Interest on late payment of benefits
172.—(1) This regulation applies to a benefit except—
(a)a phased retirement pension or a lump sum payable under regulation 162 in place of part of that pension; or
(b)a total incapacity pension payable between the date on which the person to whom it is paid first engages in any other form of work as mentioned in regulation 115(2)(c) and the date on which the scheme manager is satisfied that the person continues to meet the total incapacity condition despite engaging in such work.
(2) Except as provided in paragraphs (8) and (9), where a benefit to which this regulation applies is not paid within one month after the due date, the scheme manager must pay interest on the amount unpaid at the Bank of England base rate compounded with 3-monthly rests from the due date to the date of payment.
(3) Where the benefit is a death grant, the due date is the day after the date on which the scheme manager became satisfied that payment may be made.
(4) Where the benefit is a lump sum under regulation 162, 165 or 168 or a grant other than a death grant, the due date is the day on which the benefit is payable.
(5) Where the benefit is a pension or annuity, the due date is the last day of the month in which entitlement to the benefit took effect.
(6) In determining the due date in accordance with paragraphs (4) and (5), no account is to be taken of the requirement to make an application for the benefit under regulation 159.
(7) In this regulation “Bank of England base rate” means—
(a)the rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short-term liquidity in the money markets; or
(b)where an order under section 19 of the Bank of England Act 1998(1) is in force, any equivalent rate determined by the Treasury under that section.
(8) Where a payment to the scheme manager is received after the benefit to which it relates becomes payable, the scheme manager may determine that this regulation does not apply to the benefit until the payment is received.
(9) If paragraph (10) applies, the scheme manager may determine that this regulation does not apply to any benefit, either in respect of the whole period or any part of the period.
(10) This paragraph applies if—
(a)a benefit is payable between the date specified under regulation 169(1) and the date on which the evidence required under that regulation is received by the scheme manager;
(b)that evidence was not provided by the date specified but was provided later; and
(c)it does not appear to the scheme manager that the delay in providing the evidence was due to circumstances outside the control of the person to whom the benefit is payable.