Part III E+W+S Certification of Pension Schemes and Effects on Members’ State Scheme Rights and Duties

Modifications etc. (not altering text)

C1 Pt. III power to modify conferred by Social Security Administration Act 1992 (c. 5), s. 148 (as read with Pensions Act 1995 (c. 26), ss. 128(3)(4), 180(2) (with s. 128(5)(6)); Child Support, Pensions and Social Security Act 2000 (c. 19), ss. 33(2)-(4), 86(1)(b)(2))

C2 Pt. III: power to modify conferred (1.6.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 149(1), 180(1); S.I. 1996/778, art. 2(6); S.I. 1997/664, art. 2(3), Sch. Pt. 2

C3 Pt. III applied (with modifications) (6.4.1997) by The Occupational Pension Schemes (Mixed Benefit Contracted-out Schemes) Regulations 1996 (S.I. 1996/1977), regs. 1(1), 2(4)(a)-(f)

C4 Pt. III applied (with modifications) (6.4.1997) by The Contracting-out (Transfer and Transfer Payment) Regulations 1996 (S.I. 1996/1462), regs. 1(1), 12, 13, Sch. 2 (with reg. 14, Sch. 4)

C5 Pt. III: power to amend conferred (1.4.1999) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), ss. 23, 28(3); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

C6 Pt. III: power to transfer functions conferred (1.4.1999) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), ss. 23, 28(3); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

Chapter I E+W+S Certification

Requirements for certification of occupational and personal money purchase schemes E+W+S

28 Ways of giving effect to protected rights. E+W+S

(1) The rules of the scheme must provide for effect to be given to the protected rights of a member—

(a) in any case where subsection (3) so requires, by the purchase of such an annuity as is mentioned in that subsection, and

(aa) [F1 in any case where subsection (1A) so requires, by the making of such payments as are mentioned in that subsection,]

(b) in any other case, in such of the ways [F2 permitted] [F2 provided for] by the following subsections as the rules may specify,

and they must not provide for any part of a member’s protected rights to be discharged otherwise than in accordance with those subsections.

[F3 (1A) [F4 In the case of a personal pension scheme, where the member so elects, effect shall be given to his protected rights—

(a) during the interim period, by the making of payments under an interim arrangement which—

(i) complies with section 28A,

(ii) satisfies such conditions as may be prescribed, and

(b) at the end of the interim period, in such of the ways permitted by the following subsections as the rules of the scheme may specify.]]

[F4 Where the scheme is a personal pension scheme which provides for the member to elect to receive payments in accordance with this subsection, and the member so elects, effect shall be given to his protected rights during the interim period by the making of payments under an interim arrangement which—

(a) complies with section 28A, and

(b) satisfies such conditions as may be prescribed;

and in such a case subsections (2) to (4) accordingly apply as regards giving effect to his protected rights as from the end of that period.]

(2) Effect may be given to protected rights—

(a) by the provision by the scheme of a pension which—

(i) complies with the pension requirements (within the meaning of section 29(1)), and

(ii) satisfies such conditions as may be prescribed; or

(b) in such circumstances and subject to such conditions as may be prescribed, by the making of a transfer payment—

(i) in the case of an occupational pension scheme, to another occupational pension scheme or to a personal pension scheme, and

(ii) in the case of a personal pension scheme, to another personal pension scheme or to an occupational pension scheme,

where the scheme to which the payment is made satisfies such requirements as may be prescribed.

(3) Subject to subsections (5) and (7), if—

(a) the rules of the scheme do not provide for a pension; or

(b) the member [F5 or, where section 28A(2) applies, the member’s widow or widower] so elects,

then, except to the extent that effect is given to protected rights in accordance with subsection [F6 (1A)(a) or] [F6 (1A) or] (4), effect shall be given to them by the purchase by the scheme of an annuity which—

(i) complies with the annuity requirements (within the meaning of section 29(3)), and

(ii) satisfies such conditions as may be prescribed.

(4) Effect may be given to protected rights by the provision of a lump sum if—

(a) the lump sum is payable on a date which is—

(i) in the case of an occupational pension scheme, a date not earlier than that on which the member attains the age of 60 nor later than that on which he attains the age of F7 ... [F7 65 or such later date as has been agreed by him, or

F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii) in the case of a personal pension scheme, where the member has elected to receive payments under an interim arrangement, the date by reference to which the member elects to terminate that arrangement, and otherwise such date as has been agreed by him and is not earlier than his 60th birthday nor later than his 75th birthday.]

(b) the annual rate of a pension under subsection (2) or an annuity under subsection (3) giving effect to the protected rights and commencing on the date on which the lump sum is payable would not exceed the prescribed amount;

(c) the circumstances are such as may be prescribed; and

(d) the amount of the lump sum is calculated in F8 ... [F8 the prescribed manner] by reference to the amount of the pension or annuity.

(5) If the member has died without effect being given to protected rights under subsection [F9 (1A)] (2), (3) or (4), effect may be given to them in such manner as may be prescribed.

(6) No transaction is to be taken to give effect to protected rights unless it falls within this section.

F10 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F11 (8) In this section and sections 28A, 28B and 29—

• “the interim period” means the period beginning with the starting date in relation to the member in question and ending with the termination date;

• “the starting date” means the date, which must not be earlier than the member’s 60th birthday, by reference to which the member elects to begin to receive payments under the interim arrangement;

• “the termination date” means the date by reference to which the member (or, where section 28A(2) applies, the member’s widow or widower) elects to terminate the interim arrangement, and that date must be not later than—

  (i)

  the member’s 75th birthday, or

  (ii)

  where section 28A(2) applies, the earlier of the member’s widow or widower’s 75th birthday and the 75th anniversary of the member’s birth.]

[F12 (9) This section is subject to section 32A]

Textual Amendments

F1 S. 28(1)(aa) repealed (11.11.1999 for specified purposes) by virtue of Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 5(2)(a), Sch. 13 Pt. I; S.I. 2001/4049, art. 2(1)(a)

F2 Words in s. 28(1)(b) substituted (11.11.1999 for specified purposes) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 5(2)(b); S.I. 2001/4049, art. 2(1)(a)

F3 S. 28(1A) inserted (13.3.1996 for specified purposes, 1.4.1996 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 142(3), 180(1); S.I. 1996/778, art. 2(2), Sch. Pt. 2

F4 S. 28(1A) substituted (11.11.1999 for specified purposes) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 5(3); S.I. 2001/4049, art. 2(1)(a)

F5 Words in s. 28(3)(b) inserted (13.3.1996 for specified purposes, 1.4.1996 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 142(4)(a), 180(1); S.I. 1996/778, art. 2(2), Sch. Pt. 2

F6 Words in s. 28(3) substituted (11.11.1999 for specified purposes) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 5(4); S.I. 2001/4049, art. 2(1)(a)

F7 Words in s. 28(4)(a) substituted (13.3.1996 for specified purposes, 1.4.1996 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 142(5), 180(1); S.I. 1996/778, art. 2(2), Sch. Pt. 2

F8 Words in s. 28(4)(d) substituted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 34(a); S.I. 1996/778, art. 2(5)(a), Sch. Pt. 5; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F9 Word in s. 28(5) inserted (13.3.1996 for specified purposes, 1.4.1996 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 142(6), 180(1); S.I. 1996/778, art. 2(2), Sch. Pt. 2

F10 S. 28(7) omitted (6.4.1997) by virtue of Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 34(b), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F11 S. 28(8) added (13.3.1996 for specified purposes, 1.4.1996 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 142(7), 180(1); S.I. 1996/778, art. 2(2), Sch. Pt. 2

F12 S. 28(9) inserted (13.3.1996 for specified purposes, 1.4.1996 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 146(2), 180(1); S.I. 1996/778, art. 2(2), Sch. Pt. 2

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2