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PART 4 E+WContributions

CHAPTER 2E+WRefund: short service

Eligibility for refundE+W

40.—(1) Contributions made by a member (M) must be repaid to M if—

(a)the 1993 Act condition applies; or

(b)the short service condition applies.

(2) The “1993 Act condition” is that—

(a)[F1Chapter 2 of Part 4ZA] of the 1993 Act M1 applies to M; and

(b)the repayment is made in accordance with that Chapter.

(3) The short service condition applies if—

(a)M does not qualify for benefits under regulation 72;

(b)M is not a pensioner member;

(c)M ceases to be an active member;

(d)the 1993 Act condition does not apply to M; and

(e)M makes a claim in writing to the scheme manager for the repayment.

Textual Amendments

Marginal Citations

M1Chapter 5 of Part 4 deals with early leavers: cash transfer sums and contribution refunds.

Amount of refundE+W

41.—(1) The amount of a repayment to a member (M) pursuant to regulation 40 is—

(a)if the 1993 Act condition applies, the amount to which M is entitled to be paid pursuant to [F2Chapter 2 of Part 4ZA] of that Act, less the appropriate deductions;

(b)if the short service condition applies, an amount equal to the sum of the contributions paid by M, less the appropriate deductions.

(2) The appropriate deductions are—

(a)so much of the contributions equivalent premium paid in respect of M [F3under section 55] of the 1993 Act M2 [F4or article 3 of the 2016 Order]; and

(b)an amount equal to the income tax payable under section 205 of the 2004 Act M3 (short service lump sum charge) as a result of the repayment.

(3) M is entitled to interest on the amount of the repayment unless M's pensionable service ceases because M's employment is terminated—

(a)pursuant to M's contract of employment;

(b)at M's request; or

(c)by reason of misconduct or inefficiency.

(4) The rate of interest is 2.5% per year calculated on a compound basis with yearly rests.

(5) Interest is payable in respect of the period starting on 1st April following the day when M started to pay contributions and ending on the day M leaves pensionable service.

(6) Paragraphs (4) and (5) do not apply if—

(a)regulation 40(1)(a) applies; and

(b)M is entitled to a greater amount of interest under [F5Chapter 2 of Part 4ZA] of the 1993 Act.

(7) So far as contributions paid by M were paid under another scheme and were included in a transfer payment to this scheme—

(a)interest for the period before the transfer period was made is calculated in accordance with the other scheme (subject to any enactment applicable to the transfer); and

(b)paragraphs (4) and (5) do not apply as respects that period.

Textual Amendments

Marginal Citations

M2Section 61 has been amended by section 151 of, and paragraph 55 of Schedule 5 to, the Pensions Act 1995 (c.20), section 56 of, and paragraph 5(2) of Schedule 5 to, the Child Support, Pensions and Social Security Act 2000 (c.19) and section 319(1) of, and paragraphs 9 and 12 of Schedule 12 to, the Pensions Act 2004 (c.35).

M3Section 205 has been amended by section 219(1) of, and paragraphs 119 and 121 of Schedule 46 to, the Finance Act 2013 (c.29) and by article 3 of S.I. 2010/536.

Effect of refundE+W

42.—(1) If a repayment of contributions is made pursuant to regulation 40, the rights of the member (M) under this scheme are extinguished unless—

(a)M or M's spouse or civil partner is entitled to a guaranteed minimum pension under the scheme; and

(b)no contributions equivalent premium has been paid.

(2) Paragraph (1) does not apply if—

(a)M again becomes a member of this scheme; and

(b)before the end of the period of 6 months starting on the date M again becomes a member, M repays to the scheme manager the contributions together with any interest paid in respect of them.