25.—(1) Where—
(a)a member of an occupational pension scheme has, under the applicable rules, accrued rights to—
(i)cash balance benefits in respect of which the available sum is not calculated by reference to final salary;
(ii)a defined benefit minimum (in relation to money purchase underpin benefits or cash balance underpin benefits); or
(iii)top-up benefits;
(b)the accrued rights to benefits specified in sub-paragraph (a) are attributable to periods of pensionable service before the appointed day; and
(c)the trustees or managers of the scheme have before that day treated those benefits as if they were money purchase benefits,
if the trustees or managers of the scheme think it appropriate, those benefits or (as the case may be) the available sum in respect of which those benefits are calculated shall be revalued by the money purchase method.
(2) Where—
(a)the conditions specified in paragraph (1)(a) and (c) are satisfied; and
(b)the accrued rights to benefits specified in paragraph (1)(a) which were treated as money purchase benefits are attributable to periods of pensionable service falling partly before and partly on or after the appointed day,
if the trustees or managers of the scheme think it appropriate, so much of those benefits or of the available sum in respect of which those benefits are calculated as is attributable to periods of pensionable service before that day shall be revalued by the money purchase method.
(3) In this regulation—
(a)“final salary”, in relation to a member to or in respect of whom benefits under a pension scheme are payable, means the member’s pensionable earnings, or highest, average or representative pensionable earnings, in a specified period ending at, or defined by reference to, the time when the member’s pensionable service in relation to that scheme ends;
(b)“money purchase method” has the meaning given by Schedule 3 to the 1993 Act, except that it also includes the application of a guaranteed notional interest rate or investment yield, in accordance with the rules of the scheme, to the benefits or to the available sum in respect of which the benefits are calculated; and
(c)“pensionable earnings”, in relation to a member of a pension scheme, means earnings by reference to which benefits under the scheme are calculated.
(4) Where the trustees or managers of the scheme determine that benefits should be revalued in accordance with this regulation, section 84 of the 1993 Act applies in relation to those benefits revalued in accordance with this regulation as if they were money purchase benefits.
Commencement Information
I1Reg. 25 comes into force in accordance with reg. 1(1)
26.—(1) Section 51 of the 1995 Act (annual increase in rate of pension)(1) does not apply to a pension or part of a pension payable under an occupational pension scheme which meets the conditions specified in paragraph (2).
(2) The conditions specified in this paragraph are that—
(a)the pension or part of a pension—
(i)is derived from any of the benefits specified in paragraph (3) which were attributable to a member’s pensionable service on or after 6th April 1997; and
(ii)first came into payment on or after 6th April 2005 but before the appointed day;
(b)the trustees or managers of the scheme before the appointed day treated those benefits as if they were money purchase benefits; and
(c)the pension or part of a pension is not, under the scheme, required to be increased each year or is to be increased at a rate below that required by section 51 of the 1995 Act.
(3) The benefits specified in this paragraph are—
(a)cash balance benefits;
(b)a defined benefit minimum (in relation to money purchase underpin benefits or cash balance underpin benefits); and
(c)top-up benefits.
Commencement Information
I2Reg. 26 comes into force in accordance with reg. 1(1)
27.—(1) The Occupational Pension Schemes (Preservation of Benefit) Regulations 1991(2) are amended as follows.
(2) In regulation 10(2) (money purchase benefits) for the words after “calculate” to the end substitute—
“(a)the money purchase benefits, when they become payable, in accordance with the terms of an insurance policy or annuity contract in which the amount allocated to provide the benefits is invested; or
(b)a pension under the scheme derived from the money purchase benefits, on the basis of actuarial advice.”.
(3) Omit regulation 14 (computation of benefit – money purchase schemes)(3).
(4) For regulation 14A (circumstances in which uniform accrual does not apply – money purchase benefits)(4), substitute—
14A. Section 74(6) of the Act (computation of short service benefit) does not apply to money purchase benefits.”.
Commencement Information
I3Reg. 27 comes into force in accordance with reg. 1(1)
28.—(1) Regulation 4 of the Occupational Pension Schemes (Revaluation) Regulations 1991 (hybrid benefits)(5) is amended as follows.
(2) For paragraph (2), substitute—
“(2) In this regulation, “hybrid benefit” means a benefit the rate or amount of which is calculated by reference to the greatest, or smallest, of two or more benefits.”.
Commencement Information
I4Reg. 28 comes into force in accordance with reg. 1(1)
Section 51 was amended by section 84(1) of and Schedule 12 to the Welfare Reform and Pensions Act 1999 (c. 30) (“the 1999 Act”), section 51(1) of the Child Support, Pensions and Social Security Act 2000 (c. 19) (“the 2000 Act”), section 278(1), (2)(b) and (c), (3), (5) and (6)(a) and (b) of the 2004 Act, sections 19(7) and (8) and 21(1), (2) and (3) of the Act and S.I. 2006/745.
Regulation 14A was inserted by S.I. 1996/2131.
S.I. 1991/168. Regulation 4 was amended by S.I. 1994/1062.