The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2006

Amendment of Schedule 2

7.—(1) In paragraph 1(2) of Schedule 2 (determination of annual and initial payments – introductory)—

(a) omit the definition of “the FAS Information and Payments Regulations”; and

(b) after the definition of “the certification date” insert—

““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(1);

“Group 1 qualifying member” means a qualifying member of a qualifying pension scheme who—

(a)

will have attained his normal retirement age on or before 14th May 2011, or

(b)

died before attaining that age but would have attained that age on or before that date;

“Group 2 qualifying member” means a qualifying member of a qualifying pension scheme who—

(a)

will attain his normal retirement age during the period beginning on 15th May 2011 and ending on 14th May 2015, or

(b)

died before attaining that age but would have attained that age during that period;

“Group 3 qualifying member” means a qualifying member of a qualifying pension scheme who—

(a)

will attain his normal retirement age during the period beginning on 15th May 2015 and ending on 14th May 2019, or

(b)

died before attaining that age but would have attained that age during that period;”.

(2) In paragraph 2 of that Schedule (determination of annual and initial payments – actual pension)—

(a) in sub-paragraph (1)—

(i) for “sub-paragraph (3)” substitute “sub-paragraphs (3) and (4)”, and

(ii) after “which has been,” insert “can be”; and

(b) in sub-paragraph (3)—

(i) for “can be” substitute “has been, can be or could have been”,

(ii) after “shall be determined” insert “(or, as the case may be, redetermined)”; and

(iii) in paragraph (a), for “immediately before that scheme began to wind up” substitute “on the crystallisation date”.

(3) In paragraph 3 of that Schedule (determination of annual and initial payments – qualifying members receiving pensions from the qualifying pension scheme)—

(a) in sub-paragraph (1)—

(i) omit “immediately before a qualifying pension scheme began to wind up,”; and

(ii) after “under the scheme rules” add “on the crystallisation date”;

(b) for sub-paragraph (2), substitute—

“(2) The annual payment payable to a qualifying member to whom this paragraph applies who is—

(a) a Group 1 qualifying member shall be—

• ;

(b) a Group 2 qualifying member shall be—

• ; and

(c) a Group 3 qualifying member shall be—

• .”;

(c) in sub-paragraph (3), after ““expected pension” means”, insert “, subject to sub-paragraph (4),”; and

(d) after sub-paragraph (3), add—

“(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.”.

(4) In paragraph 4 of that Schedule (determination of annual and initial payments – active and deferred members)—

(a) in sub-paragraph (1)—

(i) omit “immediately before a qualifying pension scheme began to wind up,”; and

(ii) after “a deferred member of that scheme” add “on the crystallisation date”;

(b) for sub-paragraph (2), substitute—

“(2) The annual payment payable to a qualifying member to whom this paragraph applies who is—

(a) a Group 1 qualifying member shall be—

• ;

(b) a Group 2 qualifying member shall be—

• ; and

(c) a Group 3 qualifying member shall be—

• .”;

(c) in sub-paragraph (3), for “sub-paragraph (4)” substitute “sub-paragraphs (3A), (3B) and (4)”;

(d) after sub-paragraph (3), insert—

“(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).”;

(e) in sub-paragraph (4), after “sub-paragraph (3),” insert “(3A) or (3B),”; and

(f) after sub-paragraph (12), insert—

“(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).”.

(5) In paragraph 5 of that Schedule (determination of annual and initial payments – survivors of qualifying members)—

(a) for sub-paragraph (1), substitute—

“(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(2) (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.”;

(b) for sub-paragraph (3) substitute—

“(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) and—

(a) that member is a Group 1 qualifying member, the annual payment payable to his survivor shall be—

(b) that member is a Group 2 qualifying member, the annual payment payable to his survivor shall be—

(c) that member is a Group 3 qualifying member, the annual payment payable to his survivor shall be—

.”;

(c) in sub-paragraph (4), for “immediately before his death”, in both places it occurs, substitute “on the crystallisation date”; and

(d) in sub-paragraph (6), for “after the certification date” substitute “on or after the date on which the liabilities of the scheme in respect of that member were discharged”.

(6) In paragraph 6 of that Schedule (determination of annual and initial payments – exclusion of certain benefits)—

(a) at the end of sub-paragraph (2)(a), insert “and”;

(b) at the end of sub-paragraph (2)(b) omit “and”, and

(c) omit sub-paragraphs (2)(c) and (3).

(7) In paragraph 7 of that Schedule (determination of annual and initial payments – cap on expected pension and actual pension), after “multiplied by 0.8” in each place it occurs, insert “(where the qualifying member is a Group 1 qualifying member), 0.65 (where the qualifying member is a Group 2 qualifying member), or 0.5 (where the qualifying member is a Group 3 qualifying member)”.

(8) In paragraph 9 of that Schedule (determination of annual and initial payments – revaluation)—

(a) after sub-paragraph (2) insert—

“(2A) But sub-paragraph (2) does not apply to an annual payment payable to a beneficiary who is the survivor of a qualifying member where that qualifying member was in receipt of an annual payment at the time of his death.”; and

(b) in sub-paragraph (3)(a), for “second revaluation period determined in accordance with paragraph 4(7)” substitute “period referred to in sub-paragraph (2)”.

(9) In paragraph 10 of that Schedule (determination of annual and initial payments – initial payments)—

(a) for sub-paragraph (a), substitute—

“(a) for paragraph 2, substitute—

“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 no such communication; 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) after sub-paragraph (c), insert—

“(ca) for “0.65”, in each place, substitute “0.5”;”; and

(c) for sub-paragraph (e), substitute—

“(e) in paragraph 5—

(i) for sub-paragraph (3) substitute—

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

(a) where that qualifying member was a Group 1 qualifying member—

; and

(b) in any other case—

.”; and

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

(1)

S.I. 1996/3126; although regulation 4 was substituted by S.I. 2005/706 (as amended by S.I. 2005/2159) that substitution does not have effect in relation to any scheme which was regarded, by virtue of regulation 2 of S.I. 1996/3126 or in accordance with the Pensions Act 1995 (c.26), s. 124(3A)–(3E) (as inserted by s.49(2) of the Child Support, Pensions and Social Security Act 2000 (c.19) and amended by paragraph 69(3) and (4) of Schedule 12 to the Pensions Act 2004), as having begun to be wound up before 6th April 2005 (see regulation 1(2) and (3) of S.I. 2005/706).

(2)

1999 c.30.