Part III Contracting-Out

Protection of pensions

41B

(1)

If—

(a)

there is an interval between the earner’s termination of employment date and whichever of the following is the earlier—

(i)

the date of his death;

(ii)

his commencement of payment date; and

(b)

the relevant sum exceeds one half of the earner’s guaranteed minimum on the day after the termination of employment date; and

(c)

at any time when a pension under the occupational pension scheme is required to be paid to his widow her guaranteed minimum pension under the scheme exceeds one half of his guaranteed minimum on the day after the termination of employment date,

the weekly rate of the pension to be paid to her at the time shall be an amount not less

F1(i)

in a case where by virtue of paragraph 9(2)(b) of Schedule 16 to the Social Security Act 1973 a pension is provided by way of complete substitute for a widow’s pension, than the weekly rate of pension so provided; and

(ii)

in any other case, than the relevant aggregate.

F2(1A)

In subsection (1) above “the relevant aggregate” means the aggregate of the following—

(a)

the relevant sum;

(b)

the excess mentioned in subsection (1)(c) above; . . . F3

(c)

any amount which is an appropriate addition at the time in questionF4and

(d)

where the scheme provides that part of the widow’s pension shall accrue after the termination of employment date by reason of the earner’s employment after that date, the later earnings addition.

(2)

In subsection F5(1A) above “appropriate addition” means—

(a)

where a scheme provides that a widow’s pension shall accrue after the termination of employment date by reason of the earner’s employment after that date, an amount equal to the part which has so accrued; and

(b)

where a scheme provides that a widow’s pension which has accrued before that date shall be enhanced after it if payment of the earner’s pension is postponed, the amount by which the excess of the widow’s pension on the day after the termination of employment date over one half of the earner’s guaranteed minimum on the day after the termination of employment date has been enhanced by reason of the postponement.

(3)

Subject to subsection (5) below, in this section “the relevant sum” means an amount equal to the weekly rate at which, on the F6prescribed assumptions, a pension would have commenced to be paid to the widow if she had satisfied the conditions for entitlement to a pension which are specified in the scheme.

F7(3A)

In this section “the later earnings addition” means the amount (if any) by which (R2—G2) exceeds (R1—G1), where—

  • R1 is the relevant sum;

  • G1 is one half of the earner’s guaranteed minimum on the day after his termination of employment date;

  • R2 is the amount that would have been the relevant sum, had the weekly rate of the pension which determines that sum been calculated by reference to the earner’s later earnings level; and

  • G2 is that amount which bears to R2 the proportion which G1 bears to R1.

(3B)

For the purposes of subsection (3A) above, the earner’s “later earnings level” is the level of earnings by reference to which the weekly rate of the pension which determines the relevant sum would have been calculated, had the termination of employment date fallen on the earlier of—

(a)

the earner’s commencement of payment date, or

(b)

the date on which the earner ceased to be in pensionable service under the scheme.

(4)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F8

(5)

To the extent that amounts attributable to transfer credits have accrued by reason of any transfer before the commencement of this section they are to be disregarded for the purposes of F9subsections (1)(c) and (1A)(b) above.

F10(6)

In this section “pensionable service” shall be construed in accordance with Schedule 16 of the Social Security Act 1973.