PART II DISCHARGE OF LIABILITY WHERE GUARANTEED MINIMUM PENSIONS, SHORT SERVICE BENEFITS AND ALTERNATIVES TO SHORT SERVICE BENEFITS ARE SECURED BY INSURANCE POLICIES OR ANNUITY CONTRACTS

Other requirements applying to policies of insurance and annuity contracts

[F15.—(1) The requirements referred to in section 19(4)(d) of the 1993 Act (policy of insurance or annuity contract appropriate if it satisfies such other requirements as may be prescribed) are—

(a)that the insurance company with which the policy is taken out or the contract entered into assumes an obligation to the earner in question or to trustees of a trust for the benefit of the earner and, if appropriate, dependants of his, to pay the benefits secured by the policy or contract to him or, as the case may be, to dependants of his, or to the trustees of such a trust;

(b)[F2that the policy or contract contains, or is endorsed with, terms so as to provide for such increase (if any) in the payments under the policy or contract as is required by paragraph (2);]

(c)that, if any guaranteed minimum pension is due or prospectively due to the earner in question, the policy or contract contains, or is endorsed with, terms so as to provide—

(i)that the annuity to be paid thereunder to or for his benefit will be at least equal to the guaranteed minimum pension due to him, or, as the case may be, prospectively due to him, at pensionable age, subject to section 15 (increase of guaranteed minimum pension) or section 16 (revaluation of earnings factors) of the 1993 Act, and

(ii)in the case where the earner dies leaving a [F3widow, widower or surviving civil partner] , that the annuity payable for the [F4widow's, widower’s or surviving civil partner's] will be at least equal to the guaranteed minimum pension due or prospectively due to the [F3widow, widower or surviving civil partner] , and

(iii)in each case mentioned in sub-paragraphs (i) and (ii), that any increase of guaranteed minimum pension under Chapter II of Part V of the 1993 Act M1 results in a similar increase in the annuity.

[F5(2) For the purposes of paragraph (1)(b)—

(a)an increase is required if sections 51 and 52 of the 1995 Act, and regulations made under those sections, would apply to payments under the policy or contract if those payments were benefits payable under an occupational pension scheme (and for this purpose, the provisions of the 1995 Act shall be construed in accordance with regulation 11(6)(a) to (d)); and

(b)such an increase shall be payable at the same rate, and to the same extent, as would be required under those provisions.]]

Textual Amendments

Marginal Citations

M1Chapter II Part V was amended by sections 53(4) and 55 of the Pensions Act 1995.