The Railways Pension Scheme Order 1994

Buy–Outs

8D  Except in the case of a Section which has adopted the rules of the Defined Contribution Arrangement, instead of providing benefits under the Scheme in respect of a beneficiary, the Trustee may buy a Buy–out Policy in the name of the beneficiary from the UK office or branch of an Insurance Company.

A Buy–out Policy must satisfy the Transfer Value Laws and the requirements of the Inland Revenue. In particular, the policy must provide that the annuities payable to or for the benefit of the Member and the Member’s spouse shall be at least equal to their GMP under the Scheme, including revaluation in accordance with the Contracting–out Laws.

Where the Preservation and Contracting–out Laws so require, the Trustee shall obtain the consent of the Member or other beneficiary before buying the policy.

The Trustee must be reasonably satisfied that the amount paid to the Insurance Company is at least equal in value to the benefits that would otherwise have been provided in respect of the beneficiary under the Scheme.