surviving civil partner is not a survivor of that qualifying member.

(3) Where a person is regarded as a qualifying member by virtue of regulation 15(5) that person is not a survivor of the former member referred to in regulation 15(5)(b).

(4) The conditions for the purposes of paragraph (2) are that—

(a)immediately before the qualifying member’s death, the qualifying member had a partner (“the surviving partner”);

(b)the rules of the qualifying pension scheme include provision (whether discretionary or otherwise) to pay a survivor’s pension to a partner of the qualifying member;

(c)the scheme manager is satisfied that the surviving partner was living with the qualifying member immediately before the qualifying member’s death; and

(d)either—

(i)the qualifying member provided the scheme manager with a signed written notice nominating the surviving partner as that member’s survivor;

(ii)the qualifying member provided the trustees or managers of the qualifying pension scheme with a valid nomination in accordance with the rules of the qualifying pension scheme to pay a survivor’s pension to the surviving partner; or

(iii)where the qualifying member did not leave a widow, widower or surviving civil partner, the scheme manager is satisfied that the qualifying member and the surviving partner were financially interdependent or the surviving partner was financially dependent on the qualifying member.

(5) For the purposes of enabling the scheme manager to be satisfied or not satisfied that the conditions in paragraphs (4)(c) and (d)(ii) or (iii) are met, the surviving partner must provide evidence that those conditions are met to the scheme manager.

Textual Amendments

Surviving dependantsU.K.

16B.—(1) Subject to paragraph (2), a child of the family of a qualifying member is a surviving dependant of that qualifying member for the purposes of these Regulations where—

(a)the child was financially dependent on the member and is aged—

(i)less than 18; or

(ii)less than 23 and is—

(aa)attending a qualifying course; or

(bb)incapable of engaging in full time paid employment due to having a disability within the meaning of the Disability Discrimination Act 1995; and

(b)the scheme manager is provided with—

(i)in the case of a natural child or unborn child, a birth certificate demonstrating that the child was the natural child of the member;

(ii)in the case of an adopted child, the adoption certificate demonstrating that the child was the adopted child of the member;

(iii)in the case of any other child in respect of whom sub-paragraph (a) is satisfied, evidence demonstrating to the satisfaction of the scheme manager that the child was a dependent child of the member immediately before the qualifying member’s death.

(2) Where a person is regarded as a qualifying member by virtue of regulation 15(5) that person is not a surviving dependant of the former member referred to in regulation 15(5)(b).]

Textual Amendments

PART 5U.K.ANNUAL AND INITIAL PAYMENTS

Annual paymentsU.K.

17.—[F82(1) Schedule 2 makes provision for the determination of the amount of annual payments to be paid to, or in respect of, qualifying members of qualifying pension schemes including provision for a cap to be imposed on such amounts.]

(2) Except where paragraph (3)[F83, (3A) or (3C) or regulation 17C] applies [F84or where the qualifying member is receiving an ill health payment under regulation 17A(1) or an interim ill health payment under regulation 17B(2)], a qualifying member of a qualifying pension scheme shall be entitled to an annual payment determined in accordance with Schedule 2 from—

(a)14th May 2004; or

(b)the day on which the qualifying member attains [F85normal retirement age],

whichever is the later.

(3) [F86Except where the qualifying member is receiving [F87a payment under paragraph (3C) or] an ill health payment under regulation 17A(1) or an interim ill health payment under regulation 17B(2) [F88or an annual payment under regulation 17C],] where the scheme manager is satisfied that a qualifying member is terminally ill F89..., that member shall be entitled to an annual payment determined in accordance with Schedule 2 from the day on which the scheme manager is first notified that that member may be terminally ill.

[F90(3A) Where a person is regarded as a qualifying member under regulation 15(5)—

(a)that member shall be entitled to an annual payment determined in accordance with Schedule 2 from—

(i)14th May 2004; or

(ii)the date on which he became entitled to a present payment from the qualifying pension scheme;

whichever is the later; and

(b)F91... instalments of the annual payment which would have been payable to that member shall cease to be payable from the date on which that member would have ceased to be entitled to the payment referred to in regulation 15(5)(a) in accordance with the rules of the qualifying pension scheme.

(3B) Where the date referred to in paragraph (3A)(b) cannot be determined from the rules of the qualifying pension scheme, the date on which annual payments shall cease to be payable shall be such date as the scheme manager shall determine having regard to the rules of that scheme and to such other information as [F92it] considers relevant.]

[F93(3C) Except where regulation 17C applies, a qualifying member shall be entitled to an annual payment determined in accordance with Schedule 2 where—

(a)that member makes a written request for such a payment;

(b)the member is—

(i)not receiving any payments under these Regulations; or

(ii)receiving only payments for a survivor by virtue of paragraph (4), regulation 17A(3), 17B(2)(b) or 18(4); and

(c)the scheme manager is satisfied that the member meets the conditions in paragraph (3D).

(3D) The conditions in this paragraph are that the qualifying member—

(a)has attained the age of 55;

(b)suffers from a progressive disease and as a consequence—

(i)cannot reasonably be expected to die within six months; and

(ii)can reasonably be expected to die within five years;

(c)is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age; and

(d)is not regarded as a qualifying member by virtue of regulation 15(5).

(3E) The date from which a qualifying member is entitled to an annual payment under paragraph (3C) is the date on which the scheme manager receives the written request mentioned in paragraph (3C)(a).]

(4) [F94Except where regulation 17A(3) applies [F95and subject to paragraph (4C)],] a survivor of a qualifying member of a qualifying pension scheme shall be entitled to an annual payment determined in accordance with Schedule 2 from—

(a)14th May 2004; or

(b)the day after the day on which that qualifying member died,

whichever is the later.

[F96(4A) Except where regulation 17A(3) applies and subject to paragraph (4C), a surviving dependant of a qualifying member of a qualifying pension scheme shall be entitled to an annual payment determined in accordance with Schedule 2 from—

(a)14th May 2004;

(b)the day after the day on which that qualifying member died; or

(c)where a surviving dependant is an unborn child on the day on which the qualifying member died, the day on which that surviving dependant is born,

whichever is the latest.

(4B) An annual payment payable to a surviving dependant under paragraph (4A) shall continue, subject to paragraph (5B), until the surviving dependant—

(a)where neither sub-paragraph (b) nor (c) applies, attains the age of 18;

(b)where the surviving dependant is attending a qualifying course—

(i)attains the age of 23; or

(ii)leaves the qualifying course,

whichever is the earlier; or

(c)where the surviving dependant is incapable of engaging in full time paid employment due to having a disability within the meaning of the Disability Discrimination Act 1995, attains the age of 23.

(4C) A survivor or surviving dependant of a person who is regarded as a qualifying member under regulation 15(5) is not entitled to an annual payment as a survivor or surviving dependant of that qualifying member.

(4D) Where an annual payment ceases to be payable to a surviving dependant as a result of paragraph (4B)(a) or (b)(ii) and the surviving dependant subsequently—

(a)attends a qualifying course; or

(b)becomes incapable of engaging in full time paid employment due to having a disability within the meaning of the Disability Discrimination Act 1995,

before attaining the age of 23, that surviving dependant shall be entitled to an annual payment determined in accordance with Schedule 2 from the day on which the scheme manager is satisfied that the surviving dependant satisfies sub-paragraph (a) or (b) until a day determined in accordance with paragraph (4B).]

(5) The year in respect of which the annual payment is to be made shall be the year starting on the day on which [F97an instalment] of the annual payment or, as the case may be, an initial payment, is first payable to a beneficiary by virtue of regulation 19 and in respect of subsequent years, on each anniversary of that day.

[F98(5A) In determining the amount of annual payment that is payable to, or in respect of, a beneficiary for any previous year or years (“arrears payable”)—

(a)the total of all F99... instalments of an initial payment that have been made to, or in respect of, the beneficiary for any previous year or years is to be deducted from the amount of arrears payable to that beneficiary; and

(b)if the total of all such F99... instalments is greater than that amount of arrears payable—

(i)the amount to be paid in respect of arrears payable is nil, and

(ii)the difference between that total and the amount of arrears payable is recoverable from the beneficiary in accordance with regulation 7 of the FAS Information and Payments Regulations (recovery of overpayments).]

[F100(5B) Where a beneficiary dies or otherwise ceases to be entitled to an annual payment—

(a)subject to sub-paragraph (b), any further instalments of an annual payment that would have been payable to that beneficiary, in respect of that year, cease to be payable;

(b)any instalment of an annual payment which is payable in respect of a period which includes the day on which the beneficiary has died or otherwise ceased to be entitled to an annual payment shall be payable.]

(6) [F101Subject to [F102paragraphs (3A)(b) [F103and (5B), regulation 17C(8) and paragraphs 2A and 4A of Schedule 2]], annual] payments which are payable to a [F104qualifying member or survivor] under this Part shall continue for life.

[F105(7) Paragraphs 7 and 8 of Schedule 2 provide for the circumstances in which an annual payment is not payable under this Part.]

Textual Amendments

[F106Ill health paymentsU.K.

17A.—(1) Except where the qualifying member is entitled to an annual payment under regulation 17(2)[F107, (3) or (3C) or 17C], where the scheme manager is satisfied that a qualifying member is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age, that member shall be entitled to a payment (“an ill health payment”) in accordance with paragraph 2 of Schedule 2A from—

(a)the day on which the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 come into force;

(b)subject to paragraph (2), the day on which the scheme manager is first notified that that member is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age; or

(c)the day on which the member attains the age which is 5 years less than normal retirement age,

whichever is the latest.

(2) Where the scheme manager—

(a)has been notified that a qualifying member is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age;

(b)is not so satisfied or the qualifying member withdraws the notification; and

(c)receives a further notification in relation to that qualifying member and is then so satisfied,

the day which is the day for the purposes of paragraph (1)(b) is the day of the later notification.

(3) Where—

(a)a qualifying member of a qualifying pension scheme has died and leaves a survivor [F108or a surviving dependant]; and

(b)that qualifying member was receiving an ill health payment or an interim ill health payment when he died,

the survivor [F109and any surviving dependants] of that qualifying member shall be entitled to an ill health payment from the day after the day on which that qualifying member died.

(4) An ill health payment shall be made in respect of a year starting on the day on which [F110an instalment] of the ill health payment or, as the case may be, an interim ill health payment, is first payable to a beneficiary by virtue of regulation 19 and in respect of subsequent years, on each anniversary of that day.

(5) In determining the amount of an ill health payment that is payable to, or in respect of, a beneficiary for any previous year or years (“arrears payable”)—

(a)the total of all F111... instalments of an interim ill health payment that have been made to, or in respect of, the beneficiary for any previous year or years is to be deducted from the amount of arrears payable to that beneficiary; and

(b)if the total of all such F111... instalments is greater than that amount of arrears payable—

(i)the amount to be paid in respect of arrears payable is nil, and

(ii)the difference between that total and the amount of arrears payable is recoverable from the member in accordance with regulation 7 of the FAS Information and Payments Regulations (recovery of overpayments).

(6) Subject to paragraph (7)[F112, regulation 17C(7) and paragraph 10 of Schedule 2A], ill health payments which are payable to a [F113qualifying member or survivor] under this regulation shall continue for life.

[F114(6A) Ill health payments which are payable to a surviving dependant under this regulation shall continue, subject to paragraph (7), until the surviving dependant—

(a)where neither sub-paragraph (b) nor (c) applies, attains the age of 18;

(b)where the surviving dependant is attending a qualifying course,—

(i)attains the age of 23; or

(ii)leaves the qualifying course

whichever is the earlier; or

(c)where the surviving dependant is incapable of engaging in full time paid employment due to having a disability within the meaning of the Disability Discrimination Act 1995, attains the age of 23.

(6B) Where an ill health payment ceases to be payable to a surviving dependant as a result of paragraph (6A)(a) or (b)(ii) and the surviving dependant subsequently—

(a)attends a qualifying course; or

(b)becomes incapable of engaging in full time paid employment due to having a disability within the meaning of the Disability Discrimination Act 1995,

before attaining the age of 23, that surviving dependant shall be entitled to an ill health payment determined in accordance with Schedule 2A from the day on which the scheme manager is satisfied that the surviving dependant satisfies sub-paragraph (a) or (b) until a day determined in accordance with paragraph (6A).]

[F115(7) Where a beneficiary dies or otherwise ceases to be entitled to an ill health payment—

(a)subject to sub-paragraph (b), any further instalments of an ill health payment that would have been payable to that beneficiary, in respect of that year, cease to be payable;

(b)any instalment of an ill health payment which is payable in respect of a period which includes the day on which the beneficiary has died or otherwise ceased to be entitled to an ill health payment shall be payable.]

(8) Schedule 2A makes provision for the determination of the amount of ill health payments and the circumstances in which an ill health payment is not payable.

Textual Amendments

Interim ill health paymentsU.K.

17B.—(1) This regulation applies where F116...—

(a)the scheme manager has been notified that, and is satisfied that, a qualifying member of [F117a qualifying pension scheme] is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age; or

(b)a qualifying member of that scheme—

(i)has died and leaves a survivor [F118or a surviving dependant]; and

(ii)was receiving an interim ill health payment when he died.

(2) [F119Except where regulation 17C(8)(b)(i) applies, the scheme manager] may, in [F120its] discretion, make an interim ill health payment, in anticipation of an ill health payment being payable under this Part and on account of such a payment—

(a)to the qualifying member with effect from—

(i)the day on which the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 come into force;

(ii)subject to paragraph (3), the day on which the scheme manager is first notified that that member is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age; or

(iii)the day on which the member attains the age which is 5 years less than normal retirement age,

whichever is the latest; or

(b)if the qualifying member has died, to a survivor [F121and any surviving dependants] of that qualifying member with effect from the day after the day on which that qualifying member died.

(3) Where the scheme manager—

(a)has been notified that a qualifying member is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age;

(b)is not so satisfied or the qualifying member withdraws the notification; and

(c)receives a further notification in relation to that qualifying member and is then so satisfied,

the day which is the day for the purposes of paragraph (2)(a)(ii) is the day of the later notification.

(4) In exercising [F122its] discretion under paragraph (2), the scheme manager shall only have regard to—

(a)the amount, if any, of any interim pension that was in payment, is in payment, or is proposed to be paid, from the qualifying pension scheme to the qualifying member; and

(b)any circumstances relating to the scheme which, in the opinion of the scheme manager are relevant to determining whether an interim ill health payment should be made.

(5) Where the trustees or managers have determined the amount of interim pension that would be paid to the qualifying member[F123, any surviving dependants] or the survivor of that qualifying member, but do not propose to pay that interim pension for administrative reasons, the scheme manager may, in exercising [F122its] discretion under paragraph (2) and in determining the amount of interim ill health payment under Schedule 2A, deem that member[F124, any such surviving dependant] or that survivor to be receiving that interim pension, if in the scheme manager’s opinion it is reasonable to do so.

(6) Schedule 2A makes provision for the determination of the amount of interim ill health payments and the circumstances in which an interim ill health payment is not payable.

(7) If the scheme manager determines that an interim ill health payment may be made under paragraph (2), the interim ill health payment is payable—

(a)to a qualifying member from the relevant day mentioned in that paragraph until the day on which the qualifying member—

(i)would have been paid, or is paid, the first F125... instalment of an ill health payment in accordance with regulation 19, if an ill health payment were payable, or is payable, to him under this Part; or

(ii)dies,

whichever is the earlier; F126...

(b)in respect of a qualifying member who has died, to a survivor of that qualifying member from the day after the day on which that qualifying member died until the day on which his survivor—

(i)would have been paid, or is paid, the first F127... instalment of an ill health payment in accordance with regulation 19, if an ill health payment were payable, or is payable, to him under this Part; or

(ii)dies,

whichever is the earlier; [F128and]

[F128(c)in respect of a qualifying member who has died, to a surviving dependant of that qualifying member from the day after the day on which that qualifying member died until the day on which the surviving dependant—

(i)would have been paid, or is paid, the first instalment of an ill health payment in accordance with regulation 19, if an ill health payment were payable, or is payable, to that surviving dependant under this Part; or

(ii)dies or otherwise ceases to be entitled to an ill health payment in accordance with regulation 17A,

whichever is the earlier.]

[F129(8) Where a beneficiary dies or otherwise ceases to be entitled to an ill health payment—

(a)subject to sub-paragraph (b), any further instalments of an interim ill health payment that would have been payable to that beneficiary, in respect of that year, cease to be payable;

(b)any instalment of an interim ill health payment which is payable in respect of a period which includes the day on which the beneficiary has died or otherwise ceased to be entitled to an ill health payment shall be payable.]

(9) The scheme manager may, at any time before the amount of the ill health payment is determined, redetermine the amount of any interim ill health payment paid under paragraph (2) if [F130it] is satisfied that the amount being paid by way of an interim ill health payment, as determined in accordance with Schedule 2A, may be incorrect.

(10) The power to redetermine the amount of an interim ill health payment under paragraph (9) includes the power to redetermine the amount as a result of a change in the amount of interim pension being paid to the qualifying member.

(11) If, having determined that an interim ill health payment may be made under paragraph (2), the scheme manager subsequently determines, in accordance with Schedule 2A, that no ill health payment is payable to or in respect of that qualifying member[F131, that qualifying member’s surviving dependants] or his survivor, then the total of all F132... instalments of an interim ill health pension made to or in respect of that qualifying member[F133, any surviving dependant] or his survivor is recoverable in accordance with regulation 7 of the FAS Information and Payments Regulations.]

Textual Amendments

[F134Annual payments for certain applications in cases of severe ill healthU.K.

17C.—(1) A qualifying member shall be entitled to an annual payment determined in accordance with Schedule 2 where the conditions in paragraphs (2) and (3) are met.

(2) The condition in this paragraph is that, subject to paragraph (9), the qualifying member makes a written request for an annual payment under this regulation during the period of 12 months beginning with the date on which the Financial Assistance Scheme and Incapacity Benefit (Miscellaneous Amendments) Regulations 2009 come into force.

(3) The conditions in this paragraph are that the scheme manager is satisfied that the qualifying member—

(a)has attained the age of 55;

(b)suffers from a progressive disease and as a consequence can reasonably be expected to die within five years;

(c)is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age; and

(d)is not regarded as a qualifying member by virtue of regulation 15(5).

(4) The date from which a qualifying member is entitled to an annual payment under this regulation is—

(a)where the scheme manager is satisfied that the conditions in paragraph (3) were met before the date on which the scheme manager receives the written request mentioned in paragraph (2), whichever is the later of—

(i)the date on which the scheme manager is satisfied that the conditions in paragraph (3) would first have been met; or

(ii)14th May 2004; or

(b)in all other cases, the date on which the scheme manager receives the written request mentioned in paragraph (2).

(5) In determining whether or not the scheme manager is satisfied in accordance with paragraph (4)(a), the scheme manager shall have regard to—

(a)the information available as to the length of time the qualifying member has met the conditions in paragraph (3);

(b)the medical evidence available, taking into account—

(i)such evidence as the scheme manager would have expected the qualifying member to have been able to provide in accordance with Schedule 2 to the FAS Information and Payments Regulations, and

(ii)the effect of the lapse of time on the availability of that evidence; and

(c)such other matters as the scheme manager considers relevant.

(6) Paragraphs (4) to (7) of regulation 17 apply to annual payments made under this regulation.

(7) Paragraph (8) applies where—

(a)on the date the Financial Assistance Scheme and Incapacity Benefit (Miscellaneous Amendments) Regulations 2009 come into force, the qualifying member is receiving a payment in accordance with these Regulations (other than payments for a survivor by virtue of regulation 17(4), 17A(3), 17B(2)(b) or 18(4)); and

(b)the qualifying member is entitled to an annual payment in accordance with this regulation.

(8) Where this paragraph applies, from the date on which the scheme manager determines that the qualifying member is entitled to an annual payment in accordance with this regulation—

(a)the qualifying member is not entitled to—

(i)an annual payment under regulation 17(2);

(ii)an annual payment for terminal illness under regulation 17(3); or

(iii)an ill health payment under regulation 17A(1); and

(b)the scheme manager may not make—

(i)an initial payment under regulation 18 in anticipation of an annual payment being payable under regulation 17(2);

(ii)an interim ill health payment under regulation 17B(2); or

(iii)an initial payment for terminal illness by virtue of [F135regulation 18(4)].

(9) Where—

(a)a qualifying member has died;

(b)the scheme manager is satisfied that prior to death that qualifying member satisfied the conditions in paragraph (3); and

(c)the relevant representative makes a written request in respect of that qualifying member during the time period set out in paragraph (2);

that qualifying member shall be entitled to an annual payment in accordance with this regulation.

(10) Any annual payment (or initial payment under regulation 18) payable under paragraph (9) is payable to the estate of the deceased qualifying member.

(11) For the purposes of paragraph (9), references in these Regulations to “qualifying member” may be construed as references to the deceased qualifying member or to the deceased qualifying member’s estate, as the case requires.

(12) For the purposes of this regulation—

“relevant representative” means—

(a)

the survivor of the deceased qualifying member referred to in paragraph (9), or

(b)

where there is no survivor in relation to that qualifying member, that member’s personal representative; and

“personal representative” has the meaning given in regulation 2(1) of the FAS Information and Payments Regulations.]

Textual Amendments

[F136Initial paymentsU.K.

18.—F137(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F138(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F138(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) [F139[F140Except where [F141paragraph (4B) or] regulation 17C(8)(b)(i) or (iii) applies, the scheme manager] may, in [F142its discretion], make a payment (“an initial payment”) to, or in respect of, a qualifying member[F143, the qualifying member’s surviving dependants] or his survivor—

(a)in anticipation of an annual payment being payable under this Part to the qualifying member[F143, the qualifying member’s surviving dependants] or his survivor, and on account of such a payment; and

(b)before any F144... instalment of that annual payment is made.]

(4A) [F139An initial payment under paragraph (4) may be made—

(a)except where sub-paragraph (c) applies, to the qualifying member with effect from whichever is the later of—

(i)14th May 2004; or

(ii)the [F145earliest] of—

(aa)the day on which the qualifying member attains normal retirement age; or

(bb)the day on which the scheme manager is first notified that the qualifying member is terminally ill[F146; or]

(cc)[F146the day on which the qualifying member becomes entitled to a payment under regulation 17(3C) or 17C;]

(b)if the qualifying member has died, to a survivor [F147and any surviving dependants] of that qualifying member with effect from whichever is the later of—

(i)14th May 2004; or

(ii)the day after the day on which that qualifying member died; or

(c)if the qualifying member is regarded as a qualifying member under regulation 15(5), to that member with effect from whichever is the later of—

(i)14th May 2004; or

(ii)the date on which he became entitled to a present payment from the qualifying pension scheme.]

[F148(4B) Where a qualifying member who has died was a party to a polygamous marriage the scheme manager may, in its discretion, make a payment (“a shared initial payment”) to each survivor—

(a)in anticipation of an annual payment being payable under this Part to those survivors;

(b)before any instalment of that annual payment is made; and

(c)with effect from whichever is the later of—

(i)14th May 2004; and

(ii)the day after the day on which that qualifying member died.

(4C) In exercising its discretion under paragraph (4B), the scheme manager may only have regard to—

(a)the amount, if any, of any interim pension that was in payment, is in payment, or is proposed to be paid, from the qualifying pension scheme to any of the survivors of the qualifying member; and

(b)any circumstances relating to the scheme which, in the opinion of the scheme manager, are relevant to determining whether a shared initial payment should be made.

(4D) Paragraphs (5A) and (7) to (9A) shall apply to a shared initial payment under paragraph (4B) with the following modifications—

(a)for “paragraph (4)” in each place it occurs, substitute “paragraph (4B)”; and

(b)for “initial payment” in each place it occurs, substitute “shared initial payment”.]

(5) In exercising [F142its discretion] under paragraph (4), the scheme manager may only have regard to—

(a)the amount, if any, of any interim pension that was in payment, is in payment, or is proposed to be paid, from the qualifying pension scheme—

(i)to a qualifying member up until his death; or

(ii)after his death, to his survivor [F149or surviving dependants] ; and

(b)any circumstances relating to the scheme which, in the opinion of the scheme manager, are relevant to determining whether an initial payment should be made.

[F150(5A) Where the trustees or managers have determined the amount of interim pension that would be paid to the qualifying member[F151, any surviving dependants] or the survivor of that qualifying member, but do not propose to pay that interim pension for administrative reasons, the scheme manager may, in exercising [F152its] discretion under paragraph (4) and in determining the amount of initial payment under Schedule 2, deem that member[F153, that surviving dependant] or that survivor to be receiving that interim pension, if in the scheme manager’s opinion it is reasonable to do so.]

(6) Schedule 2 makes provision for the determination of the amount of initial payments [F154and shared initial payments].

(7) If the scheme manager determines that an initial payment may be made under paragraph (4), the initial payment is payable—

(a)to a qualifying member from the relevant day mentioned in that paragraph until the day on which that qualifying member—

(i)would have been paid, or is paid, the first F155... instalment of an annual payment in accordance with regulation 19, if an annual payment were payable, or is payable, to him under this Part; or

(ii)dies,

whichever is the earlier; F156...

(b)in respect of a qualifying member who has died, to a survivor of that qualifying member from the day after the day on which that qualifying member died until the day on which his survivor—

(i)would have been paid, or is paid, the first F157... instalment of an annual payment in accordance with regulation 19, if an annual payment were payable, or is payable, to him under this Part; or

(ii)dies,

whichever is the earlier; [F158and]

[F158(c)in respect of a qualifying member who has died, to a surviving dependant of that qualifying member from the day after the day on which that qualifying member died until the surviving dependant—

(i)would have been paid, or is paid, the first instalment of an annual payment in accordance with regulation 19, if an annual payment were payable, or is payable, to that surviving dependant under this Part; or

(ii)dies or otherwise ceases to be entitled to an annual payment in accordance with regulation 17,

whichever is the earlier.]

(8) [F159Where a beneficiary dies or otherwise ceases to be entitled to an annual payment—

(a)subject to sub-paragraph (b), any further instalments of an initial payment that would have been payable to that beneficiary, in respect of that year, cease to be payable;

(b)any instalment of an initial payment which is payable in respect of a period which includes the day on which the beneficiary has died or otherwise ceased to be entitled to an annual payment shall be payable.]

(9) The scheme manager may, at any time before the amount of the annual payment is determined, redetermine the amount of any initial payment paid under paragraph (4) if [F160it] is satisfied that the amount being paid by way of initial payment, as determined in accordance with Schedule 2, may be incorrect.

[F161(9ZA) The power to redetermine the amount of an initial payment under paragraph (9) includes the power to redetermine that amount as a result of a change in the amount of interim pension being paid to the beneficiary.]

[F162(9A) If, having determined that an initial payment may be made under paragraph (4), the scheme manager subsequently determines, in accordance with Schedule 2, that no annual payment is payable to or in respect of that qualifying member [F163or that qualifying member’s survivor or surviving dependant], then the total of all F164... instalments of an initial payment made to or in respect of that qualifying member [F163or that qualifying member’s survivor or surviving dependant] is recoverable in accordance with regulation 7 of the FAS Information and Payments Regulations.]

F165(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

PART 6 U.K.ADMINISTRATION OF PAYMENTS

Time and manner of payment: general provisionsU.K.

19.—(1) The scheme manager shall pay the annual payment[F166, the ill health payment, an interim ill health payment] or an initial payment to the beneficiary or to his appointed representative, [F167in instalments of no more than 52 in a year on a day specified by the scheme manager for the making of such payments to that beneficiary.]

(2) For the purposes of paragraph (1), where the amount of [F168an instalment] would, but for this paragraph, include a fraction of a penny, that fraction shall be disregarded if it is less than half a penny and shall otherwise be treated as a penny.

(3) The scheme manager shall start to pay the F169... instalments payable to a beneficiary on the first day specified in paragraph (1) which is as soon as reasonably practicable after the day on which—

(a)the beneficiary becomes entitled to an annual payment under regulation 17(2) to (4); F170...

(b)the scheme manager determines that an initial payment may be made under regulation [F17118(4)].

[F172(c)the beneficiary becomes entitled to an ill health payment under regulation 17A(1) or (3); or

(d)the scheme manager determines that an interim ill health payment may be made under regulation 17B(2).]

(4) F169... instalments shall be paid by means of direct credit transfer or by such other means as appear to the scheme manager to be appropriate in the circumstances of any particular case.

Textual Amendments

Direct credit transferU.K.

20.—(1) Subject to paragraphs (3) and (4), F173... instalments under regulation 19 may, by an arrangement between the scheme manager and the beneficiary or his appointed representative, be paid by way of direct credit transfer into a bank or other account—

(a)in the name of the beneficiary, his appointed representative or any other person with the consent of the beneficiary; or

(b)in the joint names of the beneficiary and any other person or the appointed representative and any other person.

(2) F173... instalments shall be paid in accordance with paragraph (1) within seven days of the day on which each instalment is payable under regulation 19(1).

(3) The scheme manager may make a particular payment by direct credit transfer otherwise than in accordance with paragraph (1) if it appears to [F174it] to be appropriate to do so for the purpose of paying any arrears.

(4) The arrangements under this regulation may be terminated—

(a)by the beneficiary or his appointed representative, by notice in writing delivered or sent to the scheme manager; or

(b)by the scheme manager if the arrangement seems to [F175it] to be no longer appropriate to the circumstances of the particular case.

(5) A direct credit transfer into the account of an appointed representative or of any person to whom an amount is paid with the consent of the beneficiary, shall be a good discharge to the scheme manager for any sum paid under these Regulations.

Textual Amendments

Signed by authority of the Secretary of State for Work and Pensions.

Philip A. Hunt

Parliamentary Under-Secretary of State,

Department for Work and Pensions

Regulation 4(1)

SCHEDULE 1U.K.MODIFICATION OF CERTAIN PROVISIONS OF PARTS 1 AND 2 OF THE ACT

1.  In section 68 (power for the Regulator to collect information relevant to the Board of the Pension Protection Fund), for “the Board of the Pension Protection Fund”, substitute “ the scheme manager of the financial assistance scheme which are conferred on [F176it] by regulations made under, or by virtue of, section 286 ”.U.K.

Textual Amendments

2.  In section 85 (disclosure by the Regulator for facilitating the exercise of functions by the Board)—U.K.

(a)for “Section 82 does not preclude” substitute “ Neither section 82 nor Article 77 of the Pensions (Northern Ireland) Order 2005 precludes ”;

(b)for the words “the Board of the Pension Protection Fund to exercise its functions”, substitute “ the scheme manager of the financial assistance scheme to exercise functions conferred on [F177it] by regulations made under or by virtue of section 286, and Part 2 of the Pensions (Northern Ireland) Order 2005 shall be read accordingly ”.

Textual Amendments

3.  In section 88(4) (disclosure of tax information by the Regulator), after “subsection (3)” insert “ or as mentioned in Article 83(3) of the Pensions (Northern Ireland) Order 2005 ”.U.K.

[F1783ZA.  In section 113 (investment of funds)—U.K.

(a)at the beginning of subsection (1), insert “Subject to subsection (1A),”; and

(b)after subsection (1), insert—

“(1A) The Board may hold any grant received in accordance with regulation 5(3) of the Financial Assistance Scheme Regulations 2005 (scheme manager) in an interest-bearing account but may not otherwise invest any such grant.”.

Textual Amendments

3ZB.  After section 114(4) (investment principles), insert—U.K.

“(4A) A statement of investment principles need not cover investments made in accordance with section 113(1A).”.

Textual Amendments

3ZC.  In section 115(1)(a) (borrowing), after “any of its functions”, insert “except its functions relating to the financial assistance scheme”.U.K.

Textual Amendments

3ZD.  In section 117(1)(b) (administration levy), after “section 116”, insert “except where such expenditure relates to the financial assistance scheme”.U.K.

Textual Amendments

3ZE.  In section 119 (annual reports to Secretary of State)—U.K.

(a)in subsection (2)—

(i)after “the Board” insert “in relation to the financial assistance scheme”;

(ii)for “the report” substitute “any part of the report”; and

(iii)after “that section” insert “which relates to the financial assistance scheme”;

(b)in subsection (3), after paragraph (c) insert—

(“d)the operation of the financial assistance scheme including the number of persons who have received payments under the Financial Assistance Scheme Regulations 2005 and the total amount of those payments.”; and

(c)in subsection (6)(a), for “the date on which the Board is established” substitute “the date on which the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009 come into force”.]

Textual Amendments

[F1793A.  In section 134 (directions)—U.K.

(a)in subsection (1), for “there is an assessment period in relation to an eligible scheme” substitute “an occupational pension scheme is a qualifying pension scheme under section 286(2) which has not been fully wound up”;

(b)in subsection (2), for the words from the beginning to “is kept to a minimum” substitute “With a view to ensuring that any reduction in the scheme’s assets is kept to a minimum or that the assets of the scheme are invested in a way which, in the opinion of the scheme manager, is appropriate”;

(c)in subsections (2) and (4), for “the Board”, substitute “the scheme manager”; and

(d)in subsection (3), after paragraph (a)(i) insert—

“(ia)a professional adviser to the scheme;

(ib)any other person appearing to the scheme manager to be a person who carries out, or is likely to carry out, activities relevant to the use of the assets of the scheme;”.]

Textual Amendments

4.  In section 168 (administration of compensation payable by the Board)—U.K.

(a)in subsection (1), for “this Chapter” substitute “ the financial assistance scheme established by regulations under section 286 ”;

(b)for subsection (2), substitute—

“(2) Regulations under subsection (1) may, in particular, make provision—

(a)for the recovery of amounts paid by the scheme manager of the financial assistance scheme in excess of entitlement;

(b)specifying the circumstances in which payments from the financial assistance scheme can be suspended.”; and

(c)omit subsection (3).

5.  In section 190 (information to be provided to the Board etc.)—U.K.

[F180(a)in subsection (1), for “the Board” substitute “the scheme manager”]

(b)in subsection (2), for “of entitlement to compensation under Chapter 3 of this Part” substitute “ that a person is entitled to a payment from the financial assistance scheme ”.

Textual Amendments

[F1816.  In section 191 (notices requiring provision of information to the Board)—U.K.

(a)in subsection (1)(b), after “the Board’s” insert “or scheme manager’s”;

(b)in subsection (2)—

(i)before paragraph (a), insert—

“(za)the scheme manager, in relation to the scheme manager’s functions,”;

(ii)in paragraph (a), after “the Board,” insert “in relation to the Board’s functions,”; and

(iii)in paragraph (b), after “the Board” insert “or scheme manager”; and

(c)in subsection (3)—

(i)omit “and” at the end of paragraph (d);

(ii)after paragraph (d), insert—

“(da)in the case of a wound up scheme, any insurance company (within the meaning of the Financial Assistance Scheme Regulations 2005) which is paying annuities to former members of the scheme, and”; and

(iii)in paragraph (e)—

(aa)after “the Board” insert “, scheme manager”; and

(bb)after “the Board’s” insert “or scheme manager’s”.]

Textual Amendments

7.  In section 192 (entry of premises to enable performance of functions by the Board)—U.K.

(a)for “the Board”, in each place, substitute “ the scheme manager ”;

(b)in subsection (1)(f), for “the Board's” substitute “ the scheme manager's ”; and

(c)in subsection (6), for “The Board” substitute “ The scheme manager ”.

8.  In section 194 (warrants to enforce entry of premises and obtaining of documents by, or on behalf, of the Board)—U.K.

(a)for “the Board”, in each place, substitute “ the scheme manager ”;

(b)omit in both places “ , or any corresponding provision in force in Northern Ireland ”;

(c)in subsection (1), after “information on oath” insert “ or, in Northern Ireland, on complaint on oath ”;

(d)in subsection (1)(b), for “the Board's” substitute “ the scheme manager's ”;

(e)in subsection (2)(a), after “the information” insert “ or complaint ”; and

(f)in subsection (6), for “The Board” substitute “ The scheme manager ”.

9.  In section 195(1)(b) (offence of providing false or misleading information to the Board), for the words from “by the Board” to the end of that paragraph substitute “ by the scheme manager for the purposes of exercising [F182its] functions. ”.U.K.

Textual Amendments

10.  In section 196 (use of information by the Board)—U.K.

(a)for “the Board”, in each place, substitute “ the scheme manager ”; and

F183(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

11.  In section 197 (restricted information)—U.K.

(a)in subsections (1) and (3), after “the Board”, in each place, insert “ or the scheme manager ”;

[F184(ab)in subsection (2), before paragraph (a) insert—

“(za)regulation 6A of the Financial Assistance Scheme Regulations 2005,”;]

(b)in subsection (4), after “its functions” insert “ or by the scheme manager in the exercise of [F185its] functions ”;

(c)in subsection (6)(a), after “that section” insert “ (disregarding any modifications of that section made by the Financial Assistance Scheme Regulations 2005) ”; and

(d)after subsection (6), insert—

“(6A) Information which—

(a)is obtained under section 191 by a person authorised under subsection (2)(b) of that section, but

(b)if obtained by the scheme manager, would be restricted information,

is treated for the purposes of subsections (1) and (3) and sections 198 to 201 and 203 as restricted information which the person has received from the scheme manager.”.

Textual Amendments

12.  In section 198 (disclosure by the Board of restricted information for facilitating exercise of functions by the Board)—U.K.

(a)at the end of subsection (1), add “ or the scheme manager to exercise [F186its] functions ”;

(b)in subsection (2)—

(i)after “its functions”, insert “ or the scheme manager properly to exercise any of [F187its] functions ”; and

(ii)after “the Board”, in the second place, insert “ or, as the case may be, the scheme manager ”; and

(c)in subsection (3)—

(i)after “the Board”, in both places, insert “ or, as the case may be, the scheme manager ”; and

(ii)for “he” substitute “ that person ”.

Textual Amendments

13.  In section 200(1) (disclosure by the Board of restricted information for facilitating the exercise of functions by other supervisory authorities)—U.K.

(a)after “the Board”, in the first place, insert “ or the scheme manager ”; and

(b)after “the Board”, in the second place, insert “ or, as the case may be, the scheme manager ”.

14.  In section 201 (other permitted disclosures of restricted information by the Board)—U.K.

(a)in subsection (1)—

(i)after “the Board”, in the first place, insert “ or the scheme manager ”;

(ii)after “the Board”, in the second place, insert “ or, as the case may be, the scheme manager ”;

(b)in subsection (2), after “the Board”, in both places, insert “ or the scheme manager ”;

(c)in subsection (2)(d), for “it has a right” substitute “ the Board or the scheme manager has a right ”;

(d)in subsection (8), for “with the consent of the Board” substitute—

“(a)in a case where the disclosure under that subsection was made by the Board, with the consent of the Board, and

(b)in a case where the disclosure under that subsection was made by the scheme manager, with [F188its] consent”;

(e)for subsection (9)(a), substitute—

“(a)in a case where the disclosure under that subsection was made by the Board, with the consent of the Board,

(aa)in a case where the disclosure under that subsection was made by the scheme manager, with [F188its] consent, and”; and

(f)in subsection (10)—

F189(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii)after “the Board” insert “ or, as the case may be, the scheme manager ”; and

F190(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

15.  In section 203 (provision of information to members of schemes etc. by the Board)—U.K.

(a)in subsection (1), after “the Board” insert “ or the scheme manager ”;

(b)in subsections (3)(c), (5)(b) and (c) and (6)(c), after “the Board”, in each place, insert “ or, as the case may be, the scheme manager ”;

(c)after “the Board's”, in each place, insert “ or the scheme manager's ”;

(d)omit “ or ” at the end of subsection (1)(b)(ii) and insert after that sub-paragraph—

“(iia)relating to any determination made in relation to the financial assistance scheme, or”;

(e)in subsection (2), after “Chapter 3” insert “ or, as the case may be, to a payment from the financial assistance scheme ”;

(f)in subsection (4)—

(i)in paragraph (a), after “who is” insert “ or was ”;

(ii)in paragraph (b), after “member” insert “ or former member ”; and

(g)after subsection (6)(a)(iv), insert—

“(v) in the case of a wound up scheme, any insurance company (within the meaning in the Financial Assistance Scheme Regulations 2005) which is paying annuities to former members of the scheme,”.

16.  In section 204 (interpretation of sections 190 to 203)—U.K.

(a)after subsection (2), insert—

“(2A) The “scheme manager” is the person who manages the financial assistance scheme.

(2B) The “financial assistance scheme” is the scheme established by regulations under section 286.”; and

(b)after subsection (3), add—

“(4) Where the scheme manager has functions in relation to a scheme which is wound up, any reference to a trustee, manager, professional adviser or employer in relation to the scheme is to be read as reference to a person who held that position in relation to the scheme before it wound up.”.

[F19117.  In paragraph 18(2) of Schedule 5 (delegation)—U.K.

(a)after sub-paragraph (g), insert—

“(ga)regulation 9(1)(d) of the Financial Assistance Scheme Regulations 2005 (“the 2005 Regulations”) (receiving notification of the details prescribed in regulation 14);

(gb)regulation 14A of the 2005 Regulations (working with qualifying pension schemes);

(gc)regulations 17 to 20 of, and Schedules 2 and 2A to, the 2005 Regulations in so far as those provisions relate to—

(i)the determination of the amount of payments to beneficiaries,

(ii)paying instalments of payments to beneficiaries (including non-payment where the scheme manager decides to suspend payments in accordance with regulation 8 of the Financial Assistance Scheme (Provision of Information and Administration of Payments) Regulations 2005), or

(iii)receiving information pursuant to notification requirements;

(gd)the Financial Assistance Scheme (Provision of Information and Administration of Payments) Regulations 2005 except—

(i)regulation 3(2) (notification following determination of whether or not a scheme is a qualifying pension scheme), and

(ii)regulation 8 (suspension of payments) in so far as that regulation provides for the scheme manager to decide to suspend payments or not continue any such suspension;

(ge)regulations 3 (notice of a reviewable determination), 14(d) (dealing with matters arising out of a review decision) and 16 (notice of a review decision or a subsequent review decision) of the Financial Assistance Scheme (Internal Review) Regulations 2005;

(gf)regulation 23(6) and (8) (taking or refraining from taking such steps as directed by the Ombudsman) of the Financial Assistance Scheme (Appeals) Regulations 2005;”; and

(b)in sub-paragraph (h), for the words “paragraphs (a) to (g)” substitute “paragraphs (a) to (gf)”.

Textual Amendments

18.  In paragraph 22(7)(a) of Schedule 5 (accounts), for “the date on which the Board is established” substitute “the date on which the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009 come into force”.]U.K.

Textual Amendments

Regulations 17 and 18(5)

SCHEDULE 2U.K.DETERMINATION OF ANNUAL AND INITIAL PAYMENTS

IntroductoryU.K.

1.—(1) This Schedule applies for the purposes of determining the amount of an annual payment or of an initial payment payable to or in respect of qualifying members of qualifying pension schemes.

(2) In this Schedule—

[F192“appropriate person” has the meaning given by regulation 2(1) of the FAS Information and Payments Regulations (interpretation);]

F193...

F194...

F195...

F195...

F195...

F196...

“guaranteed minimum pension” has the meaning given in section 8(2) of the 1993 Act;

[F192“relevant information” means any information—

(a)

that is described in any of paragraphs (j) to (l) of the fourth item of the table in paragraph 1(2) of Schedule 1 to the FAS Information and Payments Regulations (information to be provided by appropriate persons);

(b)

that is to be provided by an appropriate person to the scheme manager in accordance with regulation 3(3)(a) of those Regulations; and

(c)

from which the amount of the actual pension or interim pension of a qualifying member, or of a survivor of a qualifying member, may be derived;]

“scheme rules” means the rules of the qualifying pension scheme.

(3) [F197Paragraphs 2 to 5B] are subject to paragraphs 6 to 9.

F198(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F198(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Actual pensionU.K.

2.—[F199(1) In this Schedule, “actual pension” means, subject to sub-paragraphs (3), (3A) and (4) and paragraph 2A, the annual rate of annuity which has been, can be or could have been, paid to the beneficiary as at the later of—

(a)the day from which the beneficiary is entitled to an annual payment; or

(b)the day on which the qualifying pension scheme began to be wound up,

as a result of the purchase of an annuity with the assets available to discharge the liability of the scheme to, or in respect of, the qualifying member after that liability has, or had, been determined.]

(2) The liability of the scheme to the beneficiary shall be determined for the purposes of sub-paragraph (1)—

(a)in accordance with section 73 of the 1995 Act; or

(b)where that section does not apply, in accordance with the scheme rules.

(3) The annual rate of annuity which [F200has been, can be or could have been] purchased for the beneficiary for the purposes of sub-paragraph (1) [F201or, as the case may be, paragraph 2A, as a result of the purchase of an annuity] with the assets referred to in that sub-paragraph, shall be determined [F202(or, as the case may be, redetermined)]—

[F203(a)where the beneficiary was an active or a deferred member of the qualifying pension scheme [F204on the day before the day on which the qualifying pension scheme began to be wound up], on the basis that the sum which will be, or has been, used to discharge the liability of the scheme to him will only be, or has only been, used to purchase an annuity when the qualifying member attains, or attained, his normal retirement age;]

(b)where the beneficiary is a survivor [F205or surviving dependant] of a member of that scheme, having regard to the annual rate of annuity which will come into payment [F206to that beneficiary on the later of—

(i)the day on which an annuity has been purchased from the assets of the scheme; or

(ii)the day after the day on which that qualifying member died;]

[F207(ba)where the beneficiary is a survivor or surviving dependant, on the basis that any amount (including any lump sum) payable to that beneficiary as a result of the death of the qualifying member being within a period specified in the scheme rules beginning on the day on which the member became entitled to a pension from the scheme or, if later, the day on which the pension was first paid, shall not be taken into account;]

F208(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)on the basis that there has been no commutation of benefits deriving from the scheme [F209after the day on which the scheme began to be wound up].

[F210(3A) Where the scheme manager is satisfied that the amount of interim pension paid to the beneficiary in respect of any previous year or years in which an annual payment was payable to the beneficiary is higher or lower than the annual rate of annuity determined in accordance with this paragraph, the scheme manager may determine how the actual pension is to be calculated for the purposes of determining the annual payment in respect of each year in which an annual payment is payable to the beneficiary, having regard to—

(a)the annual rate of annuity determined in accordance with this paragraph;

(b)the amount of any interim pension which was, or is due to be, paid to the beneficiary; and

(c)such other matters as the scheme manager considers relevant.]

(4) Where the scheme manager is satisfied that it is not possible for him to determine the annual rate of annuity for the purposes of sub-paragraph (1) having regard to the information [F211available to it and to such other matters as the scheme manager considers appropriate], [F212it] shall determine the annual rate of annuity on the basis of the sum which would discharge the liability of the scheme to the beneficiary [F213and of such other matters] as [F212it] considers relevant.

[F214(5) Where the scheme manager is satisfied that increases have been, are being, or will be made to the annual rate of annuity, and [F212it] considers that those increases are not reasonable, [F212it] may determine the annual rate of annuity on the basis of the sum which would discharge the liability of the scheme to the beneficiary and of such other matters as [F212it] considers relevant.]

Textual Amendments

[F215Annual redeterminationU.K.

2A.—(1) This paragraph applies where—

(a)on the first indexation date following the date on which the beneficiary first became entitled to an annual payment; and

(b)on any indexation date following that first indexation date;

the annual rate of annuity which has been or could have been paid to the beneficiary as at that indexation date as a result of the purchase of an annuity with the assets available to discharge the liability of the scheme to, or in respect of, the qualifying member after that liability has or had been determined, is higher as a result of indexation or revaluation than the annual rate determined in accordance with paragraph 2.

(2) Where this paragraph applies, the scheme manager shall redetermine the annual payment payable to that beneficiary with effect from the indexation date.

(3) When redetermining an annual payment under sub-paragraph (2), the actual pension for the purposes of paragraph 3(2) or 4(2) shall be the annual rate of annuity which has been or could have been paid to the beneficiary as at the indexation date as a result of the purchase of an annuity with the assets available to discharge the liability of the scheme to, or in respect of, the qualifying member after that liability has or had been determined, on the basis of, and having regard to, the matters referred to in paragraph 2(3).

(4) In any case where the scheme manager is satisfied, having regard to the information available to it, that it is not possible for it to determine the annual rate of annuity for the purposes of this paragraph, it shall determine that annual rate having regard to such matters as it considers relevant.

(5) Where the scheme manager is satisfied that increases have been, are being, or will be made to the annual rate of annuity, and it considers that those increases are not reasonable, it may determine the annual rate of annuity for the purposes of this paragraph on the basis of the sum which would discharge the liability of the scheme to the beneficiary and of such other matters as it considers relevant.]

Textual Amendments

Qualifying members receiving pensions from the qualifying pension schemeU.K.

[F2163.—(1) This paragraph applies to—

(a)a member or former member of a qualifying scheme who—

(i)is a qualifying member under regulation 15(1), and

(ii)was entitled to present payment of a pension under the scheme rules [F217on the day before the day on which the qualifying pension scheme began to be wound up]; and

(b)a person who is regarded as a qualifying member under regulation 15(5).]

[F218(2) The annual payment payable to a qualifying member to whom this paragraph applies shall be—

F219 .]

[F220(3) Subject to sub-paragraphs (4) and (5) and paragraphs 4A and 4B, in this paragraph “expected pension” means—

(a)the annual rate of the pension which was or should have been in payment to the qualifying member in accordance with the scheme rules in respect of rights accrued in a qualifying pension scheme as at the day before the day on which the qualifying pension scheme began to be wound up; or

(b)where the day on which the qualifying pension scheme began to be wound up is earlier than 14 May 2004, the aggregate of—

(i)the annual rate of the pension which was or should have been in payment to the qualifying member in accordance with the scheme rules in respect of rights accrued in a qualifying pension scheme as at the day on which the qualifying pension scheme began to be wound up; and

(ii)the revaluation amount for the period beginning on the day on which the qualifying pension scheme began to be wound up and ending on 14 May 2004.]

[F220(3A) In sub-paragraph (3)(b)(ii), the revaluation amount is—

(a)where that period is less than one month, nil; or

(b)in any other case, the revaluation percentage of the amount of the annual rate of pension under sub-paragraph (3)(b)(i).

(3B) In sub-paragraph (3A), “the revaluation percentage” means the lesser of—

(a)the percentage increase in the general level of prices in Great Britain during the revaluation period determined in accordance with sub-paragraph (3)(b)(ii); and

(b)the maximum revaluation rate.

(3C) The method for determining the percentage increase in the general level of prices in Great Britain during the revaluation period determined in accordance with sub-paragraph (3)(b)(ii) is—

(100 x (A/B)) -100

where—

A is the level of the retail prices index for March 2004; and

B is the level of the retail prices index for the month two months before the month during which the relevant qualifying pension scheme began to be wound up.

(3D) In sub-paragraph (3B)(b), “the maximum revaluation rate” in relation to the revaluation period is—

(a)if that period is a period of 12 months, 5%; or

(b)in any other case, the percentage that would be the percentage mentioned in sub-paragraph (3B)(a) had the general level of prices in Great Britain increased at the rate of 5% compound per annum during that period.]

[F221(4) Where the scheme manager is satisfied that it is not possible for [F222it] to determine the annual rate of the pension for the purposes of sub-paragraph (3) having regard to all the information available to [F222it] , [F223it] shall determine that annual rate, having regard to such matters as [F223it] considers relevant.]

[F224(5) Where—

(a)the annual rate of the pension determined for the purposes of calculating the expected pension under sub-paragraph (2) includes an amount which, under the rules of the qualifying pension scheme, was payable for a period which is shorter than the period in respect of which the remainder of the pension was payable; and

(b)the liabilities of the scheme in respect of the beneficiary have been discharged (whether by the purchase of an annuity or by other means) in a manner which does not provide for a reduction in the annual rate of an annuity from the date on which the amount referred to in paragraph (a) would have ceased to be payable under the rules of the pension scheme,

the scheme manager shall determine the expected pension having regard to the expected pension which would have been determined in accordance with paragraph 4A if that paragraph had applied and to such other matters as it considers relevant.]

Textual Amendments

Active and deferred membersU.K.

4.—(1) This paragraph applies in respect of a qualifying member of a qualifying pension scheme who F225... was an active member or a deferred member of that scheme [F226on the day before the day on which the qualifying pension scheme began to be wound up].

[F227(2) The annual payment payable to a qualifying member to whom this paragraph applies shall be—

F219 .]

(3) In sub-paragraph (2), “expected pension” means, subject to [F228sub-paragraphs (3A)F229... and (4)], the aggregate of—

(a)the annual rate of the pension to which the qualifying member would have been entitled in accordance with the scheme rules had he attained his normal retirement age when the pensionable service relating to the pension ended;

(b)the revaluation amount for the first revaluation period (see sub-paragraphs (5) and (6)); F230...

(c)the revaluation amount for the second revaluation period (see sub-paragraphs (7) to (11)); [F231and]

[F231(d)in any case where 14 May 2004 is later than—

(i)the day on which the qualifying pension scheme began to be wound up; and

(ii)the day on which the qualifying member attained normal retirement age,

the revaluation amount for the third revaluation period (see sub-paragraphs (13) to (13D)).]

[F232(3A) Where—

(a)the annual rate of the pension determined for the purposes of sub-paragraph (3)(a) includes an amount which, under the rules of the qualifying pension scheme, was payable for a period which is shorter than the period in respect of which the remainder of the pension was payable; and

(b)the liabilities of the scheme in respect of the beneficiary have been discharged (whether by the purchase of an annuity or by other means) in a manner which does not provide for a reduction in the annual rate of an annuity from the date on which the amount referred to in paragraph (a) would have ceased to be payable under the rules of the pension scheme,

the scheme manager shall determine the annual rate for the purposes of sub-paragraph (3)(a) having regard to the expected pension which would have been determined in accordance with paragraph 4A if that paragraph had applied and to such other matters as it considers relevant.]

F233(3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) In any case where the scheme manager is satisfied, having regard to the information available to [F234it], that it is not possible for [F234it] to identify any one of the elements in [F235sub-paragraph (3) or (3A) or paragraph 4B] [F236it] may determine how the annual payment is to be calculated having regard to such matters as [F236it] considers relevant.

[F237(5) The first revaluation period is the period—

(a)beginning on the day on which the qualifying member’s pensionable service ended; and

(b)ending on [F238the day before the day on which the qualifying pension scheme began to be wound up.]

(6) The revaluation amount for the first revaluation period is the amount by which the annual rate of the pension under sub-paragraph (3)(a) would fall to be revalued—

(a)in relation to any guaranteed minimum pension, in accordance with section 16 of the 1993 Act, having regard to the relevant scheme rules; and

(b)in relation to the remainder of the pension, in accordance with Chapter 2 of Part 4 of the 1993 Act.

[F239(7) The second revaluation period is the period—

(a)beginning on the day after the date determined in accordance with sub-paragraph (5)(b); and

(b)ending on—

[F240(i)the day on which the qualifying member attains normal retirement age;]

(ii)the day from which the qualifying member is entitled to an annual payment in accordance with regulation 17(2)[F241, (3) or (3C) or 17C],

whichever is the earlier.]

(8) The revaluation amount for the second revaluation period is, subject to sub-paragraph (12)—

(a)where that period is less than one month, nil; or

(b)in any other case, the revaluation percentage of the aggregate of the annual rate of the pension under sub-paragraph (3)(a) and the revaluation amount for the first revaluation period under sub-paragraph (6).

(9) In sub-paragraph (8), “the revaluation percentage” means the lesser of—

(a)the percentage increase in the general level of prices in Great Britain during the second revaluation period determined in accordance with sub-paragraph (7); and

(b)the maximum revaluation rate.

(10) The method for determining the percentage increase in the general level of prices in Great Britain during the second revaluation period is—

where—

A is the level of the retail prices index for the month which falls two months before the month in which [F242the day from which the qualifying member is entitled to an annual payment] falls;

B is the level of the retail prices index for the month two months before the month during which the relevant qualifying pension scheme began to wind up.

(11) In sub-paragraph (9)(b), “the maximum revaluation rate” in relation to the second revaluation period is—

(a)if that period is a period of 12 months, 5%; or

(b)in any other case, the percentage that would be the percentage mentioned in sub-paragraph (9)(a) had the general level of prices in Great Britain increased at the rate of 5% compound per annum during that period.

(12) In determining the revaluation amount for the second revaluation period in accordance with sub-paragraphs (8) to (11), no revaluation shall be made in respect of any benefits which are not subject to revaluation under the scheme rules.

(13) [F243The third revaluation period is the period—

(a)beginning on the day after the day on which the member attained normal retirement age; and

(b)ending on 14 May 2004.]

[F243(13A) The revaluation amount for the third revaluation period is—

(a)where that period is less than one month, nil; or

(b)in any other case, the revaluation percentage of the aggregate of—

(i)the annual rate of the pension under sub-paragraph (3)(a);

(ii)the revaluation amount for the first revaluation period under sub-paragraph (6); and

(iii)the revaluation amount for the second revaluation period under sub-paragraph (8).

(13B) In sub-paragraph (13A), “the revaluation percentage” means the lesser of—

(a)the percentage increase in the general level of prices in Great Britain during the revaluation period determined in accordance with sub-paragraph (13); and

(b)the maximum revaluation rate.

(13C) The method for determining the percentage increase in the general level of prices in Great Britain during the revaluation period determined in accordance with sub-paragraph (13) is—

(100 x (A/B)) -100

where—

A is the level of the retail prices index for March 2004; and

B is the level of the retail prices index for the month two months before the month in which the qualifying member attained normal retirement age.

(13D) In sub-paragraph (13B)(b), “the maximum revaluation rate” in relation to the revaluation period is—

(a)if that period is a period of 12 months, 5%; or

(b)in any other case, the percentage that would be the percentage mentioned in sub-paragraph (13B)(a) had the general level of prices in Great Britain increased at the rate of 5% compound per annum during that period.]]

Textual Amendments

[F244Bridging pensionsU.K.

4A.—(1) This paragraph applies where—

(a)the annual rate of the pension determined for the purposes of calculating the expected pension under paragraph 3(2) or 4(2) includes an amount which, under the scheme rules, was payable for a period which is shorter than the period in respect of which the remainder of the pension was payable; and

(b)an annuity has been purchased for the beneficiary which provides for payment of a pension to the beneficiary at a lower annual rate from the date on which the amount referred to in paragraph (a) would have ceased to be payable under the rules of the pension scheme.

(2) Where this paragraph applies, the scheme manager shall redetermine the annual payment payable to that beneficiary with effect from the date on which the amount referred to in sub-paragraph (1)(a) would have ceased to be payable under the rules of the pension scheme.

(3) When redetermining an annual payment under sub-paragraph (2)—

(a)the annual rate of the pension for the purposes of paragraph 3(3)(a) shall be the annual rate of pension which was or should have been in payment to the qualifying member in accordance with the scheme rules in respect of rights accrued in a qualifying pension scheme less the annual amount which was payable for the shorter period referred to in sub-paragraph (1)(a), as at the day which is the day before the day on which the qualifying pension scheme began to be wound up;

(b)the annual rate of the pension for the purposes of paragraph 3(3)(b)(i) shall be the amount which was or should have been in payment to the qualifying member in accordance with the scheme rules in respect of rights accrued in a qualifying pension scheme less the annual amount which was payable for the shorter period referred to in sub-paragraph (1)(a), as at the day on which the qualifying member attained normal retirement age;

(c)the amount specified in paragraph 4(3)(a) shall be the amount determined in accordance with that paragraph less the amount which is the amount which was payable for the shorter period referred to in sub-paragraph (1)(a);

(d)the amount which was payable for the shorter period referred to in sub-paragraph (1)(a) shall be disregarded when determining the revaluation amounts; and

(e)the beneficiary shall be entitled to so much of the total amount of the annual increases determined in accordance with paragraph 9 payable to the beneficiary as at the date referred to in sub-paragraph (2) as are attributable to the amount of expected pension determined in accordance with this paragraph.

(4) In any case where the scheme manager is satisfied, having regard to the information available to it, that it is not possible for it to determine the annual rate of pension for the purposes of sub-paragraph (3)(a) or (b) or any one of the amounts for the purposes of sub-paragraph (3)(c) to (e) it shall determine that annual rate or amount, having regard to such matters as it considers relevant.

(5) In sub-paragraph (3)(d) “the revaluation amounts” means—

(a)the revaluation amount referred to in paragraph 3(3)(b)(ii); and

(b)the revaluation amounts referred to in paragraph 4(3)(b) to (d).

Textual Amendments

Pension payable at an age other than normal retirement ageU.K.

4B.—(1) This paragraph applies where any pension or part of a pension would have been payable to the qualifying member for life without actuarial adjustment under the rules of the qualifying pension scheme (disregarding any rule making special provision as to early payment on the grounds of ill health or otherwise) at an age other than the member’s normal retirement age.

(2) Where this paragraph applies—

(a)paragraphs 3(3) and 4(3) and (3A) shall have effect as if the amount of pension or part of a pension payable at the age other than the member’s normal retirement age were a separate pension;

(b)paragraph 4(3)(a) shall have effect as if the reference to normal retirement age were a reference to the age at which the pension or part of a pension would be payable to the qualifying member without actuarial reduction under the rules of the qualifying pension scheme (disregarding any rule making special provision as to early payment on the grounds of ill health or otherwise); and

(c)“expected pension” in paragraphs 3(2) and 4(2) means, subject to paragraph 4(4), the aggregate of the amounts calculated as the expected pension in accordance with paragraphs 3 and 4 in relation to any pension treated as a separate pension in accordance with paragraph (a).

(3) An actuarial factor, determined having regard to such matters as the person determining the factor considers relevant, shall be applied to any amount determined in accordance with sub-paragraph (2)(a).]

Textual Amendments

Survivors of qualifying membersU.K.

5.—[F245(1) This paragraph applies where—

(a)immediately before a qualifying pension scheme began to wind up, a qualifying member—

(i)was entitled to present payment of a pension under the scheme rules and that pension was attributable—

(aa)to the member’s pensionable service; or

(bb)(directly or indirectly) to a pension credit to which the member became entitled under section 29(1)(b) of the Welfare Reform and Pensions Act 1999 (creation of pension debits and credits); or

(ii)was an active member or a deferred member of that scheme;

(b)that member dies on or after the day on which the scheme began to wind up; and

(c)that member—

(i)was entitled to an annual payment determined in accordance with this Schedule, or

(ii)would have been entitled to such an annual payment had he not died before he became so entitled.]

(2) The annual payment payable to the survivor of a qualifying member to whom this paragraph applies shall be determined in accordance with [F246sub-paragraph (3) or (6A)].

[F247(3) Except where sub-paragraph (6A) applies, the annual payment payable to a survivor shall be—]

[F247]

(4) In sub-paragraph (3), “expected pension” shall, subject to sub-paragraph (5), be determined—

(a)where the qualifying member was entitled to present payment of a pension under the scheme rules [F248on the day before the day on which the qualifying pension scheme began to be wound up] in accordance with paragraph 3(3); or

(b)where the qualifying member was an active member or a deferred member of a qualifying pension scheme [F248on the day before the day on which the qualifying pension scheme began to be wound up] in accordance with [F249sub-paragraph (7)].

(5) In any case where the scheme manager is satisfied that it is not possible for [F250it] to identify either or both elements of the formula in sub-paragraph (3), [F251it] may determine how the annual payment is to be calculated having regard to the scheme rules and such other matters as [F251it] considers relevant.

F252(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F253(6A) Where the qualifying member was a party to a polygamous marriage, the annual payment payable to each survivor shall be—

(6B) In this paragraph—

“A” means the actual pension;

“B” means the sum of the actual pensions of all the survivors of that qualifying member;

“E” means one half of the product of 0.9 multiplied by the expected pension which would be determined in accordance with sub-paragraph (3) if sub-paragraph (6A) did not apply;

“H” means the aggregate of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled before the day on which the qualifying member died;

“N” means the number of survivors of that qualifying member.

(6C) Where a survivor of a qualifying member who was a party to a polygamous marriage dies, the annual payment payable to each survivor of that qualifying member shall be redetermined with effect from the day after the day on which the survivor died.]

[F254(7) For the purposes of sub-paragraph (4)(b), “expected pension” means the aggregate amount of—

(a)the amount specified in paragraph 4(3)(a);

(b)the revaluation amount for the first survivor revaluation period (see sub-paragraphs (8) and (9)); F255...

(c)the revaluation amount for the second survivor revaluation period (see sub-paragraphs (10) and (11)); [F256and]

[F256(d)in any case where 14 May 2004 is later than—

(i)the day on which the qualifying member died; and

(ii)the day on which the qualifying pension scheme began to be wound up,

the revaluation amount for the third survivor revaluation period (see sub-paragraphs (12) and (13)).]

(8) The first survivor revaluation period is the period—

(a)beginning on the day on which the qualifying member’s pensionable service ended; and

(b)ending on—

(i)the day before the day on which the scheme began to wind up;

(ii)the day from which the qualifying member became entitled to an annual payment in accordance with regulation 17(2)[F257, (3) or (3C) or 17C]; or

(iii)the day from which the survivor of the qualifying member became entitled to an annual payment under regulation 17(4),

whichever is the earliest.

(9) The revaluation amount for the first survivor revaluation period is the revaluation amount determined in accordance with paragraph 4(6).

(10) The second survivor revaluation period is the period—

(a)beginning on the day after the date determined in accordance with sub-paragraph (8)(b); and

[F258(b)ending on—

(i)the earlier of—

(aa)the day from which the qualifying member became entitled to an annual payment; or

(bb)the day from which the survivor of the qualifying member became entitled to an annual payment; or

(ii)in any case where 14 May 2004 is later than—

(aa)the day on which the qualifying member died; and

(bb)the day on which the qualifying pension scheme began to be wound up,

the day on which the qualifying member died.]

(11) The revaluation amount for the second survivor revaluation period is the revaluation amount determined in accordance with paragraph 4(8) to (12).]

[F259(12) The third survivor revaluation period is the period—

(a)beginning on the day after the day on which the qualifying member died; and

(b)ending on 14 May 2004.

(13) The revaluation amount for the third survivor revaluation period is the revaluation amount determined in accordance with paragraph 4(13A) to (13D).]

Textual Amendments

[F260Payment for an entitlement under regulation 17CU.K.

5A.—(1) This paragraph applies where a qualifying member is entitled to an annual payment in accordance with regulation 17C for a period during which that member has previously received a relevant payment.

(2) The annual payment payable to a qualifying member to whom this paragraph applies is determined in accordance with this Schedule.

(3) For any period for which an annual payment under regulation 17C is due to be paid and a relevant payment has previously been paid, the relevant payment is treated as a payment on account of the annual payment under regulation 17C.

(4) Where the amount of the relevant payment so treated equals the amount of the annual payment payable under sub-paragraph (2), no further payment under regulation 17C is due to the qualifying member.

(5) In this paragraph, “relevant payment” means a payment in accordance with these Regulations other than a payment for a survivor by virtue of regulation 17(4), 17A(3), 17B(2)(b) or 18(4).]

Textual Amendments

[F261Surviving dependants of qualifying membersU.K.

5B.—(1) The annual payment payable to a surviving dependant of a qualifying member shall be determined in accordance with sub-paragraphs (2) to (5).

(2) Where an annual payment is also payable to a survivor of the qualifying member and—

(a)there is only one surviving dependant, the amount of the annual payment shall be—

(b)there are two or more surviving dependants, the amount of the annual payment shall be—

(3) Where the qualifying member does not have a survivor and—

(a)there is only one surviving dependant, the amount of annual payment shall be—

(b)there are two or more surviving dependants, the amount of the annual payment shall be—

(4) Where—

(a)a survivor of a qualifying member, who is not a person who is treated as a survivor under regulation 37 of the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009, dies; or

(b)a person ceases to be a surviving dependant of a qualifying member,

the annual payment payable to a surviving dependant of that qualifying member shall be redetermined with effect from the day after the day on which the survivor died or the person ceased to be a surviving dependant.

(5) In this paragraph—

“B” means—

(a)

where there is only one surviving dependant, the surviving dependant’s actual pension; or

(b)

where there are two or more surviving dependants, the sum of the actual pensions of all the surviving dependants of that qualifying member;

“E” means one half of the sum of ;

“G” means the product of 0.9 multiplied by the expected pension which has been or could have been determined in respect of the survivor in accordance with paragraph 5(3);

“H” means the aggregate of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled before the day on which the qualifying member died;

and

“N” means the number of surviving dependants of that qualifying member.]

Textual Amendments

Exclusion of certain benefitsU.K.

6.—(1) No account shall be taken of the benefits specified in sub-paragraph (2) when determining, for the purposes of this Schedule—

(a)the assets available to be used to discharge a liability of a qualifying pension scheme;

(b)the liabilities of such a scheme; and

(c)the annual rate of pension from such a scheme.

(2) The specified benefits are—

(a)money purchase benefit; [F262and]

(b)benefits derived from the payment of voluntary contributions where, on the winding up of the scheme, the assets of the scheme have first been applied to satisfy liabilities in respect of those benefits; F263...

F264(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F265(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Cap on expected pension and actual pensionU.K.

7.—[F266(1) Where the amount of a qualifying member’s expected pension determined in accordance with the previous provisions of this Schedule multiplied by 0.9 exceeds the FAS cap—

(a)the amount of the annual payment payable to, or in respect of, that member under paragraphs 3 to 5B shall be determined on the basis that the product of that calculation was the amount of the FAS cap; and

(b)the expected pension for the purposes of paragraph (b)(i) in the definition of “underlying rate” in paragraph 9 shall be the amount of the FAS cap;]

(2) Where the amount of a qualifying member's actual pension determined in accordance with paragraph 2 exceeds—

(a)the amount of a qualifying member's expected pension determined in accordance with the previous provisions of this Schedule multiplied by [F2190.9] F267...; or

(b)[F268the FAS cap],

no annual payment shall be payable to, or in respect of, that member.

[F269(3) Except where sub-paragraph (5) applies, in this paragraph “the FAS cap” is—

(a)where the beneficiary became entitled to an annual payment before 1st April 2007, £26,000;

(b)where the beneficiary became entitled to an annual payment in the period beginning on 1st April 2007 and ending on 31st March 2008, £26,936;

(c)where the beneficiary became entitled to an annual payment in the period beginning on 1st April 2008 and ending on 31st March 2009, £27,987;

(d)where the beneficiary became entitled, or becomes entitled, to an annual payment in the period beginning on 1st April 2009 and ending on 31st March 2010, £29,386; and

(e)where the beneficiary becomes entitled to an annual payment in the period after 31st March 2010, the amount determined in accordance with sub-paragraph (4).

(4) For each successive period of 12 months from 1st April 2010, the FAS cap shall be—

(a)where paragraph (b) does not apply, the amount of the FAS cap for the previous period of 12 months increased by the percentage increase of the retail prices index for the period of 12 months ending on the 30th September falling within that previous period of 12 months; or

(b)where there is no such percentage increase, the amount of the FAS cap for the previous period of 12 months.

(5) Where a qualifying member dies on or after the day on which that qualifying member became entitled to an annual payment, “the FAS cap” for the purposes of determining the amount of the annual payment payable to a survivor or a surviving dependant of that qualifying member under paragraph 5 or 5B is the amount which was determined in accordance with sub-paragraph (3) for the purposes of determining the amount of the annual payment payable to that qualifying member.

(6) Where the amount of the FAS cap determined in accordance with sub-paragraph (3)(e) results in a fraction of a pound, that fraction shall be treated as a pound.]

Textual Amendments

De minimis ruleU.K.

F2708.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F271Annual increase to an annual paymentU.K.

9.—(1) Except where there is no percentage increase in the retail prices index for the period of 12 months ending with 31st May last falling before the indexation date, a beneficiary entitled to an annual amount determined in accordance with paragraphs 2A to 5B shall be entitled, on the indexation date, to an increase of—

(a)the appropriate percentage of the amount of the underlying rate immediately before that date, or

(b)where the beneficiary first became entitled to an annual payment during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the annual payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—

(a)

the percentage increase in the retail prices index for the period of 12 months ending with the 31st May last falling before the indexation date; and

(b)

2.5%;

“underlying rate” means—

(a)

the aggregate of—

(i)

the product of X multiplied by so much of the expected pension as is attributable to post-1997 service;

(ii)

where—

(aa)

the beneficiary is a survivor or a surviving dependant of a qualifying member; and

(bb)

that qualifying member dies on or after the day on which that qualifying member became entitled to an annual payment,

the product of X multiplied by W; and

(iii)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date; or

(b)

where paragraph 7(1) applies, the aggregate of—

(i)

so much of the expected pension as is, proportionately, attributable to post-1997 service; and

(ii)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date;

“post-1997 service” means—

(a)

pensionable service (whether actual or notional) which occurs on or after 6th April 1997; or

(b)

where the annual payment is payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred on or after 6th April 1997;

“W” means the amount of any annual increases to which the qualifying member was entitled in accordance with sub-paragraph (1) on the day before the day on which the qualifying member died;

“X” means—

(a)

0.9, where the beneficiary is the qualifying member;

(b)

0.45, where the beneficiary is a survivor who is not a survivor to whom paragraph 5(6A) applies;

(c)

the product of 0.45 divided by Y, where the beneficiary is a survivor to whom paragraph 5(6A) applies;

(d)

the product of 0.9 divided by Z, where the beneficiary is a surviving dependant and the qualifying member does not have a survivor; or

(e)

the product of 0.45 divided by Z, where the beneficiary is a surviving dependant and an annual payment is also payable to a survivor of the qualifying member;

“Y” means the number of survivors of the qualifying member; and

“Z” means—

(a)

where there is only one surviving dependant, 2; or

(b)

where there is more than one surviving dependant, the number of surviving dependants of the qualifying member.

(3) In any case where the scheme manager is satisfied, having regard to the information available, that it is not possible for the scheme manager to determine the amount of expected pension which is attributable to post-1997 service for the purposes of this paragraph, the scheme manager shall determine that amount, having regard to such matters as the scheme manager considers relevant.]

Textual Amendments

Initial paymentsU.K.

10.  The preceding provisions of this Schedule shall apply for the purposes of determining the amount of an initial payment with the following modifications—

(a)for paragraph 2, substitute—

[F272“Interim pension

2.—(1) In this Schedule, “interim pension” means, subject to sub-paragraphs (2) and (3), the annual rate of pension that was in payment, is in payment, or is proposed to be paid, to a qualifying member, or to a survivor [F273or surviving dependant] of that qualifying member, from the assets of the qualifying pension scheme of which that qualifying member is, or was, a member—

(a)on or after the time when the scheme began to wind up; but

(b)before the day on which the scheme’s liabilities to or in respect of the qualifying member are, or were, discharged.

(2) Where—

(a)the annual rate of pension referred to in sub-paragraph (1)—

(i)was or is in payment, and

(ii)was determined following commutation[F274, after the day on which the qualifying pension scheme began to be wound up,] of some of the benefits deriving from the scheme to which that qualifying member is entitled,

that annual rate shall be redetermined on the basis that there was [F275no such commutation]; and

(b)the annual rate of pension referred to in sub-paragraph (1) is proposed to be paid, that annual rate shall be determined on the basis that there has been no commutation of benefits [F276after the day on which the scheme began to be wound up].

(3) Where the scheme manager is satisfied that it is not possible for [F277it] to determine the annual rate of pension for the purposes of sub-paragraph (1) having regard to the information available to [F277it], [F278it] shall determine the annual rate of pension on the basis of that portion of the assets of the qualifying pension scheme (of which the qualifying member is, or was, a member) provisionally allocated to the member by the trustees or managers, or survivor [F273or surviving dependant] of that member—

(a)on or after the time when the scheme began to wind up; but

(b)before the day on which the scheme’s liabilities in respect of the qualifying member are, or were, discharged,

and such other matters as the scheme manager considers relevant.”];

(b)for “actual pension”, in each place, substitute “interim pension”;

[F279(ba)for “[F280regulation 17(2), (3) or (3C) or 17C]” in each place, substitute “regulation 18(4)”;]

F281(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F281(ca). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F282(d)for “annual payment”, in each place that it occurs (except in paragraph 1(1)), substitute “initial payment”; and]

[F283(e)in paragraph 5—

(i)for sub-paragraph (3) substitute—

“(3) The initial payment payable to a survivor of a qualifying member shall be—F219

(ii)[F284for sub-paragraph (4) substitute—

“(4) In sub-paragraph (3), “expected pension” shall, subject to sub-paragraph (5), be the sum of—

(a)the amount determined—

(i)where the qualifying member was entitled to a present payment of a pension under the scheme rules on the day before the day on which the qualifying pension scheme began to be wound up, in accordance with paragraph 3(3); or

(ii)where the qualifying member was an active member or a deferred member of a qualifying pension scheme on the day before the day on which the qualifying pension scheme began to be wound up, in accordance with paragraph 4(3); and

(b)the product of the aggregate of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled on the day before the day on which the qualifying member died divided by 0.9.”.]]

Textual Amendments

[F285Shared initial paymentsU.K.

10A.—(1) Where two or more survivors of a qualifying member are entitled to a shared initial payment by virtue of regulation 18(4B), the amount of each survivor’s shared initial payment shall be—

(2) In this paragraph—

“N” means the number of survivors of the qualifying member;

“Y” means the sum of the interim pensions of all the survivors which would have been determined in accordance with paragraph 5(3) had that paragraph applied to the survivors; and

“Z” means the product of 0.9 multiplied by the expected pension which would have been determined in accordance with paragraph 5(3) had that paragraph applied to the survivors.]

Textual Amendments

RoundingU.K.

11.  Where the amount of an annual payment or an initial payment determined in accordance with this Schedule results in a fraction of a penny, that fraction shall be treated as a penny.

Regulations 17A(8) and 17B(6)

[F286SCHEDULE 2AU.K.DETERMINATION OF ILL HEALTH AND INTERIM ILL HEALTH PAYMENTS

Textual Amendments

IntroductoryU.K.

1.  This Schedule applies for the purposes of determining the amount of an ill health payment or an interim ill health payment payable to or in respect of qualifying members of qualifying pension schemes who are unable to work due to ill health and are likely to continue to be so unable to work until normal retirement age.

Amount of an ill health paymentU.K.

2.—(1) The amount of an ill health payment payable to a qualifying member of a qualifying pension scheme shall be—

(2) [F287Except where sub-paragraph (2A) applies, the amount of an ill health payment to a survivor of a qualifying member of a qualifying pension scheme shall be—]

(C(A x 0.9)/2))-B

[F287(2A) Where a qualifying member was a party to a polygamous marriage, the amount of an ill health payment payable to each survivor shall be—

(2B) Where a survivor of a qualifying member who was a party to a polygamous marriage dies, the ill health payment payable to each survivor of that qualifying member shall be redetermined with effect from the day after the day on which the survivor died.]

(3) In this paragraph—

“A” means the amount of expected pension which would be determined in accordance with Schedule 2 if—

(a)

the beneficiary were entitled to an annual payment; and

(b)

the modifications in paragraph 6 applied;

“B” means the amount of actual pension which would be determined in accordance with Schedule 2 if—

(a)

the beneficiary were entitled to an annual payment; and

(b)

the modifications in paragraph 6 applied; F288...

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied.

[F289“D” means the sum of the actual pensions of all the survivors of that qualifying member which would be determined in accordance with paragraph 2 if sub-paragraph (2A) did not apply;

“E” means the produce of—

“H” means the aggregate of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled before the day on which the qualifying member died; and

“N” means the number of survivors of that qualifying member.]

(4) This paragraph is subject to [F290paragraph 7].

Textual Amendments

[F291Amount of an ill health payment to a surviving dependantU.K.

2A.—(1) The amount of an ill health payment payable to a surviving dependant of a qualifying member shall be determined in accordance with sub-paragraphs (2) to (5).

(2) Where an ill health payment is also payable to a survivor of the qualifying member and—

(a)there is only one surviving dependant, the amount of the ill health payment shall be—

(b)there are two or more surviving dependants, the amount of the ill health payment shall be—

(3) Where the qualifying member does not have a survivor and—

(a)there is only one surviving dependant, the amount of the ill health payment shall be—

(b)there are two or more surviving dependants, the amount of the ill health payment shall be—

(4) Where—

(a)a survivor of a qualifying member, who is not a person who is treated as a survivor under regulation 37 of the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009, dies; or

(b)a person ceases to be a surviving dependant of a qualifying member,

the ill health payment payable to a surviving dependant of that qualifying member shall be redetermined with effect from the day after the day on which the survivor died or the person ceased to be a surviving dependant.

(5) In this paragraph—

“A” means the amount of expected pension which would be determined in accordance with Schedule 2 if—

(a)

the qualifying member were entitled to an annual payment; and

(b)

the modifications in paragraph 6 applied;

“B” means—

(a)

where there is only one surviving dependant, the actual pension of that surviving dependant which would be determined in accordance with Schedule 2 if—

(i)

the surviving dependant were entitled to an annual payment; and

(ii)

the modifications in paragraph 6 applied;

(b)

where there are two or more surviving dependants, the sum of the actual pensions of all the surviving dependants of that qualifying member which would be determined in accordance with Schedule 2 if—

(i)

the surviving dependants were entitled to annual payments; and

(ii)

the modifications in paragraph 6 applied;

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied;

“F” means one half of the product of—

“H” means the aggregate of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled before the day on which the qualifying member died; and

“N” means the number of surviving dependants of that qualifying member.]

Textual Amendments

Amount of an interim ill health paymentU.K.

3.—(1) The amount of an interim ill health payment payable to a qualifying member of a qualifying pension scheme shall be—

(2) [F292Except where sub-paragraph (2A) applies,] the amount of an interim ill health payment payable to a survivor of a qualifying member of a qualifying pension scheme shall be—F293

(C(A x 0.9)/2))-B

[F294(2A) Where a qualifying member was a party to a polygamous marriage, the amount of an interim ill health payment payable to each survivor shall be—]

(3) In this paragraph—

“A” means the amount of expected pension which would be determined in accordance with Schedule 2 if—

(a)

the beneficiary were entitled to an initial payment; and

(b)

the modifications in paragraph 6 applied;

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied;

“D” means the amount of interim pension which would be determined in accordance with Schedule 2 if—

(a)

the qualifying member were entitled to an initial payment; and

(b)

the modifications in paragraph 6 applied; F295...

“E” means the amount of interim pension payable to the survivor which would be determined in accordance with Schedule 2 if—

(a)

the survivor were entitled to an initial payment; and

(b)

the modifications in paragraph 6 applied.

[F296“F” means the sum of the interim pensions of all the survivors which would have been determined in accordance with Schedule 2 if—

(a)

the survivors had been entitled to initial payments; and

(b)

the modifications in paragraph 6 applied;

“H” means the aggregate of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled before the day on which the qualifying member died; and

“N” means the number of survivors of that qualifying member.]

(4) This paragraph is subject to [F297paragraph 7].

Textual Amendments

[F298Amount of an interim ill health payment for a surviving dependantU.K.

3A.—(1) The amount of an interim ill health payment payable to a surviving dependant of a qualifying member shall be determined in accordance with sub-paragraphs (2) to (5).

(2) Where an interim ill health payment is also payable to a survivor of the qualifying member and—

(a)there is only one surviving dependant, the amount of the interim ill health payment shall be—

(b)there are two or more surviving dependants, the amount of the interim ill health payment shall be—

(3) Where the qualifying member does not have a survivor and—

(a)there is only one surviving dependant, the amount of the interim ill health payment shall be—

(b)there are two or more surviving dependants, the amount of the ill health payment shall be—

(4) Where—

(a)a survivor of a qualifying member, who is not a person who is treated as a survivor under regulation 37 of the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009, dies; or

(b)a person ceases to be a surviving dependant of a qualifying member,

the interim ill health payment payable to a surviving dependant of that qualifying member shall be redetermined with effect from the day after the day on which the survivor died or the person ceased to be a surviving dependant.

(5) In this paragraph—

“A” means the amount of expected pension which would be determined in accordance with Schedule 2 if—

(a)

the qualifying member were entitled to an annual payment; and

(b)

the modifications in paragraph 6 applied;

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied;

“F” means one half of the product of—

“G” means—

(a)

where there is only one surviving dependant, the interim pension of the surviving dependant which would be determined in accordance with Schedule 2 if—

(i)

the surviving dependant was entitled to an annual payment; and

(ii)

the modifications in paragraph 6 applied;

(b)

where there are two or more surviving dependants, the sum of the interim pensions of all the surviving dependants which would be determined in accordance with Schedule 2 if—

(i)

the surviving dependants were entitled to annual payments; and

(ii)

the modifications in paragraph 6 applied;

“H” means the aggregate of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled before the day on which the qualifying member died; and

“N” means the number of surviving dependants of that qualifying member.]

Textual Amendments

RevaluationU.K.

F2994.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Actuarial reductionU.K.

5.  The actuarial factor to be applied in paragraphs 2 and 3 shall be determined F300..., having regard to—

(a)the age of the qualifying member;

(b)the normal retirement age of the qualifying member; and

(c)such other matters as the [F301person determining the factor] considers relevant.

Textual Amendments

Modifications to Schedule 2U.K.

6.  The following modifications to Schedule 2 apply for the purposes of paragraphs 2 and 3 of this Schedule—

[F302(za)in paragraph 2(1), for the words from “the later of” to the end of paragraph (b), substitute “the day on which the beneficiary is entitled to an ill health payment in accordance with regulation 17A”;

(zb)in paragraph 4(3)—

(i)after paragraph (b) insert “and”;

(ii)after paragraph (c) omit “and”; and

(iii)omit paragraph (d);]

(a)for [F303paragraph] 5(8)(b) substitute—

“(b)ending on the day before the day on which the scheme began to wind up.”;

[F304(b)in paragraph 4(7)(b)(i) for “the day on which the qualifying member attains normal retirement age” substitute “the day from which the qualifying member is entitled to an ill health payment in accordance with regulation 17A(1)]

[F305(ba)in paragraph 4(10) for “annual payment” substitute “ill health payment]

(c)for paragraph 5(10)(b) substitute—

“(b)ending on the day from which the qualifying member became entitled to an ill health payment in accordance with regulation 17A(1).”;

(d)omit [F306paragraphs 2A, 4(13) to (13D), 4A, 7, 9 and 10]; and

(e)for paragraph 10(ba) substitute—

“(ba)for “regulation 17A(1)”, in each place it occurs, substitute “regulation 17B(2)”;

(bb)for “ill health payment”, in each place it occurs, substitute “interim ill health payment”;

(bc)for paragraph 4(7)(b) substitute—

(“b)ending on the day from which the qualifying member is entitled to an interim ill health payment in accordance with regulation 17B(2).”.

Textual Amendments

Cap on expected pension and actual pensionU.K.

7.—[F307(1) Where the amount of a qualifying member’s expected pension determined in accordance with paragraph 2, 3 or 3A multiplied by 0.9 exceeds the FAS cap—

(a)the amount of the ill health payment or interim ill heath payment payable to, or in respect of, that member under paragraph 2, 2A, 3 or 3A shall be determined on the basis that the product of that calculation was the amount of the FAS cap; and

(b)the amount “A” under paragraph 2 for the purposes of paragraph (b)(i) in the definition of “underlying rate” in paragraph 9 shall be the amount of the FAS cap;]

(2) Where the amount of a qualifying member’s actual pension or interim pension determined in accordance with this Schedule exceeds—

(a)the amount of the qualifying member’s expected pension determined in accordance with paragraph 2 or 3 multiplied by 0.9; or

(b)[F308the FAS cap],

no ill health payment or interim ill health payment shall be payable to, or in respect of, that member.

[F309(3) In this paragraph, “the FAS cap” is—

(a)where the qualifying member became entitled to an ill health payment in the period beginning on 1st April 2008 and ending on 31st March 2009, £27,987;

(b)where the qualifying member became entitled, or becomes entitled, to an ill health payment in the period beginning on 1st April 2009 and ending on 31st March 2010, £29,386; and

(c)where the qualifying member becomes entitled to an ill health payment in the period after 31st March 2010, the amount determined in accordance with sub-paragraph (4).

(4) For each successive period of 12 months from 1st April 2010, the FAS cap shall be—

(a)where paragraph (b) does not apply, the amount of the FAS cap for the previous period of 12 months increased by the percentage increase of the retail prices index for the period of 12 months ending on the 30th September falling within that previous period of 12 months; or

(b)where there is no such percentage increase, the amount of the FAS cap for the previous period of 12 months.

(5) Where the amount of the FAS cap determined in accordance with sub-paragraph (3)(c) results in a fraction of a pound, that fraction shall be treated as a pound.]

Textual Amendments

RoundingU.K.

8.  Where the amount of an ill health payment or interim ill health payment determined in accordance with this Schedule results in a fraction of a penny, that fraction shall be treated as a penny.]

[F310Annual increase to an ill health paymentU.K.

9.—(1) Except where there is no percentage increase in the retail prices index for the period of 12 months ending with 31st May last falling before the indexation date, a beneficiary entitled to an amount determined in accordance with this Schedule shall be entitled, on the indexation date, to an increase of—

(a)the appropriate percentage of the amount of the underlying rate immediately before that date, or

(b)where the beneficiary first became entitled to an ill health payment during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the ill health payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—

(a)

the percentage increase in the retail prices index for the period of 12 months ending with the 31st May last falling before the indexation date; and

(b)

2.5%;

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied;

“E” means so much of the expected pension as is attributable to post-1997 service;

“post-1997 service” means—

(a)

pensionable service (whether actual or notional) which occurs on or after 6th April 1997; or

(b)

where the ill health payment is payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred on or after 6th April 1997;

“underlying rate” means—

(a)

the aggregate of—

(i)

the product of X multiplied by ;

(ii)

where the beneficiary is a survivor or a surviving dependant of a qualifying member, the product of X multiplied by W; and

(iii)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date; or

(b)

where paragraph 7(1) applies, the aggregate of—

(i)

so much of the amount “A” for the purposes of paragraph 2 as is, proportionately, attributable to post-1997 service; and

(ii)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date;

“W” means the aggregate of any annual increases to which the qualifying member was entitled in accordance with sub-paragraph (1) on the day before the day on which the qualifying member died;

“X” means—

(a)

0.9, where the beneficiary is the qualifying member;

(b)

0.45, where the beneficiary is a survivor who is not a survivor to whom paragraph 2(2A) applies;

(c)

the product of 0.45 divided by Y, where the beneficiary is a survivor to whom paragraph 2(2A) applies;

(d)

the product of 0.9 divided by Z, where the beneficiary is a surviving dependant and the qualifying member does not have a survivor; or

(e)

the product of 0.45 divided by Z, where the beneficiary is a surviving dependant and an ill health payment is also payable to a survivor of the qualifying member;

“Y” means the number of survivors of the qualifying member; and

“Z” means—

(a)

where there is only one surviving dependant, 2; or

(b)

where there is more than one surviving dependant, the number of surviving dependants of the qualifying member.

(3) In any case where the scheme manager is satisfied, having regard to the information available, that it is not possible for the scheme manager to determine the amount of the amount “A” which is attributable to post-1997 service for the purposes of this paragraph, the scheme manager shall determine that amount, having regard to such matters as the scheme manager considers relevant.

Textual Amendments

Annual redeterminationU.K.

10.—(1) This paragraph applies where—

(a)on the first indexation date following the date on which the beneficiary first became entitled to an ill health payment; and

(b)on any indexation date following that first indexation date;

the annual rate of annuity which has been or could have been paid to the beneficiary as at that indexation date as a result of the purchase of an annuity with the assets available to discharge the liability of the scheme to, or in respect of, the qualifying member after that liability has, or had been, determined, is higher as a result of indexation or revaluation than the annual rate determined in accordance with the preceding paragraphs of this Schedule.

(2) Where this paragraph applies, the scheme manager shall redetermine the ill health payment payable to that beneficiary with effect from the indexation date.

(3) When redetermining an ill health payment under sub-paragraph (2), the actual pension shall be the annual rate of annuity which has been or could have been paid to the beneficiary as at the indexation date as a result of the purchase of an annuity with the assets available to discharge the liability of the scheme to, or in respect of, the qualifying member after that liability has, or had been, determined, on the basis of, and having regard to, the matters referred to in paragraph 2(3) of Schedule 2.

(4) In any case where the scheme manager is satisfied, having regard to the information available to it, that it is not possible for it to determine the annual rate of annuity for the purposes of this paragraph, it shall determine that annual rate having regard to such matters as it considers relevant.

(5) Where the scheme manager is satisfied that increases have been, are being, or will be made to the annual rate of annuity, and it considers that those increases are not reasonable, it may determine the annual rate of annuity for the purposes of this paragraph on the basis of the sum which would discharge the liability of the scheme to the beneficiary and of such other matters as it considers relevant.

Textual Amendments

Bridging pensionsU.K.

11.—(1) This paragraph applies where—

(a)the annual rate of the pension determined for the purposes of calculating the expected pension under paragraph 3(2) or 4(2) of Schedule 2 (for the purposes of determining an ill health payment) includes an amount which, under the scheme rules, was payable for a period which is shorter than the period in respect of which the remainder of the pension was payable; and

(b)an annuity has been purchased for the beneficiary which provides for payment of a pension to the beneficiary at a lower annual rate from the date on which amount referred to in paragraph (a) would have ceased to be payable under the rules of the pension scheme.

(2) Where this paragraph applies, the scheme manager shall redetermine the ill health payment payable to that beneficiary with effect from the date on which the amount referred to in sub-paragraph (1)(a) would have ceased to be payable under the rules of the pension scheme.

(3) When redetermining an ill health payment under sub-paragraph (2)—

(a)the annual rate of the pension for the purposes of paragraph 3(3)(a) of Schedule 2 shall be the annual rate of pension which was or should have been in payment to the qualifying member in accordance with the scheme rules in respect of rights accrued in a qualifying pension scheme less the annual amount which was payable for the shorter period referred to in sub-paragraph (1)(a), as at the day which is the day before the day on which the qualifying pension scheme began to be wound up;

(b)the annual rate of the pension for the purposes of paragraph 3(3)(b)(i) of Schedule 2 shall be the amount which was or should have been in payment to the qualifying member in accordance with the scheme rules in respect of rights accrued in a qualifying pension scheme less the annual amount which was payable for the shorter period referred to in sub-paragraph (1)(a), as at the day on which the qualifying member attained normal retirement age;

(c)the amount specified in paragraph 4(3)(a) of Schedule 2 shall be the amount determined in accordance with that paragraph less the amount which is the amount which was payable for the shorter period referred to in sub-paragraph (1)(a);

(d)the amount which was payable for the shorter period referred to in sub-paragraph (1)(a) shall be disregarded when determining the revaluation amounts; and

(e)the beneficiary shall be entitled to so much of the total amount of the annual increases determined in accordance with paragraph 9 payable to the beneficiary as at the date referred to in sub-paragraph (2) as are attributable to the amount of expected pension determined in accordance with this paragraph.

(4) In any case where the scheme manager is satisfied, having regard to the information available to it, that it is not possible for it to determine the annual rate of pension for the purposes of sub-paragraph (3)(a) or (b) or any one of the amounts for the purposes of sub-paragraph (3)(c) to (e) it shall determine that annual rate or amount, having regard to such matters as it considers relevant.

(5) In sub-paragraph (3)(d) “the revaluation amounts” means—

(a)the revaluation amount referred to in paragraph 3(3)(b)(ii) of Schedule 2; and

(b)the revaluation amounts referred to in paragraph 4(3)(b) and (c) of Schedule 2.]

Textual Amendments

Explanatory Note

(This note is not part of the Regulations)

These Regulations establish a financial assistance scheme, allowing for payments to be made to, or in respect of, certain members or former members of certain occupational pension schemes where the liabilities of the scheme to those members are unlikely to be satisfied in full.

Part 1 makes provision for citation, commencement and extent, and also for interpretation of words and phrases used in the Regulations. In particular, it prescribes when a scheme is deemed to have started to wind up for the purposes of these Regulations (regulation 3), applies parts of Parts 1 and 2 of the Pensions Act 2004 (c. 35) for the purposes of these Regulations with the modifications prescribed in Schedule 1 and makes special provision for Northern Ireland (regulation 4).

Part 2 establishes the financial assistance scheme. It provides that the scheme is to be managed by the Secretary of State (regulation 5), that there is to be a fund out of which payments are to be made which shall consist both of monies allocated by Parliament and other amounts which may be provided by third parties on a voluntary basis (regulation 6), that the Secretary of State must report to Parliament on the operation of the financial assistance scheme in respect of each financial year (regulation 7) and that the scheme manager may delegate performance of his functions arising under, or by virtue of, these Regulations to another person on his behalf (regulation 8).

Part 3 prescribes which occupational pension schemes are to be regarded as qualifying pension schemes for the purposes of these Regulations. It both lists the basic criteria (regulation 9) and describes certain types of scheme which are not to be regarded as qualifying pension schemes (regulation 10). It also prescribes the conditions which must apply to the employer for a scheme to be so regarded (regulations 11 and 12), what are to be insolvency events for the purposes of these Regulations (regulation 13) and what details about the scheme must be provided to the scheme manager before the scheme can be regarded as a qualifying pension scheme (regulation 14).

Part 4 prescribes which persons are to be regarded as qualifying members for the purposes of these Regulations (regulation 15) and the basis for ascertaining when a scheme is regarded as having insufficient assets for discharging its liability to the member (regulation 16).

Part 5 prescribes that annual payments are payable to, or in respect of, qualifying members of qualifying pension schemes, that the amounts of those payments are to be determined in accordance with Schedule 2 and that those payments are payable for the life of the beneficiary (regulation 17). It also prescribes that initial payments can be made to qualifying members in certain circumstances (regulation 18).

Part 6 deals with the administration of payments. It prescribes how and when annual payments and initial payments are to be paid (regulation 19), and the arrangements for making payments by direct credit transfer (regulation 20).

The modifications in Schedule 1—

  • allow an inspector on behalf of the Pensions Regulator to collect information on behalf of the scheme manager (paragraph 1);

  • allow the Regulator to disclose restricted information to facilitate the scheme manager's functions (paragraphs 2 and 3);

  • allow for regulations to be prescribed which allow amounts overpaid from the financial assistance scheme to be recovered and payments from the financial assistance scheme to be suspended (paragraph 4);

  • allow for regulations to be prescribed to require certain information to be supplied to the scheme manager (paragraph 5);

  • allow notices to be issued requiring the provision of such information and for enforcement action to be taken if such information is not provided (paragraphs 6 to 9);

  • allow the scheme manager to use information (paragraph 10) and to disclose restricted information in certain circumstances and for certain purposes (paragraphs 11 to 14);

  • allow for regulations to require the scheme manager and other persons to disclose certain information in certain circumstances (paragraph 15);

  • make appropriate interpretation provisions (paragraph 16).

Schedule 2 prescribes the method for calculating the amount of an annual payment under these Regulations for each category of qualifying member or their survivor (paragraphs 1 to 5). It also prescribes certain benefits which are not to be taken into account in determining the annual payment (paragraph 6), for a cap to be imposed on the amount of expected or actual pension to be taken into account (paragraph 7) and for no payment to be made if the amount of the annual payment does not exceed a certain amount (paragraph 8). It also prescribes the method for calculating initial payments (paragraph 10).

A regulatory impact assessment has not been published for this instrument as it has only a negligible impact on business, charities and voluntary bodies.

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