The Financial Assistance Scheme Regulations 2005

Regulations 17G(2) and 17H(2)

[F1 SCHEDULE 7 U.K. Determination of payments to early retirees and other beneficiaries

Textual Amendments

F1 Sch. 7 added (2.4.2010) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010 (S.I. 2010/1149), regs. 1, 18(e), Sch. 2

Introductory U.K.

1.— (1) This Schedule applies for the purposes of determining the amount of a payment payable to a person to whom regulation 17G or 17H applies.

(2) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before a transfer notice is given, a debt to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the payment which would otherwise be payable under this Schedule is to be reduced, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(3) Sub-paragraph (5) applies where the scheme manager is satisfied that the amount of interim pension paid to a beneficiary in respect of any year in the period determined in accordance with sub-paragraph (4) is higher or lower than the sum of—

(a) the notional pension; and

(b) any annual increases or proportion of annual increases, which the scheme manager considers could have been paid in respect of that year, taking into account—

(i) the determination under regulation 27(1)(d); and

(ii) the proportion of that year which falls after the 1^st January.

(4) For the purposes of sub-paragraph (3), the period is the period from the later of—

(a) the day on which the beneficiary began to receive a payment from the scheme; and

(b) the day on which the qualifying pension scheme began to be wound up,

until the day on which the scheme manager gave a transfer notice to the scheme trustees or managers.

(5) Where this sub-paragraph applies, the scheme manager may—

(a) determine the amount by which the payment which would otherwise be payable under this Schedule in respect of the beneficiary is to be reduced, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid; and

(iii) such other matters as the scheme manager considers relevant; and

(b) where the interim pension paid in respect of any year is lower than the sum referred to in sub-paragraph (3) in respect of that year, make a payment to the beneficiary or, where the beneficiary has died prior to the scheme manager making this determination, to the beneficiary’s estate, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid; and

(iii) such other matters as the scheme manager considers relevant.

Amount of the payment where regulation 17G applies U.K.

2.   Where a person is entitled to a payment in accordance with regulation 17G, the amount of that payment shall be sum of—

(a) the amount of the notional pension determined in respect of that person; and

(b) the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the day on which the scheme’s liability to provide a pension or other benefit to the person arose until the day on which the transfer notice was given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5).

Amount of the payment where regulation 17H applies U.K.

3.   Where a qualifying member is entitled to a payment in accordance with regulation 17H, the amount of that payment shall be the sum of—

(a) the notional pension in relation to the qualifying member; and

(b) the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the later of—

(i) the date on which the qualifying member began to receive a present payment from the scheme; and

(ii) the date on which the scheme began to be wound up,

until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5).

Annual increases U.K.

4.— (1) Except where there is no percentage increase in the [F2 general level of prices] for the period of 12 months ending with 31st May last falling before the indexation date, where the asset share determined in respect of a person to whom an amount is payable in accordance with this Schedule was sufficient to be applied to annual increases, that person shall be entitled, on each indexation date after the day on which the transfer notice is given, to an increase of—

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

(b) where that person first became entitled to a payment in accordance with regulation 17G or 17H 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 payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—

(a)

the percentage increase in the [F2 general level of prices] for the period of 12 months ending with 31st May last falling before the indexation date; and

(b)

2.5%;

“relevant date” means—

(a)

in the cases of a person to whom regulation 17G applies, the day on which the scheme’s liability to provide a pension or other benefit to the person arose; and

(b)

in the case of a person to whom regulation 17H applies, the later of—

(i)

the day from which the beneficiary began to receive a present payment from the scheme; and

(ii)

the day on which the scheme began to be wound up.

“underlying rate” means—

the aggregate of—

(i)

where regulation 17G applies, so much of the payment as the scheme manager determined under regulation 27(7)(b)(ii) could be increased; and

(ii)

where regulation 17H applies, so much of the payment as the scheme manager determined under regulation 27(7)(a)(ii) could be increased;

(b)

the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which the transfer notice is given; and

(c)

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

(3) The reference to payments in the definition of “underlying rate” in sub-paragraph (2) is to the amount of payment prior to any reduction made by the scheme manager under paragraph 1(2) or (5).]

Textual Amendments

F2 Words in Schs. 3-7 substituted (31.12.2011) by The Financial Assistance Scheme (Revaluation and Indexation Amendments) Regulations 2011 (S.I. 2011/839), regs. 1(2), 15