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The Financial Assistance Scheme Regulations 2005

Changes over time for: SCHEDULE 2A

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Version Superseded: 31/03/2011

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Regulations 17A(8) and 17B(6)

[F1SCHEDULE 2AU.K.DETERMINATION OF ILL HEALTH AND INTERIM ILL HEALTH PAYMENTS

This schedule has no associated Explanatory Memorandum

Textual Amendments

IntroductoryU.K.

1.  This Schedule applies for the purposes of determining the amount of an ill health payment or an interim ill health payment payable to or in respect of qualifying members of qualifying pension schemes who are unable to work due to ill health and are likely to continue to be so unable to work until normal retirement age.

Amount of an ill health paymentU.K.

2.—(1) The amount of an ill health payment payable to a qualifying member of a qualifying pension scheme shall be—

(2) [F2Except where sub-paragraph (2A) applies, the amount of an ill health payment to a survivor of a qualifying member of a qualifying pension scheme shall be—]F3

[F2(2A) Where a qualifying member was a party to a polygamous marriage, the amount of an ill health payment payable to each survivor shall be—F4

(2B) Where a survivor of a qualifying member who was a party to a polygamous marriage dies, the ill health payment payable to each survivor of that qualifying member shall be redetermined with effect from the day after the day on which the survivor died.]

(3) In this paragraph—

“A” means the amount of expected pension which would be determined in accordance with Schedule 2 if—

(a)

the beneficiary were entitled to an annual payment; and

(b)

the modifications in paragraph 6 applied;

“B” means the amount of actual pension which would be determined in accordance with Schedule 2 if—

(a)

the beneficiary were entitled to an annual payment; and

(b)

the modifications in paragraph 6 applied; F5...

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied.

F6[F7...

“N” means the number of survivors of that qualifying member.]

[F8“Q” means the sum of—

(a)

the product of C multiplied by A multiplied by 0.9; and

(b)

the total amount of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled on the day on which the qualifying member died;

“S” means—

(a)

where sub-paragraph (2B) applies, the total amount of any annual increases to which any survivor was entitled on the day on which the survivor died; and

(b)

in all other cases, nil.]

(4) This paragraph is subject to [F9paragraph 7].

Textual Amendments

F2Sch. 2A para. 2(2)-(2B) substituted for Sch. 2A para. 2(2) (10.7.2009) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009 (S.I. 2009/1851), regs. 1, 31(a)(i) (with reg. 37)

Amount of an ill health payment to a surviving dependantU.K.

[F102A.—(1) The amount of an ill health payment payable to a surviving dependant of a qualifying member shall be determined in accordance with sub-paragraphs (2) to (5).

(2) Where an ill health payment is also payable to a survivor of the qualifying member and—

(a)there is only one surviving dependant, the amount of the ill health payment shall be—

(b)there are two or more surviving dependants, the amount of the ill health payment shall be—

(3) Where the qualifying member does not have a survivor and—

(a)there is only one surviving dependant, the amount of the ill health payment shall be—

(b)there are two or more surviving dependants, the amount of the ill health payment shall be—

(4) Where—

(a)a survivor of a qualifying member, who is not a person who is treated as a survivor by virtue of regulation 37 of the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009, dies;

(b)a person ceases to be a surviving dependant of a qualifying member; or

(c)another person becomes entitled to an ill health payment as a surviving dependant of a qualifying member,

the ill health payment payable to a surviving dependant of that qualifying member shall be redetermined with effect from the day after the day on which the event referred to in paragraphs (a) to (c) occurred.

(5) In this paragraph—

“A” means the amount of expected pension which would be determined in accordance with Schedule 2 if—

(a)

the qualifying member were entitled to an annual payment; and

(b)

the modifications in paragraph 6 applied;

“B” means—

(a)

where there is only one surviving dependant, the actual pension of that surviving dependant which would be determined in accordance with Schedule 2 if—

(i)

the surviving dependant were entitled to an annual payment; and

(ii)

the modifications in paragraph 6 applied;

(b)

where there are two or more surviving dependants, the sum of the actual pensions of all the surviving dependants of the qualifying member which would be determined in accordance with Schedule 2 if—

(i)

the surviving dependants were entitled to annual payments; and

(ii)

the modifications in paragraph 6 applied;

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied;

“D” means—

(a)

subject to paragraph (b), where sub-paragraph (4) applies, the total amount of annual increases to which any surviving dependant was entitled under this Schedule on the day on which the event referred to in paragraphs (a) to (c) of that sub-paragraph occurred;

(b)

where sub-paragraph (4)(a) applies and, as a result, the annual payment payable to a surviving dependant is redetermined under sub-paragraph (3)(a), nil; and

(c)

in all other cases, nil;

“N” means the number of surviving dependants of the qualifying member;

“Q” means the sum of—

(a)

the product of C multiplied by A multiplied by 0.9; and

(b)

the total amount of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled on the day on which the qualifying member died; and

“S” means—

(a)

where sub-paragraph (4)(a) applies and, as a result the annual payment payable to a surviving dependant is redetermined under sub-paragraph (3), the total amount of annual increases to which the survivor was entitled on the day on which the survivor died; and

(b)

in all other cases, nil.]

Textual Amendments

Amount of an interim ill health paymentU.K.

3.—(1) The amount of an interim ill health payment payable to a qualifying member of a qualifying pension scheme shall be—

(2) [F11Except where sub-paragraph (2A) applies,] the amount of an interim ill health payment payable to a survivor of a qualifying member of a qualifying pension scheme shall be—F12

(C(A x 0.9)/2))-B

[F13(2A) Where a qualifying member was a party to a polygamous marriage, the amount of an interim ill health payment payable to each survivor shall be—]

(3) In this paragraph—

“A” means the amount of expected pension which would be determined in accordance with Schedule 2 if—

(a)

the beneficiary were entitled to an initial payment; and

(b)

the modifications in paragraph 6 applied;

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied;

“D” means the amount of interim pension which would be determined in accordance with Schedule 2 if—

(a)

the qualifying member were entitled to an initial payment; and

(b)

the modifications in paragraph 6 applied; F14...

“E” means the amount of interim pension payable to the survivor which would be determined in accordance with Schedule 2 if—

(a)

the survivor were entitled to an initial payment; and

(b)

the modifications in paragraph 6 applied.

[F15“F” means the sum of the interim pensions of all the survivors which would have been determined in accordance with Schedule 2 if—

(a)

the survivors had been entitled to initial payments; and

(b)

the modifications in paragraph 6 applied;

“H” means the aggregate of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled [F16on] the day on which the qualifying member died; and

“N” means the number of survivors of that qualifying member.]

(4) This paragraph is subject to [F17paragraph 7].

Textual Amendments

[F18Amount of an interim ill health payment for a surviving dependantU.K.

3A.—(1) The amount of an interim ill health payment payable to a surviving dependant of a qualifying member shall be determined in accordance with sub-paragraphs (2) to (5).

(2) Where an interim ill health payment is also payable to a survivor of the qualifying member and—

(a)there is only one surviving dependant, the amount of the interim ill health payment shall be—

(b)there are two or more surviving dependants, the amount of the interim ill health payment shall be—

(3) Where the qualifying member does not have a survivor and—

(a)there is only one surviving dependant, the amount of the interim ill health payment shall be—

(b)there are two or more surviving dependants, the amount of the ill health payment shall be—

(4) Where—

(a)a survivor of a qualifying member, who is not a person who is treated as a survivor under regulation 37 of the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009, dies; F19...

(b)a person ceases to be a surviving dependant of a qualifying member[F20; or]

[F20(c)another person becomes entitled to an ill health payment as a surviving dependant of a qualifying member.]

the interim ill health payment payable to a surviving dependant of that qualifying member shall be redetermined with effect from the day after the day on which [F21the event referred to in paragraphs (a) to (c) occurred].

(5) In this paragraph—

“A” means the amount of expected pension which would be determined in accordance with Schedule 2 if—

(a)

the qualifying member were entitled to an annual payment; and

(b)

the modifications in paragraph 6 applied;

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied;

“F” means one half of the product of—

“G” means—

(a)

where there is only one surviving dependant, the interim pension of the surviving dependant which would be determined in accordance with Schedule 2 if—

(i)

the surviving dependant was entitled to an annual payment; and

(ii)

the modifications in paragraph 6 applied;

(b)

where there are two or more surviving dependants, the sum of the interim pensions of all the surviving dependants which would be determined in accordance with Schedule 2 if—

(i)

the surviving dependants were entitled to annual payments; and

(ii)

the modifications in paragraph 6 applied;

“H” means the aggregate of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled [F22on] the day on which the qualifying member died; and

“N” means the number of surviving dependants of that qualifying member.]

Textual Amendments

RevaluationU.K.

F234.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Actuarial reductionU.K.

5.  The actuarial factor to be applied in [F24paragraphs 2 to 3A] shall be determined F25..., having regard to—

(a)the age of the qualifying member;

(b)the normal retirement age of the qualifying member; and

(c)such other matters as the [F26person determining the factor] considers relevant.

Textual Amendments

Modifications to Schedule 2U.K.

6.  The following modifications to Schedule 2 apply for the purposes of paragraphs 2 and 3 of this Schedule—

[F27(zza)in paragraph 1(2), in the definition of “revalued notional pension” for “regulation 17(10)” substitute “regulation 17A(10);]

[F28(za)in paragraph 2(1), for the words from “the later of” to the end of paragraph (b), substitute “the day on which the beneficiary is entitled to an ill health payment in accordance with regulation 17A”;

[F29(zab)in paragraph 2(3H)(b), for “Schedule 4”, substitute “Schedule 6”;

(zac)in paragraph 3(3) and (3ZD), for “attains normal retirement age” substitute “becomes entitled to an ill health payment”.]

(zb)in paragraph 4(3)—

(i)after paragraph (b) insert “and”;

(ii)after paragraph (c) omit “and”; and

(iii)omit paragraph (d);]

(a)for [F30paragraph] 5(8)(b) substitute—

“(b)ending on the day before the day on which the scheme began to wind up.”;

[F31(b)in paragraph 4(7)(b)(i) for “the day on which the qualifying member attains normal retirement age” substitute “the day from which the qualifying member is entitled to an ill health payment in accordance with regulation 17A(1)]

[F32(ba)in paragraph 4(10) for “annual payment” substitute “ill health payment]

(c)for paragraph 5(10)(b) substitute—

“(b)ending on the day from which the qualifying member became entitled to an ill health payment in accordance with regulation 17A(1).”;

(d)omit [F33paragraphs 2A, 4(13) to (13D), 4A, 7, 9 and 10]; and

(e)for paragraph 10(ba) substitute—

“(ba)for “regulation 17A(1)”, in each place it occurs, substitute “regulation 17B(2)”;

(bb)for “ill health payment”, in each place it occurs, substitute “interim ill health payment”;

(bc)for paragraph 4(7)(b) substitute—

(“b)ending on the day from which the qualifying member is entitled to an interim ill health payment in accordance with regulation 17B(2).”.

Textual Amendments

Cap on expected pension and actual pensionU.K.

7.—[F34(1) Where the amount of a qualifying member’s expected pension determined in accordance with paragraph 2, 3 or 3A multiplied by 0.9 exceeds the FAS cap—

(a)the amount of the ill health payment or interim ill heath payment payable to, or in respect of, that member under paragraph 2, 2A, 3 or 3A shall be determined on the basis that the product of that calculation was the amount of the FAS cap; and

(b)the amount “A” under paragraph 2 for the purposes of paragraph (b)(i) in the definition of “underlying rate” in paragraph 9 shall be the amount of the FAS cap;]

(2) Where the amount of a qualifying member’s actual pension or interim pension determined in accordance with this Schedule exceeds—

(a)the amount of the qualifying member’s expected pension determined in accordance with paragraph 2 or 3 multiplied by 0.9; or

(b)[F35the FAS cap],

no ill health payment or interim ill health payment shall be payable to, or in respect of, that member.

[F36(3) In this paragraph, “the FAS cap” is—

(a)where the qualifying member became entitled to an ill health payment in the period beginning on 1st April 2008 and ending on 31st March 2009, £27,987;

(b)where the qualifying member became entitled, or becomes entitled, to an ill health payment in the period beginning on 1st April 2009 and ending on 31st March 2010, £29,386; and

(c)where the qualifying member becomes entitled to an ill health payment in the period after 31st March 2010, the amount determined in accordance with sub-paragraph (4).

(4) For each successive period of 12 months from 1st April 2010, the FAS cap shall be—

(a)where paragraph (b) does not apply, the amount of the FAS cap for the previous period of 12 months increased by the percentage increase of the retail prices index for the period of 12 months ending on the 30th September falling within that previous period of 12 months; or

(b)where there is no such percentage increase, the amount of the FAS cap for the previous period of 12 months.

(5) Where the amount of the FAS cap determined in accordance with sub-paragraph (3)(c) results in a fraction of a pound, that fraction shall be treated as a pound.]

Textual Amendments

RoundingU.K.

8.  Where the amount of an ill health payment or interim ill health payment determined in accordance with this Schedule results in a fraction of a penny, that fraction shall be treated as a penny.]

[F37Annual increase to an ill health paymentU.K.

9.—(1) Except where there is no percentage increase in the retail prices index for the period of 12 months ending with 31st May last falling before the indexation date, a beneficiary entitled to an amount determined in accordance with this Schedule shall be entitled, on the indexation date, to an increase of—

(a)the appropriate percentage of the amount of the underlying rate immediately before that date, or

(b)where the beneficiary first became entitled to an ill health payment during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the ill health payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—

(a)

the percentage increase in the retail prices index for the period of 12 months ending with the 31st May last falling before the indexation date; and

(b)

2.5%;

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied;

“E” means so much of the expected pension as is attributable to post-1997 service;

“post-1997 service” means—

(a)

pensionable service (whether actual or notional) which occurs on or after 6th April 1997; or

(b)

where the ill health payment is payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred on or after 6th April 1997;

“underlying rate” means—

(a)

the aggregate of—

(i)

the product of X multiplied by ;

(ii)

where the beneficiary is a survivor or a surviving dependant of a qualifying member, the product of X multiplied by W; and

(iii)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date; or

(b)

where paragraph 7(1) applies, the aggregate of—

(i)

so much of the amount “A” for the purposes of paragraph 2 as is, proportionately, attributable to post-1997 service; and

(ii)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date;

“W” means the aggregate of any annual increases to which the qualifying member was entitled in accordance with sub-paragraph (1) on F38... the day on which the qualifying member died;

“X” means—

(a)

0.9, where the beneficiary is the qualifying member;

(b)

0.45, where the beneficiary is a survivor who is not a survivor to whom paragraph 2(2A) applies;

(c)

the product of 0.45 divided by Y, where the beneficiary is a survivor to whom paragraph 2(2A) applies;

(d)

the product of 0.9 divided by Z, where the beneficiary is a surviving dependant and the qualifying member does not have a survivor; or

(e)

the product of 0.45 divided by Z, where the beneficiary is a surviving dependant and an ill health payment is also payable to a survivor of the qualifying member;

“Y” means the number of survivors of the qualifying member; and

“Z” means—

(a)

where there is only one surviving dependant, 2; or

(b)

where there is more than one surviving dependant, the number of surviving dependants of the qualifying member.

(3) In any case where the scheme manager is satisfied, having regard to the information available, that it is not possible for the scheme manager to determine the amount of the amount “A” which is attributable to post-1997 service for the purposes of this paragraph, the scheme manager shall determine that amount, having regard to such matters as the scheme manager considers relevant.

Textual Amendments

Annual redeterminationU.K.

10.—(1) This paragraph applies where—

(a)on the first indexation date following the date on which the beneficiary first became entitled to an ill health payment; and

(b)on any indexation date following that first indexation date;

the annual rate of annuity which has been or could have been paid to the beneficiary as at that indexation date as a result of the purchase of an annuity with the assets available to discharge the liability of the scheme to, or in respect of, the qualifying member after that liability has, or had been, determined, is higher as a result of indexation or revaluation than the annual rate determined in accordance with the preceding paragraphs of this Schedule.

(2) Where this paragraph applies, the scheme manager shall redetermine the ill health payment payable to that beneficiary with effect from the indexation date.

(3) When redetermining an ill health payment under sub-paragraph (2), the actual pension shall be the annual rate of annuity which has been or could have been paid to the beneficiary as at the indexation date as a result of the purchase of an annuity with the assets available to discharge the liability of the scheme to, or in respect of, the qualifying member after that liability has, or had been, determined, on the basis of, and having regard to, the matters referred to in paragraph 2(3) of Schedule 2.

(4) In any case where the scheme manager is satisfied, having regard to the information available to it, that it is not possible for it to determine the annual rate of annuity for the purposes of this paragraph, it shall determine that annual rate having regard to such matters as it considers relevant.

(5) Where the scheme manager is satisfied that increases have been, are being, or will be made to the annual rate of annuity, and it considers that those increases are not reasonable, it may determine the annual rate of annuity for the purposes of this paragraph on the basis of the sum which would discharge the liability of the scheme to the beneficiary and of such other matters as it considers relevant.

Textual Amendments

Bridging pensionsU.K.

11.—(1) This paragraph applies where—

(a)the annual rate of the pension determined for the purposes of calculating the expected pension under paragraph 3(2) or 4(2) of Schedule 2 (for the purposes of determining an ill health payment) includes an amount which, under the scheme rules, was payable for a period which is shorter than the period in respect of which the remainder of the pension was payable; and

[F39(b)either—

(i)an annuity has been purchased for the beneficiary which provides for payment of a pension to the beneficiary at a lower annual rate from the date on which the amount referred to in sub-paragraph (1)(a) would have ceased to be payable under the rules of the pension scheme; or

(ii)a notional pension has been determined in respect of the beneficiary which includes an amount in respect of an amount which under scheme rules would be payable for a period which is shorter than the period in respect of which the remainder of the pension would be payable.]

(2) Where this paragraph applies, the scheme manager shall redetermine the ill health payment payable to that beneficiary with effect from the date on which the amount referred to in sub-paragraph (1)(a) would have ceased to be payable under the rules of the pension scheme.

(3) When redetermining an ill health payment under sub-paragraph (2)—

(a)the annual rate of the pension for the purposes of paragraph 3(3)(a) of Schedule 2 shall be the annual rate of pension which was or should have been in payment to the qualifying member in accordance with the scheme rules in respect of rights accrued in a qualifying pension scheme less the annual amount which was payable for the shorter period referred to in sub-paragraph (1)(a), as at the day which is the day before the day on which the qualifying pension scheme began to be wound up;

(b)the annual rate of the pension for the purposes of paragraph 3(3)(b)(i) of Schedule 2 shall be the amount which was or should have been in payment to the qualifying member in accordance with the scheme rules in respect of rights accrued in a qualifying pension scheme less the annual amount which was payable for the shorter period referred to in sub-paragraph (1)(a), as at the day on which the qualifying member attained normal retirement age;

(c)the amount specified in paragraph 4(3)(a) of Schedule 2 shall be the amount determined in accordance with that paragraph less the amount which is the amount which was payable for the shorter period referred to in sub-paragraph (1)(a);

(d)the amount which was payable for the shorter period referred to in sub-paragraph (1)(a) shall be disregarded when determining the revaluation amounts; and

(e)the beneficiary shall be entitled to so much of the total amount of the annual increases determined in accordance with paragraph 9 payable to the beneficiary as at the date referred to in sub-paragraph (2) as are attributable to the amount of expected pension determined in accordance with this paragraph.

(4) In any case where the scheme manager is satisfied, having regard to the information available to it, that it is not possible for it to determine the annual rate of pension for the purposes of sub-paragraph (3)(a) or (b) or any one of the amounts for the purposes of sub-paragraph (3)(c) to (e) it shall determine that annual rate or amount, having regard to such matters as it considers relevant.

(5) In sub-paragraph (3)(d) “the revaluation amounts” means—

(a)the revaluation amount referred to in paragraph 3(3)(b)(ii) of Schedule 2; and

(b)the revaluation amounts referred to in paragraph 4(3)(b) and (c) of Schedule 2.]

Textual Amendments

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