The Pensions (Northern Ireland) Order 2005

14.—(1) Compensation is payable in accordance with this paragraph where immediately before the assessment date, under the admissible rules of the scheme, an active member of the scheme has not attained normal pension age in respect of his rights to a lump sum ( “the scheme lump sum”). N.I.

(2) If the active member survives to attain normal pension age in respect of the scheme lump sum, he is entitled to compensation in respect of the scheme lump sum when he attains that age.

(3) The compensation is a lump sum equal to 90% of [F2 the aggregate of—

(a) the protected amount, and

(b) if the payment of compensation under this paragraph has been postponed for any period by virtue of paragraph 25A, the amount of the actuarial increase under that paragraph.]

(4) In sub-paragraph (3) “the protected amount” means the aggregate of—

(a) the accrued amount, and

(b) the revaluation amount for the revaluation period.

(5) Subject to sub-paragraphs (6) and (7), the accrued amount is—

where—

AR is the active member's annual accrual rate in respect of the scheme lump sum under the admissible rules,

PE is the active member's annual pensionable earnings in respect of the scheme lump sum under the admissible rules, and

PS is the active member's pensionable service in respect of the scheme lump sum, under the admissible rules, in years (including any fraction of a year).

(6) If the accrual rates or pensionable earnings differ in respect of different parts of the active member's pensionable service relating to the scheme lump sum, an amount is calculated in accordance with the formula in sub-paragraph (5) in respect of each of those parts and the accrued amount is the aggregate of those amounts.

For this purpose the references in that sub-paragraph to the active member's pensionable service, accrual rate and pensionable earnings are to be read as references to the part of his pensionable service in question and to his accrual rate and pensionable earnings in respect of that part.

(7) In any case where the Board is satisfied that it is not possible to identify one or more of the elements of the formula in sub-paragraph (5), the Board may, having regard to the admissible rules, determine how the accrued amount is to be calculated.

(8) Paragraph 12 applies for the purpose of determining the revaluation amount except that—

(a) in that paragraph the references to the pension are to be read as references to the scheme lump sum, and

(b) in sub-paragraph (6) of that paragraph the reference to paragraph 11 is to be read as a reference to this paragraph.

(9) This paragraph is subject to—

(a) paragraph 20 (compensation in respect of scheme right to transfer payment or contribution refund),

[F3 (aa) paragraph 25E (terminal illness lump sum),]

(b) paragraph 26 (compensation cap), and

(c) paragraph 30 (power of Department to change percentage rates by order).F4

F2 Words in Sch. 6 para. 14(3) substituted (27.3.2013) by Pensions Act (Northern Ireland) 2012 (c. 3), s. 34(3), Sch. 4 para. 23(6); S.R. 2013/83, art. 2(b)(ii)

F3 Sch. 6 para. 14(9)(aa) inserted (1.4.2009) by Pensions (No. 2) Act (Northern Ireland) 2008 (c. 13), ss. 100, 118(1), Sch. 6 para. 6; S.R. 2009/147, art. 2(a)(i)(b)

F4 mod. by SR 2005/149