The Financial Assistance Scheme Regulations 2005

Regulation 4(1)

SCHEDULE 1 U.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 him by regulations made under, or by virtue of, section 286 ”. U.K.

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 him by regulations made under or by virtue of section 286, and Part 2 of the Pensions (Northern Ireland) Order 2005 shall be read accordingly ”.

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.

[F1 3A.   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

F1 Sch. 1 para. 3A inserted (17.7.2008) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 (S.I. 2008/1903), regs. 1, 13(a)

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.

(a) in subsection (1), for paragraphs (a) and (b), substitute—

“(a) to the scheme manager, or

(b) to a person—

(i) with whom the scheme manager has made arrangements for any of his functions to be exercised on his behalf, and

(ii) who is authorised by the scheme manager for the purposes of the regulations,”; and

(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 ”.

[F2 6.   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

F2 Sch. 1 para. 6 substituted (17.7.2008) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 (S.I. 2008/1903), regs. 1, 13(b)

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 his functions. ”. U.K.

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

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

(b) for “its functions”, in each place, substitute “ his functions ”.

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 ”;

(b) in subsection (4), after “its functions” insert “ or by the scheme manager in the exercise of his 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.”.

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 his functions ”;

(b) in subsection (2)—

(i) after “its functions”, insert “ or the scheme manager properly to exercise any of his 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 ”.

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 his 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 his consent, and”; and

(f) in subsection (10)—

(i) after “its” insert “ or his ”;

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

(iii) after “it” insert “ or him ”.

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.”.

Regulations 17 and 18(5)

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

Introductory U.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—

[F3 “appropriate person” has the meaning given by regulation 2(1) of the FAS Information and Payments Regulations (interpretation);]

F4 ...

[F5 “the crystallisation date” has the same meaning as in paragraphs (6) and (7) of regulation 4 of the Occupational Pension Schemes (Winding Up) Regulations 1996, as those paragraphs were in force on 5th April 2005;]

F6 ...

F6 ...

F6 ...

F7 ...

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

[F3 “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) Paragraphs 2 to 5 are subject to paragraphs 6 to 9.

F8 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F8 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F3 Words in Sch. 2 para. 1(2) inserted (24.11.2005) by The Financial Assistance Scheme (Modifications and Miscellaneous Amendments) Regulations 2005 (S.I. 2005/3256), regs. 1(1), 4(6)(a)(ii)

F4 Words in Sch. 2 para. 1(2) omitted (17.7.2008) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 (S.I. 2008/1903), regs. 1, 14(a)

F5 Words in Sch. 2 para. 1(2) inserted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(1)(b)

F6 Words in Sch. 2 para. 1(2) omitted (19.12.2007) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(1)

F7 Words in Sch. 2 para. 1(2) omitted (16.12.2006) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(1)(a)

F8 Sch. 2 para. 1(4)(5) omitted (4.6.2008) by virtue of The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(3) (with reg. 8)

Actual pension U.K.

2.—(1) In this Schedule, “ actual pension” means, subject to [F9 sub-paragraphs (3) and (4)] the annual rate of annuity [F10 which has been,] [F11 can be] or could have been, purchased for the beneficiary as at the certification date with the assets available to discharge the liability of the scheme to him 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 [F12 has been, can be or could have been] purchased for the beneficiary for the purposes of sub-paragraph (1) with the assets referred to in that sub-paragraph, shall be determined [F13 (or, as the case may be, redetermined)]—

[F14 (a) where the beneficiary was an active or a deferred member of the qualifying pension scheme [F15 on the crystallisation date], 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 of a member of that scheme, having regard to the annual rate of annuity which will come into payment to him immediately on the purchase of the annuity from the assets of the scheme;

(c) on the basis that benefits payable to survivors F16 ... are no more generous than provided in relation to pensions under the scheme rules; and

(d) on the basis that there has been no commutation of benefits deriving from the scheme.

(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 available to him, he shall determine the annual rate of annuity on the basis of the sum which would discharge the liability of the scheme to the beneficiary and to such other matters as he considers relevant.

[F17 (5) Where the scheme manager is satisfied that increases have been, are being, or will be made to the annual rate of annuity, and he considers that those increases are not reasonable, he 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 he considers relevant.]

Textual Amendments

F9 Words in Sch. 2 para. 2(1) substituted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(2)(a)(i)

F10 Words in Sch. 2 para. 2(1) substituted (24.11.2005) by The Financial Assistance Scheme (Modifications and Miscellaneous Amendments) Regulations 2005 (S.I. 2005/3256), regs. 1(1), 4(6)(b)(i)

F11 Words in Sch. 2 para. 2(1) inserted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(2)(a)(ii)

F12 Words in Sch. 2 para. 2(3) substituted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(2)(b)(i)

F13 Words in Sch. 2 para. 2(3) inserted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(2)(b)(ii)

F14 Sch. 2 para. 2(3)(a) substituted (24.11.2005) by The Financial Assistance Scheme (Modifications and Miscellaneous Amendments) Regulations 2005 (S.I. 2005/3256), regs. 1(1), 4(6)(b)(ii)

F15 Words in Sch. 2 para. 2(3)(a) substituted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(2)(b)(iii)

F16 Words in Sch. 2 para. 2(3)(c) omitted (19.12.2007) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(3)(a)

F17 Sch. 2 para. 2(5) added (19.12.2007) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(3)(b)

Qualifying members receiving pensions from the qualifying pension scheme U.K.

[F18 3.— (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 on the crystallisation date; and

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

[F19 (2) The annual payment payable to a qualifying member to whom this paragraph applies shall be—

F20 .]

(3) In this paragraph, “expected pension” means[F21 , subject to sub-paragraph (4),] the annual rate of the pension which would have been in payment to the qualifying member in respect of rights accrued in a qualifying pension scheme as at the certification date if the scheme had not started to wind up.

[F22 (4) Where the scheme manager is satisfied that it is not possible for him to determine the annual rate of the pension for the purposes of sub-paragraph (3) having regard to all the information available to him, he shall determine that annual rate, having regard to such matters as he considers relevant.]

Textual Amendments

F18 Sch. 2 para. 3(1) substituted (19.12.2007) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(4)(a)

F19 Sch. 2 para. 3(2) substituted (19.12.2007) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(4)(b)

F20 Word in Sch. 2 substituted (4.6.2008) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(2) (with reg. 8)

F21 Words in Sch. 2 para. 3(3) inserted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(3)(c)

F22 Sch. 2 para. 3(4) added (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(3)(d)

Active and deferred members U.K.

4.—(1) This paragraph applies in respect of a qualifying member of a qualifying pension scheme who F23 ... was an active member or a deferred member of that scheme [F24 on the crystallisation date].

[F25 (2) The annual payment payable to a qualifying member to whom this paragraph applies shall be—

F20 .]

(3) In sub-paragraph (2), “expected pension” means, subject to [F26 sub-paragraphs (3A), (3B) 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)); and

(c) the revaluation amount for the second revaluation period (see sub-paragraphs (7) to (11)).

[F27 (3A) In a case to which sub-paragraph (13) applies, “expected pension” means, subject to sub-paragraph (4), the aggregate of the amount specified in sub-paragraph (3)(a) and the revaluation amount for the revaluation period specified in sub-paragraph (13).

(3B) In a case where the certification date is on or before the day on which the qualifying member’s pensionable service ended, “expected pension” means, subject to sub-paragraph (4), the amount specified in sub-paragraph (3)(a).]

(4) In any case where the scheme manager is satisfied, having regard to the information available to him, that it is not possible for him to identify any one of the elements in sub-paragraph (3), [F28 (3A) or (3B),] he may determine how the annual payment is to be calculated having regard to such matters as he considers relevant.

[F29 (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 the earlier of—

(i) the day before the day on which the scheme began to wind up; or

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

(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.

[F30 (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—

(i) the certification date; or

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

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 the certification date 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.

[F31 (13) This sub-paragraph applies to a case where the certification date falls before the day on which the scheme began to wind up, and in such a case—

(a) the revaluation period is the period beginning on the day on which the qualifying member’s pensionable service ended and ending on the certification date; and

(b) the revaluation amount for the period specified in paragraph (a) shall be calculated in accordance with sub-paragraph (6)(a) and (b).]

Textual Amendments

F20 Word in Sch. 2 substituted (4.6.2008) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(2) (with reg. 8)

F23 Words in Sch. 2 para. 4(1) omitted (16.12.2006) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(4)(a)(i)

F24 Words in Sch. 2 para. 4(1) added (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(4)(a)(ii)

F25 Sch. 2 para. 4(2) substituted (19.12.2007) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(5)

F26 Words in Sch. 2 para. 4(3) substituted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(4)(c)

F27 Sch. 2 para. 4(3A)(3B) inserted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(4)(d)

F28 Words in Sch. 2 para. 4(4) inserted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(4)(e)

F29 Sch. 2 para. 4(5) substituted (4.6.2008) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(4)(a) (with reg. 8)

F30 Sch. 2 para. 4(7) substituted (4.6.2008) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(4)(b) (with reg. 8)

F31 Sch. 2 para. 4(13) inserted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(4)(f)

Survivors of qualifying members U.K.

5.— [F32 (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 sub-paragraph (3) or (6).

[F33 (3) Where the qualifying member dies before the date on which the liabilities of the scheme in respect of that member are discharged (whether by entry into an annuity contract or by other means), the annual payment payable to his survivor shall be—

F20 ]

(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 [F34 on the crystallisation date] 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 [F34 on the crystallisation date] in accordance with [F35 sub-paragraph (7)].

(5) In any case where the scheme manager is satisfied that it is not possible for him to identify either or both elements of the formula in sub-paragraph (3), he may determine how the annual payment is to be calculated having regard to the scheme rules and such other matters as he considers relevant.

(6) Where the qualifying member dies [F36 on or after the date on which the liabilities of the scheme in respect of that member were discharged], the annual payment payable to his survivor shall be—

(a) one-half of the annual payment which was payable to that member in accordance with paragraph 3 or 4 immediately before his death; or

(b) where the annual payment was not payable to that member immediately before his death, one-half of the annual payment which would have been payable to him in accordance with [F37 paragraph 3 or 4 if—

(i) he had attained [F38 normal retirement age] before his death; or

(ii) he had not attained that age, but the scheme manager, after being notified that the qualifying member was terminally ill, was satisfied as to that fact.]

[F39 (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)); and

(c) the revaluation amount for the second survivor revaluation period (see sub-paragraphs (10) and (11)).

(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) or (3); 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

(b) ending on—

(i) the day from which the qualifying member became entitled to an annual payment in accordance with regulation 17(2) or (3); or

(ii) the day from which the survivor of the qualifying member became entitled to an annual payment under regulation 17(4),

whichever is the earlier.

(11) The revaluation amount for the second survivor revaluation period is the revaluation amount determined in accordance with paragraph 4(8) to (12).]

Textual Amendments

F20 Word in Sch. 2 substituted (4.6.2008) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(2) (with reg. 8)

F32 Sch. 2 para. 5(1) substituted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(5)(a)

F33 Sch. 2 para. 5(3) substituted (19.12.2007) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(6)

F34 Words in Sch. 2 para. 5(4) substituted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(5)(c)

F35 Words in Sch. 2 para. 5(4)(b) substituted (4.6.2008) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(5)(a) (with reg. 8)

F36 Words in Sch. 2 para. 5(6) substituted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(5)(d)

F37 Words in Sch. 2 para. 5(6)(b) substituted (24.11.2005) by The Financial Assistance Scheme (Modifications and Miscellaneous Amendments) Regulations 2005 (S.I. 2005/3256), regs. 1(1), 4(6)(c)

F38 Words in Sch. 2 para. 5(6)(b)(i) substituted (4.6.2008) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(5)(b) (with reg. 8)

F39 Sch. 2 para. 5(7)-(11) inserted (4.6.2008) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(5)(c) (with reg. 8)

Exclusion of certain benefits U.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; [F40 and]

(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; F41 ...

F42 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F43 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F40 Word in Sch. 2 para. 6(2)(a) inserted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(6)(a)

F41 Word in Sch. 2 para. 6(2)(b) omitted (16.12.2006) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(6)(b)

F42 Sch. 2 para. 6(2)(c) omitted (16.12.2006) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(6)(c)

F43 Sch. 2 para. 6(3) omitted (16.12.2006) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(6)(c)

Cap on expected pension and actual pension U.K.

7.—(1) Where the amount of a qualifying member's expected pension determined in accordance with the previous provisions of this Schedule multiplied by [F20 0.9] , F44 ... exceeds [F45 £26,000], the amount of the annual payment payable to, or in respect of, that member under paragraphs 3 to 5 shall be determined on the basis that the product of that calculation was [F45 £26,000].

(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 [F20 0.9] F46 ...; or

(b) [F45 £26,000],

no annual payment shall be payable to, or in respect of, that member.

Textual Amendments

F20 Word in Sch. 2 substituted (4.6.2008) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(2) (with reg. 8)

F44 Words in Sch. 2 para. 7(1) omitted (19.12.2007) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(7)(a)

F45 Word in Sch. 2 para. 7 substituted (19.12.2007) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(7)(c)

F46 Words in Sch. 2 para. 7(2)(a) omitted (19.12.2007) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(7)(b)

De minimis rule U.K.

F47 8.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F47 Sch. 2 para. 8 omitted (19.12.2007) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(8)

Revaluation U.K.

9.—(1) The amount of the annual payment shall be determined in accordance with the preceding paragraphs of this Schedule on the basis of the circumstances applying as at the certification date.

(2) Where there is a period of one month or more between the certification date and the date on which the annual payment is first payable to the beneficiary in accordance with regulation 17, the annual payment shall be increased by the appropriate revaluation percentage of that amount.

[F48 (2A) But sub-paragraph (2) does not apply to an annual payment payable to a beneficiary who is the survivor of a qualifying member [F49 where an annual payment was payable to that qualifying member immediately before his death].]

(3) In sub-paragraph (2), “the appropriate revaluation percentage” means the lesser of—

(a) the percentage increase in the general level of prices in Great Britain during the [F50 period referred to in sub-paragraph (2)]; and

(b) the maximum revaluation rate.

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

where—

A is the level of the retail prices index for the month which falls two months before [F51 the month] in which the annual payment is first payable to the beneficiary under regulation 17;

B is the level of the retail prices index for the month two months before the month in which the certification date falls.

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

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

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

Textual Amendments

F48 Sch. 2 para. 9(2A) inserted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(8)(a)

F49 Words in Sch. 2 para. 9(2A) substituted (4.6.2008) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(6) (with reg. 8)

F50 Words in Sch. 2 para. 9(3)(a) substituted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(8)(b)

F51 Words in Sch. 2 para. 9(4) inserted (24.11.2005) by The Financial Assistance Scheme (Modifications and Miscellaneous Amendments) Regulations 2005 (S.I. 2005/3256), regs. 1(1), 4(6)(d)

Initial payments U.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—

[F52 “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 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 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 [F53 no 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.

(3) Where the scheme manager is satisfied that it is not possible for him to determine the annual rate of pension for the purposes of sub-paragraph (1) having regard to the information available to him, he 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 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”;

[F54 (ba) for “regulation 17(2) and (3)” in each place, substitute “regulation 18(4)”;]

F55 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F55 (ca) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F56 (d) for “annual payment”, in each place that it occurs (except in paragraph 1(1)), substitute “initial payment”; and]

[F57 (e) in paragraph 5—

(i) for sub-paragraph (3) substitute—

“(3) The initial payment payable to a survivor of a qualifying member shall be—F20

(ii) omit sub-paragraphs (2) and (6).]

Textual Amendments

F20 Word in Sch. 2 substituted (4.6.2008) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008 (S.I. 2008/1432), regs. 1, 7(2) (with reg. 8)

F52 Sch. 2 para. 10(a) substituted (16.12.2006) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006 (S.I. 2006/3370), regs. 1(1), 7(9)(a)

F53 Words in Sch. 2 para. 10(a) substituted (19.12.2007) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(9)(a)

F54 Sch. 2 para. 10(ba) substituted (17.7.2008) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 (S.I. 2008/1903), regs. 1, 14(b)

F55 Sch. 2 para. 10(c)(ca) omitted (19.12.2007) by virtue of The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(9)(c)

F56 Sch. 2 para. 10(d)(e) added (24.11.2005) by The Financial Assistance Scheme (Modifications and Miscellaneous Amendments) Regulations 2005 (S.I. 2005/3256), regs. 1(1), 4(6)(e)(ii)

F57 Sch. 2 para. 10(e) substituted (19.12.2007) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007 (S.I. 2007/3581), regs. 1(1), 7(9)(d)

Rounding U.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)

[F58 SCHEDULE 2A U.K. DETERMINATION OF ILL HEALTH AND INTERIM ILL HEALTH PAYMENTS

Textual Amendments

F58 Sch. 2A inserted (17.7.2008) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 (S.I. 2008/1903), regs. 1, 15

Introductory U.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 payment U.K.

2.— (1) The amount of an ill health payment payable to a qualifying member of a qualifying pension scheme shall be—

(2) The amount of an ill health payment payable to a survivor of a qualifying member of a qualifying pension scheme shall be—

(a) one-half of the ill health payment which was payable to the qualifying member in accordance with sub-paragraph (1) immediately before his death where—

(i) that member was in receipt of an ill health payment at the time of his death; or

(ii) that member was in receipt of an interim ill health payment and dies on or after the date on which the liabilities of the scheme in respect of that member are discharged (whether by entry into an annuity contract or by other means); or

(b) where the qualifying member was in receipt of an interim ill health payment at the time of his death and dies before the date on which the liabilities of the scheme in respect of that member are discharged—

(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; and

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied.

(4) This paragraph is subject to paragraphs 4 and 7.

Amount of an interim ill health payment U.K.

3.— (1) The amount of an interim ill health payment payable to a qualifying member of a qualifying pension scheme shall be—

(2) The amount of an interim ill health payment payable to a survivor of a qualifying member of a qualifying pension scheme 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; and

“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.

(4) This paragraph is subject to paragraphs 4 and 7.

Revaluation U.K.

4.— (1) Where there is a period of one month or more between the certification date and the date on which the ill health payment or interim ill health payment is first payable to a qualifying member of a qualifying pension scheme in accordance with regulation 17A or 17B, the amount determined in accordance with paragraph 2(1) or 3(1) before the actuarial factor “C” is applied shall be increased by the appropriate revaluation percentage of that amount.

(2) In sub-paragraph (1) the “appropriate revaluation percentage” means the lesser of—

(a) the percentage increase in the general level of prices in Great Britain during the period referred to in sub-paragraph (1); and

(b) the maximum revaluation rate.

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

where—

“A” is the level of the retail prices index for the month which falls two months before the month in which the ill health payment or interim ill health payment is first payable to the qualifying member under regulation 17A or 17B; and

“B” is the level of the retail prices index for the month two months before the month in which the certification date falls.”.

(4) In sub-paragraph (2)(b), “the maximum revaluation rate” in relation to that period is—

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

(b) in any other case, the percentage that would be the percentage mentioned in sub-paragraph (2)(a) had the general level of prices in Great Britain increased at the rate of 5% compound per annum during that period.

Actuarial reduction U.K.

5.   The actuarial factor to be applied in paragraphs 2 and 3 shall be determined by the scheme manager, 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 scheme manager considers relevant.

Modifications to Schedule 2 U.K.

6.   The following modifications to Schedule 2 apply for the purposes of paragraphs 2 and 3 of this Schedule—

(a) for paragraphs 4(5)(b) and 5(8)(b) substitute—

“(b) ending on the day before the day on which the scheme began to wind up.”;

(b) in paragraph 4(7)(b)(ii) for “annual payment in accordance with regulation 17(2) or (3)” substitute “ill health payment in accordance with regulation 17A(1)”;

(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 paragraphs 7 and 9; 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).”.

Cap on expected pension and actual pension U.K.

7.— (1) Where the amount of a qualifying member’s expected pension determined in accordance with paragraph 2 or 3 multiplied by 0.9 exceeds £26,000, the amount of the ill health payment or interim ill health payment payable to, or in respect of, that member under paragraph 2 or 3 shall be determined on the basis that the product of that calculation was £26,000.

(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) £26,000,

no ill health payment or interim ill health payment shall be payable to, or in respect of, that member.

Rounding U.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.]