Social Security Pensions Act 1975

43 Premium under section 42: additional provisions. E+W+S

(1) The amount of a contributions equivalent premium shall be the equivalent, as certified by the Secretary of State, of the amount by which the Class 1 contributions payable in respect of the earner’s employment in contracted-out employment by reference to the scheme have fallen short of what would have been payable if the employment had not been contracted-out; and in certifying any amount under this section the Secretary of State may make such adjustments as he thinks necessary for avoiding fractional amounts.

[F1 (1A) Where an earner’s earnings paid in any period—

(a) exceeded the lower earnings limit; but

(b) were not such as that primary Class 1 contributions within Bracket 3 fell to be paid in respect of them,

it shall be assumed for the purposes of subsection (1) above that his earnings paid in that period were such that, taking the rate specified in Bracket 3 as the appropriate rate, the same amount of primary Class 1 contributions fell to be paid in respect of them as in fact fell to be paid in respect of them.]

[F2 (1B) Where the amount of a person’s earnings for any period (whether before or after the passing of this Act is relevant for any purpose of subsection (1) or (1A) above and the Secretary of State is satisfied that records of those earnings have not been maintained or retained or are otherwise unobtainable, he may for that purpose—

(a) compute, in such manner as he thinks fit, an amount which shall be regarded as the amount of those earnings; or

(b) take their amount to be such sum as he may specify in the particular case.

(1C) Where—

(a) the Secretary of State subsequently ascertains the amount of those earnings, and

(b) it appears to him that the amount of the premium would have been different if he had not made the calculation of the basis described in subsection (1A) above,

he shall refund to the prescribed person the amount by which it would have been less or, as the case may be, the prescribed person shall pay to the Secretary of State the amount by which it would have been more.]

(2) Where under the rules of the scheme transfer credits have been allowed in respect of the earner’s accrued rights under another scheme, the references in section 42(1), and in subsection (1) above, to contracted-out employment by reference to the scheme shall include references to employment in any period of linked qualifying service which was contracted-out employment by reference to the other scheme.

[F3 (2A) [F4 Subject to subsection (2B) below] for the purposes of this Act any period of an earner’s service in an employment is linked qualifying service in relation to a later period of service (whether in the same or another employment) if—

[F5 (a) under the rules of a scheme applying to him in the earlier period of service—

(i) there was made a transfer of his accrued rights under that scheme to another scheme applying to him in the later period of service; or

(ii) those rights were secured by a policy of insurance or an annuity contract and were subsequently transferred to another scheme applying to him in the later period of service;][F6 and]

(b) in consequence of [F7 [F8 the transfer of] his accrued rights to the second scheme], there are (or were) allowed to him transfer credits under the rules of that other scheme.

except that, for any service to be taken into account as linked qualifying service, it must be actual service and no regard shall be had to any scheme rule which provides for service to be treated for any purposes of benefit or otherwise as longer or shorter than it actually was.]

[F9 (2B) Only so much of the earlier period as is a period of service in respect of which there accrued under the first scheme any of the rights transferred to the second scheme shall be linked qualifying service in relation to the later period of service.]

(3) For the purposes of section 42(2), a scheme conforms to the appropriate extent with the preservation requirements of Part II of the M1 Social Security Act 1973 if—

(a) it entitles the earner to short service benefit within the meaning of those requirements; or

(b) it makes any provision which under those requirements is permitted as an alternative to short service benefit (other than provision for return of contributions or for benefit in the form of a lump sum).

(4) Except in such cases as may be prescribed, [F10 the prescribed person] shall not, in making or abstaining from making elections under section 42(2) or (3), discriminate between different earners on any grounds other than their respective lengths of relevant service; and if the Occupational Pensions Board consider that [F10 the prescribed person] is contravening this subsection, they may cancel any contracting-out certificate held by [F10 the earner’s employer] in respect of the scheme in question.

(5) In subsection (4) above “relevant service” means service in contracted-out employment by reference to the scheme, together with any service in contracted-out employment which in relation to service in that employment is linked qualifying service.

(6) An election by [F10 the prescribed person] under section 42(2) or (3) must be made within the prescribed period in the prescribed manner; and where [F10 the prescribed person] elects to pay a premium in respect of an earner, he shall pay it to the Secretary of State within the prescribed period.

(7) Payment of a premium under section 42(2) shall operate to extinguish the earner’s accrued rights to guaranteed minimum pensions under the scheme; and payment of a premium under section 42(3) shall operate to extinguish any right to guaranteed minimum pension in respect of the widow.

(8) Subject to regulations made under paragraph 1 of Schedule 2 to this Act, an employment which is terminated by the death of the employer shall be treated for the purposes of section 42 as terminated immediately before the death.

Textual Amendments

F1 S. 43(1A) inserted by Social Security Act 1985 (c. 53), Sch. 5, para. 26

F2 S. 43(1B) and (1C) inserted (with effect from 1.10.1989) by Social Security Act 1989 (c. 24), Sch. 6, para. 9(1)

F3 S. 43(2A) inserted by Health and Social Security Act 1984 (c. 48), Sch. 7, para. 4

F4 Words inserted (with effect from 1.10.1989) by Social Security Act 1989 (c. 24), Sch. 6, para. 9(2)

F5 S. 43(2A)(a) substituted by Social Security Act 1986 (c. 50), Sch. 10, para. 22(a)

F6 Word inserted (with effect from 1.10.1989) by Social Security Act 1989 (c. 24), Sch. 7, para. 21

F7 Words substituted by Social Security Act 1986 (c. 50), Sch. 10, para. 22(b)

F8 Words substituted (with effect from 1.10.1989) by Social Security Act 1989 (c. 24), Sch. 7, para. 21

F9 S. 43(2B) inserted (with effect from 1.10.1989) by Social Security Act 1989 (c. 24), Sch. 6, para. 9(2)

F10 Words substituted by Social Security Act 1985 (c. 53), Sch. 5, para. 25

Modifications etc. (not altering text)

C1 S. 43(1A) shall not apply to any period after the end of the tax year 1986/87 (Social Security Act 1986 (c. 50), Sch. 8 para. 9.)

Marginal Citations

M1 1973 c. 38.