http://www.legislation.gov.uk/id/uksi/1996/1462

http://www.legislation.gov.uk/uksi/1996/1462/part/IV/2014-01-01

The Contracting-out (Transfer and Transfer Payment) Regulations 1996

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Statute Law Database

PENSIONS

2022-02-21

Expert Participation

2014-01-01

These Regulations replace the Contracting-out (Transfer) Regulations 1985 which are now (subject to transitional provisions) revoked. The Regulations supplement changes introduced by the Pensions Act 1995 to Part III of the Pension Schemes Act 1993. They also consolidate and amend those provisions of the 1985 Regulations which remain relevant. The regulations made by virtue of section 12C of the 1993 Act as inserted by section 136 of the 1995 Act are made within six months of that provision coming into force and as a consequence there is no requirement to consult. As regards those regulations which are neither made only for the purpose of consolidation nor under the 1995 Act, the Occupational Pensions Board has agreed that proposals to make such regulations need not be referred to them.Part I of the Regulations contains general provisions relating to citation, commencement and interpretation.Part II of the Regulations makes provision for the circumstances in which and the conditions subject to which a transfer of or transfer payment in respect of an earner’s accrued rights to guaranteed minimum pensions (or the liability for the payment of guaranteed minimum pensions in respect of which entitlement has already arisen) may be made from one pension scheme to another or from an insurance policy or annuity contract to a pension scheme.Part III of the Regulations makes provision for the circumstances in which and the conditions subject to which a transfer of liability may be made from a pension scheme or from an insurance policy or annuity contract to a pension scheme or arrangement in respect of rights to pensions which have accrued on or after the principal appointed day under a scheme contracted-out by virtue of section 9(2B) of the 1993 Act.Part IV of the Regulations modifies Part III of the 1993 Act where a transfer or transfer payment has been made under Part I of the Regulations to a scheme which is contracted-out under section 9(2) of that Act (a salary-related contracted-out scheme) so as to ensure that the receiving scheme provides guaranteed minimum pensions in consequence of the transfer or transfer payment.Part V of the Regulations contains revocations and transitional provisions.An assessment of the compliance cost for employers of the measures arising from the Pensions Act 1995, including these Regulations, has been placed in the libraries of both Houses of Parliament. Copies can be obtained by post from the Department of Social Security, Private Pensions Directorate, 11th floor, The Adelphi, 1-11 John Adam Street, London, WC2N 6HT.

The Contracting-out (Transfer and Transfer Payment) Regulations 1996

Regulations

The Occupational Pension Schemes (Mixed Benefit Contracted-out Schemes) Regulations 1996

reg. 4

reg. 1(1)

PART IV MODIFICATION OF PART III OF THE 1993 ACT

Modifications of Part III of the 1993 Act on transfers of and transfer payments in respect of guaranteed minimum pensions from occupational pension schemes12

Where a transfer to a salary-related contracted-out scheme, or a transfer payment to an overseas scheme, has taken place from an occupational pension scheme in accordance with regulations 3, 4 or 6 (or with regulation 2 of the Contracting-out (Transfer) Regulations 1985 M1), the 1993 Act shall have effect subject to the following modifications—

a

where the transfer was of the accrued rights to guaranteed minimum pensions of an earner who was in employment which was contracted-out by reference to the receiving scheme, the modification of section 14(1) M2 (earner’s guaranteed minimum) specified in paragraph 3 of Schedule 2;

b

in the case of any other transfer of the accrued rights of an earner to guaranteed minimum pensions, the modifications of sections 8(2) M3 (meaning of “guaranteed minimum pension"), 20(6) (transfer of accrued rights: meaning of “accrued rights") and 159 M4 (inalienability of guaranteed minimum pension and protected rights payments) specified in paragraphs 1, 4 and 5 of Schedule 2;

c

in the case of any transfer of the liability for payment of guaranteed minimum pensions to or in respect of a person who had become entitled to them, the modifications of sections 8(2) and 159 specified in paragraphs 1 and 5 of Schedule 2;

d

in the case of any transfer payment to an overseas scheme in respect of the accrued rights of an earner to guaranteed minimum pensions, the modification of section 46 M5 (effect of entitlement to guaranteed minimum pensions on payment of social security benefits) specified in paragraph 2 of Schedule 2.

Modifications of Part III of the 1993 Act on transfers from policies of insurance or annuity contracts13

Where a transfer to a salary-related contracted-out scheme, or a transfer payment to an overseas scheme, in respect of an earner’s accrued rights to guaranteed minimum pensions has taken place from an appropriate policy in accordance with regulation 3 or 6 (or with regulation 2A of the Contracting-out (Transfer) Regulations 1985), the 1993 Act shall have effect subject to the following modifications—

a

where the earner was in employment which was contracted-out by reference to the receiving scheme, the modification of section 14(1) specified in paragraph 7 of Schedule 2;

b

where the earner was in employment which was not contracted-out by reference to the receiving scheme, the modifications of sections 8(2), 20(6) and 159 specified in F2paragraphs 5, 6 and 8 of Schedule 2;

c

in the case of any transfer payment to an overseas scheme, the modification of section 46 specified in paragraph 2 of Schedule 2.

F1Modification of section 12C of the 1993 Act where transfer payments are made to salary-related contracted-out schemes13A

In section 12C of the 1993 Act any reference to the liability for, or rights to, pensions so far as attributable to service on or after the principal appointed day shall include any liability or rights arising under the scheme as a consequence of a transfer payment which are derived directly or indirectly from—

a

an earner’s service in contracted-out employment on or after the principal appointed day under another scheme contracted-out by virtue of section 9(2B) of the 1993 Act; or

b

protected rights under another occupational pension scheme or under a personal pension scheme attributable to payments or contributions in respect of employment on or after the principal appointed dayF3, where that transfer payment was made before the abolition date.