The Local Government Superannuation (Scotland) Amendment Regulations 1989

Regulation 43

SCHEDULE 1 SCHEDULE TO BE INSERTED AFTER SCHEDULE 7 TO THE PRINCIPAL REGULATIONS

Regulation C9A

“SCHEDULE 7A ADDITIONAL VOLUNTARY CONTRIBUTIONS

1.— (1) An election to pay contributions under regulation C9A shall be made by notice given in writing to the pensionable employee’s employing authority, and shall specify—

(a) the amount of the additional contributions which are to be paid, expressed either as a percentage of his remuneration in his local government employment or as a sum payable at the times mentioned in sub-paragraph (2); and

(b) the proportion (if any) of the contributions which he wishes to be used to provide benefits payable in the event of death.

(2) The additional contributions shall be payable on the pensionable employee’s usual pay day, and for that purpose shall be deductible by the employing authority, or be otherwise recoverable by the appropriate administering authority, under regulation C11.

2.   With respect to any election under paragraph 1—

(a) the appropriate administering authority may require, before any contributions are first made pursuant to the notice given under paragraph 1(1), that (until discontinued) the amount of the additional contributions payable in any tax year shall be not less than the amount specifie d in regulation 2(8) of the Pension Schemes (Voluntary Contributions Requirements and Voluntary and Compulsory Membership) Regulations 1987(1);

(b) the amount of additional contributions payable in any tax year shall, when aggregated with the amount of any other contributions payable under these Regulations or under a free-standing additional voluntary contribution scheme, not exceed the amount allowed to be deducted under section 592(7) of the Income and Corporation Taxes Act 1988 as specified in or under subsection (8) of that section;

(c) subject to paragraphs (a) and (b), the pensionable employee may at any time elect by notice given in writing to his employing authority to vary his additional contributions (both as to the amount and as to the proportion of those he is to continue to pay which are to be used to provide benefits payable on death) or to discontinue those contributions; and

(d) no additional contributions shall be payable with respect to periods during which the person contributing is not a pensionable employee under these Regulations, or (subject to paragraph 6) with respect to any period after he ceases to be employed by the employing authority to which notice was given under paragraph 1(1).

3.— (1) Where a notice under paragraph 1(1) or 2(c) specifies that all or part of the additional contributions are to be used to provide benefits payable in the event of death, the appropriate administering authority shall make arrangements for the provision of those benefits under a pension policy with respect to which the authority are to make payments to the insurance company with which the policy is entered into of the same amounts as the contributions to be so used within one month of the day on which they are payable by the pensionable employee under paragraph 1(2).

(2) The policy shall be subject to the conditions mentioned in paragraph 2, and make provision for the arrangements mentioned in paragraph 6 in the event of a change of employment by the pensionable employee.

4.— (1) The administering authority shall invest any additional contributions which are not to be used to provide benefits payable in the event of death with a relevant body.

(2) Subject to sub-paragraph (3) and paragraphs 6, 7 and 8, upon the pensionable employee ceasing to be employed by the employing authority to which notice was given under paragraph 1(1) or ceasing to be a pensionable employee by virtue of a notification under regulation B4A, the appropriate administering authority shall, as soon as reasonably practicable after his benefits under Part E become, or would become, payable, apply the accumulated value of the additional contributions invested, as mentioned in sub-paragraph (1), to the provision of additional pension benefits under a pension policy.

(3) If the pensionable employee dies before such a policy is entered into, the accumulated value shall be payable to his executors.

(4) The additional contributions invested in accordance with sub-paragraph (1) shall not be used to provide benefits in lump sum form except where the aggregate of the pension benefits provided under Part E and the additional pension benefits provided by the pension policy mentioned in sub-paragraph (2) do not exceed the annual rate or amount referred to in regulation E21 and the pension benefits provided under Part E are being compounded in accordance with that regulation.

5.— (1) As soon as an employing authority receives a notice under paragraph 1(1) or 2(c) they shall forward it to the appropriate administering authority.

(2) The appropriate administering authority shall give effect to a notice under paragraph 1(1) or 2(c) as soon as reasonably practicable, and in any event—

(a) in the case of a notice under paragraph 1(1), so that the pensionable employee may begin to pay his additional contributions under paragraph 1(2) within 6 months of his giving that notice; and

(b) in the case of a notice under paragraph 2(c), so that the pensionable employee may pay his contributions at the varied amount or proportions, or cease to pay his contributions (as the case may be), within 3 months of his giving that notice.

(3) The benefits under a pension policy entered into under paragraph 3(1) or 4(2) shall be money purchase benefits the value of which is reasonable having regard to the amount of the contributions paid.

(4) Before entering into such a policy, the administering authority shall consult the pensionable employee and shall give effect, so far as is practicable and subject to sub-paragraph (3), to his wishes with respect to the benefits to be provided under it.

6.— (1) If, after ceasing to be employed by the employing authority to which notice was given under paragraph 1(1)—

(a) the pensionable employee within one month and one day of the cessation enters a new employment in which he is also a pensionable employee;

(b) his appropriate administering authority in both the former and new employments are the same; and

(c) he was making payments of additional contributions up to the date of cessation,

he may elect by notice given in writing to his new employing authority before or within one month of beginning the new employment that his election to pay contributions under regulation C9A shall continue to have effect.

(2) In the event of an election under sub-paragraph (1)—

(a) as soon as the new employing authority receive the notice of election they shall forward it to the appropriate administering authority;

(b) no payment of additional contributions shall be made with respect to the period (if any) between the two employments, but subject to that the pensionable employee shall, with effect from the pay day next after the day notice was given under sub-paragraph (1), make payments of additional contributions in his new employment under his notice under paragraph 1(1) as from time to time varied under paragraph 2(c);

(c) the appropriate administering authority shall continue to invest all additional contributions paid by the pensionable employee not specified to be used to provide benefits payable in the event of death in the manner mentioned in paragraph 4(1) and apply any continuing additional contributions which are so specified towards the pension policy mentioned in paragraph 3(1);

(d) paragraphs 4(2), 6 and 7 shall have effect in relation to a cessation of the new employment as if the new employment were the one in relation to which notice was given under paragraph 1(1).

7.   Where a pensionable employee has ceased—

(a) to be employed by the employing authority to which notice was given under paragraph 1(1); or

(b) to be a pensionable employee without ceasing to be employed by the employing authority to which notice was given under paragraph 1(1);

he may elect to have the accumulated value of the invested additional contributions, mentioned in paragraph 4(1), used in one or more of the following ways:—

(i) to subscribe to a superannuation scheme;

(ii) to subscribe to a personal pension scheme;

(iii) to subscribe to a self-employed pension arrangement;

(iv) to purchase an appropriate policy from one or more insurance companies; or

(v) to subscribe to a scheme approved by the Board of Inland Revenue under section 591 of the Income and Corporation Taxes Act 1988(2), to which an employer is not a contributor and which provides benefits additional to those provided by a superannuation scheme.

8.   Where a pensionable employee has ceased—

(a) to be employed by an employing authority; or

(b) to be a pensionable employee without ceasing to be employed by an employing authority;

and has as a consequence become entitled to receive a refund of contributions under regulation C12 he may receive immediate payment of the accumulated value of the invested additional contributions, mentioned in paragraph 4(1).

9.   Paragraph 2(d) shall not preclude a pensionable employee who has again become employed by a scheduled body (and has not elected under paragraph 6(1)), or a person who has made an election under regulation B4B(1), from making a new election by notice under paragraph 1(1).

10.— (1) Regulations C12 to C15 (return of contributions), P5 (management of superannuation funds) and P15(3) do not apply to contributions (or interest on late payments which relate to contributions) payable under regulation C9A.

(2) The making of contributions under regulation C9A, and any rights or liabilities arising under a pension policy entered into under paragraphs 3(1) or 4(2), shall be left out of account in calculating the amount of a transfer value payable under Parts J or Q; and Parts M (forfeiture etc) and N (decisions and appeals) do not apply in relation to benefits under such a policy.

11.   In this Schedule—

• “insurance company” means—

  (a)

  a person authorised under section 3 or 4 of the Insurance Companies Act 1982(3) to carry on long term business and acting through a branch or agency in the United Kingdom, or

  (b)

  a society registered as a friendly society under the Friendly Societies Act 1974(4) or the Friendly Societies Act (Northern Ireland) 1970(5);

• “money purchase benefits” has the same meaning as in the Social Security Act 1986(6);

• “pension policy” means a contract entered into on behalf of the pensionable employee by the appropriate administering authority with an insurance company for the payment by the company of pension benefits to the intended recipients of those benefits which are in addition to those payable under Part E;

• “relevant body” means—

  (a)

  a person for the time being operating a scheme which is an approved scheme for the purposes of Chapter I of Part XIV of the Income and Corporation Taxes Act 1988, and which provides benefits in relation to people who have paid contributions to it which are in addition to those provided in relation to those people under an occupational pension scheme; or

  (b)

  a building society within the meaning of the Building Societies Act 1986(7); and

• “remuneration” has the same meaning as in Chapter I of Part XIV of the Income and Corporation Taxes Act 1988.”.

(1)

S.I. 1987/1108

(2)

1988 c. 1

(3)

1982 c. 50

(4)

1974 c. 46

(5)

1970 c. 31 (N.I.).

(6)

1986 c. 50

(7)

1986 c. 53