The Parliamentary Pensions (Amendment) Regulations 2006

Members entitled to enhanced protection

18.—(1) In regulation A2(1) of the Contributory Fund Regulations (definitions) insert at the appropriate place—

““protected individual” has the meaning assigned to it by regulation T1(2);”.

(2) After Part S of those Regulations insert—

“Part T Members with enhanced protection

Application of this Part

T1— (1) This Part relates to individuals in the case of whom paragraph 12 of Schedule 36 to the Finance Act 2004 applies (enhanced protection).

(2) In these Regulations such individuals are referred to as “protected individuals”.

Option to cease contributions

T2— (1) A protected individual may opt for Part D of these Regulations (contributions) not to apply in respect of the individual’s salary.

(2) The option under paragraph (1) may only be exercised by notice in writing to the Trustees.

(3) An individual who has exercised such an option may revoke it by such a notice if—

(a) the individual has ceased to be a protected individual, and

(b) the Trustees consent.

(4) A notice exercising or revoking such an option must specify the date on which the option is to take effect or, as the case may be, cease to have effect.

(5) In the case of a notice exercising such an option, that date may not be earlier than—

(a) 6th April 2006, or

(b) the beginning of the month in which the notice is given,

whichever is the later.

(6) In the case of a notice revoking such an option, the date specified as the date on which the option is to take effect may not be earlier than the beginning of the month in which the notice is given.

(7) Where such an option is revoked, any option as to the rate at which deductions are made under Part D that was effective immediately before the option under this regulation took effect is treated as continuing in force from the date on which the revocation takes effect, subject to any further exercise of any option as to that rate.

Effect of option to cease contributions

T3— (1) An individual shall not be regarded as a participating Member or a participating office holder for the purposes of Part D of these Regulations (contributions) at any time when an option exercised by the individual under regulation T2 has effect.

(2) But, except as provided by paragraph (3), the fact that the individual is not making contributions to the Fund deducted from his salary under that Part shall be disregarded for the purposes of determining whether the individual falls within the definition of “participant”, “participating Member” or “participating office-holder” in regulation A2(1).

(3) Notwithstanding anything in paragraph (2)—

(a) no period during which the individual’s option has effect shall be regarded as a period of reckonable service (or actual reckonable service) as a participant, participating Member or participating office-holder, except for the purpose of determining the relevant terminal salary of the individual under regulation F2 or F4, and

(b) if a pension becomes payable to the individual under regulation F1 by virtue of regulation J1 (ill-health pensions based on service as a participating Member) for the purposes of calculating the annual amount of the pension the words in regulation J1(4) from “but for the purposes of that calculation” onwards (by virtue of which the individual’s reckonable service would be increased) are disregarded.

Surrender of excess rights for the purpose of obtaining enhanced protection

T4— (1) An individual who proposes to give notice under paragraph 12 of Schedule 36 to the Finance Act 2004 (enhanced protection) may surrender the whole or part of such rights as in accordance with regulations made under paragraph 12(5) of that Schedule are to be treated as representing the relevant excess (as defined in paragraph 12(6) of that Schedule) in the case of the individual.

(2) Such a surrender may only be made by notice in writing to the Trustees and is irrevocable.

(3) A surrender under this regulation is ineffective so far as it purports to affect—

(a) any rights in respect of an excluded pension (as defined in section 172A(10) of the Finance Act 2004) that is payable under Part M or paragraph 3 of Schedule 13, or

(b) any rights entitlement to which is required for the employment of the individual to be contracted-out in relation to the principal scheme.

Surrender to avoid relevant benefit accrual

T5— (1) Subject to paragraphs (2) and (3), a protected individual may surrender the whole or part of any rights to any benefit to which he (or any dependant of his) has a prospective entitlement under these Regulations.

(2) Such a surrender may only be made by notice in writing to the Trustees and is irrevocable.

(3) A surrender under this regulation is ineffective so far as it purports to affect—

(a) any rights in respect of an excluded pension (as defined in section 172A(10) of the Finance Act 2004) that is payable under Part M or paragraph 3 of Schedule 13, or

(b) any rights entitlement to which is required for the employment of the individual to be contracted-out in relation to the principal scheme.”.