C1Part III Certification of Pension Schemes and Effects on Members’ State Scheme Rights and Duties
Chapter III Termination of Contracted-out or Appropriate Scheme Status: State Scheme Premiums
State scheme premiums
C251 Payment of state scheme premiums on termination of certified status.
1
If a scheme ceases to be a contracted-out scheme or an appropriate scheme (whether by being wound up or otherwise) a state scheme premium shall be payable—
a
in respect of each earner whose accrued rights to guaranteed minimum pensions or protected rights under the scheme are not subject to approved arrangements and have not been disposed of so as to discharge the trustees or managers of the scheme under section 15 or 95;
b
in the case of an occupational pension scheme other than a money purchase contracted-out scheme, in respect of each person who has then become entitled to receive a guaranteed minimum pension under the scheme and whose guaranteed minimum pension rights are not subject to approved arrangements; and
c
in the case of a money purchase contracted-out scheme or a personal pension scheme, in respect of each person who has become entitled to receive a pension under the scheme giving effect to protected rights which are not subject to approved arrangements.
F12
Where—
a
an earner is serving in employment which is contracted-out employment by reference to an occupational pension scheme (other than a money purchase contracted-out scheme),
b
paragraph (a) ceases to apply, by reason of any of the following circumstances, before the earner attains the scheme’s normal pension age or (if earlier) the end of the tax year preceding that in which the earner attains pensionable age, and
c
the earner has served for less than two years in the employment,
the prescribed person may elect to pay a premium under this subsection (referred to in this Act as a “contributions equivalent premium”).
2A
The circumstances referred to in subsection (2) are that—
a
the earner’s service in the employment ceases otherwise than on the earner’s death,
b
the earner ceases to be a member of the scheme otherwise than on the earner’s death,
c
the earner’s service in the employment ceases on the earner’s death and the earner dies leaving a widow or widower,
d
the scheme is wound up,
e
the scheme ceases to be a contracted-out occupational pension scheme;
but paragraph (a), (b), (d) or (e) does not apply if the earner has an accrued right to short service benefit.
3
The Department may by regulations provide that, in such cases and subject to such conditions as may be prescribed, if—
a
an earner in employment to which an occupational pension scheme which is not a money purchase contracted-out scheme applies has ceased (whether before or after the commencement of this subsection) to be in that employment before attaining normal pension age;
b
there has been a transfer from that scheme to another scheme of his accrued rights other than his accrued rights to guaranteed minimum pensions;
c
the scheme to which his accrued rights are transferred is neither a contracted-out scheme nor one which was formerly contracted-out and in respect of which the Board have duties under section 49 at the time of the transfer;
d
no premium under subsection (1)(a) is payable in respect of the earner; and
e
the circumstances in which by virtue of paragraphs (a) and (b) of subsection (2) a premium is payable under that subsection do not exist,
a state scheme premium may be paid under this subsection.
4
Subject to subsection (5), where—
a
an earner’s service in contracted-out employment by reference to an occupational pension scheme which is not a money purchase contracted-out scheme is terminated before he attains pensionable age (otherwise than by his death);
b
no premium is payable in respect of the earner under subsection (1) or (2); and
c
the weekly rate of the guaranteed minimum pensions to which he has accrued rights under the scheme will fall to be determined in accordance with provisions included in the scheme by virtue of section 12(2) and (3),
a state scheme premium shall be payable in respect of the earner under this subsection.
5
Subsection (4) does not apply if the provisions mentioned in paragraph (c) of that subsection conform with such additional requirements as may be prescribed.
6
In this Act—
a
a premium payable under paragraph (a) of subsection (1) in the case of an occupational pension scheme other than a money purchase contracted-out scheme is referred to as an “accrued rights premium”;
b
a premium payable under paragraph (b) of that subsection in such a case is referred to as a “pensioner’s rights premium”;
c
a premium payable under paragraph (a) or (c) of that subsection in the case of a money purchase contracted-out scheme is referred to as a “contracted-out protected rights premium”;
d
a premium payable under paragraph (a) or (c) of that subsection in the case of a personal pension scheme is referred to as a “personal pension protected rights premium”;
e
a premium under subsection (2) is referred to as a “contributions equivalent premium”;
f
a premium under subsection (3) is referred to as a “transfer premium”; and
g
a premium under subsection (4) is referred to as a “limited revaluation premium”.
Pt. 3: power to modify conferred (1.6.1996 for certain purposes otherwise 6.4.1997) by S.I. 1995/3213 (N.I. 22), art. 146(1); S.R. 1996/91, art. 2(f); S.R. 1997/192, art. 2
Pt. 3: power to transfer functions conferred (1.4.1999) by 1999 c. 2, s. 23(1)(2)(6); S.I. 1999/527, art. 2(b), Sch. 2