The Pension Sharing (Valuation) Regulations (Northern Ireland) 2000

Made: 26th April 2000

Coming into operation: 1st December 2000

The Department for Social Development, in exercise of the powers conferred on it by Articles 24(2), 27(1) and (2) and 73(4) of the Welfare Reform and Pensions (Northern Ireland) Order 1999[^f00001], and now vested in it[^f00002], and of all other powers enabling it in that behalf, hereby makes the following Regulations:

Citation, commencement and interpretation

1

• (1) These Regulations may be cited as the Pension Sharing (Valuation) Regulations (Northern Ireland) 2000 and shall come into operation on 1st December 2000.

• (2) In these Regulations—

• “the 1999 Order” means the Welfare Reform and Pensions (Northern Ireland) Order 1999;

• ...

• “the Minimum Funding Requirement Regulations” means the Occupational Pension Schemes (Minimum Funding Requirement and Actuarial Valuations) Regulations (Northern Ireland) 1996[^f00003];

• “the Transfer Values Regulations” means the Occupational Pension Schemes (Transfer Values) Regulations (Northern Ireland) 1996;

• “the Winding Up Regulations” means the Occupational Pension Schemes (Winding Up) Regulations (Northern Ireland) 1996[^f00004];

• ...

• “the Department” means the Department for Social Development;

• ...

• “employer” has the meaning given by section 176(1);

• ...

• “occupational pension scheme” has the meaning given by section 1;

• “pension arrangement” has the meaning given by Article 43(1) of the 1999 Order;

• “relevant arrangement” has the meaning given by Article 26(8) of the 1999 Order;

• ...

• “scheme” means an occupational pension scheme;

• ...

• “transfer credits” has the meaning given by section 176(1);

• “transfer day” has the meaning given by Article 26(8) of the 1999 Order;

• “transferor” has the meaning given by Article 26(8) of the 1999 Order;

• “trustees or managers” has the meaning given by Article 43(1) of the 1999 Order;

• “valuation day” has the meaning given by Article 26(7) of the 1999 Order.

• (3) In these Regulations—

• (a) any reference to a numbered section is a reference to the section of the Pension Schemes Act bearing that number; and

• (b) any reference to a numbered Article is a reference to the Article of the Pensions Order bearing that number.

• (4) For the purposes of these Regulations and notwithstanding section 39(2) of the Interpretation Act (Northern Ireland) 1954[^f00006], where a period of time is expressed to begin on, or to be reckoned from, a particular day, that day shall be included in the period.

Rights under a pension arrangement which are not shareable

2

• (1) Rights under a pension arrangement which are not shareable are—

• (a) subject to paragraph (2), any rights accrued between 1961 and 1975 which relate to contracted-out equivalent pension benefit within the meaning of section 56 of the National Insurance Act (Northern Ireland) 1966[^f00007] (equivalent pension benefits, etc.);

• (b) any rights in respect of which a person is in receipt of—

• (i) a pension;

• (ii) an annuity, or ;

• (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (iv) dependants’, nominees’ or successors’ income withdrawal within the meaning of, as the case may be, paragraph 21, 27D or 27J of Schedule 28 to the Finance Act 2004,

by virtue of being the widow, widower , surviving civil partner , nominee, successor or other dependant of a deceased person with pension rights under a pension arrangement;

• (ba) any rights relating to sums and assets held for the purposes of—

• (i) a dependant’s drawdown pension fund or flexi-access drawdown fund within the meaning of, as the case may be, paragraph 22 or 22A of Schedule 28 to the Finance Act 2004;

• (ii) a nominee’s or successor’s flexi-access drawdown fund within the meaning of, as the case may be, paragraph 27E or 27K of Schedule 28 to the Finance Act 2004 (nominee’s flexi-access drawdown fund and successor’s flexi-access drawdown fund);

• (c) any rights which will result in the payment of a benefit which is to be provided solely by reason of the—

• (i) disablement, or

• (ii) death,

due to an accident suffered by a person occurring during his pensionable service, and

• (d) any rights in respect of a cash transfer sum or contribution refund that the member would be entitled to under section 97AB (right to cash transfer sum and contribution refund) if pensionable service were to be terminated.

• (2) Paragraph (1)(a) applies only when those rights are the only rights held by a person under a pension arrangement.

Calculation and verification of cash equivalents for the purposes of the creation of pension debits and credits

3

For the purposes of Article 26 of the 1999 Order (creation of pension debits and credits), cash equivalents may be calculated and verified—

• (a) where the relevant arrangement is an occupational pension scheme, in accordance with regulation 4 , or

• (b) in any other case, in accordance with regulations 5 and 7 .

Occupational pension schemes: manner of calculation and verification of cash equivalents

4

• (1) Subject to this regulation, where a person with pension rights is, for the purposes of Part 2 of the Pensions Order, an active member, a deferred member or a pensioner member of an occupational pension scheme, or where a person with pension rights attains, or is over, normal pension age and is not in receipt of the pension, the value of rights in relation to a category of benefits referred to in section 89(6) (scope of Chapter 1) must be calculated and verified in accordance with regulations 7 to 7C and 7E(1) to (3) of the Transfer Values Regulations (manner of calculation of cash equivalents, initial cash equivalents etc), as if—

• (a) in the case of benefits other than money purchase benefits, the member has made an application for a statement of entitlement under section 89A (right to statement of entitlement: benefits other than money purchase), or

• (b) in the case of money purchase benefits, the member has made an application under section 91 (ways of taking right to cash equivalent) to use the cash equivalent of those benefits.

• (2) Where a person with pension rights is continuing to accrue rights to benefits in the category of benefits to be valued, paragraph (1) applies as if the person had ceased to accrue rights in that category of benefits on the valuation day.

• (3) Where a person with pension rights is entitled to present payment of the pension, but the pension is not yet in payment, the cash equivalent must be calculated and verified on the assumption that the pension comes into payment on the transfer day.

• (4) When calculating and verifying the cash equivalent, regulations 7 to 7C and 7E(1) to (3) of the Transfer Values Regulations are to be read as if—

• (a) in regulation 7—

• (i) in paragraph (1)(a) the words “and then making any reductions in accordance with regulation 7D” were omitted;

• (ii) in paragraph (1)(b) for “regulation 7E” there were substituted “regulation 7E(1) to (3)”;

• (b) in regulation 7A(2) for “guarantee date” there were substituted “valuation day”;

• (c) in regulation 7C(2) for “at the date of calculation” there were substituted “on the valuation day”;

• (d) “valuation day” has the meaning given by Article 26(7) of the 1999 Order (meaning of valuation day).

Occupational pension schemes: further provisions as to the calculation of cash equivalents and increases and reductions of cash equivalents

5

• (1) Subject to this regulation, cash equivalents for members of a relevant arrangement other than an occupational pension scheme are to be calculated and verified in accordance with regulations 7 to 7C and 7E(1) to (3) of the Transfer Values Regulations, as if the person with the pension rights had made a valid application under section 91 (ways of taking right to cash equivalent) to use the cash equivalent of the rights to benefits .

• (2) When calculating and verifying the cash equivalent, the Transfer Values Regulations are to be read as if—

• (za) in regulation 7(1)(a) the words “, and then making any reductions in accordance with regulation 7D” were omitted;

• (zb) in regulation 7(1)(b) for “regulation 7E” there were substituted “regulation 7E(1) to (3)”;

• (a) in regulation 1(2)—

• (i) after the definition of “the Taxes Act” there were inserted—

• “transfer day” has the meaning given by Article 26(8) of the Welfare Reform and Pensions (Northern Ireland) Order 1999;

, and

• (ii) for the definition of “trustees” there were substituted—

• “trustees” means the person responsible for the relevant arrangement;

• (b) in regulation 7(1) for “paragraph (5)” there were substituted “paragraphs (5) and (6)”, and

• (c) after regulation 7(5) there were added—

(6) Where the person with pension rights is a member of a personal pension scheme, or those rights are contained in a retirement annuity contract, the value of the benefits which he has accrued under that scheme or contract on the transfer day must be taken to be the cash equivalent to which he would have acquired a right under section 90(1)(b) (right to cash equivalent), if he had made an application under section 91(1) (ways of taking right to cash equivalent) on the date on which the request for the valuation was received.

• (3) In relation to a personal pension scheme which is comprised in a retirement annuity contract made before 4th January 1988, this regulation applies as if such a scheme were not excluded from the scope of Chapter 1 of Part 4ZA of the Pension Schemes Act by section 89(5)(b) (scope of Chapter 1)

Other relevant arrangements: manner of calculation and verification of cash equivalents

6

• (1) Except in a case to which paragraph (3) applies, cash equivalents are to be calculated and verified in such manner as may be approved in a particular case by—

• (a) a Fellow of the Institute of Actuaries;

• (b) a Fellow of the Faculty of Actuaries, or

• (c) a person with other actuarial qualifications who is approved by the Department, at the request of the person responsible for the relevant arrangement, as being a proper person to act for the purposes of this regulation and regulation 7 in connection with that arrangement,

and in paragraph (2) “actuary” means any person such as is referred to in sub-paragraph (a), (b) or (c).

• (1A) Where the person with pension rights is a member of a personal pension scheme, or those rights are contained in a retirement annuity contract, the value of the benefits which he has accrued under that scheme or contract on the transfer day shall be taken to be the cash equivalent to which he would have acquired a right under section 90(1)(b), if he had made an application under section 91(1) on the date on which the request for the valuation was received.

• (1B) In relation to a personal pension scheme which is comprised in a retirement annuity contract made before 4th January 1988, paragraph (2) shall apply as if such a scheme were not excluded from the scope of Chapter IV of Part IV of the Pension Schemes Act by section 89(1)(b) (scope of Chapter IV).

• (2) Except in a case to which paragraph (3) applies, cash equivalents are to be calculated and verified by adopting methods and making assumptions which—

• (a) if not determined by the person responsible for the relevant arrangement, are notified to him by an actuary, and

• (b) are certified by an actuary to the person responsible for the arrangement as being consistent with “Retirement Benefit Schemes—Transfer Values (GN 11)”, adopted or prepared, and from time to time revised, by the Board for Actuarial Standards and current on the valuation day.

• (3) Where a transferor’s cash equivalent, or any portion of it—

• (a) represents his rights to money purchase benefits under the relevant arrangement, and

• (b) those rights do not fall, either wholly or in part, to be valued in a manner which involves making estimates of the value of benefits,

then that cash equivalent, or that portion of it, shall be calculated and verified in such manner as may be approved in a particular case by the person responsible for the relevant arrangement , and by adopting methods consistent with the requirements of Chapter IV of Part IV of the Pension Schemes Act

• (4) This regulation and regulation 7 apply to a relevant arrangement other than an occupational pension scheme.

Other relevant arrangements: reduction of cash equivalents

7

Where all or any of the benefits to which a cash equivalent relates have been surrendered, commuted or forfeited before the date on which the person responsible for the relevant arrangement discharges his liability for the pension credit in accordance with the provisions of Schedule 5 to the 1999 Order, the cash equivalent of the benefits so surrendered, commuted or forfeited shall be reduced in proportion to the reduction in the total value of the benefits.

Signed

Sealed with the Official Seal of the Department for Social Development on 26th April 2000.

John O'Neill — Senior Officer of the — Department for Social Development

Explanatory note

(This note is not part of the Regulations.)

These Regulations specify the types of pension rights which are not subject to pension sharing, and make provision for the calculation and verification of cash equivalents for the purpose of creating pension debits and credits.

Regulation 1 provides for citation, commencement and interpretation.

Regulation 2 specifies rights under a pension arrangement which are not subject to pension sharing.

Regulation 3 specifies that the calculation and verification of cash equivalents for the purposes of creating pension debits and credits may be made by reference to these Regulations.

Regulations 4 and 5 specify how cash equivalents in respect of rights in occupational pension schemes may be calculated and verified.

Regulations 6 and 7 specify how cash equivalents in respect of rights in pension arrangements other than occupational pension schemes may be calculated and verified.

As these Regulations make in relation to Northern Ireland only provision corresponding to provision contained in regulations made by the Secretary of State for Social Security in relation to Great Britain, the requirement for consultation does not apply by virtue of Article 73(9) of the Welfare Reform and Pensions (Northern Ireland) Order 1999 (“the Order”).

The Welfare Reform and Pensions (1999 Order) (Commencement No. 3) Order (Northern Ireland) 2000 (S.R. 2000 No. 133 (C. 5)) provides for the coming into operation of Articles 24 (2) and 27(1) and (2) of the Order, insofar as they are not already in operation, on 1st December 2000.

Footnotes

[^f00001]: S.I. 1999/3147 (N.I. 11)

[^f00002]: See Article 8(b) of S.R. 1999 No. 481

[^f00003]: S.R 1996 No. 570; relevant amending regulations are S.R. 1997 Nos. 160 and 544

[^f00004]: S.R 1996 No. 621, as amended by S.R. 1997 No. 160 and S.R. 1999 No. 486

[^f00006]: 1954 c. 33 (N.I.)

[^f00007]: 1966 c. 6 (N.I.); section 56 was repealed by Schedule 28 to the Social Security Act 1973 (c. 38) but continued in force by regulation 3 of, and Schedule 1 to, S.R. 1975 No. 48

Editorial notes

[^key-e7f48178e3a9375e57594537309602af]: Reg. 1 in operation at 1.12.2000, see reg. 1(1)

[^key-3664e4a0f76923dd86c58c7366d57c5c]: Reg. 2 in operation at 1.12.2000, see reg. 1(1)

[^key-a37af9c7cbf3a63bf3ecde79acff0fce]: Reg. 3 in operation at 1.12.2000, see reg. 1(1)

[^key-bfe64df2c68401e2e29a98e1ee7d92f6]: Reg. 6 in operation at 1.12.2000, see reg. 1(1)

[^key-aecc67d900b6a061064c511aff3c47cb]: Reg. 7 in operation at 1.12.2000, see reg. 1(1)