Ways of giving effect to safeguarded rights — money purchase schemes6
1
The rules of a scheme must provide for effect to be given to the safeguarded rights of a member either by—
a
the provision of a pension or the purchase of an annuity which satisfies the requirements specified in—
i
paragraph (4) or (5), as the case may be, and
ii
regulation 7 (the pension and annuity requirements — money purchase schemes), or
b
in any other case, in such of the ways provided for by the following paragraphs as the rules may specify.
2
Where the scheme provides for the member to elect to receive payments in accordance with this paragraph, and the member so elects, effect shall be given to his safeguarded rights during the interim period by the making of payments under an interim arrangement which—
a
complies with the requirements of sections 24A(1), (3), (4) and (5) and 24B13 (requirements for interim arrangements and information about interim arrangements), except insofar as those provisions concern payments to be made to the member’s widow or widower, and
b
satisfies the conditions prescribed in regulations 6 and 7 of the Protected Rights Regulations (interim arrangements and payments made under interim arrangements), except insofar as those provisions concern payments to be made to the member’s widow, widower, a person in accordance with directions given by the member, or to the member’s estate, in the event of the death of the member,
as if references in those provisions to protected rights were to safeguarded rights.
3
Where paragraph (2) applies, paragraphs (4) to (7) and regulations 7 and 8 (the pension and annuity requirements—money purchase schemes, and insurance companies that may provide safeguarded rights by way of annuities) apply in order to give effect to the member’s safeguarded rights from the end of the period referred to in paragraph (2).
4
Effect may be given to safeguarded rights by the provision by the scheme of a pension, or, subject to paragraph (5), an annuity, which complies with the requirements of regulation 7 and 8 of these Regulations and regulations 32 and 33 of the Pension Credit Benefit Regulations (increase of relevant pension and annual increase in rate of pension: qualifying occupational and personal pension schemes), provided that—
a
the pension or annuity gives effect to all the safeguarded rights of the member, and the terms on which the pension is provided, or the terms of the purchase of the annuity—
i
satisfy the requirements of sub-paragraphs (b) to (d);
ii
make no provision other than such as is necessary to establish what the initial rate and the method of payment of the pension or annuity are to be, and that it shall continue to be paid throughout the lifetime of the member, and
iii
make no provision other than such as is necessary to satisfy the requirements of sub-paragraphs (b) to (d);
b
the rate of the pension or annuity is determined without regard to the sex of the member;
c
except with the consent of the member, the pension or annuity, if paid in arrears, is paid no less frequently than by monthly installments, and
d
the pension or annuity is paid no less frequently than by annual installments.
5
Where paragraph (4) applies, an annuity may be provided if—
a
the rules of the scheme do not provide a pension, or
b
the member so elects.
6
Effect may be given to safeguarded rights by the making of a transfer payment in such circumstances and subject to such conditions as are prescribed in regulations 16 to 19 and regulation 24 of the Pension Credit Benefit Regulations (manner of calculation and verification of cash equivalents) in the case of a money purchase contracted-out scheme, an appropriate scheme, or a scheme which has ceased to be a contracted-out scheme or an appropriate scheme—
a
to another money purchase contracted-out scheme or to a salary related contracted-out scheme, if the person with safeguarded rights is an active member of such a scheme, or
b
to an appropriate scheme,
where the scheme to which the payment is made satisfies the requirements prescribed in regulation 22 of the Pension Credit Benefit Regulations (requirements to be met by an eligible scheme).
7
Effect may be given to safeguarded rights by the provision of a lump sum in accordance with the provisions of regulation 3 or 4 of the Pension Credit Benefit Regulations (commutation of the whole or part of pension credit benefit).
8
If the member has died—
a
after having elected to receive payments in accordance with paragraph (2), or
b
without effect being given to safeguarded rights under paragraph (3), (4), (5), (6) or (7),
effect may be given to those rights by the payment, as soon as practicable, of the value of the member’s safeguarded rights, or the balance of the value of those rights, as the case may be, to or for the benefit of any person in accordance with directions given by the member in writing, or to the member’s estate.
9
The rules of a scheme may provide for effect to be given to the safeguarded rights of a member by making payments to—
a
the widow or widower of the member;
b
another person in accordance with a direction given by the member, or
c
in any other case, to the member’s estate,
if the member dies after he has become entitled to the payment of benefit derived from his safeguarded rights.
10
In this regulation—
“the interim period” means the period beginning with the starting date in relation to the member in question and ending with the termination date;
“scheme” means a money purchase contracted-out scheme or an appropriate scheme;
“the starting date” means the date, which must not be earlier than the member’s 60th birthday, by reference to which the member elects to begin to receive payments under the interim arrangement;
“the termination date” means the date by reference to which the member elects to terminate the interim arrangement, and that date must not be later than the member’s 75th birthday.