Finance Act 1989

Accelerated accrual U.K.

23 (1) This paragraph applies where the scheme allows a member to commute hispension or part of it for a lump sum or sums and— U.K.

(a) where the scheme came into existence before 14th March 1989, applies asregards an employee who became a member of the scheme on or after 1st June1989, and

(b) where the scheme came into existence on or after 14th March 1989, appliesas regards any employee who is a member of the scheme (whenever he became amember).

(2) The rules of the scheme shall have effect (notwithstanding anything inthem to the contrary and notwithstanding the effect of paragraph 3 of Schedule23 to the Taxes Act 1988) as if they did not allow the employee to obtain byway of commutation a lump sum or sums exceeding in all the greater of thefollowing sums—

(a) a sum of three-eightieths of his relevant annual remuneration for eachyear of service up to a maximum of 40;

(b) a sum of the pension payable under the scheme to the employee for thefirst year in which it is payable multiplied by 2.25.

(3) The following rules shall apply in calculating, for the purposes ofsub-paragraph (2) above, the pension payable under the scheme to the employeefor the first year in which it is payable—

(a) if the pension payable for the year changes, the initial pension payableshall be taken;

(b) it shall be assumed that the employee will survive for the year;

(c) the effect of commutation, and of any allocation of pension to providebenefits for survivors, shall be ignored.

Modifications etc. (not altering text)

C1 See The Retirement Benefits Schemes (Contiuationof Rights of Members of Approved Schemes) Regs. 1990 (S.I.1990/2101–in Part III Vol. 5)for circumstanceswhen para. 23disapplied or modified

24 (1) This paragraph applies where the scheme provides a lump sum or sums fora member otherwise than by commutation of his pension or part of itand— U.K.

(a) where the scheme came into existence before 14th March 1989, applies asregards an employee who became a member of the scheme on or after 1st June1989, and

(b) where the scheme came into existence on or after 14th March 1989, appliesas regards any employee who is a member of the scheme (whenever he became amember).

(2) The rules of the scheme shall have effect (notwithstanding anything inthem to the contrary and notwithstanding the effect of paragraph 4 of Schedule23 to the Taxes Act 1988) as if they did not allow the payment to theemployee, otherwise than by way of commutation, of a lump sum or sumsexceeding in all the greater of the following sums—

(a) a sum of three-eightieths of his relevant annual remuneration for eachyear of service up to a maximum of 40;

(b) a sum of the relevant number of eightieths of his relevant annualremuneration.

(3) For the purposes of sub-paragraph (2) above the relevant number shall befound by taking the number of eightieths (of relevant annual remuneration) byreference to which the pension payable under the scheme to the employee iscalculated, multiplying that number by three, and treating the resultingnumber as 120 if it would otherwise exceed 120.

Modifications etc. (not altering text)

C2 See The Retirement Benefits Schemes (Continuationof Rights of Members of Approved Schemes) Regs. 1990 (S.I.1990/2101–in Part III Vol. 5)for circumstanceswhen para. 24disapplied