The European Parliamentary (United Kingdom Representatives) Pensions (Additional Voluntary Contributions Scheme) (No. 2) Order 1995

Explanatory Note

(This note is not part of the Order)

This Order makes provision for participants in the pension scheme for United Kingdom Representatives to the European Parliament (constituted by the provisions of Orders made under section 4 of the European Parliament (Pay and Pensions Act 1979) to pay additional voluntary contributions in order to secure additional benefits within limits determined by the Board of Inland Revenue. Article 3 provides for the Secretary of State to appoint financial institutions to accept contributions and to provide pension benefits and for the scheme to be administered by the Managers of the principal scheme.

Article 5 deals with the payment of regular and lump sum contributions and imposes a limit on their total amount. A transfer value to the AVC scheme may be accepted by the Managers only if it represents the realisable value of the contributor’s own voluntary contributions. Article 6 provides for the Managers to invest contributions in accordance with any instructions given by the contributor, which may include instructions to pay all or part of the contributions to secure a lump sum death benefit in the event of death while paying such contributions.

Article 7 sets out what benefits are available and when. On retirement, article 9 provides that investments (except those made with death benefit contributions) are to be realised and retirement or dependants' pensions, or both, purchased with the proceeds from an institution appointed by the Secretary of State in accordance with the contributor’s instructions. Article 10 sets out the circumstances in which, before retirement, the realisable value of a contributor’s investments may be transferred to another pension scheme, used to purchase an annuity, or returned to him.

Article 11, with Schedule 2, sets out the limits imposed by the Board of Inland Revenue on all kinds of benefits payable under the Order; to the extent that any limit would otherwise be exceeded, article 12 refers to Revenue Regulations which provide that the contributor may choose to use the excess to increase or to provide another permitted benefit, to link to the Index of Retail Prices pension which would otherwise be payable at a flat rate or to have the excess amount repaid, after deduction of tax.

Article 13 permits the Secretary of State to require an institution to surrender the whole or part of the value of contributions invested with it; the Managers must then re-invest the amount surrendered in accordance with article 6. Article 15 specifies that the costs of establishing and administering the AVC scheme are to be paid out of money provided by Parliament and article 16 prohibits the assignment or charge of any benefits payable under the scheme.

The Order revokes S.I. 1995/720 which was defective and was not published.