- Latest available (Revised)
- Original (As made)
The Pension Schemes (Voluntary Contributions Requirements and Voluntary and Compulsory Membership) Regulations 1987 is up to date with all changes known to be in force on or before 17 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
Revised legislation carried on this site may not be fully up to date. Changes and effects are recorded by our editorial team in lists which can be found in the ‘Changes to Legislation’ area. Where those effects have yet to be applied to the text of the legislation by the editorial team they are also listed alongside the legislation in the affected provisions. Use the ‘more’ link to open the changes and effects relevant to the provision you are viewing.
Statutory Instruments
PENSIONS
Made
25th June 1987
Laid before Parliament
6th July 1987
Coming into force
For the purposes of personal pension schemes
4th January 1988
For the purposes of occupational pension schemes
6th April 1988
The Secretary of State for Social Services, in exercise of the powers conferred upon him by sections 12(1), 15(1) and 84(1) of the Social Security Act 1986 M1, and of all other powers enabling him in that behalf, by this instrument, which is made before the end of a period of 12 months from the commencement of the enactments under which it is made, makes the following Regulations:—
Marginal Citations
M11986 c. 50; see definitions of “prescribed” and “regulations” in section 84(1).
1.—(1) These Regulations may be cited as the Pension Schemes (Voluntary Contributions Requirements and Voluntary and Compulsory Membership) Regulations 1987 and shall come into force—
(a)for the purposes of personal pension schemes on 4th January 1988; and
(b)for the purposes of occupational pension schemes on 6th April 1988.
(2) In these Regulations, except where the context otherwise requires—
“the Act” means the [F1Pension Schemes Act 1993];
“normal pension age” and “public service pension scheme” shall be construed in accordance with [F2section 181(1) of the Act];
“pensionable service” and “relevant employment” shall be construed in accordance with [F3section 70 of the Act];
“scheme” means a personal or occupational pension scheme;
“secondary Class 1 contribution” shall be construed in accordance with section 4 of the Social Security Act 1975 M2;
and other expressions have the same meaning as in the Act.
(3) In these Regulations, except where the context otherwise requires, any reference to a numbered section is to the section of the Act bearing that number.
Textual Amendments
F1Words in reg. 1(2) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(2)(a)
F2Words in reg. 1(2) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(2)(b)
F3Words in reg. 1(2) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(2)(c)
Marginal Citations
2.—(1) [F4Section 111(1)] (voluntary contributions requirements) shall not apply to the rules of any public service pension scheme unless it is an exempt approved scheme for the purposes of section 21 of the Finance Act 1970 M3.
(2) [F4Section 111(1)] shall not apply to the rules of any personal pension scheme in so far as it is comprised in an annuity contract made before [F51st July 1988].
(3) Section [F6111(1)(a) and (b)] shall not apply to the rules of any scheme in so far as they relate to the payment by a member of any sum as voluntary contributions where that payment would not qualify for relief from tax in accordance with section 21(4) or 22(2) of the Finance Act 1970 M4.
(4) Section [F6111(1)(a) and (b)] shall not apply to the rules of any scheme in so far as they provide that a member of the scheme must give the trustees or managers of the scheme notice, of a period not exceeding 12 months, of his intention to pay voluntary contributions at a specified rate or to vary that rate.
(5) Section [F6111(1)(a) and (b)] shall not apply to the rules of any personal pension scheme in so far as they relate to a member whose rights under the scheme derive only from one or more transfer payments.
(6) Section [F6111(1)(a) and (b)] shall not apply to the rules of any occupational pension scheme (“the first scheme”) in so far as they relate to a member—
(a)in respect of whose current pensionable service the scheme will provide benefit only on his death; or
(b)whose pensionable service either has not begun or has terminated; or
(c)who is either within one year of reaching, or has reached, normal pension age; or
(d)who is, or is eligible to become, a member of at least one other occupational pension scheme which applies to the same employment as the first scheme and which—
(i)if he is a member of it, complies in relation to him, or, if he is not a member of it, would comply in relation to him if he were, with the voluntary contributions requirements, and
(ii)is not a scheme which, if he is a member of it, falls in relation to him, or, if he is not a member of it, would fall in relation to him if he were, to be regarded as a scheme excepted from the application of section [F6111(1)(a) and (b)] by virtue of paragraph (1), (2), (5) or (6)(a), (b) or (c) of this regulation.
[F7(6A) Section [F6111(1)(a) and (b)] shall not apply to the rules of any scheme which provides that the only contributions payable in respect of a member shall be the minimum contributions payable by the Secretary of State in respect of that member under [F8section 43] of the Act if—
(a)the scheme is an appropriate schemeF9...; and
(b)the member to whom the limitation applies is concurrently a member of an occupational pension scheme; and
(c)the scheme is currently the member’s chosen scheme under [F10section 44] of the Act; and
(d)the member has entered into a written agreement with the trustees or managers of the scheme that this regulation shall apply in his case.]
(7) [F11Section 111(1)(b)] shall not apply to the rules of any scheme in so far as they impose, or allow any person to impose, a lower limit on the payment by a member of voluntary contributions in respect of any tax year if that lower limit is not higher than the amount specified in paragraph (8) of this regulation.
(8) The amount last mentioned in paragraph (7) of this regulation is 0.5 per cent. of the member's earnings in that tax year, or, if it is greater, 3 times the lower earnings limit (within the meaning of section 1 of the Social Security Pensions Act 1975 M5 for that tax year.
(9) In paragraph (8) of this regulation, “member's earnings” means—
(a)in the case of a member of a personal pension scheme, his earnings attributable to his employment as an employed earner; or
(b)in the case of a member of an occupational pension scheme, his earnings attributable to his relevant employment,
in respect of which secondary Class 1 contributions are payable.
(10) [F11Section 111(1)(b)] shall not apply to the rules of any scheme in so far as they impose, or allow any person to impose, an upper limit on the payment by a member of voluntary contributions which is equivalent to the maximum amount which, ignoring any remuneration in kind, could be paid in any period without prejudicing the qualification of the scheme for tax-exemption or tax-approval.
(11) [F12Section 111(1)(c) and (d)] shall not apply to the rules of any scheme in relation to a member's voluntary contributions to the extent that those contributions are paid under an agreement—
(a)which was made before the date on which [F12section 12 of the Social Security Act 1986 (from which section 111 of the Act is derived)] came into force; and
(b)which has not, since that date, been varied.
(12) [F13Section 111(1)(d)(ii)] shall not apply to the rules of any scheme to the extent that the additional benefits provided in accordance with them are money purchase benefits.
Textual Amendments
F4Words in reg. 2(1)(2) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(3)(a)
F5Words in reg. 2(2) substituted (15.12.1987) by S.I. 1987/1933, reg. 1, 3
F6Words in reg. 2(3)(4)(5)(6)(6A) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(3)(b)
F7Reg. 2(6A) inserted (1.7.1988) by S.I. 1988/830 reg. 1(2)(b), 2
F8Words in reg. 2(6A) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(3)(c)(i)
F9Words in reg. 2(6A)(a) omitted (12.5.1994) by virtue of The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(3)(c)(ii)
F10Words in reg. 2(6A)(c) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(3)(c)(iii)
F11Words in reg. 2(7)(10) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(3)(d)
F12Words in reg. 2(11) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(3)(e)
F13Words in reg. 2(12) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(3)(f)
Marginal Citations
M31970 c. 24; section 21(6) was repealed by the Finance Act 1971 (c. 68), sections 56(3) and 69(7) and Schedule 14, Part IV; section 21(10) and (11) was repealed by the Finance Act 1971, section 69(7) and Schedule 14, Part I.
M4Section 22(2) was amended by the Finance Act 1972 (c. 41), section 74(3).
M5Section 1(2) was amended by section 74(6) of the Social Security Act 1986.
2A. For the purposes of [F15section 111] of the Act (which exempts scheme rules from the need to comply with that section to the extent necessary to qualify for tax-exemption or tax-approval) “tax-exemption” and “tax-approval” mean respectively exemption from tax and approval of the Inland Revenue under either Chapter I or Chapter IV of Part XIV of the Income and Corporation Taxes Act 1988. ]
Textual Amendments
F14Reg. 2A inserted (6.4.1988) by S.I. 1988/474, reg. 1(2)(b), 5
F15Words in reg. 2A substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(4)
3. [F16Section 160(1)(a)] (terms of contracts of service or schemes restricting choice to be void) shall not apply to any term of a contract of service or any rule of an occupational pension scheme to the effect that an employed earner must be a member of a particular occupational pension scheme or one or other of a number of particular occupational pension schemes, during any period when that scheme is, or those schemes are, so framed that in relation to that period—
(a)the earner in question is not required to pay contributions to the scheme, and
(b)the scheme will provide benefit in respect of that earner only on his death.
Textual Amendments
F16Words in reg. 3 substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 14(5)
Signed by authority of the Secretary of State for Social Services.
Nicholas Scott
Minister of State,
Department of Health and Social Security
(This note is not part of the Regulations)
These Regulations are made under either section 12(1) or section 15(1) of the Social Security Act 1986 (“the 1986 Act”) before the expiry of the period of 12 months beginning with the bringing into force (on 4th January 1988 for the purposes of personal pension schemes and on 6th April 1988 for the purposes of occupational pension schemes) of those sections.
Consequently, by virtue of section 61(5) of the 1986 Act, the provisions of section 61(2) and (3) of the Social Security Pensions Act 1975 (which, as amended by section 86(1) of, and paragraph 94 of Schedule 10 to, the 1986 Act, require reference to the Occupational Pensions Board of, and a report by the Board on, proposals to make regulations for the purposes of Part I of the 1986 Act), do not apply to them.
Regulation 2 provides that section 12(1) of the 1986 Act (voluntary contributions requirements) shall not apply, to the extent specified, to the rules of occupational and personal pension schemes. In particular, regulation 2(1) provides that none of the voluntary contributions requirements shall apply to the rules of any public service pension scheme other than any such scheme which is an exempt approved scheme for the purposes of section 21 of the Finance Act 1970; regulation 2(2) provides that none of the voluntary contributions requirements shall apply to the rules of any personal pension scheme to the extent that it is comprised in an annuity contract made before 4th January 1988; regulation 2(5) provides that a personal pension scheme is not required to accept voluntary contributions from a member whose rights under the scheme derive only from transfer payments; regulation 2(6) provides that an occupational pension scheme need not accept voluntary contributions from a member—
in respect of whom the scheme will pay only death benefits;
who is not in pensionable service;
who is within a year of normal pension age or older; and
who is, or is eligible to become, a member of another occupational pension scheme which meets the voluntary contributions requirements;
and regulation 2(7) provides that a scheme may impose a lower limit, not greater than that specified in regulation 2(8), on the voluntary contributions it will accept from a member in a tax year.
Regulation 3 provides that section 15(1)(a) of the 1986 Act (subject to prescribed exceptions, any term of a contract of service or any rule of an occupational pension scheme to the effect that an employed earner must be a member of a particular scheme or one of a number of particular schemes shall be void) does not apply during any period when that scheme is, or those schemes are, so framed that, in relation to that period—
the earner in question is not required to pay contributions to the scheme, and
the scheme will provide benefit in respect of that earner only on his death.
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: