PART 3BENEFITS FOR PRACTITIONERS ETC.

CHAPTER 6TRANSFERS

Transfers out

Introduction: rights to transfer value payment220.

(1)

This Chapter supplements the rights conferred by or under Chapter IV of Part IV of the 1993 Act (transfer values) and applies to practitioners.

(2)

This Chapter is without prejudice to that Chapter or Chapter V of that Part M1 (early leavers: cash transfer sums and contribution refunds).

(3)

Accordingly—

(a)

a member to whom Chapter IV of that Part applies (see F1section 89 of that Act) is entitled to require the payment of a transfer value in respect of the rights to benefit that have accrued to or in respect of the member under F2this Section of the Scheme, and

(b)

a member to whom Chapter V of that Part applies (see section 97AA(1) of that Act) is entitled to a cash transfer sum or a contribution refund in accordance with that Chapter.

(4)

Subject to paragraph (5) and the other provisions of this Chapter, any other member is entitled to require such a payment as if such rights had accrued to or in respect of him by reference to the pensionable service the member is entitled to count under F3this Section of the Scheme (and references in this Chapter to the member's accrued rights or benefits are to be read accordingly).

(5)

Paragraph (4) does not—

(a)

give any rights to an active member,

(b)

give any rights to a pensioner member in respect of the pension to which the member has become entitled, or

(c)

give any rights to a pension credit member in respect of rights that are directly attributable to a pension credit.

Applications for statements of entitlement221.

(1)

A member who requires a transfer value payment to be made must apply in writing to the Department for a statement of the amount of the cash equivalent of the member's accrued benefits under F4this Section of the Scheme at the guarantee date (“a statement of entitlement”).

(2)

In this Part, “the guarantee date” means any date that—

(a)

falls within the required period,

(b)

is chosen by the Department,

(c)

is specified in the statement of entitlement, and

(d)

is within the period of 10 days ending with the date on which the member is provided with the statement of entitlement.

(3)

In counting the period of 10 days referred to in sub-paragraph (d), Saturdays, Sundays, Christmas Day, New Year's Day and Good Friday are excluded.

(4)

In paragraph (2) “the required period” means—

(a)

the period of 3 months beginning with the date of the member's application for a statement of entitlement, or

(b)

such longer period beginning with that date (but not exceeding six months) as may reasonably be required if, for reasons beyond the control of the Department, the requisite information cannot be obtained to calculate the amount of the cash equivalent.

(5)

The member may withdraw the application for a statement of entitlement by notice in writing at any time before the statement is provided.

Applications for transfer value payments: general222.

(1)

A member who has applied for and received a statement of entitlement under regulation 221 may apply in writing to the Department for a transfer value payment to be made.

(2)

On making such an application a member becomes entitled to a payment of an amount equal, or amounts equal in aggregate, to the amount specified in the statement of entitlement (or such other amount as may be payable by virtue of regulation 223(2)).

(3)

In this Part such a payment is referred to as “the guaranteed cash equivalent transfer value payment”.

(4)

The application must specify the pension scheme or other arrangement to which the payment or payments should be applied.

(5)

The application must meet such other conditions as the Department may require.

(6)

An application under this regulation may be withdrawn by notice in writing to the Department, unless an agreement for the application of the whole or part of the guaranteed cash equivalent transfer value payment has been entered into with a third party before the notice is given.

Applications for transfer value payments: time limits223.

(1)

An application under regulation 222(1) must be made before the end of the period of 3 months beginning with the guarantee date, and, subject to paragraph (4), the payment must be made no later than—

(a)

6 months after that date, or

(b)

if it is earlier, the date on which the member reaches 65.

(2)

If the payment is made later than 6 months after the guarantee date, the amount of the payment to which the member is entitled must be increased by—

(a)

the amount by which the amount specified in the statement of entitlement falls short of the amount it would have been if the guarantee date had been the date on which the payment is made, or

(b)

if it is greater and there was no reasonable excuse for the delay in payment, interest on the amount specified in the statement of entitlement, calculated on a daily basis over the period from the guarantee date to the date when the payment is made at an annual rate of 1% above the base rate.

(3)

Paragraph (4) applies if—

(a)

disciplinary or court proceedings against the member are begun within 12 months after the member leaves the employment which qualified the member to belong to F5this Section of the Scheme, and

(b)

it appears to the Department that the proceedings may lead to all or part of the member's benefits being forfeited under regulation 254 (forfeiture of rights to benefit).

(4)

The Department may defer doing what is needed to carry out what the member requires until the end of the period of 3 months beginning with the date on which those proceedings (including any proceedings on appeal) are concluded.

(5)

In any case where a direction is given under regulation 254 for the forfeiture of a member's benefits, this regulation applies as if the amount specified in the statement of entitlement were reduced by an amount equal to the value of the benefits forfeited, as determined by the Scheme actuary.

(6)

In respect of an applicant who F6falls within regulation 220(4) —

(a)

in the case of an application that requires the guaranteed cash equivalent transfer value payment to be made to a registered occupational pension scheme or a registered personal pension scheme, an application under paragraph (1) may only be made if—

(i)

the applicant became a member of that scheme not later than the end of the period of 12 months beginning with the day after the date on which member ceased to be in the pensionable service in which the rights accrued (“the leaving date”), and

(ii)

the application is made not later than—

(aa)

the end of the period of 12 months beginning with the day on which the applicant became a member of that scheme, or

(bb)

if the applicant became a member of that scheme on or before the leaving date, the end of the period of 12 months beginning with the day after the leaving date,

(b)

in any other case, an application under paragraph (1) may only be made before the end of the period of 12 months beginning with the day after the leaving date.

Ways in which transfer value payments may be applied224.

(1)

F7If Chapter IV of Part IV of the 1993 Act applies to a member, that member may only require the Department to apply the guaranteed cash equivalent transfer value payment in one or more of the ways permitted under section 91 of the 1993 Act.

F8(2)

In any other case, a member may only require the Department to apply the guaranteed equivalent transfer value payment in one or more of the ways permitted under section 97AE of the 1993 Act.

(3)

The whole of the guaranteed cash equivalent transfer value payment must be applied, unless paragraph (4) applies.

(4)

The benefits attributable to—

(a)

the member's accrued rights to a guaranteed minimum pension, or

(b)

the member's accrued rights attributable to service in contracted-out employment on or after 6th April 1997,

may be excluded from the guaranteed cash equivalent transfer value payment if section 92(2) of the 1993 Act applies (trustees or managers of certain receiving schemes or arrangements able and willing to accept a transfer payment only in respect of the member's other rights).

(5)

A transfer payment may only be made to—

(a)

a pension scheme that is registered under Chapter 2 of Part 4 of the Finance Act 2004, or

(b)

an arrangement that is a qualifying recognised overseas pension scheme for the purposes of that Part (see section 169(2) of that Act).

Calculating amounts of transfer value payments225.

F9(1)

The amount of the guaranteed cash equivalent transfer value payment is to be calculated and verified by the Department in accordance with the Occupational Pension Schemes (Transfer Values) Regulations (Northern Ireland)1996.

  • This is subject to paragraphs (2), (3) and (5).

(2)

Before determining the factors to be used in the calculation of the member’s guaranteed cash equivalent, the Department shall take advice from the Scheme actuary.

(3)

Subject to paragraph (5), if the amount calculated in accordance with paragraph (1) is less than the member's minimum transfer value (if any), the amount of the guaranteed cash equivalent transfer value payment is to be equal to that value instead.

F10(4)

In paragraph (3), “minimum transfer value” means—

(a)

in the case of a person other than a 2008 Section Optant, the sum of—

(i)

any transfer value payments that have been made to this Section of the Scheme in respect of the person as a result of which the person is entitled to count any pensionable service under this Section of the Scheme by reference to which the accrued rights subject to the transfer are calculated, and

(ii)

any contributions paid by the person under Chapter 3 of this Part as a result of which the person is entitled to count such service;

(b)

in the case of a 2008 Section Optant, the sum of—

(i)

any transfer value payments that have been made to the 1995 Section in respect of the Optant,

(ii)

any contributions paid by the Optant under regulation 10 as modified by paragraph 10 of Schedule 2 to the 1995 Regulations (Contributions by members) in respect of superannuable employment in that Section on or before 31st March 2008, and

(iii)

any payments made by the Optant under regulation 67 as modified by paragraph 20 of Schedule 2 to the 1995 Regulations (Right to buy additional service) for the purchase of additional service,

which entitle the Optant to count, under Chapter 10 of this Part, any pensionable service by reference to which the accrued rights subject to the transfer are calculated.

(5)

If the transfer value payment is made under the public sector transfer arrangements, the amount of the transfer value payment is calculated—

(a)

in accordance with those arrangements rather than paragraphs (1) and (3), and

(b)

by reference to the guidance and tables provided by the Scheme actuary for the purposes of this paragraph that are in use on the date used for the calculationF11; and

(c)

separately in respect of—

  1. (i)

    the aggregate of any amounts of pensionable earnings that the member is entitled to count for the purpose of calculating benefits payable to, or in respect of, the member that fall to be treated as—

    1. (aa)

      a capped increase to pensionable earnings in accordance with regulation 231; or

    2. (bb)

      an amount of capped Optant pensionable earnings in accordance with regulation 260I, and

  2. (ii)

    any amount of pensionable earnings that do not fall to be so treated.

F12(6)

In the case of a 2008 Section Optant, this regulation is subject to regulation 260K.

Effect of transfers-out226.

If a transfer value payment is made under this Chapter in respect of a person's rights under F13this Section of the Scheme, those rights are extinguished.