The Occupational Pension Schemes (Contracting-out) Regulations (Northern Ireland) 1996

Approval of arrangements for schemes ceasing to be contracted out

45.—(1) Subject to regulation 74 (transitional arrangements relating to schemes ceasing to contract out before the principal appointed day), for the purposes of section 46(1B) of the Act(1) (prescribed conditions to be met in order for arrangements to be approved on the cessation of contracting-out) arrangements shall not be approved by the Department unless the conditions specified in paragraphs (2) or (3) are satisfied.

(2) To the extent that the arrangements concern the transfer of rights or the discharge of liabilities they must meet the requirements of (as the case may be) section 8C of the Act(2) (transfer or discharge of section 5(2B) rights), section 15 of the Act (discharge of liability for guaranteed minimum pensions secured by insurance policies or annuity contracts), section 16 of the Act (transfer of accured rights), section 24(2)(b) and (3) of the Act(3) (transfer of protected rights) or section 28A of the Act (discharge of protected rights on winding up) and any regulations made under those provisions and the Department must be satisfied that such arrangements will be completed within 2 years of the date of cessation or such later date as the Department may specify in relation to a particular case or class of case.

(3) To the extent that the arrangements concern the preservation of rights within the scheme, the scheme must comply with the requirements of sub-paragraph (a) or (b), as the case may be—

(a) in the case of a scheme where the employment was contracted out under section 5(2) of the Act(4) (salary related contracted-out scheme) the scheme must continue to satisfy the requirements of that section and any regulations which would apply to the scheme by reason of its being a scheme to which section 5(2) of the Act relates, other than section 5(2B)(a) of the Act (requirement to comply with section 8A of the Act) and any regulations which relate to compliance with that section, and the scheme must contain a rule which provides that the amount of any benefits under the scheme arising in respect of section 5(2B) rights and guaranteed minimum pensions for each member and his widow or widower shall, at normal pension age, be the higher of A and B where—

• A is the aggregate of—

  (i)

  the amount of such benefits calculated on an early leaver basis in accordance with Chapter I of Part IV of the Act and any regulations made under that Chapter as if the member had ceased to be in pensionable service at the date on which the scheme ceased to be contracted out, and

  (ii)

  the amount of any benefits due in respect of rights which have accrued to the member in relation to service which was not contracted out, and

• B is the amount of benefits otherwise payable under the scheme;

(b) in the case of a scheme where employment was contracted out under section 5(3) of the Act (money purchase contracted-out scheme) the scheme must, subject to paragraph (4), continue to satisfy the requirements of section 5(3) of the Act and any regulations which apply to the scheme by reason of its being a scheme to which section 5(3) of the Act relates.

(4) For the purposes of paragraph (3)(b), in determining whether a scheme complies with the requirements concerning the calculation of protected rights in accordance with section 23(2) of the Act, regard shall be had only to any rights of the member to money purchase benefits which have accrued under the scheme up to the date it ceased to be contracted out.

(1)

Section 46(1B) was inserted by paragraph 37(b) of Schedule 3 to the Pensions (Northern Ireland) Order 1995

(2)

Section 8C was inserted by Article 133(5) of the Pensions (Northern Ireland) Order 1995

(3)

Section 24(3) was amended by Article 139 of the Pensions (Northern Ireland) Order 1995

(4)

Subsections (2) to (2C) were substituted for section 5(2) by Article 133(3) of the Pensions (Northern Ireland) Order 1995