The Pension Sharing (Safeguarded Rights) Regulations (Northern Ireland) 2000

Prospective

Ways of giving effect to safeguarded rights—salary related schemes N.I.

9.—(1) The rules of a salary related contracted-out scheme which satisfy the requirements of section 5(2B)(1) must provide for effect to be given to the safeguarded rights of a member by the provision of a pension for life except where the circumstances specified in paragraph (2), (3) or (4) apply.

(2) The circumstances specified in this paragraph are that the member consents to a transaction by which the trustees or managers of the scheme are to discharge their liability in respect of safeguarded rights and the transaction to discharge the liability satisfies all the conditions specified in paragraphs (6) and (7).

(3) The circumstances specified in this paragraph are that a transfer payment may be made in such circumstances and subject to such conditions as are prescribed in regulations 16 to 19 and 24 of the Pension Credit Benefit Regulations in case of a salary related contracted-out scheme—

(a) to another salary related contracted-out scheme or to a money purchase 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.

(4) The circumstances specified in this paragraph are that effect may be given to safeguarded rights by the provision of a lump sum in accordance with the provisions of regulation 6 of the Pension Sharing (Implementation and Discharge of Liability) Regulations (Northern Ireland) 2000(2) (discharge of liability in respect of a pension credit following the death of the person entitled to the pension credit), or regulation 3 or 4 of the Pension Credit Benefit Regulations.

(5) For the purposes of paragraph (2) “transaction” means—

(a) the taking out of an insurance policy or a number of such policies;

(b) the entry into an annuity contract or a number of such contracts, or

(c) the transfer of pensions and accrued rights to such a policy or policies or such a contract or contracts.

(6) The insurance policy or annuity contract must be taken out or entered into with an insurance company such as is described in regulation 8(2).

(7) The insurance policy or annuity contract must contain provision to the effect, or must be endorsed so as to provide that—

(a) the benefits secured under the policy or contract shall become payable with the beneficiary’s consent, and the beneficiary—

(i) has reached normal benefit age, or

(ii) is suffering from an incapacity or serious ill health prior to normal benefit age;

(b) any rights of a beneficiary to a payment under the policy or contract which derive from a pension or accrued rights under the salary related contracted-out scheme shall be treated as if this regulation were applicable to them, and

(c) any increase in accordance with regulation 32 of the Pension Credit Benefit Regulations (increase of relevant pension) which would have been applied to the benefits derived from safeguarded rights which have become secured or been replaced by the annuity contract or insurance policy, is applied to them.

(8) The rules of a salary related contracted-out 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.

(9) For the purposes of paragraph (7)—

“beneficiary” means a member of a salary related contracted-out scheme, in respect of whose safeguarded rights the trustees or managers of that scheme have discharged their liability by entering into an insurance policy or an annuity contract;

“incapacity” means physical or mental deterioration which is sufficiently serious to prevent a person from following his normal employment or which seriously impairs his earning capacity;

“serious ill health” has the same meaning as in regulation 3(4) of the Pension Credit Benefit Regulations (commutation of the whole of pension credit benefit).

Commencement Information

I1 Reg. 9 in operation at 1.12.2000, see reg. 1(1)

(1)

Section 5(2B) was inserted by Article 133(3) of the Pensions (Northern Ireland) Order 1995 and amended by paragraph 38(2) of Schedule 1 to the Social Security Contributions (Transfer of Functions, etc.) (Northern Ireland) Order 1999 (S.I.1999/671)

(2)

S.R. 2000 No. 145