Citation and commencement1
1
These Regulations may be cited as the Occupational Pension Schemes (Revaluation) Regulations 1991.
2
These Regulations come into force on 28th February 1991.
Interpretation2
Benefits payable later than normal pension age3
1
This regulation applies where the member’s normal pension age is earlier than 60.
2
The references to “normal pension age” in F3section 83(1)(a)(iii) of and paragraph 2(7) of Schedule 3 to the Act are to be treated as references to the age at which short service benefit is made payable to the member under the rules of the scheme. F3Section 83(1)(a)(iii) of and paragraph 2(7) of Schedule 3 to the Act are modified accordingly.
Hybrid benefits4
1
This regulation applies to hybrid benefits.
F202
In this regulation, “hybrid benefit” means a benefit the rate or amount of which is calculated by reference to the greatest, or smallest, of two or more benefits.
3
F4Chapter II of Part IV of the Act is modified so as to require that—
a
before deciding which benefit is the greatest or smallest, each benefit must be revalued in accordance with F4whichever method applies to it in accordance with section 84 of the Act, and
b
the rate or amount of the hybrid benefit must be calculated by reference to the greatest, or smallest, of those benefits as revalued.
Benefits consisting of two or more components5
1
This regulation applies to any benefit consisting partly of a component to which F5the final salary method, within the meaning of paragraph 1 of Schedule 3 to the Act, applies and partly of a component to which that method does not apply.
2
F6Paragraph 1 of Schedule 3 to the Act is modified so that, for the purpose of revaluing the component to which F6the final salary method applies, the pensionable service and the amount of pension or other benefit referred to in sub-paragraph (1) of that paragraph are to be calculated by reference only to the component to which F6that method applies and the pensionable service which qualified the member for that component.
Administrative expenses in relation to money purchase benefits6
1
This regulation applies in relation to money purchase benefits that are revalued in accordance with F7paragraph 5 of Schedule 3 to the Act.
2
The trustees or managers of the scheme may deduct from any pension or other retirement benefit that is revalued in accordance with F7paragraph 5 of Schedule 3 to the Act an amount in respect of the administrative expenses incurred by them in carrying that paragraph into effect. The amount deducted must not exceed an amount equal to the smaller of—
a
the administrative expenses incurred, and
b
the administrative expenses that would have been incurred in providing the corresponding benefit if the member’s pensionable service had not terminated before normal pension age.
Benefits other than short service benefit7
1
This regulation applies where a scheme provides so that a member becomes entitled to benefit when his pensionable service terminates before normal pension age, even if the member does not become entitled to short service benefit.
2
For the purposes of F8section 129 of the Act as it applies as respects Chapter II of Part IV of the Act, any provision contained in the scheme that would be a protected provision in relation to short service benefit is to be treated as a protected provision in relation to any benefit to which a member becomes entitled as described in paragraph (1) above. F8Section 129 is modified accordingly.
Commutation, forfeiture and surrender8
1
F9Section 86(1) of the Act is modified so that it does not apply in the cases specified in this regulation.
2
3
4
F9Section 86(1) of the Act does not apply to surrender of the whole or part of a pension where it is to provide benefit for the F18widow, widower or surviving civil partner or a dependant of the member and the scheme provides for that benefit to be revalued in accordance with F9Chapter II of Part IV of the Act.
Retirement benefits varied at pensionable age9
1
This regulation applies where—
a
a scheme provides that the pension or other retirement benefit payable under the scheme to a member at normal pension age is to be varied at pensionable age, and
b
that benefit is subject to revaluation by F10the final salary method, within the meaning of paragraph 1 of Schedule 3 to the Act.
Rounding10
1
This regulation applies where F12the final salary method, within the meaning of paragraph 1 of Schedule 3 to the Act applies to a benefit under the scheme and the scheme provides that, in calculating the amount of that benefit, a member’s pensionable service is to be calculated in whole months.
F132
Paragraph 1 of Schedule 3 to the Act is modified so that the scheme may provide for the pensionable service referred to in sub-paragraph (1) of that paragraph to be calculated to the nearest, next highest or next lowest whole month. Where a scheme provides for rounding as described in this paragraph it must provide for all pensionable service there referred to to be rounded in the same way.
Schemes with an overseas element11
1
This regulation applies to schemes with any overseas element, as described in F14section 165(6) of the Act (requirements as to preservation of benefit under occupational pension schemes).
Breaks in pensionable service12
1
This regulation applies in the case of a member whose pensionable service is broken. For this purpose, a member’s pensionable service is broken if, after it terminates, the member returns to pensionable service under the same scheme.
2
F16Chapter II of Part IV of the Act is modified so that it does not apply if, when the member returns to pensionable service under the scheme—
a
the member exercises an option to surrender the benefits that had accrued before the break to acquire entitlement to further benefits under the same scheme, or
b
the scheme provides that the member’s pensionable service before and after the break is to be treated as continuous for the purpose of qualifying the member for long service benefit under the scheme.
Lump sum in respect of service before 6th April 197513
1
This regulation applies where a lump sum (whether or not being or including a payment by way of a refund of contributions) has been paid to a member in respect of any period of pensionable service before 6th April 1975.
2
F17Paragraph 1 of Schedule 3 to the Act is modified so that—
a
the period of pensionable service in respect of which the lump sum is paid is excluded from F17the total pensionable service referred to in sub-paragraph (1)(b) of that paragraph, and
b
F17the amount of the pension or other benefit which has accrued on the termination date as referred to in sub-paragraph (1) of that paragraph is reduced by an amount equal to the part of the pension or other benefit that would have been payable in respect of that period if the lump sum had not been paid.
F19Purpose for which trustees may modify the scheme13A
1
This regulation prescribes a purpose for which the trustees of a trust scheme may by resolution modify the scheme under section 68 of the Pensions Act 1995 (power of trustees to modify schemes by resolution).
2
The purpose is to—
a
reduce the rate or amount by which the scheme revalues any benefits that accrue after the date of the resolution; or
b
change the method for determining that rate or amount in order to make such a reduction.
3
No modification may be made for the purpose in paragraph (2) without the consent of—
a
where there is one employer in relation to the scheme, that employer; or
b
where there is more than one employer in relation to the scheme—
i
all those employers; or
ii
a person nominated by all those employers, or in accordance with the scheme rules, to act as their representative.
Revocations14
The Regulations specified in Column 1 of the Schedule to these Regulations are revoked to the extent specified in Column 2.
Signed by authority of the Secretary of State for Social Security.