The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010

Amendment of Schedule 2

16.  In Schedule 2 (determination of annual and initial payments)—

(a) in paragraph 1(2)—

(i) omit the definition of “scheme rules”; and

(ii) at the end, insert—

““revalued notional pension” shall be construed in accordance with regulation 17(10).”;

(b) in paragraph 2—

(i) in sub-paragraph (1) for “sub-paragraphs (3), (3A) and (4)” substitute “sub-paragraphs (3) to (4)”;

(ii) after sub-paragraph (1) insert—

“(1A) For the purposes of sub-paragraph (1), where a transfer notice has been given in respect of a qualifying pension scheme, no assets which are transferred to the Secretary of State shall be treated as being available to discharge the liability in respect of any qualifying member of that scheme from the day on which the transfer notice is given.”; and

(iii) after sub-paragraph (3A) insert—

“(3B) Sub-paragraph (3D) applies where the scheme manager is satisfied that the sum of interim pension paid to a beneficiary and any payment made under these Regulations in respect of any year in the period determined in accordance with sub-paragraph (3C) is higher or lower than the sum of—

(a) the revalued notional pension or survivor notional pension; and

(b) any annual increases or proportion of annual increases, which the scheme manager considers could have been paid in respect of that year, taking into account—

(i) the determination under regulation 27(1)(d);

(ii) the revaluation amount determined in accordance with regulation 17(11); and

(iii) the proportion of that year which falls after the 1st January.

(3C) For the purposes of sub-paragraph (3B), the period is the period from—

(a) the earlier of—

(i) the day on which the beneficiary became entitled to a payment under these Regulations; and

(ii) the day on which the beneficiary became entitled under the scheme rules to a pension or other benefit; or

(b) the day on which the qualifying pension scheme began to be wound up if that is later than the day determined in accordance with paragraph (a),

until the day on which the scheme manager gave a transfer notice to the scheme trustees or managers.

(3D) Where this sub-paragraph applies, the scheme manager may—

(a) determine how the actual pension is to be calculated, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the revalued notional pension or survivor notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii) the amount of any payments made under these Regulations prior to the day on which the transfer notice is given; and

(iv) such other matters as the scheme manager considers relevant; and

(b) where the sum of the interim pension paid and any payments made under these Regulations in respect of any year is lower than the sum of the amounts referred to in sub-paragraph (3B)(a) and (b), make a payment to the beneficiary or, where the beneficiary has died prior to the scheme manager making this determination, to the beneficiary’s estate, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the revalued notional pension or survivor notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii) the amount of any payments made under these Regulations prior to the scheme manager giving the transfer notice; and

(iv) such other matters as the scheme manager considers relevant.

(3E) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before the day on which a transfer notice is given, an amount to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the actual pension is to be calculated, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(3F) Where the beneficiary is a qualifying member who has received a payment in accordance with regulation 17H (payments to qualifying members receiving a pension from the qualifying pension scheme before entitlement to an annual payment or ill health payment), or the survivor or surviving dependant of such a qualifying member, the scheme manager may determine how the actual pension is to be calculated, having regard to—

(a) the amount paid under regulation 17H;

(b) any interim pension paid by the scheme from the day on which the scheme began to be wound up until the day on which a transfer notice was given; and

(c) such other matters as the scheme manager considers relevant.

(3G) Where the beneficiary is a qualifying member to whom regulation 17D applies or a survivor or surviving dependant of such a qualifying member, the scheme manager may determine how the actual pension is to be calculated, having regard to any lump sum paid and determined in accordance with that regulation.

(3H) Where the beneficiary is—

(a) a qualifying member to whom regulation 17H applied whose payment under Schedule 7 had been reduced under paragraph 1(2) or (5) of that Schedule; or

(b) a beneficiary who was entitled to an annual payment determined in accordance with Schedule 4 whose payment under that Schedule has been reduced under paragraph 1(2) or (5),

the scheme manager shall include the amount by which the payment has been reduced when determining the actual pension.

(3I) Sub-paragraph (3J) applies where—

(a) a qualifying member to whom Part 7 applies has received a payment from the scheme before becoming entitled to an annual payment;

(b) a transfer notice has been given in respect of the qualifying pension scheme; and

(c) the qualifying member became entitled to an annual payment prior to the day on which the transfer notice was given.

(3J) Where this sub-paragraph applies, the scheme manager may determine how the actual pension is to be calculated, having regard to—

(a) any interim pension paid by the scheme from the day on which the scheme began to be wound up until the day on which the transfer notice was given; and

(b) such other matters as the scheme manager considers relevant.

(3K) Where—

(a) the beneficiary is a qualifying member or the survivor or surviving dependant of a qualifying member to whom part 7 applies;

(b) the qualifying member has commuted for a lump sum a portion of the benefits deriving from the scheme after the day on which the scheme began to be wound up; and

(c) a transfer notice has been given in respect of the scheme,

the scheme manager may determine how the actual pension is to be calculated having regard to any lump sum paid as a result of the commutation.”;

(c) in paragraph 3—

(i) at the beginning of sub-paragraph (3)(b) insert “except where paragraph (c) applies, ”;

(ii) after sub-paragraph (3)(b) insert—

“; or

(c) where the qualifying member attains normal retirement age after 14th May 2004, the aggregate of—

(i) the annual rate of pension which was or should have been in payment to the qualifying member in accordance with scheme rules in respect of rights accrued in a qualifying pension scheme as at the day on which the qualifying pension scheme began to be wound up; and

(ii) the revaluation amount for the period beginning on the day on which the qualifying pension scheme began to be wound up and ending on the day on which the qualifying member attains normal retirement age.”;

(iii) in sub-paragraph (3A)—

(aa) after “sub-paragraph (3)(b)(ii)” insert “and (c)(ii)”; and

(bb) after “sub-paragraph (3)(b)(i)” insert “or, as the case may be, sub-paragraph (3)(c)(i)”;

(iv) in sub-paragraph (3B) after “sub-paragraph (3)(b)(ii)” insert “and (c)(ii)”;

(v) after sub-paragraph (3C) insert—

“(3ZD) The method for determining the percentage increase in the general level of prices in Great Britain during the revaluation period determined in accordance with sub-paragraph (3)(c)(ii) is—

where—

A is the level of the retail prices index for the month which falls two months before the month during which the qualifying member attains normal retirement age; and

B is the level of the retail prices index for the month which falls two months before the month during which the relevant qualifying pension scheme began to be wound up.”;

(d) in paragraph 4—

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

(ii) in sub-paragraph (6)(b), after “Chapter 2 of Part 4 of the 1993 Act” insert “or, where scheme rules are more favourable, in accordance with scheme rules”;

(e) in paragraph 4A—

(i) for sub-paragraph (1)(b) substitute—

“(b) either—

(i) an annuity has been purchased for the beneficiary which provides for payment of a pension to the beneficiary at a lower annual rate from the date on which the amount referred to in sub-paragraph (1)(a) would have ceased to be payable under the scheme rules; or

(ii) a notional pension has been determined in respect of the beneficiary which includes an amount in respect of an amount which under scheme rules would be payable for a period which is shorter than the period in respect of which the remainder of the pension would be payable.”; and

(ii) in sub-paragraph (3)(a) after “paragraph 3(3)(a)” insert “and (c)”;

(f) in paragraph 5—

(i) in sub-paragraph (1)(c)(i) omit “determined in accordance with this Schedule”;

(ii) for the formula in sub-paragraph (3) substitute—

(iii) in sub-paragraph (6B) for the definition of H substitute—

““H” means the aggregate of—

(a)

one half of the amount of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled on the day on which the qualifying member died; and

(b)

where sub-paragraph (6C) applies, the total amount of annual increases determined in accordance with paragraph 9 to which any survivor was entitled on the day on which the survivor died.”;

(iv) for sub-paragraph (7)(d) substitute—

“(d) in any case where—

(i) 14th May 2004 is later than—

(aa) the day on which the qualifying member died; and

(bb) the day on which the qualifying pension scheme began to be wound up; or

(ii) the qualifying member attained normal retirement age before 14th May 2004 but died on or after 14th May 2004,

the revaluation amount for the third survivor period (see sub-paragraphs (12) and (13)).”; and

(v) in sub-paragraph (12)(a) for “the day after the day on which the qualifying member died” substitute “the day after the day determined in accordance with sub-paragraph (10)(b)”;

(g) for paragraph 5B substitute—

“5B.— (1) The annual payment payable to a surviving dependant of a qualifying member shall be determined in accordance with sub-paragraphs (2) to (5).

(2) Where an annual payment is also payable to a survivor of the qualifying member and—

(a) there is only one surviving dependant, the amount of the annual payment shall be—

(b) there are two or more surviving dependants, the amount of the annual payment shall be—

(3) Where the qualifying member does not have a survivor and—

(a) there is only one surviving dependant, the amount of annual payment shall be—

(b) there are two or more surviving dependants, the amount of the annual payment shall be—

(4) Where—

(a) a survivor of a qualifying member, who is not a person who is treated as a survivor by virtue of regulation 37 of the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009(1), dies;

(b) a person ceases to be a surviving dependant of a qualifying member; or

(c) another person becomes entitled to an annual payment as a surviving dependant of a qualifying member,

the annual payment payable to a surviving dependant of that qualifying member shall be redetermined with effect from the day after the day on which the event referred to in paragraphs (a) to (c) occurred.

(5) In this paragraph—

“B” means—

(a)

where there is only one surviving dependant, the surviving dependant’s actual pension; or

(b)

where there are two or more surviving dependants, the sum of the actual pensions of all the surviving dependants of that qualifying member;

“D” means—

(a)

subject to paragraph (b), where sub-paragraph (4) applies, the total amount of annual increases to which any surviving dependant was entitled under this Schedule on the day on which the event referred to in paragraphs (a) to (c) of that sub-paragraph occurred;

(b)

where sub-paragraph (4)(a) applies and, as a result, the annual payment payable to a surviving dependant is redetermined under sub-paragraph (3)(a), nil; and

(c)

in all other cases, nil;

“N” means the number of surviving dependants of the qualifying member;

“Q” means the sum of—

(a)

the product of 0.9 multiplied by the expected pension which has been or could have been determined in accordance with paragraph 5(4); and

(b)

the total amount of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled on the day on which the qualifying member died;

“S” means—

(a)

where sub-paragraph (4)(a) applies and, as a result the annual payment payable to a surviving dependant is redetermined under sub-paragraph (3), the total amount of annual increases to which the survivor was entitled on the day on which the survivor died; and

(b)

in all other cases, nil.”;

(h) in paragraph 9(2), in the definition of “W”, omit the words “the day before”; and

(i) in paragraph 10(e)(ii), in the substituted sub-paragraph (4)—

“(i) in paragraph (a)(ii), for “paragraph 4(3)”, substitute “sub-paragraph (7)”; and

(ii) in paragraph (b), omit the words “the day before”.

(1)

S.I. 2009/1851