Consequential amendment of the Occupational Pension Schemes (Discharge of Protected Rights on Winding Up) Regulations 19962

In the Occupational Pension Schemes (Discharge of Protected Rights on Winding Up) Regulations 19962—

a

in regulation 1(2) (interpretation), in the appropriate alphabetical places, insert—

  • “income withdrawal” has the meaning given by paragraph 7 of Schedule 28 to the Finance Act 2004 (income withdrawal);

  • “lifetime annuity” has the meaning given by paragraph 3 of Schedule 28 to the Finance Act 20043 (lifetime annuity);

  • “scheme pension” has the meaning given by paragraph 2 of Schedule 28 to the Finance Act 20044 (scheme pension); and

  • “the scheme pension purchase price” has the meaning given by paragraph 3(7B) of Schedule 29 to the Finance Act 20045 (the scheme pension purchase price);

b

for regulation 5(5)6 (conditions upon which appropriate policies of insurance may be commuted), substitute—

5

The limit referred to in paragraph (4) must not exceed—

a

in respect of a scheme pension, the lesser of—

i

one third of the value of the protected rights included in the scheme pension purchase price; or

ii

the amount which represents the proportion (expressed in percentage terms) of the value of the protected rights which is equal to the percentage that the pension commencement lump sum bears to the scheme pension purchase price and the pension commencement lump sum; or

b

in respect of a lifetime annuity or income withdrawal, the lesser of—

i

25 per cent. of the member’s protected rights which are crystallised by the member’s benefit crystallisation event 6 and the relevant pension benefit crystallisation event connected with event 6 (“the member’s benefit crystallisation events”); or

ii

the amount which represents the proportion (expressed in percentage terms) of the value of the protected rights which is equal to the percentage that the pension commencement lump sum bears to the amount crystallised by the member’s benefit crystallisation events.