The Occupational Pension Schemes (Transfer Values and Miscellaneous Amendments) Regulations 2003

Amendment of the Pension Sharing (Implementation and Discharge of Liability) Regulations 2000

5.—(1) The Pension Sharing (Implementation and Discharge of Liability) Regulations 2000(1) shall be amended as provided for by the following paragraphs of this regulation.

(2) In paragraph (2) of regulation (1) (interpretation), after the definition of “base rate” there shall be inserted the following definition:

• ““effective date” in paragraph (2) or (2A) of regulation 16 means the date as at which the assets and liabilities are valued;”.

(3) After paragraph (1) of regulation 16 (adjustments to the amount of the pension credit—occupational pension schemes which are underfunded on the valuation day), there shall be inserted the following paragraph:

“(2) Subject to paragraph (2A), where a scheme to which section 56 of the 1995 Act applies had, at the effective date of the actuary’s last report to the trustees or managers of the scheme before the valuation day in accordance with the Guidance Note 11 “Retirement Benefit Schemes—Transfer Values” published by the Institute of Actuaries and the Faculty of Actuaries and current at the valuation day, assets that were not sufficient to pay the full amount of the cash equivalent in respect of all members of the scheme, the lesser amount referred to in paragraph 8(1) of Schedule 5 to the 1999 Act may be determined for the purposes of that paragraph by reducing the amount of the pension credit which relates to the liabilities referred to in section 73(3) of the 1995 Act as modified by regulation 3 of the Occupational Pension Schemes (Winding Up) Regulations 1996 (“the Winding Up Regulations”) by an amount that is no greater than the percentage by which the assets are shown in the actuary’s last report as being insufficient to pay the full amount of the corresponding part of the cash equivalent to all members of the scheme provided, in any case, that the amount of any cash equivalent after the reduction is not less than the minimum amount that is required under regulation 4(3)(b)(iii) of the Pension Sharing (Valuation) Regulations 2000 (occupational pension schemes: manner of calculation and verification of cash equivalents) to satisfy the liabilities referred to in section 73(3) of the 1995 Act as modified by the Winding Up Regulations.”.

(4) For paragraph (2), there shall be substituted the following paragraph:

“(2A) Where a scheme to which section 56 of the 1995 Act (minimum funding requirement) applies had, at the effective date of the latest actuarial valuation under section 57 of the 1995 Act (valuation and certification of assets and liabilities) before the valuation day, assets that were not sufficient to pay the minimum amount of the cash equivalent which relates to the liabilities referred to in section 73(3) of the 1995 Act (preferential liabilities on winding up) as modified by regulation 3 of the Occupational Pension Schemes (Winding Up) Regulations 1996 in respect of all members, the lesser amount referred to in paragraph 8(1) of Schedule 5 to the 1999 Act may be determined by reducing the amount of the pension credit that relates to those liabilities by an amount which is no greater than the percentage which is the difference between—

(a) 100 per cent.; and

(b) the percentage of the pension credit which the actuarial valuation shows the scheme assets as being sufficient to satisfy.”.

(1)

S.I. 2000/1053.