PART 1Public service pension schemes

C18C17C16C15C14C19C20C21C22CHAPTER 1Schemes other than judicial schemes and local government schemes

Annotations:
Modifications etc. (not altering text)

Compensation

I1I2C4C18C1C17C10C12C16C8C7C11C5C3C2C15C9C14C6C1323C18C17C16C15C14Power to pay compensation

1

The scheme manager for a Chapter 1 legacy scheme may pay amounts by way of compensation in respect of compensatable losses incurred by members or, in the case of deceased members, their personal representatives.

2

Scheme regulations for a Chapter 1 legacy scheme may make provision under which an employer in relation to the scheme is required to reimburse the scheme manager for amounts paid under subsection (1).

3

For the purposes of this section a loss incurred by a member, or by a member’s personal representatives, is “compensatable” if and to the extent that—

a

any of the following three conditions is met, and

b

the loss is of a description specified in Treasury directions.

4

The first condition is that the loss is attributable to, or is reasonably regarded as attributable to, a relevant breach of a non-discrimination rule.

5

The second condition is that the loss is attributable to the application of any provision of, or made under, this Chapter.

6

The third condition is that—

a

the member is a relevant member, and

b

the loss is a Part 4 tax loss that is attributable to the value of rights in respect of remediable service which would, apart from section 2(1), be pensionable service under a Chapter 1 new scheme.

7

In subsection (6) “relevant member” means a member of the scheme—

a

who, immediately before the coming into force of section 2(1)—

i

is a pensioner member of the scheme, or of a Chapter 1 new scheme, in relation to the employment or office, or

ii

is deceased, and

b

in respect of whom an election by virtue of section 6 (election for new scheme benefits) has been made.

8

In this section (subject to subsection (10)) “loss” includes a loss of any kind including, in particular, a Part 4 tax loss.

9

In this section “Part 4 tax loss”, in relation to a member, means a loss arising as a result of the member—

a

incurring a charge, or incurring an increased charge, under Part 4 of FA 2004, or

b

not being entitled to a relief, or being entitled to less relief, under that Part of that Act.

10

In this section “loss” does not include an amount that is payable under this Chapter or under regulations made by virtue of this Chapter.

11

In this section “non-discrimination rule” means a rule that is, or at any time was, included in a Chapter 1 scheme by virtue of—

a

section 61 of EA 2010, or

b

paragraph 2 of Schedule 1 to EEAR(NI) 2006.

12

For the purposes of this section a breach of a non-discrimination rule is “relevant” if it arises from the application of—

a

an exception to section 18(1) of PSPA 2013 made under section 18(5) to (7) of that Act, or

b

an exception to section 18(1) of PSPA(NI) 2014 made under section 18(5) to (8) of that Act.

13

Subsection (1) does not confer power to pay amounts by way of compensation in respect of compensatable losses so far as—

a

any person has already received amounts by way of compensation in respect of them, or

b

amounts that any person has paid the scheme have been reduced by amounts in respect of them,

whether pursuant to an order of a court or tribunal or otherwise.