The Pensions (2012 Act) (Transitional, Consequential and Supplementary Provisions) Regulations (Northern Ireland) 2014

Amendment of the Early Leavers Regulations N.I.

34.—(1) The Early Leavers Regulations are amended in accordance with paragraphs (2) to (7).

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

(a) after the definition of “actuary” insert—

““cash balance benefit” has the meaning given by regulation 2 of the Pensions (2012 Act) (Transitional, Consequential and Supplementary Provisions) Regulations (Northern Ireland) 2014;”;

(b) after the definition of “discount rates” insert—

““final salary”, in relation to a member to or in respect of whom benefits under a pension scheme are payable, means the member's pensionable earnings, or highest, average or representative pensionable earnings, in a specified period ending at, or defined by reference to, the time when the member's pensionable service in relation to that scheme ends;”;

(c) after the definition of “insufficiency report liabilities” insert—

““pensionable earnings”, in relation to a member of a pension scheme, means earnings by reference to which benefits under the scheme are calculated;”.

(3) In regulation 2 M1 (manner of calculation and verification of cash transfer sums – general provisions)—

(a) in paragraph (1)(a)(i) after “salary related benefits” insert “ other than cash balance benefits in respect of which the available sum is not calculated by reference to final salary ”;

(b) in paragraph (1)(a)(ii) after “money purchase benefits” insert “ and cash balance benefits in respect of which the available sum is not calculated by reference to final salary ”;

(c) for paragraph (5) substitute—

“(5) Where a portion of the cash transfer sum relates to a benefit specified in paragraph (1)(a)(i) and a portion relates to a benefit specified in paragraph (1)(a)(ii), the initial cash transfer sum is to be calculated—

(a) for the portion falling within paragraph (1)(a)(i), in accordance with regulations 2A and 2B, and

(b) for the portion falling within paragraph (1)(a)(ii), in accordance with regulation 2C.”.

(4) In regulation 2A (manner of calculation of initial cash transfer sums for salary related benefits)—

(a) in the heading at the end insert “ other than cash balance benefits not calculated by reference to final salary ”;

(b) in paragraph (1) after “salary related benefits” insert “ other than cash balance benefits in respect of which the available sum is not calculated by reference to final salary ”.

(5) In regulation 2B M2 (initial cash transfer sum for salary related benefits: assumptions and guidance)—

(a) in the heading after “salary related benefits” insert “ other than cash balance benefits not calculated by reference to final salary ”;

(b) in paragraph (1) after “salary related benefits” insert “ other than cash balance benefits in respect of which the available sum is not calculated by reference to final salary ”.

(6) In regulation 2C M3 (manner of calculation of initial cash transfer sums for money purchase benefits)—

(a) in the heading at the end insert “ and cash balance benefits not calculated by reference to final salary ”;

(b) in paragraph (1) for “For” substitute “ For cash balance benefits in respect of which the available sum is not calculated by reference to final salary and ”;

(c) for paragraph (4) substitute—

“(4) The realisable value must include—

(a) for money purchase benefits, any increases to the benefits resulting from a payment of interest made in accordance with the scheme rules, or

(b) for cash balance benefits—

(i) any interest (including notional interest) which, in accordance with the scheme rules, applies to the available sum in respect of which the benefits are calculated;

(ii) any guarantee which, in accordance with the scheme rules, applies to the available sum in respect of the benefits or to the contributions made by the member or by another person in respect of the member;

(iii) any options the member has which would increase the value of the member's benefits under the scheme (adjusted to reflect the proportion of members that the trustees determine are likely to exercise those options), and

(iv) any discretionary benefits which the trustees determine should be taken into account, having regard to any established custom for awarding the benefits and any requirement for consent before they are awarded.”.

(7) In regulation 4 M4 (reduction of cash transfer sums and contribution refunds)—

(a) in paragraph (1) for “if the insufficiency conditions are met.” substitute—

“if—

(a) the insufficiency conditions are met, and

(b) the cash transfer sum relates to salary-related benefits.”;

(b) in paragraph (3) after “initial cash transfer sum” insert “ which does not relate to money purchase benefits ”;

(c) in paragraph (7) after “the initial cash transfer sum or contribution refund” insert “ , where it does not relate to money purchase benefits, ”.

Marginal Citations

M1 Regulations 2 and 2A to 2D were substituted for regulation 2 by paragraph 8 of Schedule 2 to S.R. 2008 No. 370

M2 Regulation 2B was amended by regulation 4 of S.R. 2008 No. 388

M3 Regulation 2C was amended by regulation 4 of S.R. 2008 No. 388

M4 Regulation 4 was substituted by paragraph 8 of Schedule 2 to S.R. 2008 No. 370