The Personal and Occupational Pension Schemes (Protected Rights) Regulations 1987

Explanatory Note

(This note is not part of the Regulations)

These Regulations are made under provisions contained in Part I of the Social Security Act 1986, before the end of a period of 12 months from the commencement of those provisions. Consequently, by virtue of section 61(5) of that Act, the provisions of section 61(2) and (3) of the Social Security Pensions Act 1975 (as amended by section 86(1) of, and paragraph 94 of Schedule 10 to, the Social Security Act 1986), which 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 Social Security Act 1986, do not apply to them.

Schedule 1 to the Social Security Act 1986 is concerned with protected rights under an appropriate personal pension scheme, or, where that Schedule is modified by section 32(2B) of the Social Security Pensions Act 1975 (inserted by Schedule 2 to the Social Security Act 1986), protected rights under a money purchase contracted-out occupational pension scheme.

The Regulations prescribe the manner of calculation and verification of protected rights mentioned in paragraph 7(2) of Schedule 1 to the Social Security Act 1986 (regulation 2); the rights which a scheme may designate as protected rights, in addition to those so designated by the Act (regulation 3); the conditions which are to apply to pensions and annuities which give effect to protected rights (regulation 4); the circumstances in which and periods for which a pension or annuity is to be paid to a widow or widower after a scheme member’s death (regulation 5); the circumstances in which a lump sum benefit may be provided by a money purchase contracted-out scheme (regulation 6); the circumstances in which protected rights may be surrendered or forfeited (regulation 7); the manner in which and the period within which an insurance company may be chosen by an annuitant (regulation 8); the conditions that an insurance company must satisfy if it is to provide an annuity which is to give effect to protected rights (regulation 9); and the provision that is to be made if a scheme member dies before effect is given to his protected rights (regulation 10). Regulation 11 requires that a scheme’s provision for giving effect to the protected rights of a member who has died must be such that the person entitled to any payment giving effect to those rights must be able to enforce that entitlement; and regulation 12 that it should not, in offering pensions which are to give effect to protected rights, discriminate on grounds of sex or marital status.

Regulation 13 provides that, when effect has been given to protected rights under a personal pension scheme, certain information must be given to the Secretary of State, and regulation 14 makes corresponding provision for occupational pension schemes.

The publication“Retirement Benefit Schemes—Transfer Values (GN11)”, referred to in regulation 2(2)(b)(ii), may be obtained from the Institute of Actuaries, Staple Inn Hall, High Holborn, London W.C. 1V 7QJ, and from the Faculty of Actuaries, 23 St. Andrew Square, Edinburgh EH2 1AQ.