PART 3BENEFITS FOR PRACTITIONERS ETC.

CHAPTER 3.FTRANSFERS

Transfers in

Right to apply for acceptance of transfer value payment from another scheme3.F.8

(1)

Subject to the provisions of this Chapter, an active member may apply for a transfer value payment in respect of some or all of the rights that have accrued to or in respect of him under any kind of scheme or arrangement to which paragraph (2) applies, other than a FSAVC, to be accepted by F1this Section of the Scheme.

(2)

This paragraph applies to—

(a)

a registered occupational pension scheme F2other than a corresponding health service scheme,

(b)

a registered personal pension scheme,

(c)

a registered buy-out policy, and

F3(d)

a corresponding 1995 scheme, and

(e)

a corresponding 2008 scheme.

F4(2A)

a member who makes an application for a transfer value to be accepted by the Secretary of State in respect of his rights under a corresponding 2008 scheme may not also make an application for a transfer value to be accepted in respect of his rights under a corresponding 1995 scheme.

(3)

Paragraph (1) does not apply to rights that are directly attributable to a pension credit.

(4)

In this regulation “FSAVC” means—

(a)

a scheme which—

(i)

immediately before 6th April 2006 was approved by the Commissioners for Her Majesty’s Revenue and Customs by virtue of section 591(2)(h) of the Income and Corporation Taxes Act 1988122 (free-standing AVC schemes), and

(ii)

became a registered scheme for the F5purposes of the 2004 Act by virtue of Schedule 36 to that Act, or

(b)

a scheme established on or after that date as a registered free-standing AVC scheme.

F6(5)

In the case of a 2008 Section Optant, this regulation is subject to regulation 3.K.10.

Procedure for applications under regulation 3.F.83.F.9

(1)

An application under regulation 3.F.8––

(a)

must be made in writing,

(b)

must specify the scheme or arrangement from which the transfer value payment is to be made and the anticipated amount of the payment,

(c)

may only be made during the period of one year beginning with the day on which the applicant becomes eligible to be an active member of F7this Section of the Scheme and before the applicant reaches the age of 65,

(d)

if the Secretary of State so requires, may only be made if the member has first requested a statement—

(i)

in the case of a transfer made under the public sector transfer arrangements, of the F8increase to pensionable earnings and the service that the member will be entitled to count as a result of the transfer if the payment is accepted by the Secretary of State, and

(ii)

in a case where the transfer is not made under those arrangements F9(including a transfer of rights from a corresponding 1995 scheme), of the F10increase to pensionable earnings and the service that member will be entitled so to count if the payment is so accepted by the Secretary of State within such period as is specified in the statement, and

(e)

must meet such other conditions as the Secretary of State may require.

(2)

A statement given to the member in pursuance of such a request as is mentioned in paragraph (1)(d)—

(a)

in the case mentioned in paragraph (1)(d)(i), must inform the member of the effect (if any) of regulation F113.F.12 in the member’s case, and

(b)

in the case mentioned in paragraph (1)(d)(ii), must specify such amount as is calculated in accordance with guidance and tables provided by the Scheme actuary for the purpose.

F12(3)

A statement given to the member of a corresponding 1995 scheme in pursuance of such a request as is mentioned in paragraph (1)(d) must inform the member of the amount of—

(a)

the increase to pensionable earnings that will count under this Section of the Scheme for the purposes of calculating benefits payable to or in respect of the member, and

(b)

the amount of pensionable service that will count for the purposes of determining whether or not the member has reached 45 years of pensionable service for the purposes of regulation 3.A.3.

Acceptance of transfer value paymentsF133.F.10

(1)

If an application is duly made by a member under regulation 3.F.8, the Secretary of State may accept the transfer value payment if such conditions as the Secretary of State may require are met.

This is subject to paragraph (10).

(2)

If the Secretary of State accepts the payment, the member is entitled to count—

(a)

the appropriate increase in the member’s pensionable earnings for the purposes of calculating benefits payable to, or in respect of, the member under the Scheme, and

(b)

the relevant period of pensionable service for the purpose of determining whether or not the member has reached 45 years of pensionable service for the purposes of regulation 3.A.3.

This is subject to paragraph (8).

(3)

In paragraph (2)(a) “the appropriate increase” means the increase calculated in accordance with regulation 3.F.11.

(4)

In paragraph (2)(b) “the relevant period” means the period calculated by reference to whichever of paragraphs (5), (6) or (7) apply in respect of the transfer payment.

(5)

If the Secretary of State accepts the payment in respect of a member of a corresponding 1995 scheme, “the relevant period” means the period calculated in accordance with any guidance, tables and other relevant factors provided by the Scheme actuary for that purpose, having regard to the period of employment that qualified the member for the rights in the corresponding 1995 scheme.

(6)

If the Secretary of State accepts the payment under the public sector transfer arrangements, “the relevant period” means the period of pensionable service the member is entitled to count calculated—

(a)

in accordance with those arrangements, and

(b)

by reference to the guidance and tables provided by the Scheme actuary for the purposes of this paragraph, that are in use on the date that is used by the transferring scheme for calculating the transfer value payment.

(7)

If the Secretary of State accepts the payment from a scheme that does not participate in the public sector transfer arrangements, “the relevant period” means a period equal to the period of employment that qualified the member for the rights in respect of which the transfer payment is being made.

(8)

Any part of a member’s increase to pensionable earnings under paragraph (2)(a) that falls to be treated as a capped increase to pensionable earnings shall count as a capped increase to pensionable earnings for the purpose of paragraph (5) of regulation 3.F.6.

(9)

For the meaning of “capped increase to pensionable earnings”, see regulation 3.F.12.

(10)

The Secretary of State may not accept a transfer value payment if—

(a)

it would be applied in whole or in part in respect of the member’s or the member’s spouse’s entitlement to a guaranteed minimum pension, and

(b)

it is less than the amount required for that purpose, as calculated in accordance with guidance and tables prepared by the Scheme actuary for the purposes of this paragraph.

This is subject to paragraph (11).

(11)

Paragraph (10) does not apply if the transfer would be paid under the public sector transfer arrangements.

(12)

In the case of a 2008 Section Optant, this regulation is subject to regulation 3.K.10.

F14Calculation of increase to pensionable earnings as the result of a transfer-in3.F.11

(1)

The increase in pensionable earnings that the member is entitled to count under regulation 3.F.10 as the result of a transfer is calculated in accordance with guidance and tables provided by the Scheme actuary for the purpose by reference to any relevant factors as at the date on which the transfer payment is received by the Secretary of State.

This is subject to the following provisions of this regulation.

F15(2)

Subject to paragraph (4), for the purposes of the calculation under paragraph (1), the benefits in respect of the transfer payment will be calculated by increasing the member’s pensionable earnings for—

(a)

the financial year in which the member joined this Section of the Scheme; or

(b)

the financial year in which the transfer payment is received if the payment is received more than 12 months after the day on which the member joined this Section of Scheme (“the starting day”).

(3)

The amount of the increase referred to in paragraph (2) will be calculated by––

(a)

treating the member as entitled to a period of officer service equal to the period of employment that qualified the member for the rights in respect of which the transfer payment is being made,

(b)

calculating the F16reckonable pay that would have given rise to a cash equivalent in respect of officer service under regulation 2.F.6 (calculating amounts of transfer value payments) F17equal to the amount of the transfer payment, and

(c)

increasing the member’s pensionable earnings by an amount equal to the pensionable pay that the member would have received during that period of officer service if the member’s pensionable pay had been equal to the F18reckonable pay mentioned in paragraph (b) throughout that period.

(4)

But F19paragraph (2)(b) does not apply if—

(a)

a written statement estimating the increase in pensionable earnings that the member would be entitled to count as a result of the transfer was given to the member by the Secretary of State during the period of 3 months ending 12 months after the starting day, and

(b)

the transfer payment is received by the Secretary of State less than 3 months after the date of the statement.

(5)

If the transfer value payment is accepted under the public sector transfer arrangements, the increase in pensionable earnings the member is entitled to count is calculated—

(a)

in accordance with those arrangements, and

(b)

by reference to the guidance and tables provided by the Scheme actuary for the purposes of this paragraph, that are in use on the date that is used by the transferring scheme for calculating the transfer value payment.

(6)

If the transfer value payment is accepted from a F20corresponding 2008 scheme, the increase in pensionable earnings the member is entitled to count is the increase that the member would be entitled to count if—

(a)

the member’s employment to which that scheme applied were NHS employment in respect of which the member was a member of F21this Section of the Scheme, and

(b)

the member’s contributions to that scheme were contributions to F21this Section of the Scheme.

F22(7)

In the case of a 2008 Section Optant, this regulation is subject to regulation 3.K.10.

F23Meaning of “Capped increase to pensionable earnings”3.F.12

(1)

This regulation applies if—

(a)

the Secretary of State accepts a transfer value payment in respect of a member under a transfer to which the public sector transfer arrangements apply, and

(b)

the service in respect of which the transfer is made was, or included, capped service in employment to which the Scheme by which the payment is made (“the transferring Scheme”) applied.

F24(2)

For the purposes of this Part—

(a)

any part of the increase to pensionable earnings that the member is entitled to count under regulation 3.F.10(2)(a), and

(b)

which is the result of capped service in employment to which the transferring scheme applied,

is a capped increase to pensionable earnings.

(3)

For the purposes of paragraph (1)(b), the service in respect of which the transfer is made was capped service so far as—

(a)

in the case of service before 6th April 2006, the member was an active member of the transferring scheme whose pension under that scheme in respect of the service was to be calculated by reference to remuneration limited in each tax year to the permitted maximum for that year within the meaning of section 590C(2) of the Income and Corporation Taxes Act 1988126, or

(b)

in the case of service on or after 6th April 2006, the member was an active member of the transferring scheme whose pension under that scheme in respect of the service was to be calculated by reference to remuneration limited in each tax year to an amount calculated in the same manner as the permitted maximum under that section was calculated for tax years ending before that date.

(4)

For the purposes of paragraph (3), it does not matter whether, apart from the application of the limit, the member’s remuneration in any tax year would have exceeded the amount of the limit.

F25(5)

In the case of a 2008 Section Optant, this regulation is subject to regulation 3.K.10.

Public sector transfer arrangements3.F.13

This Chapter applies in the case of a transfer to which the public sector transfer arrangements apply as it applies in other cases, except to the extent that—

(a)

any provision in this Chapter provides otherwise, or

(b)

the arrangements themselves make different provision.

Bulk transfers out3.F.14

(1)

This regulation applies if—

(a)

the employment of one or more active members (“the transferring employees”) is transferred without their consent to a new employer,

(b)

on that transfer the transferring employees cease to be eligible to be active members of F26this Section of the Scheme,

(c)

after that transfer the transferring employees become active members of another occupational pension scheme (“the new employer’s scheme”),

(d)

the Secretary of State has agreed special terms for the making of transfer value payments in respect of the transferring employees to the new employer’s scheme, after consultation with the Scheme actuary, and

(e)

the transferring employees have consented in writing to their rights being transferred in accordance with those terms.

(2)

In the case of the transferring members or the transferred members the transfer value payment to be paid—

(a)

is not calculated in accordance with regulation 3.F.6, but

(b)

is to be such amount as the Secretary of State determines to be appropriate in accordance with the special terms after consulting the Scheme actuary.

(3)

This Chapter has effect with such modifications as are necessary to give effect to those terms.

(4)

If the transfer is directly or indirectly attributable to an enactment, this Chapter has effect with such modifications as the Secretary of State considers necessary in consequence of the transfer.

(5)

Where a member to whom this regulation applies is also a member to whom Part 2 applies, a bulk transfer under this regulation also operates as a transfer of that member’s rights under Part 2

Bulk transfers in3.F.15

(1)

This regulation applies if—

(a)

the employment of one or more persons (“the transferred employees”) is transferred without their consent to a new employer,

(b)

on that transfer the transferred employees cease to be active members of an occupational pension scheme (“the former employer’s scheme”),

(c)

after that transfer the transferred employees become active members of F27this Section of the Scheme,

(d)

the Secretary of State has agreed special terms for the acceptance of transfer value payments in respect of the transferred employees from the former employer’s scheme, after consulting the Scheme actuary, and

(e)

the transferred employees have consented in writing to their rights being transferred in accordance with those terms.

(2)

F27This Section of the Scheme has effect with such modifications as are necessary to give effect to the terms mentioned in paragraph (1)(e).

(3)

If the transfer is directly or indirectly attributable to an enactment, F27this Section of the Scheme has effect with such modifications as the Secretary of State considers necessary in consequence of the transfer.

EU and other overseas transfers3.F.16

(1)

This regulation applies in the case of a member whose transfer is subject to transfer arrangements concluded with any scheme for the provision of retirement benefits established outside the United Kingdom.

(2)

F28This Section of the Scheme applies in relation to the member with such modifications as the Secretary of State considers necessary to comply with—

(a)

the terms of those arrangements,

(b)

any applicable provision contained in or made under any enactment, and

(c)

the requirements to be met by a scheme registered under Chapter 2 of Part 4 of the 2004 Act.