The Teachers' Pensions (Miscellaneous Amendments) (No. 2) Regulations 2014

Amendments to Part 4 (Transfers) U.K.

10.  For Part 4 substitute—

“PART 4 U.K. Transfers

CHAPTER 1 U.K. General provisions

Application of Part

31.— (1) This Part does not affect a person's entitlement to a cash equivalent conferred by or under Chapter 4 of Part 4 of PSA 1993.

(2) A transfer value in respect of any pension credit rights or pension credit benefits is not to be paid or accepted under this Part.

(3) A transfer value in respect of a person (P) is not to be accepted under this Part if the previous scheme was a money purchase arrangement as defined in section 152 of FA 2004—

(a) to which P's employer was not a contributor, and

(b) which provided benefits additional to those provided by a scheme to which P was a contributor.

(4) Under this Part a transfer value may not be paid in respect of P's phased retirement benefits in payment, only in respect of P's other benefits.

(5) A transfer value may be paid or accepted under this Part, in respect of P, to the extent that paragraphs (6) or (7) apply to the transfer value.

(6) A transfer value referable to P's NPA 65 reckonable service may be paid or accepted if—

(a) P is a person with mixed service, and

(b) P's NPA 60 reckonable service has come into payment.

(7) A transfer value referable to P's further employment may be paid if—

(a) retirement benefits, a short-service serious ill-health grant or a short-service annuity have not come into payment in respect of that further employment, and

(b) retirement benefits, a short-service serious ill-health grant or a short-service annuity have come into payment in respect of the previous employment.

Interpretation of Part

31A.   In this Part—

“club transfer value” in relation to reckonable service in this scheme or another club scheme, means an amount calculated—

(a)

in accordance with the club transfer arrangements, and

(b)

by reference to tables provided by the Government Actuary for this purpose that are in use on the date used for the calculation.

“CUKS transfer value” in relation to reckonable service in this scheme or a comparable United Kingdom scheme, means an amount calculated in accordance with the arrangements for comparable United Kingdom scheme transfers.

“transfer value” in relation to reckonable service which is not related to a club transfer value or a CUKS transfer value, under—

(a)

this scheme, means a value determined by the Secretary of State having taken advice from the Government Actuary, or

(b)

another scheme, means a value determined by the scheme actuary and accepted by the Secretary of State.

Reduction in transfer value: lifetime allowance charge

32A.— (1) This regulation applies where—

(a) the lifetime allowance charge under section 214 of FA 2004 arises on the payment of a cash equivalent or a transfer value in respect of a person to a qualifying recognised overseas pension scheme, and

(b) the person and the Secretary of State are jointly and severally liable to the charge.

(2) The Secretary of State must pay the charge.

(3) The cash equivalent or transfer value which, apart from this regulation, would be payable must be reduced to reflect the amount of the charge in such manner as the Secretary of State determines, after taking advice from the scheme actuary.

(4) In this regulation “qualifying recognised overseas pension scheme” has the same meaning as in Part 4 of FA 2004.

CHAPTER 2 U.K. Transfers on a club basis

SECTION 1 U.K. Application of Chapter

Application of this Chapter

33.   This Chapter applies in relation to the payment and acceptance of club transfer values.

SECTION 2 U.K. Transfers out

Application of this Section

33A.— (1) This Section applies to—

(a) a person who ceases to be in pensionable employment and enters a club scheme;

(b) a person who—

(i) ceases to be in pensionable employment,

(ii) enters a public service scheme established for teachers and maintained in the Channel Islands or the Isle of Man on or before 31st March 2015, and

(iii) makes an application for a transfer value payment on or before 31st March 2017.

(2) Part 1 of Schedule 6 determines the amount of a club transfer value payment.

Payment under this Section

33B.— (1) A club transfer value may only be paid under this Section in respect of a person (P) if P satisfies the conditions in either paragraph (2) or (3).

(2) The conditions are that P—

(a) has left all pensionable employment under this scheme,

(b) makes a written application to the Secretary of State within 12 months from the date on which P becomes subject to another club scheme,

(c) meets the requirements for a club transfer from the receiving scheme, and

(d) has not reached the age of 75.

(3) The conditions are that P—

(a) has entered pensionable employment in a public service scheme for teachers established and maintained in the Channel Islands or the Isle of Man on or before 31st March 2015, after leaving this scheme, and makes a written application for a transfer value payment to the Secretary of State either—

(i) on or before the day on which P reaches the normal pension age, or

(ii) after the day on which P reaches the normal pension age, having entered pensionable employment—

(aa) on or before the day on which P reaches the normal pension age, and

(bb) immediately after the end of P's employment in this scheme service, and

(b) makes the application on or before 31st March 2017.

Restrictions on the payment of a club transfer value

33C.   Save as provided in regulation 31(5), a club transfer value is not to be paid under this Section if, before a person's application for a club transfer value payment is received, the person—

(a) becomes subject to another club scheme and is in receipt of retirement benefits,

(b) is in receipt of a short-service serious ill-health grant, or

(c) is in receipt of a short-service annuity.

SECTION 3 U.K. Transfers in

Application of this Section

33D.— (1) This Section applies to—

(a) a person who ceases to be in another club scheme and enters pensionable employment in this scheme, and

(b) a person who—

(i) ceases to be in a public service scheme for teachers established and maintained in the Channel Islands or the Isle of Man on or before 31st March 2015,

(ii) enters pensionable employment in this scheme on or before 31st March 2015, and

(iii) makes an application for a transfer value payment on or before 31st March 2017.

(2) A person in respect of whom a club transfer value is accepted is entitled to count reckonable service in accordance with paragraph 11A of Part 2 of Schedule 6.

Receipt under this Section

33E.— (1) A club transfer value may be accepted under this Section in respect of a person (P) if P satisfies the conditions in either paragraph (2) or (3).

(2) P—

(a) enters pensionable employment,

(b) makes a written application to the Secretary of State within 12 months from the date on which P enters pensionable employment,

(c) makes the application before P attains the age of 75, and

(d) before P ceased to be subject to the previous scheme, retirement benefits have not come into payment to P either—

(i) under regulation 60 (retirement benefits), or

(ii) under a provision of a statutory scheme corresponding to regulation 60.

(3) (a) P enters pensionable employment on or before 31st March 2015, after leaving a public service scheme for teachers established and maintained in the Channel Islands or the Isle of Man, and either—

(i) makes a written application to the Secretary of State on or before the day on which P reaches the normal pension age, or

(ii) makes the application after the day on which P reaches the normal pension age, having entered pensionable employment—

(aa) on or before the day on which P reaches the normal pension age, and

(bb) immediately after the end of P's employment in the previous scheme service, and

(b) P makes the application on or before 31st March 2017.

CHAPTER 3 U.K. Transfers on a comparable United Kingdom service basis

SECTION 1 U.K. Application of Chapter

Application of this Chapter

34.   This Chapter applies in relation to the payment and acceptance of CUKS transfer values.

SECTION 2 U.K. Transfers out

Application of this Section

34A.— (1) This Section applies if—

(a) a person (P) ceases to be in pensionable employment and has become subject to a comparable United Kingdom scheme on or before 31st March 2015, and

(b) P makes an application for a transfer value payment on or before 31st March 2017.

(2) Part 1 of Schedule 6 determines the amount of a CUKS transfer value payment.

Payment under this Section

34B.— (1) A CUKS transfer value may only be paid under this Section in respect of a person (P) if either paragraph (2) or (3) applies.

(2) P makes an application for a CUKS transfer value payment on or before the day P reaches the normal pension age.

(3) (a) P makes an application for a CUKS transfer value after the day on which P reaches the normal pension age,

(b) P joined the comparable United Kingdom scheme—

(i) immediately after ceasing to be in pensionable employment, and

(ii) before reaching the normal pension age, and

(c) before P's application for a CUKS transfer value payment is received, P is not in receipt of—

(i) retirement benefits from the other comparable United Kingdom scheme,

(ii) a short-service serious ill-health grant, or

(iii) a short-service annuity.

SECTION 3 U.K. Transfers in

Application of this Section

34C.— (1) This Section applies if a person—

(a) ceases to be in a comparable United Kingdom scheme,

(b) enters pensionable employment in this scheme on or before 31st March 2015, and

(c) makes an application for a transfer value payment on or before 31st March 2017.

(2) A person in respect of whom a CUKS transfer value is accepted is entitled to count reckonable service in accordance with Part 2 of Schedule 6.

Receipt under this Section

34D.— (1) A CUKS transfer value payment may be accepted under this Section in respect of a person (P) to whom this Section applies, if either paragraph (2) or (3) applies.

(2) (a) P makes an application for a CUKS transfer value on or before the day on which P reaches the normal pension age, and

(b) when P's application is received, P is not in receipt of—

(i) retirement benefits under this scheme,

(ii) a short-service serious ill-health grant, or

(iii) a short-service annuity.

(3) (a) P makes an application for a CUKS transfer value after the day on which P reaches the normal pension age, and

(b) P entered pensionable employment—

(i) immediately after ceasing comparable UK service, and

(ii) on or before the date on which P reaches the normal pension age.

CHAPTER 4 U.K. Transfers on a cash equivalent basis

SECTION 1 U.K. Application of Chapter

Application of this Chapter

35.   This Chapter applies in relation to the payment and acceptance of transfer values.

SECTION 2 U.K. Transfers out

Application of this Section

35A.— (1) This Section applies if a person ceases to be in pensionable employment and has become subject to another registered pension scheme.

(2) This Section only applies to a person who ceases to be in pensionable employment and becomes subject to a personal pension scheme if the person was in pensionable employment after 31st December 1985.

Payment under this Section

35B.   A transfer value may only be paid under this Section in respect of a person (P) if P—

(a) has left all pensionable employment under this scheme,

(b) makes a written application for a transfer value payment to the Secretary of State within 12 months from the date on which P becomes subject to another registered pension scheme, and

(c) has not reached the normal pension age when P's application is received.

Restrictions on the payment of a transfer value

35C.   A transfer value is not to be paid under this Section if, before a person's application for a transfer value payment is received, the person is in receipt of—

(a) retirement benefits under this scheme,

(b) a short-service serious ill-health grant, or

(c) a short service annuity.

Limitation on payment of transfer values

35D.— (1) Where the receiving scheme is not a contracted-out occupational pension scheme a transfer value may only be paid under this Section if the person—

(a) is not qualified for retirement benefits, or

(b) has ceased to be in pensionable employment before 6th April 1978, or

(c) is a married woman or widow who, by virtue of an election made or treated as made under regulations under section 19(4) of the Social Security Contributions and Benefits Act 1992, either is liable to pay primary Class 1 contributions or Class 2 contributions at a reduced rate or is under no liability to pay Class 2 contributions.

(2) Where a person has accrued section 9(2B) rights a transfer value may only be paid under regulation 31 in respect of those rights if any applicable provisions of Part 3 of the Contracting-Out (Transfer and Transfer Payments Regulations) 1996 are complied with.

(3) Where the person has acquired a right to a cash equivalent, a transfer value may only be paid under this Section if—

(a) the service to which the cash equivalent relates includes service before 1st September 1988, and

(b) the right has been exercised by requiring the whole of the cash equivalent to be paid to the scheme managers of an occupational pension scheme which is not a club scheme.

(4) Where the person has acquired a right to a part cash equivalent, a transfer value may only be paid under this Section if the person would not remain qualified for retirement benefits on taking that right.

(5) In this regulation—

“occupational pension scheme” has the same meaning as in section 150(5) of FA 2004, and

“receiving scheme” means the scheme a person becomes subject to after leaving pensionable employment.

SECTION 3 U.K. Transfers in

Application of this Section

35E.— (1) This Section applies if a person ceases to be in another registered pension scheme and enters pensionable employment.

(2) A person in respect of whom a transfer value on a cash equivalent basis is accepted is entitled to count reckonable service in accordance with Part 2 of Schedule 6.

Receipt under this Section

35F.   A transfer value may be accepted under this Section in respect of a person (P) who enters pensionable employment if—

(a) P makes a written application to the Secretary of State within 12 months from the date on which P enters pensionable employment, and

(b) P's application is made before P attains the normal pension age.

Restrictions on the acceptance of a transfer value

35G.   A transfer value payment in respect of a person (P) may not be accepted under this Section if, before P's application for a transfer value payment is received, P is in receipt of—

(a) retirement benefits under this scheme,

(b) a short-service serious ill-health grant, or

(c) a short-service annuity.

CHAPTER 5 U.K. Bulk transfers

SECTION 1 U.K. Transfers out

Payment of bulk transfer values

36.— (1) This regulation applies where, as a result of a relevant transfer to a new employer, a person or a group of persons is no longer in pensionable employment, and either has joined or is entitled to join the new employer's pension scheme (“the receiving scheme”) referred to below as a bulk transfer.

(2) A transfer value may be calculated by the Secretary of State, after taking advice from the scheme actuary, in respect of a person who has made a written application to the Secretary of State for such a transfer within 3 months after the date on which the person was notified of the opportunity to take part in the bulk transfer arrangement.

(3) Such transfer value may be paid to the receiving scheme on the person's becoming subject to the scheme.

SECTION 2 U.K. Transfers in

Acceptance of bulk transfer values

36A.— (1) This regulation applies where, as the result of a relevant transfer to a new employer, a person or a group of persons has become employed in pensionable employment and is given the opportunity to transfer past service pension rights, referred to below as a “bulk transfer”.

(2) A transfer value may be accepted by the Secretary of State in respect of a person who has made a written application within 3 months after the date on which the person was notified of the opportunity to take part in the bulk transfer, but this paragraph is subject to regulation 33G(1).

(3) A person in respect of whom a transfer of such rights has been accepted as part of a bulk transfer is entitled to count reckonable service in accordance with Part 3 of Schedule 6.”.