Guaranteed minimum pension to which earner is treated as entitled after minimum payments have been made
4.—(1) Where, in relation to any tax week, except a tax week such as is mentioned in paragraph (3), minimum payments have been made in respect of an earner to an occupational pension scheme which in relation to the earner’s employment (“the actual employment”) is a money purchase contracted-out scheme, then, for the purposes of sections 16(2B), 28(7A) and 59(1A) of the Social Security Act 1975 and section 29 of the Pensions Act, the earner shall be treated, as from the date on which he reaches pensionable age, as if he were entitled to a guaranteed minimum pension, arising from that tax week —
(a)at the rate described in paragraph (2) if that tax week fell within a tax year which was a relevant year in relation to that earner; and
(b)at a nil rate if it did not.
(2) The rate referred to in paragraph (1)(a) is the same rate as that of the guaranteed minimum pension to which he would have been entitled if —
(a)he had been employed in that tax week in employment (“the notional employment”) which was contracted-out employment by virtue of section 32(2)(a) and (b) of the Pensions Act;
(b)his earnings in that tax week from the notional employment had been what his earnings in that tax week from the actual employment in fact were; and
(c)the occupational pension scheme by reference to which the notional employment was contracted-out had made no provision under section 35(7) of the Pensions Act.
(3) In circumstances where, in relation to any tax week —
(a)minimum payments have been paid in respect of an earner; and
(b)in respect of the protected rights which derived from them a transfer payment has been made in accordance with regulations 2(5) or (6) and 3(b) of the Transfer Payment Regulations,
sections 16(2B), 28(7A) and 59(1A) of the Social Security Act 1975 and section 29 of the Pensions Act shall have effect in relation to him, as from the date on which he reaches pensionable age, as if he were entitled to a guaranteed minimum pension arising from that tax week at a nil rate.