6.—(1) For the purposes of [F1section 73(1) of the Act], short service benefit that is not payable directly out of the resources of the scheme may be assured to the member by means of a transaction to which [F2section 19 of the Act] (extinguishment of liability of scheme for pensions secured by insurance policies or annuity contracts) applies, and which satisfies the requirements of paragraph (2) of this regulation F3....
(2) A transaction satisfies the requirements of this paragraph if—
(a)it results in the member’s short service benefit being secured by one or more policies of insurance or annuity contracts that are appropriate for the purposes of [F2section 19 of the Act]; and
(b)the member will be able to assign or surrender the insurance policies or annuity contracts on the conditions set out in [F4regulation 3 of the Occupational Pension Schemes (Discharge of Liability) Regulations 1997] (conditions on which policies of insurance and annuity contracts may be assigned or surrendered).
(3) For the purposes of paragraph (2) of this regulation, a policy of insurance or annuity contract which is taken out or entered into with an authorised friendly society, but which otherwise satisfies the conditions for being “appropriate” for the purposes of [F2section 19 of the Act], is to be treated as if it were appropriate for the purposes of that section [F5provided the terms of such policy or contract are not capable of being amended, revoked or rescinded].
(4) In this regulation—
[F6“friendly society” has the same meaning as in the Friendly Societies Act 1992 (including any society which by virtue of section 96(2) of that Act is to be treated as a registered friendly society within the meaning of that Act);
“authorised friendly society” means a friendly society which is authorised under section 32 of the Friendly Societies Act 1992 to carry on long term business under any of the Classes specified in Head A of Schedule 2 to that Act.]
Textual Amendments
F1Words in reg. 6(1) 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. 30(6)(a)
F2Words in reg. 6(1)(2)(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. 30(7)
F3Words in reg. 6(1) omitted (1.2.96) by virtue of S.I. 1995/3067, reg. 2(2)
F4Words in reg. 6(2)(b) substituted (6.4.97) by S.I. 1997/786, sch. 1, para. 3(2)
F5Words in reg. 6(3) inserted (7.2.95) by S.I. 1995/35, reg. 8(a)
F6Words in reg. 6(4) substituted (7.2.95) by S.I. 1995/35, reg. 8(b)