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The National Health Service Pension Scheme (Scotland) Regulations 2008

Type Scottish-Statutory-Instrument

Publication 2008-06-04

State In force

Jurisdiction Scotland

Department Queen's Printer for Scotland

Source legislation.gov.uk

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(i) payable under regulation 3.D.7(5) (upper tier ill health pension), if the deceased had not reached the age of 65 on the date of death; and

(ii) payable under regulation 3.D.1 (normal retirement pensions), if the deceased had reached the age of 65 on the date of death,

to which the member would have been entitled on the date of death; and

(b) in respect of each pension to which the person has been entitled for less than 5 years, the lesser of–

(i) 5 times the annual rate of the pension payable after exercising any option under regulation 3.D.10 (general option to exchange part of pension for lump sum), less the amount of the pension payments already made to the member; and

(ii) an amount equal to twice the annual average of the member’s uprated earnings at the date of death by reference to which the pension was calculated, less any lump sum paid to the member when the pension came into payment as a result of the member exercising the option under regulation 3.D.10 (general option to exchange part of pension for lump sum).

(3) If the pensioner member exercised the option under regulation 3.D.14 (election to allocate pension), the reference in paragraph (2)(b) to the amount of the pension payments already made to the member is a reference to the amount of the pension payments that would have been made apart from the election.

Amount of lump sum: dual capacity members: members with pensions under regulation 3.D.5

3.E.19

(1) Paragraph (2) applies for determining the lump sum payable by virtue of this regulation on the death of a member who–

(a) is an active member in service in an employment in respect of which the member has exercised the option under regulation 3.D.5; and

(b) is a pensioner member by virtue of being entitled to a pension under that regulation.

(2) The lump sum is an amount equal to the sum of–

(a) twice the appropriate fraction of the annual average of the member’s uprated earnings at the date of death; and

(b) if the member had been entitled to any pensions under regulation 3.D.5 for less than 5 years, the lesser of–

(i) the total of the guarantee amounts for each of those pensions (see paragraph (3)); and

(ii) the aggregate lump sum cap (see paragraph (4)).

(3) The guarantee amount for a pension under regulation 3.D.5 is 5 times the annual rate of the pension at the date of death, less the amount of the pension payments already made to the member in respect of the pension.

(4) The aggregate lump sum cap is equal to twice the appropriate fraction of the annual average of the member’s uprated earnings by reference to which the pension to which the member became entitled on last exercising the option under regulation 3.D.5 was calculated, less the total of any lump sums paid to the member in exchange for pensions under regulation 3.D.5 as a result of the member exercising the option under regulation 3.D.10 (general option to exchange part of pension for lump sum).

(5) In this regulation “the appropriate fraction” means–

$$DPSTDPS$ where– DPS is, where the member continues in pensionable service as an active member on the option day (or the last such option day if the option has been exercised more than once), the total percentage of the pension which does not form part of the specified percentage of pension at the option day; and TDPS is the aggregate of DPS and the total percentage of the pension (at the option day or the last such option day if the option has been exercised more than once) which forms part of the specified percentage of pension.$

Amount of lump sum: pension credit members

3.E.20

(1) The lump sum payable on the death of a pension credit member who dies before any benefits derived from the member’s pension credit have become payable is an amount equal to the amount of the annual pension to which the member would have become entitled under regulation 3.D.2 if the member had reached the age of 65 on the date of death, multiplied by 2.25.

(2) The lump sum payable on the death of a pension credit member who dies after a pension under that regulation has become payable is equal to the lower of–

(a) the annual amount of the pension that would have been payable to the member during so much of the period of 5 years beginning with the date on which the pension became payable as falls after the date of death; and

$$2AUE-CLS,$ where– AUE is the amount as at the valuation day of the annual average of the uprated earnings of the debit member from whose rights the pension credit member’s pension credit is derived; and CLS is the amount of the lump sum (if any) paid to the pension credit member as a result of the member exercising the option under regulation 3.D.10 (general option to exchange part of pension for lump sum) on becoming entitled to the pension under regulation 3.D.2 (pension credit members).$

(3) For the purposes of paragraph (2) the annual amount of the pension is taken to be the sum of–

(a) the annual amount of the pension as at the beginning date for that pension; and

(b) the increase (if any) in that annual amount under the Pensions (Increase) Act 1971 payable as at the date of death.

(4) In this regulation–

“valuation day” means the day referred to in section 29(7) of the 1999 Act; and

“the beginning date”, in relation to a pension, has the meaning given by section 8(2A) of the Pensions (Increase) Act 1971.

Payment of lump sums on death

3.E.21

(1) A lump sum payable under regulation 3.E.16 must be paid in accordance with this regulation.

(2) The lump sum must be paid to the member’s personal representatives, except so far as it is payable to a different person under paragraph (4) or (6).

(3) A member may give notice to the Scottish Ministers–

(a) specifying–

(i) the member’s personal representatives;

(ii) one or more other individuals; or

(iii) one incorporated or unincorporated body,

to whom the lump sum is to be paid; and

(b) where 2 or more individuals are specified, specifying the percentage of the payment payable to each of them.

(4) If the member–

(a) has given notice under paragraph (3) specifying a person; and

(b) has not revoked that notice,

the lump sum (or, as the case may be, the percentage of it specified in respect of the person) may be paid to the person, unless paragraph (5) or (7) applies.

(5) This paragraph applies if–

(a) the person specified in the notice has died before the payment can be made; or

(b) payment to that person is not, in the opinion of the Scottish Ministers, reasonably practicable.

(6) If the member–

(a) leaves a surviving adult dependant; and

(b) has not given notice under paragraph (3) or has revoked any notice so given,

the lump sum may be paid to that person unless paragraph (7) applies.

(7) This paragraph applies if the person to whom the lump sum (or a specified percentage of the lump sum) would otherwise be payable has been convicted of an offence specified in regulation 3.J.7(2) (forfeiture of rights to benefit) and the Scottish Ministers have directed, as a consequence of that conviction, that the person’s right to a payment in respect of the member’s death is forfeited.

(8) A notice under paragraph (3)–

(a) must be given in writing; and

(b) may be revoked at any time by a further notice in writing.

(9) The Scottish Ministers may pay the lump sum to any person claiming to be the member’s personal representative or otherwise to fall within paragraph (3)(a), without requiring proof that the person is such a person concerned, if the lump sum does not exceed–

(a) £5,000; or

(b) any higher amount specified in an order made under section 6(1) of the Administration of Estates (Small Payments) Act 1965[^f00140] as the amount to be treated as substituted for references to £500 in section 1 of that Act.

Tax treatment under the 2004 Act of lump sums payable on pensioners' deaths

3.E.22

(1) A pensioner’s lump sum (less any amount deducted under paragraph (4) where that applies) is treated for the purposes of the 2004 Act as a pension protection lump sum death benefit if the member has given the scheme administrator a statement in writing that any such lump sum is to be treated as such a benefit.

(2) In this regulation “pensioner’s lump sum” means–

(a) a lump sum payable under regulation 3.E.16 to which regulation 3.E.17(2) applies; or

(b) so much of a lump sum payable under regulation 3.E.16 as is calculated under regulation 3.E.18(2).

(3) Paragraph (4) applies if the person who is the scheme administrator for the purposes of section 206 of the 2004 Act (“the administrator”) is liable for tax under that section in respect of a pension protection lump sum death benefit.

(4) The administrator may deduct from the lump sum the tax payable in respect of it.

Miscellaneous and general provisions

Death during period of absence

3.E.23

(1) This regulation applies if a person dies during a period when the person–

(a) is absent from work because of illness or injury;

(b) is on ordinary maternity leave;

(d) is on paternity leave or parental leave,

and the earnings used to calculate the person’s pensionable pay have ceased to be paid before the person’s death.

(2) Any benefits payable under this Chapter must be calculated as if the person had died in pensionable service on the day before those earnings ceased.

Polygamous marriages

3.E.24

(1) This regulation applies if–

(a) a member dies without leaving a surviving adult dependant; and

(b) at the date of death the member was married to one or more persons under a law which permits polygamy.

(2) If, had the member left a surviving adult dependant, any benefit would have been payable to the surviving adult dependant as such, that benefit is payable–

(a) if there is one such person, to that person; or

(b) if there are 2 or more such persons, to those persons in equal shares.

(3) Such a person’s or persons' share of a pension will not be increased on the death of any such person.

Dual capacity membership: death benefits

3.E.25

(1) This paragraph applies if the deceased member was–

(a) a member of the scheme of 2 or more of the kinds specified in paragraph (2);

(b) a pensioner member in respect of 2 or more pensions; or

(2) The kinds of member are–

(a) an active member;

(b) a deferred member;

(d) a pension credit member.

(3) If paragraph (1) applies, the general rule is that–

(a) benefits are payable in respect of the member under this Chapter as if 2 or more members of the kinds in question had died (so that 2 or more pensions or lump sums are payable in respect of the one deceased member); and

(b) the amounts payable are determined accordingly.

(4) Paragraph (3) does not apply where specific provision to the contrary is made about a person to whom that paragraph would otherwise apply.

(5) In relation to the specific provision referred to in paragraph (3), see, in particular–

(a) regulation 3.E.3 (amount of pensions under regulation 3.E.1: active members);

(b) regulation 3.E.4 (amount of pensions under regulation 3.E.1: pensioner members);

(d) regulation 3.E.8 (surviving children’s pensions);

(e) regulation 3.E.15 (amount of children’s pension under regulation 3.E.8: re-employed pensioners);

(f) regulation 3.E.16 (lump sum benefits on death: introduction);

(g) regulation 3.E.18 (amount of lump sum: dual capacity members (disregarding regulation 3.D.5 employments));

(h) regulation 3.E.19 (amount of lump sum: dual capacity members: members with pensions under regulation 3.D.5); and

(i) Chapter 3.G (re-employment and rejoining the scheme).

(6) If a person who is a pension credit member is entitled to 2 or more pension credits–

(a) benefits are payable in respect of the person under this Chapter as if the person were 2 or more persons, each being entitled to one of the pension credits (so that 2 or more pensions or lump sums are payable in respect of the one pension credit member); and

(b) the amounts of those benefits are determined accordingly.

Guaranteed minimum pensions for surviving spouses and civil partners

3.E.26

(1) If a person who is the surviving spouse or civil partner of a deceased active, deferred or pensioner member has a guaranteed minimum pension under section 17 of the 1993 Act in relation to benefits in respect of the deceased member under the scheme–

(a) nothing in this Part permits or requires anything that would cause requirements made by or under that Act in relation to such a person and such a person’s rights under a scheme not to be met in the case of the person;

(b) nothing in this Part prevents anything from being done which is necessary or expedient for the purposes of meeting such requirements in the case of the person; and

(2) If apart from this regulation–

(a) no pension would be payable to the surviving spouse or civil partner under this Chapter; or

(b) the weekly rate of the pensions payable would be less than the guaranteed minimum,

a pension the weekly rate of which is equal to the guaranteed minimum is payable to the surviving spouse or civil partner for life or, as the case may be, pensions the aggregate weekly rate of which is equal to the guaranteed minimum are so payable.

(3) Paragraph (2) does not apply to a pension that is forfeited–

(a) as a result of a conviction for treason; or

(b) in a case where an offence within regulation 3.J.7(2)(b) (forfeiture of rights to benefits) is committed.

CHAPTER 3.F — TRANSFERS

Transfers out

Introduction: rights to transfer value payment

3.F.1

(1) This Chapter supplements the rights conferred by or under Chapter 4 of Part 4 of the 1993 Act (transfer values) and applies to practitioners.

(2) This Chapter is without prejudice to that Chapter or Chapter 5 of that Part[^f00141] (early leavers: cash transfer sums and contribution refunds).

(3) Accordingly–

(a) a member to whom Chapter 4 of that Part applies (see section 93(1)(a) of that Act) is entitled to require the payment of a transfer value in respect of the rights to benefit that have accrued to or in respect of the member under the scheme; and

(b) a member to whom Chapter 5 of that Part applies (see section 101AA(1) of that Act) is entitled to a cash transfer sum or a contribution refund in accordance with that Chapter.

(4) Subject to paragraphs (5) and the other provisions of this Chapter, any other member is entitled to require such a payment as if such rights had accrued to or in respect of him or her by reference to the pensionable service the member is entitled to count under the scheme (and references in this Chapter to the member’s accrued rights or benefits are to be read accordingly).

(5) Paragraph (4) does not–

(a) give any rights to an active member;

(b) give any rights to a pensioner member in respect of the pension to which the member has become entitled; or

Applications for statements of entitlement

3.F.2

(1) A member who requires a transfer value payment to be made must apply in writing to the Scottish Ministers for a statement of the amount of the cash equivalent of the member’s accrued benefits under the scheme at the guarantee date (a “statement of entitlement”).

(2) In this Part, “the guarantee date” means any date that–

(a) falls within the required period;

(b) is chosen by the Scottish Ministers;

(d) is within the period of 10 days ending with the date on which the member is provided with the statement of entitlement,

and in counting the period of 10 days referred to in sub-paragraph (d), Saturdays, Sundays, Christmas Day, New Year’s Day and Good Friday are excluded.

(3) In paragraph (2) “the required period” means–

(a) the period of 3 months beginning with the date of the member’s application for a statement of entitlement; or

(b) such longer period beginning with that date (but not exceeding 6 months) as may reasonably be required if, for reasons beyond the control of the Scottish Ministers, the requisite information cannot be obtained to calculate the amount of the cash equivalent.

(4) The member may withdraw the application for a statement of entitlement by notice in writing at any time before the statement is provided.

Applications for transfer value payments: general

3.F.3

(1) A member who has applied for and received a statement of entitlement under regulation 3.F.2 may apply in writing to the Scottish Ministers for a transfer value payment to be made.

(2) On making such an application a member becomes entitled to a payment of an amount equal, or amounts equal in aggregate, to the amount specified in the statement of entitlement (or such other amount as may be payable by virtue of regulation 3.F.4(2)).

(3) In this Part such a payment is referred to as “the guaranteed cash equivalent transfer value payment”.

(4) The application must specify the pension scheme or other arrangement to which the payment or payments should be applied.

(5) The application must meet such other conditions as the Scottish Ministers may require.

(6) An application under this regulation may be withdrawn by notice in writing to the Scottish Ministers, unless an agreement for the application of the whole or part of the guaranteed cash equivalent transfer value payment has been entered into with a third party before the notice is given.

Applications for transfer value payments: time limits

3.F.4

(1) Subject to paragraphs (4) and (5), an application under regulation 3.F.3(1) must be made before the end of the period of 3 months beginning with the guarantee date, and the payment must be made no later than–

(a) 6 months after that date; or

(b) if it is earlier, the date on which the member reaches 65.

(2) If the payment is made later than 6 months after the guarantee date, the amount of the payment to which the member is entitled must be increased by–

(a) the amount by which the amount specified in the statement of entitlement falls short of the amount it would have been if the guarantee date had been the date on which the payment is made; or

(b) if it is greater and there was no reasonable excuse for the delay in payment, interest on the amount specified in the statement of entitlement, calculated on a daily basis over the period from the guarantee date to the date when the payment is made at an annual rate of 1 per cent above the base rate.

(3) Paragraph (4) applies if–

(a) disciplinary or court proceedings against the member are begun within 12 months after the member leaves the employment which qualified the member to belong to the scheme; and

(b) it appears to the Scottish Ministers that the proceedings may lead to all or part of the member’s benefits being forfeited under regulation 3.J.7 (forfeiture of rights to benefit).

(4) The Scottish Ministers may defer doing what is needed to carry out what the member requires until the end of the period of 3 months beginning with the date on which those proceedings (including any proceedings on appeal) are concluded.

(5) In any case where a direction is given under regulation 3.J.7 for the forfeiture of a member’s benefits, this regulation applies as if the amount specified in the statement of entitlement were reduced by an amount equal to the value of the benefits forfeited, as determined by the scheme actuary.

(6) In respect of an applicant who does not fall within regulation 3.D.1(2)–

(a) in the case of an application that requires the guaranteed cash equivalent transfer value payment to be made to an occupational pension scheme or a registered personal pension scheme, an application under paragraph (1) may only be made if–

(i) the applicant became a member of that scheme not later than the end of the period of 12 months beginning with the day after the date on which the member ceased to be in the pensionable service in which the rights accrued (“the leaving date”); and

(ii) the application is made not later than–

(aa) the end of the period of 12 months beginning with the day on which the applicant became a member of that scheme; or

(bb) if the applicant became a member of that scheme on or before the leaving date, the end of the period of 12 months beginning with the day after the leaving date; and

(b) in any other case, an application under paragraph (1) may only be made before the end of the period of 12 months beginning with the day after the leaving date.

Ways in which transfer value payments may be applied

3.F.5

(1) A member may only require the Scottish Ministers to apply the guaranteed cash equivalent transfer value payment in one or more of the ways permitted under section 95 of the 1993 Act.

(2) Paragraph (1) applies whether or not the member is entitled to a guaranteed cash equivalent transfer value payment under Chapter 4 of Part 4 of that Act.

(3) The whole of the guaranteed cash equivalent transfer value payment must be applied, unless paragraph (4) applies.

(4) The benefits attributable to–

(a) the member’s accrued rights to a guaranteed minimum pension; or

(b) the member’s accrued rights attributable to service in contracted-out employment on or after 6th April 1997,

may be excluded from the guaranteed cash equivalent transfer value payment if section 96(2) of the 1993 Act applies (trustees or managers of certain receiving schemes or arrangements able and willing to accept a transfer payment only in respect of the member’s other rights).

(5) A transfer payment may only be made to–

(a) a pension scheme that is registered under Chapter 2 of Part 4 of the 2004 Act; or

(b) an arrangement that is a qualifying recognised overseas pension scheme for the purposes that Part (see section 169(2) of that Act).

Calculating amounts of transfer value payments

3.F.6

(1) Subject to paragraphs (3) and (5), the amount of the guaranteed cash equivalent transfer value payment is to be calculated in accordance with guidance and tables provided by the scheme actuary to the Scottish Ministers for use at the guarantee date.

(2) In preparing those tables the scheme actuary must use such factors as the scheme actuary considers appropriate, having regard to section 97 of the 1993 Act and regulations made under that Act (whether or not the payment is in respect of a person entitled to a guaranteed cash equivalent transfer value payment under that Act).

(3) Subject to paragraph (5), if the amount calculated in accordance with paragraph (1) is less than the member’s minimum transfer value (if any), the amount of the guaranteed cash equivalent transfer value payment is to be equal to that value instead.

(4) In paragraph (3) “minimum transfer value”, in relation to any person, means the sum of–

(a) any transfer value payments that have been made to the scheme in respect of the person as a result of which the person is entitled to count any pensionable service under the scheme by reference to which the accrued rights subject to the transfer are calculated; and

(b) any contributions paid by the person under Chapter 3.C as a result of which the person is entitled to count such service.

(5) If the transfer value payment is made under the public sector transfer arrangements, the amount of the transfer value payment is calculated–

(a) in accordance with those arrangements rather than paragraphs (1) and (3); 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 used for the calculation.

Effect of transfers-out

3.F.7

If a transfer value payment is made under this Chapter in respect of a person’s rights under the scheme, those rights are extinguished.

Transfers in

Right to apply for acceptance of transfer value payment from another scheme

3.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 or her under any kind of scheme or arrangement to which paragraph (2) applies, other than a FSAVC, to be accepted by the scheme.

(2) This paragraph applies to–

(a) a registered occupational pension scheme;

(b) a registered personal pension scheme;

(d) a corresponding health service 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)[^f00142] of the Income and Corporation Taxes Act 1988 (free-standing AVC schemes); and

(ii) became a registered scheme for the purposes of that Act by virtue of Schedule 36 to that Act; and

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

Procedure for applications under regulation 3.F.8

3.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 the scheme and before the applicant reaches the age of 65;

(d) if the Scottish Ministers so require, 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 service that the member will be entitled to count as a result of the transfer if the payment is accepted by the Scottish Ministers; and

(ii) in a case where the transfer is not made under those arrangements, of the service that member will be entitled so to count if the payment is so accepted by the Scottish Ministers within such period as is specified in the statement; and

(e) must meet such other conditions as the Scottish Ministers may require.

(2) A statement given to the member in pursuance of a 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 3.A.11 (restriction on pensionable earnings used for calculating benefits in respect of capped transferred-in service) 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.

Acceptance of transfer value payments

3.F.10

(1) If an application is duly made by a member under regulation 3.F.8, the Scottish Ministers may accept the transfer value payment if such conditions as they may require are met, unless paragraph (4) applies.

(2) If the Scottish Ministers accept the payment–

(a) the member is entitled to count the 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) in the case of a member any of whose service falls to be treated as capped transferred-in service, with such period as so falls counting as such service.

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

(4) For the meaning of “capped transferred-in service”, see regulation 3.F.12.

(5) The Scottish Ministers 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.

(6) Paragraph (5) does not apply if the transfer would be paid under the public sector transfer arrangements.

Calculation of transferred-in pensionable service

3.F.11

(1) Subject to the following provisions of this regulation, 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 Scottish Ministers.

(2) 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 the financial year in which the member joined the scheme (or the financial year in which the transfer payment is received if the payment is more than 12 months after the member joined the scheme).

(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 final year’s pensionable pay that would have given rise to a cash equivalent in respect of officer service under regulation 3.F.6 (calculating amounts of transfer value payments); 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 final year’s pensionable pay mentioned in paragraph (b) throughout that period.

(4) Paragraph (3) does not apply if–

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

(b) the transfer payment is received by the Scottish Ministers 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 corresponding health service 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 the scheme; and

(b) the member’s contributions to that scheme were contributions to the scheme.

(7) In this Part “corresponding health service scheme” means–

(a) a superannuation scheme provided under regulations made under section 10 of the Superannuation Act 1972[^f00143] and having effect in England and Wales;

(b) a superannuation scheme provided under Article 12 of the Superannuation (Northern Ireland) Order 1972[^f00144];

(d) any other occupational pension scheme approved for the purposes of this regulation by the Scottish Ministers.

Meaning of “capped transferred-in service”

3.F.12

(1) This regulation applies if–

(a) the Scottish Ministers accept 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.

(2) For the purposes of this Part, the same proportion of the service that the member is entitled to count under regulation 3.F.10(2)(a) as the capped service bears to the whole of the service in respect of which the transfer is made is capped transferred-in service.

(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 1988[^f00146]; 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.

Public sector transfer arrangements

3.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 out

3.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 the scheme;

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

(d) the Scottish Ministers have 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 Scottish Ministers determine 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 Scottish Ministers consider 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 in

3.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”);

(d) the Scottish Ministers have 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) 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, the scheme has effect with such modifications as the Scottish Ministers consider necessary in consequence of the transfer.

EU and other overseas transfers

3.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) The scheme applies in relation to the member with such modifications as the Scottish Ministers consider necessary to comply with–

(a) the terms of those arrangements;

(b) any applicable provision contained in or made under any enactment; and

CHAPTER 3.G — RE-EMPLOYMENT AND REJOINING THE SCHEME

Preliminary

Application of Chapter 3.G

3.G.1

(1) Subject to paragraphs (4) to (7), this Chapter applies to persons who–

(a) have been active members of the scheme in respect of their service in an employment;

(b) have ceased to be employed in that employment and have become deferred members or pensioner members of the scheme because of their rights in respect of that service;

(d) become active members of the scheme in respect of their service in that employment.

(2) In these regulations a member to whom this Chapter applies is referred to as a “re employed member”.

(3) In this Chapter, in relation to any re-employed member–

(a) the service referred to in paragraph (1)(a) is referred to as “the earlier service”; and

(b) the service referred to in paragraph (1)(d) is referred to as “the later service”.

(4) This Chapter also applies to members who–

(a) cease to be active members in respect of their service in an employment as the result of exercising the option under regulation 3.B.5 (opting out of the scheme); and

(b) later become active members in that or another employment,

as it applies to members who cease to be employed in the employment in which they are active members, and paragraph (3) must be read accordingly.

(5) This Chapter does not apply if the earlier service and the later service are treated as a single continuous period of pensionable service under regulation 3.A.4(5) (pensionable service: breaks in service).

(6) Regulation 3.G.4 applies whether or not the employment mentioned in paragraph (1)(c) is employment that qualifies the member to belong to the scheme.

(7) If a re-employed member ceases to be an active member again, this Chapter applies again in respect of the later service as if it were the earlier service (and so on).

General rule: separate treatment of service etc. except where unfavourable to member

General rule: separate treatment of service etc.

3.G.2

(1) The general rule is that, in accordance with regulations 3.D.17 (dual capacity membership) and 3.E.25 (dual capacity membership: death benefits)–

(a) the re-employed member’s pensionable service in respect of the earlier service and the later service are treated separately; and

(b) the re-employed member’s pensionable earnings in respect of the earlier service and the later service are determined separately.

(2) This regulation is subject to the provisions mentioned in regulations 3.D.17(4) and 3.E.25(5).

Exception to general rule in 3.G.2

3.G.3

(1) The general rule in regulation 3.G.2 does not apply if–

(a) at the time that the member first becomes entitled to a pension under the scheme in respect of the earlier service or the later service; or

(b) if it is earlier, at the time of the member’s death,

in the opinion of the Scottish Ministers the benefits payable to or in respect of the member would be more valuable if that general rule were disregarded.

(2) Accordingly, in a case within paragraph (1)–

(a) the member’s pensionable service in respect of the earlier service and the later service are treated as one single continuous period;

(b) the member’s qualifying service in respect of the earlier service and the later service are each treated as one single continuous period;

(d) the member’s pensionable earnings in respect of the later period may be determined by reference to the earlier period as well as the later period (as a result of regulation 3.A.4(5)).

Special rules about re-employment of ill health pensioners

Effect of re-employment on upper tier ill health pensions

3.G.4

(1) This regulation applies if a member who is entitled to an upper tier ill health pension under regulation 3.D.7 (early retirement on ill health (active members)) in respect earlier service–

(a) did not opt to exchange that pension for a lump sum in accordance with regulation 3.D.11 (option for members in serious ill health to exchange whole pension for lump sum); and

(b) has re-entered employment (“the further employment”).

(2) Subject to paragraphs (3) and (4), the member ceases to be entitled to the upper tier ill health pension under regulation 3.D.7 and becomes entitled to a lower tier ill health pension under that regulation.

(3) In a case where the further employment is–

(a) not NHS employment; and

(b) an excluded employment,

paragraph (2) does not apply.

(4) In a case where the further employment is–

(a) NHS employment; and

(b) an excluded employment

paragraph (2) does not apply during the initial period.

(5) As regards a further employment in NHS employment–

(a) paragraph (2) applies from the first lower tier ill health pension payment date which falls after the first anniversary of the member’s re-entry into NHS employment, whether or not that day is part of a continuous period of further NHS employment beginning with entry into that employment; and

(b) the member may not rejoin the scheme in respect of that employment or any other NHS employment until after the first anniversary of the member’s re-entry into NHS employment, whether or not that or any other NHS employment is an excluded employment.

(6) For the purposes of this regulation–

(a) an employment is an excluded employment at any time in a scheme year, in relation to a member, if the member’s earnings from the employment and any other employments are such that the lower earnings limit for that year is not exceeded;

(b) for the purposes of paragraph (2) an employment that has been an excluded employment in a scheme year is not treated as ceasing to be such an employment until the first day following the end of the pension pay period for the upper tier ill health pension in which the limit described in sub paragraph (a) is first exceeded; and

(c) “the initial period” means the period of 12 months beginning with the day on which the member first enters an employment which results in this regulation applying.

(7) A member who, before attaining the age of 65, has ceased to be entitled to an upper tier ill health pension under paragraph (2), and who–

(a) is in further NHS employment and ceases to be employed at all during the initial period; or

(b) is in further employment that is not NHS employment and ceases to be employed in that further employment within a period of one year beginning with the day on which that further employment ceased to be an excluded employment,

may apply to the Scottish Ministers under this paragraph to become entitled to an upper tier ill health pension.

(8) An application under paragraph (7)–

(a) where paragraph (7)(a) applies, must–

(i) state that the member has ceased to be employed at all;

(ii) be made within the initial period; and

(iii) be made in writing and be accompanied by evidence from a registered medical practitioner that the member meets the condition in regulation 3.D.7(3)(a) (early retirement on ill health (active members)); and

(b) where paragraph (7)(b) applies, must–

(i) state that the member has ceased to be employed at all;

(ii) be made within a period of one year beginning with the day on which that employment ceased to be an excluded employment; and

(iii) be made in writing and be accompanied by evidence from a registered medical practitioner that the member meets the condition in regulation 3.D.8(3)(a) (re assessment to entitlement to an ill health pension determined under regulation 3.D.7).

(9) If on an application under paragraph (7) the Scottish Ministers are satisfied that the member meets the condition in 3.D.7(3)(a), from the day following that on which the member’s last employment ceased–

(a) the member ceases to be entitled to the lower tier ill health pension under regulation 3.D.7; and

(b) becomes entitled to an upper tier ill health pension under that regulation in respect of the earlier service.

(10) A member who falls within paragraph (1) must–

(a) notify the Scottish Ministers if the member is in NHS employment at the end of the initial period;

(b) notify the Scottish Ministers if the member’s aggregate earnings for the purpose of national insurance from employments held in a tax year are such that the lower earnings limit is exceeded; and

(c) provide the Scottish Ministers or any other person specified by the Scottish Ministers with such further information as the Scottish Ministers specify concerning any further employment.

(11) This regulation is subject to regulation 3.G.5 (re-employed lower tier ill health pensioners).

Re-employed lower tier ill health pensioners

3.G.5

(1) This regulation applies to re-employed members who are entitled to a lower tier ill health pension under regulation 3.D.7 (early retirement on ill health: active members) in respect of the earlier service.

(2) For the purposes of determining whether a member can count 45 years of pensionable service for any purpose, the earlier service and the later service are aggregated.

(3) If the re-employed member became entitled to a lower tier ill health pension for the earlier service, and on the termination of the later service the member becomes entitled to–

(a) a lower tier ill health pension; or

(b) an upper tier ill health pension,

under regulation 3.D.7 in respect of the later service, the re-employed member is entitled to the benefits set out in paragraph (4).

(4) The benefits mentioned in paragraph (3) are–

(a) the member’s original lower tier ill health pension in respect of his or her earlier service; and

(b) a lower tier or, as the case may be, upper tier ill health pension in respect of the later service.

CHAPTER 3.H — ABATEMENT

Application of Chapter 3.H

3.H.1

(1) This Chapter applies to practitioners.

(2) This Chapter applies if–

(a) a person who is a practitioner member of the scheme is employed in NHS employment; or

(b) the person’s pension is a pension under–

(i) regulation 3.D.7 (early retirement on ill health (active members)); or

(ii) regulation 3.D.9 (early retirement on ill health: deferred members); and

(3) In this Chapter “NHS employment” includes–

(a) employment with an employer in respect of whom a direction has been made under section 7 of the Superannuation (Miscellaneous Provisions) Act 1967[^f00147];

(b) employment to which regulations made under section 10 of the Superannuation Act 1972 and having effect in England and Wales apply;

(d) employment to which a scheme made under section 2 of the Superannuation Act 1984 (an Act of Tynwald) applies; and

(e) employment with an employer with whom an agreement has been made under section 235 of the 2006 Act.

(4) In this Chapter, subject to paragraph (4)–

(a) a person to whom this Chapter applies is referred to as an “employed pensioner”;

(b) the pension to which the employed pensioner is entitled is referred to as the “old service pension”;

(d) the employment in which the employed pensioner is employed is referred to as the “new employment”.

(5) This Chapter applies whether or not the person is an active member of the scheme in the new employment.

(6) For the purposes of this Chapter, so much of any pension as is additional pension is ignored.

Information

3.H.2

(1) A person who becomes an employed pensioner must inform–

(a) the person’s employer in the new employment; and

(b) any other person that the Scottish Ministers may specify,

that the old service pension is payable.

(2) A person who ceases to be an employed pensioner in one new employment and becomes an employed pensioner in another new employment must inform–

(a) the person’s employer in the other new employment; and

(b) any other person that the Scottish Ministers may specify,

that the old service pension is payable.

Reduction of pension

3.H.3

(1) If the condition in paragraph (2) is met, the amount of the old service pension for any scheme year is reduced.

(2) The condition is that the employed pensioner’s relevant income for the scheme year exceeds the employed pensioner’s previous earnings.

(3) The amount of the reduction under paragraph (1) is equal to that excess but cannot exceed the enhancement amount.

(4) For the meaning of “relevant income” and “enhancement amount” see regulation 3.H.4.

(5) For the meaning of “previous earnings” see regulation 3.H.5.

(6) If the employed pensioner holds the new employment for only part of any scheme year, this regulation applies as if–

(a) the reference in paragraph (2) to the employed pensioner’s relevant income were a reference to the appropriate proportion of that income; and

(b) the reference in that paragraph to the employed pensioner’s previous earnings were a reference to the appropriate proportion of those earnings.

(7) In paragraph (6) “the appropriate proportion” means the same proportion as the period during which the new employment is held bears to the whole scheme year.

(8) If the member has a guaranteed minimum under section 14 of the Pension schemes Act 1993 in relation to the old service pension, nothing in this regulation requires the reduction of the old service pension below the amount of the member’s guaranteed minimum in relation to it.

Meaning of “relevant income”

3.H.4

(1) The employed pensioner’s relevant income for a scheme year is the aggregate of–

(a) the amount of pensionable earnings received by the employed pensioner during that year from the new employment (assuming, in any case where the employed pensioner is not an active member of the scheme in the new employment, that the employed pensioner is such a member); and

(b) the enhancement amount in relation to the old service pension.

(2) The enhancement amount, in relation to an old service pension, is the difference between–

(a) the amount of that pension for that year; and

(b) the amount that that pension would have been had it been payable under regulation 3.D.4 (early payment of pension with actuarial reduction).

(3) If the old service pension is payable under regulation 3.D.7 (early retirement on ill health active members) or 3.D.9 ((early retirement on ill health (deferred members)) to an employed pensioner who had not reached the age of 55 at the time when entitlement to the pension arose, for the purposes of paragraph (2)(b)–

(a) the fact that entitlement to a pension under regulation 3.D.4 depends on reaching that age is ignored; but

(b) the employed person’s actual age at the relevant time is taken into account in determining the reduction to be made under regulation 3.D.4(2).

(4) If the old service pension is an upper tier ill health pension, for the purposes of paragraph (2)(b), only the employed pensioner’s actual pensionable service at the time when entitlement to the pension arose is taken into account in determining the amount that would have been payable under regulation 3.D.4.

(5) If the employed pensioner exercised the option under regulation 3.D.10 (general option to exchange part of pension for lump sum) in relation to the old service pension, the resulting reduction in the pension is ignored for the purposes of this regulation.

(6) References in this regulation to the amount of a pension for any scheme year are to its amount for that year after any increases payable under the Pensions (Increase) Act 1971 in respect of that pension, including the increases that would have been payable in respect of any amount not paid because of a reduction ignored under paragraph (5).

Meaning of “previous earnings”: general

3.H.5

(1) For the purposes of this Chapter an employed pensioner’s previous earnings is the average of the annual amounts of the member’s earnings in respect of practitioner service (or service which is treated as practitioner service) uprated to the date of entitlement to the pension in accordance with regulation 3.D.1(4)(b) and adjusted in each scheme year for inflation.

(2) The reference in paragraph (1) to adjusting that amount in each scheme year for inflation is to increasing it by the same amount as that by which an annual pension equal to that amount would have been increased under the Pensions (Increase) Act 1971 at 6th April in that scheme year if–

(a) that pension was eligible to be so increased; and

(b) the beginning date for that pension were the same as the beginning date for the old service pension.

(3) In this regulation “the beginning date”, in relation to a pension, means the date on which it is treated as beginning for the purposes of the Pensions (Increase) Act 1971 (see section 8(2) of that Act).

Employed pensioners with more than one pension

3.H.6

(1) This regulation provides for the application of this Chapter where a person is entitled to more than one old service pension falling within regulation 3.H.1(2)(c) in any scheme year.

(2) In regulation 3.H.3–

(a) for paragraphs (1) to (3) substitute–

(1) If the condition in paragraph (2) is met, the amount of the old service pensions for any scheme year is reduced. (2) The condition is that the employed pensioner’s relevant income for the scheme year exceeds the employed pensioner’s previous earnings for all the old employments. (3) The amount of the reduction under paragraph (1) in the case of each of the pensions is equal to the same proportion of that excess as the amount of the pension for the scheme year before the reduction bears to the sum of the pensions for that year before the reduction.

(3) In regulation 3.H.4(1)(b) for “the old service pension” substitute “all the old service pensions”.

(4) Regulation 3.H.7 applies as if references to the old service pension were references to all those pensions.

Provisional reductions and later adjustments

3.H.7

(1) If it appears to the Scottish Ministers that the condition in regulation 3.H.3(2) will be met in any scheme year in respect of the old service pension for that year, the Scottish Ministers may reduce the amount of that pension paid at any time in the scheme year.

(2) Where the old service pension for a scheme year is being reduced under this Chapter, the Scottish Ministers must review the amount of the reduction–

(a) at the end of the scheme year; and

(b) at any time during the scheme year if it appears to the Scottish Ministers that–

(i) the amount of the reduction made for the year is or may become incorrect; or

(ii) no reduction should be made.

(3) If at any time during the scheme year it so appears, the Scottish Ministers must make such adjustments, whether by altering the amount of the reduction or by repaying to the employed pensioner any amount that should not have been deducted from the pension, as appear to the Scottish Ministers to be required.

(4) If at the end of the scheme year it is apparent that–

(a) the reduction in the old service pension for the year was excessive; or

(b) no such reduction should have been made,

the Scottish Ministers must repay the amount due to the employed pensioner.

(5) If at the end of the scheme year it is apparent that the old service pension paid for the year exceeded the amount due because the reduction in the old service pension required under regulation 3.H.3 was not made, the employed pensioner must repay the excess to the Scottish Ministers.

(6) Paragraph (5) does not affect the Scottish Ministers' right to recover a payment or overpayment in any case where the Scottish Ministers consider it appropriate to do so.

CHAPTER 3.J — MISCELLANEOUS AND SUPPLEMENTARY PROVISIONS

Scheme administrator

Appointment of scheme administrator

3.J.1

For the purposes of this Part and of Part 4 of the 2004 Act, the scheme administrator is the Scottish Public Pensions Agency.

Claims

Claims for benefits

3.J.2

A person claiming to be entitled to benefits under this Part must make a claim in writing to the Scottish Ministers and provide such evidence of entitlement as the Scottish Ministers may require.

Power to extend time limits

3.J.3

The Scottish Ministers may extend any time limit mentioned in this Part as it applies in any particular case.

Beneficiaries who are incapable of looking after their affairs

3.J.4

(1) In the case of a beneficiary who, in the opinion of the Scottish Ministers, is by reason of illness, mental disorder, minority or otherwise unable to look after the beneficiary’s affairs, the Scottish Ministers may–

(a) use any amount due to the beneficiary under the scheme for the beneficiary’s benefit; or

(b) pay it to some other person to do so.

(2) Payment of an amount to a person other than the beneficiary under paragraph (1) discharges the Scottish Ministers from any obligation under the scheme in respect of the amount.

Commutation of small pensions

3.J.5

(1) The Scottish Ministers may pay any person entitled to a pension under the scheme a lump sum representing the capital value of the pension and of any benefits that might have become payable under the scheme on the person’s death apart from the payment if the conditions specified in paragraph (2) are met.

(2) The conditions are that the payment complies with the following requirements (so far as apply)–

(a) the contracting-out requirements;

(b) the preservation requirements;

(c) regulation 2 of the Occupational Pension Schemes (Assignment, Forfeiture, Bankruptcy etc.) Regulations 1997[^f00148];

(d) regulation 3(2)(b) of the Pension Sharing (Pension Credit Benefit) Regulations 2000[^f00149];

(e) the lump sum rule (see, in particular, paragraph 7 of Schedule 29 to the 2004 Act: trivial commutation lump sums for the purposes of Part 4 of that Act); and

(f) the lump sum death benefit rule (see, in particular, paragraph 20 of that Schedule: trivial commutation lump sum death benefit for the purposes of that Part).

(3) The lump sum must be calculated by the Scottish Ministers in accordance with advice from the scheme actuary.

(4) The payment of a lump sum under this regulation discharges all liabilities of the Scottish Ministers in respect of the pension in question and of any other such benefits as mentioned in paragraph (1).

Reduction in and forfeiture of benefits

Reduction in benefits in cases where loss caused by member’s crime, negligence or fraud

3.J.6

(1) If, as a result of a member’s criminal, negligent or fraudulent act or omission, a loss to public funds occurs that arises out of or is connected with the member’s employment relationship with the member’s employer, the Scottish Ministers–

(a) may reduce any pension or other benefit payable to, or in respect of, the member under these Regulations by an amount less than or equal to the loss; or

(b) in a case where the loss equals or exceeds the value of the pension or other benefit, reduce them to nil or by any amount less than that value.

(2) Paragraph (1) does not apply so far as the pension or other benefit–

(a) is a guaranteed minimum pension or safeguarded rights which are derived from rights to such a pension; or

(b) arise out of a transfer payment.

(3) If the Scottish Ministers propose to exercise the power under paragraph (1), the Scottish Ministers must give the member a certificate specifying the amount of the loss to public funds and of the reduction in benefits.

(4) If the amount of the loss is disputed, no reduction may be made under paragraph (1) until the member’s obligation to make good the loss has become enforceable–

(a) under the order of a competent court; or

(b) in consequence of an award of an arbiter to be appointed (failing agreement by the parties) by the sheriff, or, in England and Wales arbitrator.

(5) If the loss is suffered by an employing authority, the amount of any reduction under paragraph (1) must be paid to that authority.

Forfeiture of rights to benefits

3.J.7

(1) The Scottish Ministers may direct that all or part of any rights to benefits or other amounts payable to or in respect of a member under these Regulations be forfeited if–

(a) the member is convicted of any of the offences specified in paragraph (2); and

(b) the offence was committed before the benefit or other amount becomes payable.

(2) The offences are–

(a) an offence in connection with employment that qualifies the member to belong to the scheme, in respect of which the Scottish Ministers have issued a forfeiture certificate; and

(b) one or more offences under the Official Secrets Acts 1911 to 1989[^f00150] for which the member has been sentenced on the same occasion to–

(i) a term of imprisonment of at least 10 years; or

(ii) 2 or more consecutive terms amounting in the aggregate to at least 10 years.

(3) In paragraph (2)(a) “forfeiture certificate” means a certificate that the Scottish Ministers are satisfied that the offence–

(a) has been gravely injurious to the State; or

(b) is liable to lead to serious loss of confidence in the public service.

(4) The Scottish Ministers may direct that all or part of any rights to benefits or other amounts payable in respect of a member under these Regulations be forfeited where the benefits or amounts are payable to a person to whom paragraph (5) applies who has been convicted of the murder or manslaughter of that member or of any other offence of which unlawful killing of that member is an element.

(5) This paragraph applies to a person who is–

(a) the member’s widow, widower, nominated partner or surviving civil partner, or surviving nominated partner;

(b) a dependant of the member;

(c) a person not falling within sub-paragraph (a) or (b) who is specified in a notice given under regulation 3.E.21(3) (payment of lump sums on death); or

(d) a person to whom such benefits or amounts are payable under the member’s will or on the member’s intestacy.

(6) A guaranteed minimum pension or safeguarded rights which are derived from rights to such pensions may be forfeited only if paragraph (1) applies in the case of an offence within paragraph (2)(b).

Provisions about tax

Deduction of tax

3.J.8

(1) The Scottish Ministers may deduct from any payment under the scheme any tax which is required to be paid in respect of it.

(2) Without prejudice to the generality of paragraph (1), if a person becoming entitled to a benefit under this Part–

(a) which is a benefit crystallisation event under section 216 (benefit crystallisation events and amounts crystallised) of the 2004 Act; and

(b) a lifetime allowance charge under section 214 (lifetime allowance charge) of that Act arises when that event occurs,

the tax charged must be paid by the scheme administrator.

(3) Paragraph (4) applies if–

(a) a member has given the scheme administrator a statement in accordance with regulation 3.E.22 (tax treatment under the 2004 Act of lump sums payable on pensioners' death) that a lump sum payable under that regulation is to be treated as a pension protection lump sum death benefit in accordance with paragraph 14 of Schedule 29 to the 2004 Act; and

(b) has not withdrawn that statement.

(4) Without prejudice to the generality of paragraph (1), when the lump sum is paid, the scheme administrator may deduct the tax payable under section 206 of that Act (special lump sum death benefits charge) from the lump sum.

Interest on delayed payments

Interest on late payment of benefits and refunds of contributions

3.J.9

(1) This regulation applies if the whole or part of an amount to which this regulation applies is not paid by the end of the period of one month beginning with the due date.

(2) This regulation applies to any amount payable by way of a pension, lump sum or refund of contributions under the scheme (other than any amount due under regulation 3.C.5 or 3.C.6) or interim award.

(3) The Scottish Ministers must pay interest on the unpaid amount to the person to whom it should have been paid unless the Scottish Ministers are satisfied that the unpaid amount was not paid on the due date because of some act or omission on the part of the member or other person to whom it should have been paid.

(4) The interest on the unpaid amount is calculated at the base rate on a day to day basis from the due date for the amount to the date of its payment and compounded with 3 monthly rests.

(5) For the purposes of this regulation, except where paragraph (6) applies, “due date”, in relation to an unpaid amount, means–

(a) in the case of an amount in respect of a pension or lump sum payable to a member under Chapter 3.D (members' retirement benefits), the day immediately following that of the member’s retirement from pensionable employment;

(b) in the case of an amount in respect of a pension payable on a member’s death, the day after the date of death;

(c) in the case of an amount in respect of a lump sum under Chapter 3.E (death benefits) that is payable to the member’s personal representatives, the earlier of–

(i) the date on which probate or letters of administration were produced to the Scottish Ministers; and

(ii) the date on which the Scottish Ministers were satisfied that the lump sum may be paid as provided in regulation 3.E.21(9) (payment of lump sum on death); and

(d) in the case of an amount in respect of any other lump sum under that Chapter, the day after the date of the member’s death; and

(e) in the case of an amount in respect of a refund of contributions, the day after that on which the Scottish Ministers received from the Commissioners of Her Majesty’s Revenue and Customs the information required for the purposes of calculating the amount to be subtracted under regulation 3.C.16(3) or (4) (repayment of contributions).

(6) If, on the date which, in accordance with paragraph (5), would have been the due date for an unpaid amount in respect of a pension, lump sum or refund of contributions, the Scottish Ministers were not in possession of all the information necessary for the calculation of the amount payable in respect of the pension, lump sum or refund, the due date for the unpaid amount is the first day on which the Scottish Ministers were in possession of that information.

(7) In this regulation, “interim award” means–

(a) any amount paid by way of an interim payment calculated by reference to an expected benefit under the scheme pending final calculation of the full value of that benefit; and

(b) any amount paid that increases the amount of an earlier payment due to a backdated or later increase in pensionable pay.

Determinations

Determination of questions

3.J.10

(1) Except as otherwise provided by this Part, any question arising under the scheme is to be determined by the Scottish Ministers.

(2) Any such disagreement as is referred to in section 50 of the 1995 Act (resolution of disputes) must be resolved by the Scottish Ministers in accordance with any arrangements applicable under that section.

(3) The Scottish Ministers, in relation to decisions under paragraph (4), may require a person to submit to a medical examination by a registered medical advisor selected by the Scottish Ministers and the Scottish Ministers in making any decision must take that report into consideration together with any medical evidence submitted by the person.

(4) This paragraph applies to any decision as to a person’s health or degree of physical or mental infirmity or impairment that is required for the purposes of this Part and, in particular, any such decision required for the purposes of–

(a) regulation 3.D.7(2)(a) or (3)(a) (early retirement on ill health (active members));

(b) regulation 3.D.8(1)(a) or (b) or (3) (provisional ill health awards);

(d) regulation 3.D.15(6)(b) (procedure for allocation election under regulation 3.D.14);

(e) regulation 3.E.9(1)(b)(ii) (meaning of “dependent child”); or

(f) regulation 3.J.4(1) (beneficiaries who are incapable of looking after their affairs).

General prohibition on unauthorised payments

3.J.11

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