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There are currently no known outstanding effects for the The Personal Pension Schemes (Advertisements) Regulations 1990, Section 3.
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3.—(1) Any projection contained in an advertisement for a deposit-based scheme shall contain or be accompanied by a statement in the following terms– “ The figures quoted in this projection of future benefits are illustrations only. They do not represent the upper and lower limits of the amounts of the benefits. What is actually payable will depend on the future movement of market forces, which can go down as well as up, and the effect of charges applicable to the Scheme. These illustrations should not be used as a basis for comparing similar contracts issued by other pension providers. ”.
(2) In so far as a projection contained in an adverstisement for a deposit-based scheme relates to contributions which will give rise to protected rights under the scheme, then–
(a)if the projection is in respect of a period of not more than 5 years it–
(i)shall be prepared on the basis that the only contributions to be made to the scheme are minimum contributions under [F1section 43 of the Act] in respect of the tax year in which the projection is prepared and, if the rate of the rebate percentage (within the meaning of [F1paragraph (2A) below]) is known, the next following tax year, which shall be treated as a single premium; and
(ii)shall assume a rate of interest not exceeding that payable in respect of the relevant investment on the day the projection is made; and
(iii)shall allow for a deduction from the contributions to be invested in respect of any explicit charges; and
(iv)any annuity derived from the fund obtained in accordance with sub-paragraphs (i) and (ii) above shall be obtained in accordance with paragraph 3(3) of Part I of Schedule 4 to the LAUTRO Rules;
(b)if the projection is in respect of a period exceeding 5 years it–
(i)shall be prepared on the basis that the only contributions to be made to the scheme are minimum contributions under [F2section 43 of the Act] in respect of the tax year in which the projection is prepared and, if the rate of the rebate percentage (within the meaning of [F2paragraph (2A) below]) is known, the next following tax year, which shall be treated as a single premium; and
(ii)shall assume a real rate of interest (after allowing for increases in excess of national average earnings) of plus one half per cent and minus one half per cent (both compound); and
(iii)where there are explicit charges, shall allow for a deduction of those charges from the contributions to be invested;
(iv)shall, unless the projection allows for explicit charges, allow for a deduction from the contributions to be invested of one per cent in respect of standard expenses; and
(v)any annuity derived from the fund obtained in accordance with sub-paragraphs (i) to (iii) above shall be obtained in accordance with paragraph 2(6) of Part I of Schedule 4 to the LAUTRO Rules.
[F3(2A) In this paragraph “rebate percentage” means the percentage arrived at by adding the percentage mentioned in paragraph (a) of section 41(1) of the Act to that mentioned in paragraph (b) of that section.]
(3) In so far as a projection contained in an advertisement for a deposit-based scheme relates to contributions which will not give rise to protected rights under the scheme, then–
(a)if the projection is in respect of a period of not more than 5 years it–
(i)shall assume a rate of interest not exceeding that payable in respect of the relevant investment on the day the projection is made; and
(ii)where there are explicit charges, shall allow for a deduction of those charges from the contributions to be invested; and
(iii)any annuity derived from the fund obtained in accordance with sub-paragraphs (i) and (ii) above shall, if the projection is in respect of a period of more than one year, be obtained in accordance with paragraph 3(3) of Part I of Schedule 4 to the LAUTRO Rules; and
(iv)shall contain or be accompanied by a statement showing the effect on the real value of the scheme benefits if retail prices in Great Britain were to increase at the rates of 4 per cent compound, 7 per cent compound and 10 per cent compound; and
(b)if the projection is in respect of a period exceeding 5 years it–
(i)shall assume an interest rate of 8 per cent and 11 per cent (both compound);
(ii)shall allow for a deduction from the contributions to be invested of one per cent in respect of standard expenses; and
(iii)where there are explicit charges, shall allow for a deduction of those charges from the contributions to be invested; and
(iv)shall contain or be accompanied by a statement showing the effect on the real value of the scheme benefits if retail prices in Great Britain were to increase at the rates of 4 per cent compound, 7 per cent compound and 10 per cent compound; and
(v)any retirement fund and annuity shall be obtained in accordance with paragraph 2(5) of Part I of Schedule 4 to the LAUTRO Rules.
Textual Amendments
F1Words in reg. 3(2)(a)(i) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 23(3)
F2Words in reg. 3(2)(b)(i) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 23(3)
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