12(1)Section 236 (defined benefits arrangements: adjustments of closing value) is amended as follows.U.K.
(2)In subsection (1), for “the closing value of the individual's rights as calculated” substitute “ PE and LSE ”.
(3)In subsection (2)—
(a)for “rights of the individual under the arrangement have” substitute “ annual rate of the pension, or the amount of the lump sum, to which the individual would be entitled under the arrangement has ”,
(b)for “the debit” substitute “ the reduction ”, and
(c)insert at the end “ to PE or LSE ”.
(4)In subsection (3)—
(a)for “rights of the individual under the arrangement have” substitute “ annual rate of the pension, or the amount of the lump sum, to which the individual would be entitled under the arrangement has ”,
(b)for “the credit” substitute “ the increase ”, and
(c)insert at the end “ from PE or LSE ”.
(5)For subsections (4) to (7) substitute—
“(4)If, during the pension input period, the annual rate of the pension, or the amount of the lump sum, to which the individual would be entitled under the arrangement has been reduced by reason of a transfer relating to the individual of any sums or assets held for the purposes of, or representing accrued rights under, the arrangement so as to become held for the purposes of, or to represent rights under, any pension scheme that is—
(a)a registered pension scheme, or
(b)a qualifying recognised overseas pension scheme,
the amount of the reduction is to be added to PE or LSE.
(5)If, during the pension input period, the annual rate of the pension, or the amount of the lump sum, to which the individual would be entitled under the arrangement has been increased by reason of a transfer relating to the individual of any sums or assets held for the purposes of, or representing accrued rights under, any pension scheme so as to become held for the purposes of, or to represent rights under, the arrangement, the amount of the increase is to be subtracted from PE or LSE.”
(6)For subsection (8) substitute—
“(8)If, during the pension input period, the annual rate of the pension, or the amount of the lump sum, to which the individual would be entitled under the arrangement has been reduced by any surrender made in return for any other entitlement, any allocation made, or any similar action taken, pursuant to an option available to the individual under the arrangement, the amount of the reduction (to the extent that it is not reflected in an amount added under subsection (8A)) is to be added to PE or LSE.
(8A)If, during the pension input period—
(a)benefit crystallisation event 2 occurs in relation to the individual and the arrangement,
(b)benefit crystallisation event 3 occurs in relation to the individual and the arrangement otherwise than by reason of a provision contained in, or made under, any enactment, or
(c)benefit crystallisation event 6 occurs in relation to the individual and the arrangement by virtue of the individual becoming entitled to a pension commencement lump sum or a lifetime allowance excess lump sum,
the relevant amount is to be added to PE or LSE.
(8B)In subsection (8A) “the relevant amount” is—
(a)in the case of benefit crystallisation event 2, the annual rate of the pension to which the individual became entitled,
(b)in the case of benefit crystallisation event 3, the increase in the annual rate of the pension, and
(c)in the case of benefit crystallisation event 6, the amount of the lump sum.
(8C)If, during the pension input period, an adjustment to the annual rate of the pension, or the amount of the lump sum, to which the individual would be entitled under the arrangement has been made in consequence of the scheme administrator satisfying a liability under section 237B in respect of the individual, if and to the extent that the adjustment is reflected in PE or LSE the amount of the adjustment is to be added to PE or LSE.
(8D)But no amount is to be added under subsection (8C) by reason of an adjustment made in consequence of the scheme administrator satisfying a liability under section 237B in a case where subsection (6) of that section applied.”
(7)Omit subsection (9).