The Pensions Act 2007 (Abolition of Contracting-out for Defined Contribution Pension Schemes) (Consequential Amendments) Regulations 2011

Amendment of the Contracting-out (Transfer and Transfer Payments) Regulations 1996 E+W+S

6.—(1) The Contracting-out (Transfer and Transfer Payments) Regulations 1996 M1 are amended as follows.

(2) In regulation 1(2) (interpretation)—

(a) omit the definitions of “appropriate personal pension scheme” and “money purchase contracted-out scheme”, and

(b) in the definition of “overseas arrangement”—

(i) after paragraph (a), add “ and ”, and

(ii) omit paragraph (b), and the word “and” immediately following it.

(3) For regulation 5 (transfer payments in respect of guaranteed minimum pensions to money purchase contracted-out schemes and appropriate personal pension schemes), substitute—

“Transfer payments in respect of guaranteed minimum pensions to occupational and personal pension schemes

5.   A transfer payment in respect of a guaranteed minimum pension may be made to a scheme which is not a salary-related contracted-out scheme, an overseas scheme or overseas arrangement, if—

(a) the earner consents in writing;

(b) the transfer payment (whether or not it forms part of a larger payment in respect of both guaranteed minimum pensions and other rights) is of an amount at least equal to the cash equivalent of the earner's accrued rights to guaranteed minimum pensions, as calculated and verified in a manner consistent with regulations made under section 97 of the 1993 Act (calculation of cash equivalents); and

(c) the earner has acknowledged in writing to the transferring scheme that the earner has received a statement from the receiving scheme showing the benefits to be awarded in respect of the transfer payment, and that the earner accepts that—

(i) the benefits to be provided by the receiving scheme may be in a different form and of a different amount to those which would have been payable by the transferring scheme, and

(ii) there is no statutory requirement on the receiving scheme to provide for survivor's benefits out of the transfer payment.”.

(4) For regulation 10 (transfer payments to money purchase contracted-out schemes and appropriate personal pension schemes in respect of section 9(2B) rights), substitute—

“10.    Transfer payments to occupational and person pension schemes in respect of section 9(2B) rights

A transfer payment in respect of an earner's accrued section 9(2B) rights may be made to a scheme which is not a salary-related contracted-out scheme, an overseas scheme or overseas arrangement, if—

(a) the earner consents in writing; and

(b) the earner has acknowledged in writing to the transferring scheme that the earner has received a statement from the receiving scheme showing the benefits to be awarded in respect of the transfer payment, and that the earner accepts that—

(i) the benefits to be provided by the receiving scheme may be in a different form and of a different amount to those which would have been payable by the transferring scheme, and

(ii) there is no statutory requirement on the receiving scheme to provide for survivor's benefits out of the transfer payment.”.

Marginal Citations

M1 S.I. 1996/1462.