Part II
2. The assets shall be allocated to sections by the trustee of the transferee scheme in accordance with the provisions of this Schedule.
3.—(1) Those assets which represent the accumulated value of—
(a)any additional voluntary contributions made by a person who, immediately before 1st October 1994, is a participant or deferred pensioner in relation to the transferor scheme; and
(b)any contributions made (or deemed to have been made) by the employer of such a person under rule 12A of the transferor scheme in respect of such contributions;
shall be allocated to the section to which the pension rights in respect of which the contributions were made are allocated by Schedule 2 to this Order.
(2) Assets having a value equal to the amount of any contributions, other than those referred to in sub-paragraph (1) of this paragraph, made by an employer in respect of any period between 1st April 1993 and 30th June 1994 shall be allocated to the Open Section.
4.—(1) The value of the assets allocated to a section shall be such proportion of the total value of the assets other than assets allocated under paragraph 3 of this Schedule, less the net cost to the trustee of the transferee scheme of carrying out the apportionment of the assets, which the allocation amount for that section bears to the total of all the allocation amounts.
(2) The allocation amount for a section shall be determined by carrying out the calculations required by sub-paragraph (3) or (4) of this paragraph, as the case may require, in relation to the amounts applied to that section under paragraphs 5, 6 and 7 of this Schedule.
(3) For the 1994 Pensioners “A” Section or 1994 Pensioners “B” Section, there shall be added together the amounts resulting from the following calculations:—
(a)48% × A × 3.5% ÷ (0.7 × GDY + 0.06 × NDY + 0.12 × EDY + 0.12 × PDY)
(b)5% × A × 4.1% ÷ GDY
(c)17% × A × X ÷ Y
(d)30% × A × Z ÷ W.
(4) For the Open Section, there shall be added together the amounts resulting from the following calculations:—
(a)80% × A × 3.5% ÷ (0.7 × GDY + 0.06 × NDY + 0.12 × EDY + 0.12 × PDY)
(b)8% × A × 4.1% ÷ GDY
(c)6% × A × X ÷ Y
(d)6% × A × Z ÷ W.
(5) For the purposes of this paragraph—
| A | = the total of the amounts applied to the relevant section under paragraphs 5, 6 and 7 of this Schedule; |
| EDY | = gross dividend yield at the close of business on 30th September 1994 shown in the FT-Actuaries World Index for Europe (ex-UK); |
| GDY | = gross dividend yield at the close of business on 30th September 1994 shown in the FT-Actuaries All-Share Index; |
| NDY | = gross dividend yield at the close of business on 30th September 1994 shown in the FT-Actuaries World Index for North America; |
| PDY | gross dividend yield at the close of business on 30th September 1994 shown in the FT-Actuaries World Index for the Pacific Basin; |
| X | = the price of £100 nominal of a notional British Government index-linked stock bearing an index-linked coupon of 2 ½% a year for 15 years, with an index-linked yield equal to the true annual yield on the British Government index-linked stock 2 ½% Treasury 2009 determined from the yield for that stock at close of business on 30th September 1994 published in the Financial Times, at the 5% inflation assumption; |
| Y | = 85.04; |
| Z | = the price of £100 nominal of a notional British Government Stock bearing a fixed coupon of 10% a year for a period of 5 years, with a yield equal to the yield at close of business on 30th September 1994 shown on the FT-Actuaries Fixed Interest Index for medium coupon stocks of 5 years' duration; |
| W | = 105.91. |
(6) In the event that any index or other publication referred to in this paragraph is not published showing a yield referred to in the relevant provision before 31st October 1994, the relevant provision shall be taken to refer to such amount in respect of yield as the actuary considers appropriate in all the circumstances of the case.
5. There shall be applied to the Open Section an amount equal to the total of—
(a)the value of contributions payable by any member of the transferor scheme of 4.52% of scheme pay (or, if greater, 2.26% of pensionable pay) from 1st October 1994 until 30th September 2003;
(b)the value of contributions payable by any employer of a member of the transferor scheme of 14.28% of scheme pay (or, if greater, 7.14% of pensionable pay) from 1st October 1994 until 31st March 1996 and of 6.78% of scheme pay (or, if greater, 3.39% of pensionable pay) from 1st April 1996 until 30th September 2003; and
(c)the value of contributions payable (or which would be deemed to be paid) by any employer of a member of the transferor scheme under rule 12A of that scheme in respect of additional voluntary contributions payable by such member throughout the period of his participation at the same level, expressed as a percentage of pensionable pay, as that at which such additional voluntary contributions are paid immediately before 1st October 1994.
6. There shall be applied to the 1994 Pensioners “A” Section and the 1994 Pensioners “B” Section an amount equal in value to the administrative and general expenses (other than those in respect of investment management) that may be expected to be incurred in relation to and met by the relevant section over its natural life.
7.—(1) There shall be applied to each section the amount calculated under sub-paragraph (2) of this paragraph in respect of that section.
(2) The amount referred to in sub-paragraph (1) of this paragraph shall be the value of the liabilities under the transferor scheme in respect of those pension rights transferred by article 2 of this Order and allocated to that section.
Provided that for all purposes of this paragraph
(a)the unfunded proportion of any pension rights, and
(b)any pension rights not in payment acquired by virtue of any additional voluntary contributions,
shall be ignored.
8.—(1) The assets allocated to the 1994 Pensioners “A” Section shall include—
(a)index-linked gilts whose value is no less than 12% of the allocation amount in respect of that section;
(b)bonds whose value is no less than 20% of the allocation amount in respect of that section.
(2) In this paragraph—
“bonds” means any investment, within the meaning of the Financial Services Act 1986, falling within paragraph 2 or 3 of Schedule 1 to that Act other than an index-linked gilt; and
“index-linked gilts” means loan stock, bonds and other instruments creating or acknowledging indebtedness issued by Her Majesty’s Government in the United Kingdom, the Government of Northern Ireland or the Government of the Isle of Man which under their terms of issue bear a rate of interest calculated by reference to fluctuations in an index.
9.—(1) Pending final allocation of the assets in accordance with this Schedule, the trustee of the transferee scheme shall allocate the assets to sections in such manner as they think fit.
(2) The assets to be allocated to a section under the provisions of this Schedule shall be adjusted to include income received on the assets to be allocated to that section, and to deduct payments made in respect of liabilities in respect of
(a)those assets; or
(b)liabilities in respect of the pension rights allocated to that section
within the period from 1st October 1994 until the date of final allocation.