The Contracting-out (Transfer) Amendment Regulations 1987

Insertion of regulations 2A and 2B into the principal Regulations

4.  After regulation 2 of the principal Regulations there shall be inserted the following regulations—

“Transfer of accrued rights to guaranteed minimum pensions from policies of insurance or annuity contracts

2A.— (1) There may be made from an appropriate policy to a contracted-out salary related scheme or to a section 49 salary related scheme a transfer in respect of an earner’s accrued rights to guaranteed minimum pensions which are appropriately secured by that policy for the purposes of section 52C, in the circumstances set out in paragraph (2) and subject to the conditions mentioned in paragraphs (3) to (5), and in paragraphs (2) to (5) “a transfer” means a transfer such as is described in this paragraph.

(2) a transfer may be made—

(a) to a contracted-out salary related scheme; or

(b) to a section 49 salary related scheme,

where the earner has consented to it in writing and has entered employment with an employer who is, or in the case of a transfer to a section 49 salary related scheme is or was, a contributor to the scheme.

(3) The receiving scheme must not make provision under section 35(7) (exclusion of guaranteed minimum pension from revaluation under section 21), or any analogous provision, in relation to those rights where the effect would be to increase them at a different rate from that at which they would have been increased had the transfer not have taken place.

(4) Subject to paragraph (3), where the earner has not entered employment which is contracted-out by reference to the receiving scheme, then that scheme must provide for pensions to be paid which are of at least equal value to the annuity which would have been payable by the transferring policy, had the transfer not have taken place, in respect of the earner’s accrued rights to guaranteed minimum pensions.

(5) A transfer to a section 49 salary related scheme may be made where it is approved by the Board, whether or not subject to conditions.

Transfer payments in respect of accrued rights to guaranteed minimum pensions made from contracted-out salary related schemes, section 49 salary related schemes and policies of insurance or annuity contracts

2B.— (1) There may be made from a contracted-out salary related scheme, a section 49 salary related scheme or an appropriate policy to a money purchase contracted-out scheme, to a section 49 money purchase scheme or to an appropriate personal pension scheme, a transfer payment in respect of the accrued rights of an earner to—

(a) guaranteed minimum pensions under the transferring scheme; or

(b) guaranteed minimum pensions which are appropriately secured for the purposes of section 52C under the transferring policy,

in the circumstances and subject to the conditions mentioned in paragraphs (2) to (4), and in those paragraphs a

“transfer payment” means a transfer payment such as is described in this paragraph.

(2) A transfer payment may be made to a money purchase contracted-out scheme—

(a) in the circumstances described in paragraphs 1 and 2 of Schedule 1A; and

(b) on the conditions specified in paragraphs 1 and 2 of Schedule 2A.

(3) A transfer payment may be made to a section 49 money purchase scheme—

(a) in the circumstances described in paragraphs 1 and 3 of Schedule 1A; and

(b) on the conditions specified in paragraphs 1, 2 and 3 of Schedule 2A.

(4) A transfer payment may be made to an appropriate personal pension scheme—

(a) in the circumstances described in paragraph 1 of Schedule 1A; and

(b) on the conditions specified in paragraphs 1 and 2 of Schedule 2A.

(5) References in Schedules 1A and 2A to “the earner” are references to the earner referred to in paragraph (1).”.