Part IV Protection for Early Leavers

C5C4C2C3C7C6Chapter I Preservation of Benefit Under Occupational Schemes

Annotations:
Modifications etc. (not altering text)

C167 Basic principle as to short service benefit.

1

A scheme must make such provision that where a member’s pensionable service is terminated before normal pension age and—

a

he has at least 2 years’ qualifying service,

F5aa

he has at least 30 days' qualifying service and, if he were entitled to benefit because of this paragraph, all of it would necessarily be money purchase benefit, or

b

a transfer payment in respect of his rights under a personal pension scheme has been made to the scheme,

he is entitled to benefit consisting of or comprising benefit of any description which would have been payable under the scheme as long service benefit, whether for himself or others, and calculated in accordance with this Chapter.

2

The benefit to which a member is entitled under subsection (1) is referred to in this Act as “short service benefit”.

F13

Subject to F3subsections (4) and (5A), short service benefit must be made payable as from an age which is no greater than—

a

the age of 65, or

b

if in the member's case normal pension age is greater than 65, normal pension age.

4

Short service benefit payable on or in respect of the member’s death after normal pension age must be made payable as from his death or within such time after it as long service benefit payable on or in respect of his death would be payable.

5

In applying subsections (3) and (4), no regard is to be had to the operation of any scheme rule, taking effect at any time after termination of the member’s pensionable service, as to what is normal pension age under the scheme.

F25A

Subsection (3) does not apply in relation to a scheme under section 1 of the Public Service Pensions Act (Northern Ireland) 2014.

6

A scheme must not provide for payment of short service benefit in the form of a lump sum at any time before normal pension age, except in such circumstances as may be prescribed.

7

In subsection (1) “2 years’ qualifying service” means 2 years (whether a single period of that duration or two or more periods, continuous or discontinuous, totalling 2 years) in which the member was at all times employed either—

a

in pensionable service under the scheme; or

b

in service in employment which was contracted-out by reference to the scheme; or

c

in linked qualifying service under another scheme.

8

For the purposes of subsection (7), no regard shall be had to whether or not the service was of the same description in the whole of the 2 years.

9

A period of service previously terminated is not to count towards the 2 years’ qualifying service unless it counts towards qualification for long service benefit, and need then count only to the same extent and in the same way.

F410

Subsections (7) to (9) apply, with the substitution for references to 2 years of references to 30 days, for determining whether a person has at least 30 days' qualifying service for the purposes of subsection (1).

11

Subsection (1)(aa) does not apply in relation to a person's membership of a scheme if any period of relevant service began before the day on which section35 of the Pensions Act (Northern Ireland) 2015 came into operation (whether or not it also ended before that date).

“Relevant service” means service that counts towards the 30 days' qualifying service for the purposes of subsection (1).