LegalizeReform history
Social Security Pensions Act 1975
9 versions
· 1975-08-07
2020-12-07
Social Security Pensions Act 1975
2017-04-09
Social Security Pensions Act 1975
2014-12-16
Social Security Pensions Act 1975
2014-12-10
Social Security Pensions Act 1975
2014-03-13
Social Security Pensions Act 1975
2013-06-25
Social Security Pensions Act 1975
2011-04-10
Social Security Pensions Act 1975
Changes on 2011-04-10
@@ -1413,798 +1413,798 @@
## SCHEDULE 5
#### Increase of official pensions.
##### 6–10
##### 12–16A
##### 18–21
##### 23–25
##### 29A
##### 29B
##### 29C
##### 37A
### Protection of pensions
##### 41A
##### 41B
##### 41C
##### 41D
##### 41E
##### 44ZA
##### 44A
##### 51A
### The revaluation percentage
##### 52A
##### 52B
### Extinguishment of liability of scheme for pensions secured by insurance policies or annuity contracts
##### 52C
##### 52D
### Information about and registration of occupational pension schemes
##### 56A
##### 56B–56D
##### 56E
##### 56F–56J
##### 56K
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 56L
##### 56M
### Auditors
##### 56P
##### 57A
##### 57B
##### 57C
##### 57D
##### 58A
##### 58B
#### Modification of effect of section 59(5).
##### 59A
- (1) This section applies where the amount by reference to which an increase in an official pension is to be calculated would, but for the provisions of this section, be reduced under section 59(5) of this Act by an amount equal to the rate of a guaranteed minimum pension.
- (2) The Minister for the Civil Service may direct that in such cases or classes of case as may be specified in the direction—
- (a) no such reduction shall be made; or
- (b) the reduction shall be of an amount less than the rate of the guaranteed minimum pension;
and in any case to which such a direction applies the increase shall, in respect of such period or periods as may be specified in the direction, be calculated in accordance with the direction, notwithstanding section 59(5).
- (2A) Where in any tax year as defined in section 181(1) of the Pension Schemes Act 1993—
- (a) an increase is calculated in accordance with a direction under this section; and
- (b) the amount by reference to which the increase is calculated, or any part of it, is increased in that tax year under section 109 of the Pension Schemes Act 1993,
the increase calculated in accordance with the direction shall be reduced by the amount of the increase under that section.
- (3) A direction under this section may provide that where it has applied in any case and ceases to apply in that case, the rate of the official pension for any period following the date on which the direction ceases to apply shall, in such circumstances as may be specified in the direction, be calculated as if the direction had never applied.
- (4) A direction under this section may provide that the rate of an official pension shall, in such circumstances as may be specified in the direction, be calculated as if the direction had been in force at all times during such period as may be so specified.
- (5) A direction made under subsection (2) above may be varied or revoked by a subsequent direction.
## Part IVA — The Pensions Ombudsman
#### Consultation about regulations.
##### 59B
##### 59C
##### 59D
##### 59E
##### 59F
##### 59G
##### 59H
##### 59J
##### 59K
##### 60ZA
##### 60ZB
##### 60ZC
##### 60ZD
##### 60ZE
##### 60ZF
##### 60A
##### 60B
##### 61A
##### 61B
- (1) Powers under this Act to make regulations or orders, . . ., are excercisable by statutory instrument.
- (2) Except in so far as this Act otherwise provides any power conferred thereby to make regulations or an order may be exercised—
- (a) either in relation to all cases to which the power extends, or in relation to those cases subject to specified exceptions, or in relation to any specified exemptions, or in relation to any specified cases or classes of case;
- (b) so as to make, as respects the cases in relation to which it is exercised—
- (i) the full provision to which the power extends or any less provision (whether by way of exception or otherwise),
- (ii) the same provision for all cases in relation to which the power is exercised, or different provision for different cases or different classes of case or different provision as respects the same case or class of case for different purposes of this Act,
- (iii) any such provision either unconditionally or subject to any specified condition;
and where such a power is expressed to be exercisable for alternative purposes it may be exercised in relation to the same case for any or all of those purposes; and powers to make regulations or an order for the purposes of any one provision of this Act are without prejudice to powers to make regulations or an order for the purposes of any other provision.
- (3) Without prejudice to any specific provision in this Act, a power conferred by this Act to make regulations or an order includes power to make thereby such incidental, supplementary, consequential or transitional provision as appears to the authority making the regulations or order to be expedient for the purposes of the regulations or order.
- (4) Without prejudice to any specific provisions in this Act, a power conferred by this Act to make regulations or an order includes power to provide for a person to exercise a discretion in dealing with any matter.
- (5) A power conferred on the Secretary of State to make any regulations or order, where the power is not expressed to be exercisable with the consent of the Treasury, shall if the Treasury so direct be exercisable only in conjunction with them.
## SCHEDULE 1A
## Part I — Revaluation of Pensions
##### 1
- (1) This Part of this Schedule applies to any member of an occupational pension scheme whose pensionable service terminates after the commencement of this schedule if—
- (a) it terminates before normal pension age; and
- (b) on the date when it terminates—
- (i) he has accrued rights to benefit under the scheme; . . .
- (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) In this Part of this Schedule “*the revaluation condition*” means—
- (a) in relation to benefit payable to the member, that, subject to subparagraph (3) below, there are 365 days or more in the period of which the first day is the day after the date when his pensionable service terminates and the last is the day on which he attains normal pension age;
- (b) in relation to benefit payable to any other person in respect of the member, that, subject to sub-paragraph (3) below, there are 365 days or more in the period mentioned in paragraph (a) above and the member dies after attaining normal pension age.
- (3) For the purpose of calculating the number of days in the period mentioned in sub-paragraph (2) above, any day which is 29th February shall be disregarded.
- (4) For the purposes of this Part of this Schedule “*normal pension age*” . . . and, subject to paragraph 2(3) below, “*pensionable service*” are to be construed in accordance with Schedule 16 to the Social Security Act 1973.
##### 2
- (1) Subject to the following provisions of this Schedule, if the revaluation condition is satisfied—
- (a) any pension or other retirement benefit payable under the scheme to the member; and
- (b) any pension or other benefit payable under it to any other person in respect of him,
is to be revalued by adding the appropriate amount to the amount that would be payable but for this Schedule or regulations made under it.
- (2) For the purposes of this Schedule “*the appropriate amount*” is
$ABC(D-E)$
, where—
- (a) A = the revaluation percentage specified in the last period of one year beginning on the date of the commencement of this Part of this Schedule or on an anniversary of that date and ending before the date on which the member attains normal pension age as the revaluation percentage for the period which is of the same length as the number of complete years in the period mentioned in paragraph 1(2)(a) above;
- (b) B = the length of the member’s qualifying pensionable service;
- (c) C = the length of his pensionable service;
- (d) D = the amount of the pension or other benefit—
- (i) which on the date when his pensionable service terminates has accrued to him or to any other person in respect of him; . . .
- (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ;
- (e) E = any part of the amount mentioned in paragraph (d) above which consists of the member’s or his widow’s guaranteed minimum.
- (3) In sub-paragraph (2)(b) and (c) above—
- “*pensionable service*” includes any notional pensionable service which is credited to the member by the scheme; and
- “*qualifying pensionable service*” means—
- (a) where the termination of pensionable service occurs after the coming into force of this paragraph of this definition, the whole of the member’s pensionable service, as defined in this sub-paragraph; and
- (b) in any other case, so much of any such service as falls on or after 1st January 1985.
- (4) For the purposes of sub-paragraph (2)(b) and (c) above, any notional pensionable service which is credited to a member by a scheme shall be taken to have ended immediately before the member’s actual pensionable service began.
- (5) Any rule of a scheme the effect of which is that benefit fails to be revalued by reference to any period is to be disregarded in making any calculation required by this paragraph.
##### 3
- (1) This paragraph applies to any benefit the rate or amount of which is calculated by reference to the member’s average salary over the period of service on which that benefit is based.
- (2) A benefit to which this paragraph applies is referred to in this Schedule as an “*average salary benefit*”.
- (3) Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any average salary benefit payable to the member or to any other person in respect of him is to be revalued—
- (a) by revaluing his salaries during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or
- (b) by the method specified in paragraph 2 above.
- (4) The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in sub-paragraph (3) above appears to the trustees or managers of the scheme to be appropriate.
- (5) In this paragraph “*salaries*”means, subject to sub-paragraph (5A) below, the member’s salaries for the period between the date when his pensionable service commenced and the date when it terminated, or such part of them as was relevant under the scheme to the calculation of the retirement benefits payable under the scheme to him or to any other person in respect of him; and those salaries are to be taken for the purposes of this paragraph to include—
- (a) any amount which is attributed to them, otherwise than by virtue of this paragraph, as the result of a revalution for which the rules of the scheme provide; and
- (b) any amount which is for any reason credited to the member by way of salary notionally earned.
- (5A) Where the member’s pensionable service terminated before the coming into force of this sub-paragraph, sub-paragraph (5) above shall have effect with the substitution for the words from, “means” to “terminated” of the words “means the member’s salaries for the period between 1st January 1985 and the date when his pensionable service terminated”.
- (6) For the purposes of the application of this Paragraph to a case where a member is credited with an amount by reference to salary notionally earned over a period of time of a particular length that period shall be taken to have ended immediately before the member’s actual pensionable service began.
##### 4
- (1) This paragraph applies to any benefit the rate or amount of which is calculated by reference solely to the member’s length of service.
- (2) A benefit to which this paragraph applies is referred to in this Schedule as a “flat rate benefit”.
- (3) Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any flat rate benefit payable to the member or to any other person in respect of him is to be revalued—
- (a) by revaluing the benefits which have accrued to him during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or
- (b) by the method specified in paragraph 2 above.
- (4) The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in sub-paragraph (3) above appears to the trustees or managers of the scheme to be appropriate.
##### 5
- (1) This paragraph applies to any benefit the rate or amount of which is calculated by reference to a payment or payments made by the member, or by any other person in respect of him and which is not an average salary benefit.
- (2) A benefit to which this paragraph applies is referred to in this Schedule as a “*money purchase benefit*”.
- (3) In the case of such a benefit, if the revaluation condition is satisfied, the investment yield and any bonuses arising from payments made by or on behalf of a member shall be applied, subject to sub-paragraph (4) below, towards providing any pension or other retirement benefit which is payable under the scheme to him or to any other person in respect of him in the manner in which they would have been applied if his pensionable service had not been terminated.
- (4) The Secretary of State may by regulations authorise trustees and managers of schemes to deduct from any pension or other retirement benefit provided under sub-paragraph (3) above an appropriate amount in respect of the administrative expenses incurred by them in carrying this paragraph into effect.
##### 6
Nothing in paragraph 2, 3, 4 or 5 above is to be construed as requiring the revaluation of any pension or other benefit provided by virtue of paragraph 9(2)(b) of Schedule 16 to the Social Security Act 1973 by way of complete substitute for another pension or benefit.
##### 7
- (1) Subject to sub-paragraph (2) below, this Part of this Schedule overrides any provision of a scheme to the extent that it conflicts with this Part of this Schedule.
- (2) This Part of this Schedule does not override a protected provision of a scheme.
- (3) Subject to sub-paragraph (4) below, in sub-paragraph (2) above “*protected provision*” has the same meaning as it has in subsection (2) of section 41C above by virtue of subsection (3) of that section.
- (4) In its application to schemes which are not contracted-out section 41C(3) above shall have effect for the purpose of this paragraph as if—
- (a) there were omitted—
- (i) from paragraph (a), sub-paragraph (ii) and the word “or” immediately preceding it;
- (ii) from paragraph (b), the word “and”; . . .
- (iii) from paragraph (c), the words from “authorised” to the end; and
- (iv) from paragraph (e), the words from “as respects” to “guaranteed minimum pension”.
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 8
If under a scheme—
- (a) the amount of the pension or other benefit for a member or for any other person in respect of him falls to be increased during the period mentioned in paragraph 1(2)(a) above—
- (i) by the percentages specified during that period under section 151(1) of the Administration Act; or
- (ii) under any arrangement which, in the opinion of the Occupational Pensions Board, maintains the value of the pension or other benefit by reference to the rise in the general level of prices in Great Britain during that period; and
- (b) the increase falls to be determined by reference to an amount from which the guaranteed minimum for a member or his widow has not been deducted,
the fact that the scheme provides as mentioned in sub-paragraph (a) above does not in itself result in conflict with paragraph 2, 3 or 4 above.
##### 9
In making any calculation for the purposes of this Part of this Schedule any commutation, forfeiture or surrender of the whole or part of a pension shall be disregarded.
##### 10
The same money may not be treated as providing both the benefit required by section 41A or 41B above and the increase in benefit required by this Part of this Schedule.
## Part II — Transfer Values
##### 11
- (1) This Part of this Schedule applies to any member of an occupational pension scheme whose pensionable service terminates after the commencement of this Part of this Schedule if—
- (a) it terminates at least one year before normal pension age; and
- (b) on the date when it terminates—
- (i) he has accrued rights to benefit under the scheme; . . .
- (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of this Part of this Schedule . . . , “*pensionable service*” and “*normal pension age*” are to be construed in accordance with Schedule 16 to the Social Security Act 1973.
- (3) Any reference to a member in the following provisions of this Part of this Schedule is a reference to a member of an occupational pension scheme to whom this Part of this Schedule applies.
##### 12
- (1) Subject to the following provisions of this Schedule, a member acquires a right, when his pensionable service terminates, to the cash equivalent at the relevant date of any benefits—
- (a) which have accrued to or in respect of him under the applicable rules; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) In this paragraph “*the applicable rules*” means—
- (a) the rules of the scheme, except so far as—
- (i) section 41A or 41B above; or
- (ii) Part I of this Schedule,
overrides them; and
- (b) any provision which the rules of the scheme do not contain but which a scheme must contain if it is to conform with the preservation requirements; and
- (c) any provision—
- (i) of section 41A or 41B above; or
- (ii) of Part I of this Schedule,
which overrides any of the rules of the scheme;
- “*the relevant date*” means , subject to regulations under sub-paragraph (2C) below, the date when the member’s pensionable service terminates or the date of the relevant application, whichever is the later; and
- “*the relevant application*” means any application which the member has made under paragraph 16 below and which he has not withdrawn.
- (2A) Where a member continues in employment to which a scheme applies after his pensionable service in that employment terminates—
- (a) if regulations so provide, he only acquires a right to the cash equivalent of such part of the benefits specified in sub-paragraph (1) above as may be prescribed; and
- (b) if regulations so provide, he acquires no right to a cash equivalent.
- (2B) Regulations may provide for the purposes of sub-paragraph (2A) above that in prescribed circumstances a number of employments (whether or not consecutive) shall be treated as a single employment.
- (2C) Regulations—
- (a) may provide that a right at the relevant date to the cash equivalent of any part of the benefits specified in sub-paragraph (1) above which but for regulations under the foregoing provisions of this paragraph a member would have on the termination of his pensionable service in an employment to which a scheme applies shall, if his employment terminates at least one year before normal pension age, accrue to him on the date when it terminates and be valued accordingly; and
- (b) may substitute, in relation to any case to which the regulations apply—
- (i) a new definition of the “relevant date” for the definition in sub-paragraph (2) above, and
- (ii) a new definition of “the last option date” for the definition in paragraph 15(2) below.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . in sub-paragraph (2) above “*the preservation requirements*” means the requirements set out in Part I of Schedule 16 to the Social Security Act 1973 as the requirements of Part II of that Act relating to preservation of benefit under occupational pension schemes.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 13
- (1) A member who acquires a right to a cash equivalent under this Part of this Schedule may only take it by exercising the option conferred by sub-paragraph (2) below.
- (2) Subject to sub-paragraphs (3) and (4) below, the option conferred by this sub-paragraph on any such member is that of requiring the trustees or managers of the scheme of which he is a member to use the cash equivalent to which he has acquired a right in whichever of the ways specified in paragraphs (a), (b) and (c) below he chooses—
- (a) for acquiring transfer credits allowed under the rules of another occupational pension scheme, or for acquiring rights allowed under the rules of a personal pension scheme whose trustees or managers , in either case, are able and willing to accept him and which , in either case, satisfies prescribed requirements;
- (b) except in respect of the cash equivalent of his protected rights, if any, under a scheme which is, or was formerly, a money purchase contracted-out scheme for purchasing from one or more insurance companies such as are mentioned in section 52C (4)(a) above, chosen by the member and willing to accept payment on account of the member from the trustees or managers, one or more annuities which satisfy prescribed requirements;
- (c) subject to sub-paragraph (3) below, for subscribing to other pension arrangements which satisfy prescribed requirements.
- (2) Subject to sub-paragraphs (3) and (4) below, the option conferred by this sub-paragraph on any such member is that of requiring the trustees or managers of the scheme of which he is a member to use the cash equivalent to which he has acquired a right in whichever of the ways specified in paragraphs (a), (b) and (c) below he chooses—
- (a) for acquiring transfer credits allowed under the rules of an occupational pension scheme, or for acquiring rights allowed under the rules of another personal pension scheme whose trustees or managers, in either case, are able and willing to accept him and which, in either case, satisfies prescribed requirements;
- (c) subject to sub-paragraph (3) below, for subscribing to other pension arrangements which satisfy prescribed requirements.
- (2A) Without prejudice to the generality of sub-paragraph (2) above, the powers conferred by that sub-paragraph include power to provide that a scheme, an annuity or pension arrangements must satisfy requirements of the Inland Revenue.
- (3) Except in such circumstances as may be prescribed sub-paragraph (2) above is to be construed as if paragraph (c) were omitted.
- (4) A member may exercise the option conferred by sub-paragraph (2) above in different ways in relation to different portions of his cash equivalent, but a member who exercises that option must do so in relation to the whole of his cash equivalent or, where sub-paragraph (5) below applies, in relation to the whole of the sum mentioned in sub-paragraph (6) below.
- (5) Where—
- (a) the trustees or managers of an occupational pension scheme which is not a contracted:-out scheme, or of a personal pension scheme which is not an appropriate scheme, or of a self-employed pension arrangement within the meaning of regulation 2D of the Occupational Pension Schemes (Transfer Values) Regulations 1985 or regulation 2A of the Personal Pension Schemes (Transfer Values) Regulations 1987 are able or willing to accept a transfer payment only in respect of a member’s rights other than his accrued rights to guaranteed minimum pensions or his protected rights; and
- (b) the member has not required the trustees or managers of the scheme from which he is being transferred to use that portion of his cash equivalent that represents guaranteed minimum pensions or protected rights in any of the ways specified in sub-paragraph (2) above.
- (6) The sum referred to in sub-paragraph (5) above is the sum equal to the balance of the cash equivalent to which the member would be entitled if sub-paragraph (5) above did not apply, after deduction of an amount sufficient for the trustees or managers of the scheme from which he is being transferred to meet their liability in respect of his and his widow’s guaranteed minimum pensions or his protected rights.
- (5) Where—
- (a) the trustees or managers of an occupational pension scheme which is not a contracted-out scheme, or of a personal pension scheme which is not an appropriate scheme, or of a self-employed pension arrangement within the meaning of regulation 2D of the Occupational Pension Schemes (Transfer Values) Regulations 1985 or regulation 2A of the Personal Pension Schemes (Transfer Values) Regulations 1987 are able or Willing to accept a transfer payment only in respect of a member’s rights other than his protected fights within the meaning given by Schedule 1 to the Social Security Act 1986; and
- (b) the member has not required the trustees or managers of the scheme from which he is being transferred to use that portion of his cash equivalent that represents protected rights within the meaning given by Schedule 1 to te Social Security Act 1986 in either of the ways specified in sub-paragraph (2) above,
- (6) The sum referred to in sub-paragraph (5) above is the sum equal to the balance of the cash equivalent to which the member would be entitled if sub-paragraph (5) above did not apply, after deduction of an amount sufficient for the trustees or managers of the scheme from which he is being transferred to meet their liability in respect of his protected rights within the meaning given by Schedule 1 to the Social Security Act 1986.
##### 14
- (1) Cash equivalents are to be calculated and verified in the prescribed manner.
- (2) The power to make regulations conferred by sub-paragraph (1) above includes power to provide that cash equivalents are to be calculated and verified in such manner as may be approved in particular cases—
- (a) by prescribed persons; or
- (b) by persons with prescribed professional qualifications or experience; or
- (c) by persons approved by the Secretary of State
and power to provide that they shall be calculated and verified in accordance with guidance prepared by a prescribed body.
- (3) Regulations may provide—
- (a) that in calculating cash equivalents account shall be taken—
- (i) of any surrender, commutation or forfeiture of the whole or part of a member’s pension which occurs before the trustees or managers of the scheme of which he is a member do what is needed to comply with what he requires under paragraph 16 below;
- (ii) in a case where a paragraph 13(5) above applies, of the need to deduct an appropriate amount to provide guaranteed minimum pensions or give effect to protected rights; and
- (ii) in a case where paragraph 13(5) above applies, of the need to deduct an appropriate amount to make provision for protected rights; and
- (b) that in prescribed circumstances a cash equivalent shall be increased or reduced.
- (4) Without prejudice to the generality of sub-paragraph (3) above—
- (a) the circumstances that may be specified by virtue of paragraph (b) of that sub-paragraph include—
- (i) the length of time which elapses between the termination of a member’s pensionable service and his exercise of the option conferred by this Part of this Schedule or regulations under it;
- (ii) failure by the trustees or managers of a scheme to do what is needed to carry out what a member of the scheme requires within six months of the date on which they receive an application from him under paragraph 16 below; and
- (iii) the state of the funding of a scheme; and
- (b) regulations under that sub-paragraph may specify as the amount by which a cash equivalent is to be reduced such an amount that a member has no right to receive anything.
##### 15
- (1) A member may only exercise the option conferred by paragraph 13 above on or before the last option date.
- (2) In this paragraph “*the last option date*” means the date which falls—
- (a) one year before the date on which he attains normal pension age, or
- (b) six months after the date when his pensionable service terminates, whichever is the later.
- (3) A member loses the right to any cash equivalent under this Part of this Schedule—
- (a) if his pension or benefit in lieu of a pension or any part of it becomes payable before he attains normal pension age;
- (b) if he fails to exercise the option conferred by paragraph 13 above on or before the last option date; or
- (c) if the scheme is wound up.
##### 16
- (1) A member may only exercise the option conferred by paragraph 13 above by making an application in writing to the trustees or managers of the scheme.
- (2) In any case where—
- (a) a member has exercised that option; and
- (b) the trustees or managers of the scheme have done what is needed to carry out what the member requires.
the trustees or managers shall be discharged from any obligation to provide benefits to which the cash equivalent related except, in any such cases as are mentioned in paragraph 13(5) above, to the extent that an obligation to provide such guaranteed minimum pensions or give effect to such protected rights continues to subsist.
- (2) In any case where—
- (a) a member has exercised that option; and
- (b) the trustees or managers of the scheme have done what is needed to carry out what the member requires,
the trustees or managers shall be discharged from any obligation to provide benefits to which the cash equivalent related except, in any such cases as are mentioned in paragraph 1 3(5) above, to the extent that an obligation to make provision for such protected rights continues to subsist.
- (3) If the trustees or managers of a scheme receive an application under this paragraph, it shall be their duty, subject to the following provisions of this paragraph, to do what is needed to carry out what the member requires—
- (a) within twelve months of the date on which they receive the application; or
- (b) by the date on which the member attains normal pension age, whichever is the earlier.
- (4) If—
- (a) disciplinary proceedings or proceedings before a court have been commenced against a member at any time before the expiry of the period of twelve months beginning with the date when his pensionable service terminates; and
- (b) it appears to the trustees or managers of the scheme of which he is a member that the proceedings may lead to the whole or part of the pension or benefit in lieu of a pension payable to the member or his widow being forfeited,
it shall be the trustees’ or managers’ duty, subject to the following provisions of this paragraph, to do what is needed to carry out what the member requires before—
- (i) the date before which they would be obliged to do it under sub-paragraph (3) above; or
- (ii) the end of the period of three months after the conclusion of the disciplinary or court proceedings (including any proceedings on appeal),
whichever is the later.
- (5) The Occupational Pensions Board may grant an extension of the period within which the trustees or managers of a scheme are obliged to do what is needed to carry out what a member of the scheme requires—
- (a) in any case where in the opinion of the Board—
- (i) the scheme is being wound up or is about to be wound up;
- (ii) the scheme is ceasing to be a contracted-out scheme;
- (iii) the interests of the members of the scheme generally will be prejudiced if the trustees or managers of the scheme do what is needed to carry out what is required within that period; or
- (iv) the member has not taken all such steps as the trustees or managers can reasonably expect him to take in order to satisfy them of any matter which falls to be established before they can properly carry out what he requires;
- (b) in any case where the provisions of section 49 above apply; and
- (c) in any case where a request for an extension has been made on a ground specified in paragraph (a) or (b) above, and the Board’s consideration of the request cannot be completed before the end of that period.
- (6) A request under sub-paragraph (5) above may only be made by the trustees or managers.
- (7) The Board shall have power, if they are satisfied that there has been a relevant change of circumstances since they granted an extension, or that they granted an extension in ignorance of a material fact or on the basis of a mistake as to a material fact—
- (a) to direct that the extension shall end on a date earlier than that on which it would otherwise have ended; or
- (b) to revoke the grant of the extension.
- (8) An application to the trustees or managers of a scheme under this paragraph is to be taken to have been made if it is delivered to them personally, or sent by post in a registered letter or by the recorded delivery service.
##### 17
- (1) Subject to sub-paragraph (2) below, a member of a scheme may withdraw an application under paragraph 16 above by giving the trustees or managers of the scheme notice in writing that he no longer wishes them to do what is needed to carry out what he previously required.
- (2) Such a notice shall be of no effect if it is given to the trustees or managers at a time when, in order to comply with what the member previously required, they have already entered into an agreement with a third party to use the whole or part of the member’s cash equivalent in a way specified in paragraph 13(2)(a), (b) or (c) above.
- (3) A member who withdraws an application may make another.
- (4) A notice to the trustees or managers of a scheme under this paragraph is to be taken to have been given if it is delivered to them personally, or sent by post in a registered letter or by recorded delivery service.
##### 18
- (1) Subject to sub-paragraph (2) below, this Part of this Schedule overrides any provision of a scheme to the extent that it conflicts with this Part of this Schedule.
- (2) This Part of this Schedule does not override any provision of a scheme to the extent that it deals with priorities on a winding-up.
## Part III — SUPPLEMENTARY
##### 19
In making any calculation for the purposes of this Schedule—
- (a) any charge or lien on the whole or part of a pension; and
- (b) any set-off against the whole or part of a pension,
shall be disregarded.
##### 20
- (1) The Secretary of State may by regulations direct that this Schedule shall have effect, in such cases as he may specify in the regulations, subject to such modifications as he may there specify.
- (2) In sub-paragraph (1) above “*modification*” includes, without prejudice to the generality of that sub-paragraph, addition, omission and amendment.
##### 21
The Occupational Pensions Board may at any time, and shall if requested by the trustees or managers of an occupational pension scheme, advise on any question whether—
- (a) any provision of this Schedule (including, without prejudice to section 20(2) of the Interpretation Act 1978, any such provision as modified by regulations under paragraph 20 above) does or does not override any provision of the scheme;
- (b) any benefit is an average salary benefit, a flat rate benefit or a money purchase benefit.
##### 22
- (1) On an application made to them in respect of an occupational pension scheme (other than a public service pension scheme) by persons competent to make such an application in respect of it, the Occupational Pensions Board shall issue a determination on any such question as is mentioned in paragraph 21 above.
- (2) The persons competent to make an application under this paragraph in respect of a scheme are—
- (a) the persons mentioned in section 41E(2)(a) to (d) above; and
- (b) such other persons as regulations may specify, in relation to any category of schemes into which the scheme falls, as being proper persons to make an application for the purposes of this paragraph in respect of a scheme of that category.
##### 23
It is hereby declared that nothing in the foregoing provisions of this Schedule is to be taken to preclude a scheme from being framed or managed more favourably to beneficiaries than is called for by those provisions.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 6–10
##### 12–16A
##### 18–21
##### 23–25
##### 29A
##### 29B
##### 29C
##### 37A
### Protection of pensions
##### 41A
##### 41B
##### 41C
##### 41D
##### 41E
##### 44ZA
##### 44A
##### 51A
### The revaluation percentage
##### 52A
##### 52B
### Extinguishment of liability of scheme for pensions secured by insurance policies or annuity contracts
##### 52C
##### 52D
### Information about and registration of occupational pension schemes
##### 56A
##### 56B–56D
##### 56E
##### 56F–56J
##### 56K
- (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 56L
##### 56M
### Auditors
##### 56P
##### 57A
##### 57B
##### 57C
##### 57D
##### 58A
##### 58B
#### Modification of effect of section 59(5).
##### 59A
- (1) This section applies where the amount by reference to which an increase in an official pension is to be calculated would, but for the provisions of this section, be reduced under section 59(5) of this Act by an amount equal to the rate of a guaranteed minimum pension.
- (2) The Minister for the Civil Service may direct that in such cases or classes of case as may be specified in the direction—
- (a) no such reduction shall be made; or
- (b) the reduction shall be of an amount less than the rate of the guaranteed minimum pension;
and in any case to which such a direction applies the increase shall, in respect of such period or periods as may be specified in the direction, be calculated in accordance with the direction, notwithstanding section 59(5).
- (2A) Where in any tax year as defined in section 181(1) of the Pension Schemes Act 1993—
- (a) an increase is calculated in accordance with a direction under this section; and
- (b) the amount by reference to which the increase is calculated, or any part of it, is increased in that tax year under section 109 of the Pension Schemes Act 1993,
the increase calculated in accordance with the direction shall be reduced by the amount of the increase under that section.
- (3) A direction under this section may provide that where it has applied in any case and ceases to apply in that case, the rate of the official pension for any period following the date on which the direction ceases to apply shall, in such circumstances as may be specified in the direction, be calculated as if the direction had never applied.
- (4) A direction under this section may provide that the rate of an official pension shall, in such circumstances as may be specified in the direction, be calculated as if the direction had been in force at all times during such period as may be so specified.
- (5) A direction made under subsection (2) above may be varied or revoked by a subsequent direction.
## Part IVA — The Pensions Ombudsman
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 59B
##### 59C
##### 59D
##### 59E
##### 59F
##### 59G
##### 59H
##### 59J
##### 59K
##### 60ZA
##### 60ZB
##### 60ZC
##### 60ZD
##### 60ZE
##### 60ZF
##### 60A
##### 60B
##### 61A
##### 61B
- (1) Powers under this Act to make regulations or orders, . . ., are excercisable by statutory instrument.
- (2) Except in so far as this Act otherwise provides any power conferred thereby to make regulations or an order may be exercised—
- (a) either in relation to all cases to which the power extends, or in relation to those cases subject to specified exceptions, or in relation to any specified exemptions, or in relation to any specified cases or classes of case;
- (b) so as to make, as respects the cases in relation to which it is exercised—
- (i) the full provision to which the power extends or any less provision (whether by way of exception or otherwise),
- (ii) the same provision for all cases in relation to which the power is exercised, or different provision for different cases or different classes of case or different provision as respects the same case or class of case for different purposes of this Act,
- (iii) any such provision either unconditionally or subject to any specified condition;
and where such a power is expressed to be exercisable for alternative purposes it may be exercised in relation to the same case for any or all of those purposes; and powers to make regulations or an order for the purposes of any one provision of this Act are without prejudice to powers to make regulations or an order for the purposes of any other provision.
- (3) Without prejudice to any specific provision in this Act, a power conferred by this Act to make regulations or an order includes power to make thereby such incidental, supplementary, consequential or transitional provision as appears to the authority making the regulations or order to be expedient for the purposes of the regulations or order.
- (4) Without prejudice to any specific provisions in this Act, a power conferred by this Act to make regulations or an order includes power to provide for a person to exercise a discretion in dealing with any matter.
- (5) A power conferred on the Secretary of State to make any regulations or order, where the power is not expressed to be exercisable with the consent of the Treasury, shall if the Treasury so direct be exercisable only in conjunction with them.
## SCHEDULE 1A
## Part I — Revaluation of Pensions
## SCHEDULE 3A
### Interpretation
##### 1
- (1) This Part of this Schedule applies to any member of an occupational pension scheme whose pensionable service terminates after the commencement of this schedule if—
- (a) it terminates before normal pension age; and
- (b) on the date when it terminates—
- (i) he has accrued rights to benefit under the scheme; . . .
- (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) In this Part of this Schedule “*the revaluation condition*” means—
- (a) in relation to benefit payable to the member, that, subject to subparagraph (3) below, there are 365 days or more in the period of which the first day is the day after the date when his pensionable service terminates and the last is the day on which he attains normal pension age;
- (b) in relation to benefit payable to any other person in respect of the member, that, subject to sub-paragraph (3) below, there are 365 days or more in the period mentioned in paragraph (a) above and the member dies after attaining normal pension age.
- (3) For the purpose of calculating the number of days in the period mentioned in sub-paragraph (2) above, any day which is 29th February shall be disregarded.
- (4) For the purposes of this Part of this Schedule “*normal pension age*” . . . and, subject to paragraph 2(3) below, “*pensionable service*” are to be construed in accordance with Schedule 16 to the Social Security Act 1973.
In this Schedule—
- “*annual rate*”, in relation to a pension or the later or earlier service component of a pension, means the annual rate of the pension or component, as previously increased under the rules of the scheme or this Schedule;
- “*the appointed day*” means the day on which this Schedule and section 58A of this Act come into force;
- “*the appropriate percentage*”, in relation to an increase in the annual rate of a pension or a component of a pension, means the percentage specified in the last revaluation order made before the increase is to take effect as the revaluation percentage for the last revaluation period of twelve months;
- “*earlier service component*” means so much (if any) of the annual rate of the pension as is attributable to pensionable service before the appointed day;
- “*later service component*” means so much (if any) of the annual rate of the pension as is attributable to pensionable service on or after the appointed day;
- “*pension*”, in relation to a scheme, means any pension which commences or has commenced under the scheme but does not include—a guaranteed minimum pension or any increase in such a pension under section 37A above; orany money purchase benefit;
- “*pensionable service*” has the meaning given by paragraph 3 of Schedule 16 to the 1973 Act;
- “*qualifying scheme*” means a scheme to which section 58A of this Act applies;
- “*revaluation order*”, “*revaluation percentage*” and “*revaluation period*” shall be construed in accordance with section 52A above.
### Annual increase of later service component
##### 2
- (1) Subject to the following provisions of this Schedule, if the revaluation condition is satisfied—
- (a) any pension or other retirement benefit payable under the scheme to the member; and
- (b) any pension or other benefit payable under it to any other person in respect of him,
is to be revalued by adding the appropriate amount to the amount that would be payable but for this Schedule or regulations made under it.
- (2) For the purposes of this Schedule “*the appropriate amount*” is
$ABC(D-E)$
, where—
- (a) A = the revaluation percentage specified in the last period of one year beginning on the date of the commencement of this Part of this Schedule or on an anniversary of that date and ending before the date on which the member attains normal pension age as the revaluation percentage for the period which is of the same length as the number of complete years in the period mentioned in paragraph 1(2)(a) above;
- (b) B = the length of the member’s qualifying pensionable service;
- (c) C = the length of his pensionable service;
- (d) D = the amount of the pension or other benefit—
- (i) which on the date when his pensionable service terminates has accrued to him or to any other person in respect of him; . . .
- (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ;
- (e) E = any part of the amount mentioned in paragraph (d) above which consists of the member’s or his widow’s guaranteed minimum.
- (3) In sub-paragraph (2)(b) and (c) above—
- “*pensionable service*” includes any notional pensionable service which is credited to the member by the scheme; and
- “*qualifying pensionable service*” means—
- (a) where the termination of pensionable service occurs after the coming into force of this paragraph of this definition, the whole of the member’s pensionable service, as defined in this sub-paragraph; and
- (b) in any other case, so much of any such service as falls on or after 1st January 1985.
- (4) For the purposes of sub-paragraph (2)(b) and (c) above, any notional pensionable service which is credited to a member by a scheme shall be taken to have ended immediately before the member’s actual pensionable service began.
- (5) Any rule of a scheme the effect of which is that benefit fails to be revalued by reference to any period is to be disregarded in making any calculation required by this paragraph.
- (1) If, apart from this Schedule, the annual rate of a pension under a qualifying scheme would not be increased as mentioned in section 58A(1)(b) of this Act, the annual rate of its later service component shall be increased annually by at least an amount equal to the appropriate percentage of the annual rate of that component as applicable immediately before the increase takes effect.
- (2) The first increase by virtue of this paragraph in the rate of a pension shall take effect not later than the first anniversary of the commencement of the pension and subsequent increases shall take effect at intervals of not more than twelve months thereafter.
- (3) This paragraph is subject to paragraphs 4 to 7 below.
### Annual increase of earlier service component where scheme is in surplus
##### 3
- (1) This paragraph applies to any benefit the rate or amount of which is calculated by reference to the member’s average salary over the period of service on which that benefit is based.
- (2) A benefit to which this paragraph applies is referred to in this Schedule as an “*average salary benefit*”.
- (3) Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any average salary benefit payable to the member or to any other person in respect of him is to be revalued—
- (a) by revaluing his salaries during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or
- (b) by the method specified in paragraph 2 above.
- (4) The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in sub-paragraph (3) above appears to the trustees or managers of the scheme to be appropriate.
- (5) In this paragraph “*salaries*”means, subject to sub-paragraph (5A) below, the member’s salaries for the period between the date when his pensionable service commenced and the date when it terminated, or such part of them as was relevant under the scheme to the calculation of the retirement benefits payable under the scheme to him or to any other person in respect of him; and those salaries are to be taken for the purposes of this paragraph to include—
- (a) any amount which is attributed to them, otherwise than by virtue of this paragraph, as the result of a revalution for which the rules of the scheme provide; and
- (b) any amount which is for any reason credited to the member by way of salary notionally earned.
- (5A) Where the member’s pensionable service terminated before the coming into force of this sub-paragraph, sub-paragraph (5) above shall have effect with the substitution for the words from, “means” to “terminated” of the words “means the member’s salaries for the period between 1st January 1985 and the date when his pensionable service terminated”.
- (6) For the purposes of the application of this Paragraph to a case where a member is credited with an amount by reference to salary notionally earned over a period of time of a particular length that period shall be taken to have ended immediately before the member’s actual pensionable service began.
- (1) If on any valuation day the value of a qualifying scheme’s assets, as determined in accordance with regulations, exceeds the value of its liabilities, as so determined, the amount of the excess (the “*valuation surplus*”) shall be applied in accordance with the following provisions of this paragraph in providing for annual increases, up to the aggregate referred to in sub-paragraph (6) below, in the annual rate of the earlier service component of each pension under the scheme that would not, apart from this Schedule, be increased as mentioned in section 58A(1)(b) of this Act.
- (2) The amount of each annual increase to be provided in pursuance of this paragraph in consequence of a valuation surplus shall be an amount equal to the appropriate percentage of the annual rate of the earlier service component of the pension in question as applicable immediately before that annual increase takes effect.
- (3) Except in a case where regulations otherwise provide, the days which are “*valuation days*” for the purposes of this paragraph are—
- (a) the appointed day; and
- (b) each subsequent day as at which the assets and liabilities of the scheme in question are actuarially valued for any purpose.
- (4) Where, in consequence of a valuation surplus, this paragraph requires provision to be made for annual increases in the annual rate of the earlier service component of a pension, the first of those increases shall take effect not later than the first anniversary of the later of—
- (a) the valuation day as at which the valuation was made which disclosed the valuation surplus; or
- (b) the commencement of the pension;
and subsequent increases shall take effect at intervals of not more than twelve months thereafter.
- (5) In any case where—
- (a) a valuation of the assets and liabilities of a qualifying scheme discloses a valuation surplus, but
- (b) the amount of the surplus is insufficient to provide in full for the annual increases otherwise required by this paragraph in pensions under the scheme,
the valuation surplus shall be applied in providing for the increases so required but only at the percentage rate that would apply year by year in relation to those increases if, for the maximum percentage of 5 per cent. specified in section 52A(9)(a) above, there were substituted such lower percentage as represents the greatest maximum percentage, as determined in accordance with regulations, by reference to which the valuation surplus is sufficient to provide for annual increases in the earlier service component of the pensions in question.
- (6) If a valuation surplus is disclosed on a valuation at any time when either—
- (a) provision has already been made by the scheme for the annual rate of the earlier service component of every such pension as is mentioned in sub-paragraph (1) above to be increased annually in the aggregate by at least the appropriate percentage of that rate, or
- (b) the application of part only of the valuation surplus would be sufficient to secure that result,
this paragraph does not require that valuation surplus or, as the case may be, the remaining part of it, to be applied in the provision of increases under this paragraph.
- (7) the powers conferred by sub-paragraphs (1) and (5) above to make regulations include, respectively, power to provide that the valuation of the scheme’s assets or liabilities is to be calculated and verified, or the percentage in question is to be determined,—
- (a) in such manner as may, in the particular case, be approved—
- (i) by a prescribed person;
- (ii) by a person with prescribed professional qualifications or experience; or
- (iii) by a person approved by the Secretary of State;
- (b) in accordance with guidance prepared by a prescribed body;
- (c) in accordance with prescribed principles and requirements; or
- (d) in accordance with principles determined by the person who performs the duties of calculation and verification.
- (8) This paragraph is subject to paragraphs 4 to 7 below.
### Proportional increases where first period is less than 12 months
##### 4
- (1) This paragraph applies to any benefit the rate or amount of which is calculated by reference solely to the member’s length of service.
- (2) A benefit to which this paragraph applies is referred to in this Schedule as a “flat rate benefit”.
- (3) Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any flat rate benefit payable to the member or to any other person in respect of him is to be revalued—
- (a) by revaluing the benefits which have accrued to him during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or
- (b) by the method specified in paragraph 2 above.
- (4) The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in sub-paragraph (3) above appears to the trustees or managers of the scheme to be appropriate.
- (1) Where a pension commenced to be paid less than twelve months before the date on which its first increase under paragraph 2 above is to take effect, the amount of that first increase shall be determined by the application of the formula—
$M×I12$
- (2) This paragraph shall apply in relation to the first increase of a pension by virtue of paragraph 3 above in consequence of each successive valuation surplus as it applies in relation to the first increase of a pension under paragraph 2 above.
### Restriction on increases where member is under 55
##### 5
- (1) This paragraph applies to any benefit the rate or amount of which is calculated by reference to a payment or payments made by the member, or by any other person in respect of him and which is not an average salary benefit.
- (2) A benefit to which this paragraph applies is referred to in this Schedule as a “*money purchase benefit*”.
- (3) In the case of such a benefit, if the revaluation condition is satisfied, the investment yield and any bonuses arising from payments made by or on behalf of a member shall be applied, subject to sub-paragraph (4) below, towards providing any pension or other retirement benefit which is payable under the scheme to him or to any other person in respect of him in the manner in which they would have been applied if his pensionable service had not been terminated.
- (4) The Secretary of State may by regulations authorise trustees and managers of schemes to deduct from any pension or other retirement benefit provided under sub-paragraph (3) above an appropriate amount in respect of the administrative expenses incurred by them in carrying this paragraph into effect.
- (1) No increase under paragraph 2 or 3 above is required to be paid to or for a member of a scheme whose pension has commenced but who has not attained the age of 55 at the time when the increase takes effect, unless—
- (a) he is permanently incapacitated by mental or physical infirmity from engaging in regular full-time employment, or
- (b) he has retired on account of mental or physical infirmity from the office or employment in respect of which, or on retirement from which, the pension is payable,
in which case the pension shall be payable at the annual rate at which it would have been payable apart from this sub-paragraph.
- (2) The rules of a scheme may provide that if, in a case where a pension has been paid to or for a member under the age of 55 at an increased rate in consequence of paragraph (a) or (b) of sub-paragraph (1) above, the member—
- (a) ceases to suffer from the infirmity in question before he attains the age of 55, but
- (b) continues to be entitled to the pension,
any increases subsequently taking effect under paragraph 2 or 3 above in the annual rate of the pension shall not be paid or shall not be paid in full.
- (3) In any case where—
- (a) by virtue only of sub-paragraph (1) or (2) above, increases are not paid to or for a member or are not paid in full, but
- (b) the member attains the age of 55 or, in a case falling within sub-paragraph (2) above, again satisfies the conditions set out in paragraph (a) or (b) of sub-paragraph (1) above,
his pension shall thereupon become payable at the annual rate at which it would have been payable apart from sub-paragraph (1) or (2) above.
### Application of Schedule to pensions not attributable to pensionable service
##### 6
Nothing in paragraph 2, 3, 4 or 5 above is to be construed as requiring the revaluation of any pension or other benefit provided by virtue of paragraph 9(2)(b) of Schedule 16 to the Social Security Act 1973 by way of complete substitute for another pension or benefit.
Regulations may provide that this Schedule (other than this paragraph) shall apply in relation to any pension under a qualifying scheme as if so much of the annual rate of the pension as would not otherwise be attributable to pensionable service were attributable in accordance with the regulations—
- (a) to pensionable service before the appointed day;
- (b) to pensionable service on or after that day; or
- (c) partly to pensionable service before, and partly to pensionable service on or after, that day;
and any reference to the earlier or later service component of the pension shall be construed accordingly.
### Regulations
##### 7
- (1) Subject to sub-paragraph (2) below, this Part of this Schedule overrides any provision of a scheme to the extent that it conflicts with this Part of this Schedule.
- (2) This Part of this Schedule does not override a protected provision of a scheme.
- (3) Subject to sub-paragraph (4) below, in sub-paragraph (2) above “*protected provision*” has the same meaning as it has in subsection (2) of section 41C above by virtue of subsection (3) of that section.
- (4) In its application to schemes which are not contracted-out section 41C(3) above shall have effect for the purpose of this paragraph as if—
- (a) there were omitted—
- (i) from paragraph (a), sub-paragraph (ii) and the word “or” immediately preceding it;
- (ii) from paragraph (b), the word “and”; . . .
- (iii) from paragraph (c), the words from “authorised” to the end; and
- (iv) from paragraph (e), the words from “as respects” to “guaranteed minimum pension”.
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (1) The Secretary of State may by regulations direct that section 58A of this Act and this Schedule shall have effect, in such cases as he may specify.
- (2) In sub-paragraph (1) above “*modification*”, without prejudice to the generality of that sub-paragraph, includes addition, omission, and amendment.
### Overriding effect of the increase provisions
##### 8
If under a scheme—
- (a) the amount of the pension or other benefit for a member or for any other person in respect of him falls to be increased during the period mentioned in paragraph 1(2)(a) above—
- (i) by the percentages specified during that period under section 151(1) of the Administration Act; or
- (ii) under any arrangement which, in the opinion of the Occupational Pensions Board, maintains the value of the pension or other benefit by reference to the rise in the general level of prices in Great Britain during that period; and
- (b) the increase falls to be determined by reference to an amount from which the guaranteed minimum for a member or his widow has not been deducted,
the fact that the scheme provides as mentioned in sub-paragraph (a) above does not in itself result in conflict with paragraph 2, 3 or 4 above.
##### 9
In making any calculation for the purposes of this Part of this Schedule any commutation, forfeiture or surrender of the whole or part of a pension shall be disregarded.
##### 10
The same money may not be treated as providing both the benefit required by section 41A or 41B above and the increase in benefit required by this Part of this Schedule.
## Part II — Transfer Values
##### 11
- (1) This Part of this Schedule applies to any member of an occupational pension scheme whose pensionable service terminates after the commencement of this Part of this Schedule if—
- (a) it terminates at least one year before normal pension age; and
- (b) on the date when it terminates—
- (i) he has accrued rights to benefit under the scheme; . . .
- (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) For the purposes of this Part of this Schedule . . . , “*pensionable service*” and “*normal pension age*” are to be construed in accordance with Schedule 16 to the Social Security Act 1973.
- (3) Any reference to a member in the following provisions of this Part of this Schedule is a reference to a member of an occupational pension scheme to whom this Part of this Schedule applies.
##### 12
- (1) Subject to the following provisions of this Schedule, a member acquires a right, when his pensionable service terminates, to the cash equivalent at the relevant date of any benefits—
- (a) which have accrued to or in respect of him under the applicable rules; . . .
- (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- (2) In this paragraph “*the applicable rules*” means—
- (a) the rules of the scheme, except so far as—
- (i) section 41A or 41B above; or
- (ii) Part I of this Schedule,
overrides them; and
- (b) any provision which the rules of the scheme do not contain but which a scheme must contain if it is to conform with the preservation requirements; and
- (c) any provision—
- (i) of section 41A or 41B above; or
- (ii) of Part I of this Schedule,
which overrides any of the rules of the scheme;
- “*the relevant date*” means , subject to regulations under sub-paragraph (2C) below, the date when the member’s pensionable service terminates or the date of the relevant application, whichever is the later; and
- “*the relevant application*” means any application which the member has made under paragraph 16 below and which he has not withdrawn.
- (2A) Where a member continues in employment to which a scheme applies after his pensionable service in that employment terminates—
- (a) if regulations so provide, he only acquires a right to the cash equivalent of such part of the benefits specified in sub-paragraph (1) above as may be prescribed; and
- (b) if regulations so provide, he acquires no right to a cash equivalent.
- (2B) Regulations may provide for the purposes of sub-paragraph (2A) above that in prescribed circumstances a number of employments (whether or not consecutive) shall be treated as a single employment.
- (2C) Regulations—
- (a) may provide that a right at the relevant date to the cash equivalent of any part of the benefits specified in sub-paragraph (1) above which but for regulations under the foregoing provisions of this paragraph a member would have on the termination of his pensionable service in an employment to which a scheme applies shall, if his employment terminates at least one year before normal pension age, accrue to him on the date when it terminates and be valued accordingly; and
- (b) may substitute, in relation to any case to which the regulations apply—
- (i) a new definition of the “relevant date” for the definition in sub-paragraph (2) above, and
- (ii) a new definition of “the last option date” for the definition in paragraph 15(2) below.
- (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . in sub-paragraph (2) above “*the preservation requirements*” means the requirements set out in Part I of Schedule 16 to the Social Security Act 1973 as the requirements of Part II of that Act relating to preservation of benefit under occupational pension schemes.
- (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
##### 13
- (1) A member who acquires a right to a cash equivalent under this Part of this Schedule may only take it by exercising the option conferred by sub-paragraph (2) below.
- (2) Subject to sub-paragraphs (3) and (4) below, the option conferred by this sub-paragraph on any such member is that of requiring the trustees or managers of the scheme of which he is a member to use the cash equivalent to which he has acquired a right in whichever of the ways specified in paragraphs (a), (b) and (c) below he chooses—
- (a) for acquiring transfer credits allowed under the rules of another occupational pension scheme, or for acquiring rights allowed under the rules of a personal pension scheme whose trustees or managers , in either case, are able and willing to accept him and which , in either case, satisfies prescribed requirements;
- (b) except in respect of the cash equivalent of his protected rights, if any, under a scheme which is, or was formerly, a money purchase contracted-out scheme for purchasing from one or more insurance companies such as are mentioned in section 52C (4)(a) above, chosen by the member and willing to accept payment on account of the member from the trustees or managers, one or more annuities which satisfy prescribed requirements;
- (c) subject to sub-paragraph (3) below, for subscribing to other pension arrangements which satisfy prescribed requirements.
- (2) Subject to sub-paragraphs (3) and (4) below, the option conferred by this sub-paragraph on any such member is that of requiring the trustees or managers of the scheme of which he is a member to use the cash equivalent to which he has acquired a right in whichever of the ways specified in paragraphs (a), (b) and (c) below he chooses—
- (a) for acquiring transfer credits allowed under the rules of an occupational pension scheme, or for acquiring rights allowed under the rules of another personal pension scheme whose trustees or managers, in either case, are able and willing to accept him and which, in either case, satisfies prescribed requirements;
- (c) subject to sub-paragraph (3) below, for subscribing to other pension arrangements which satisfy prescribed requirements.
- (2A) Without prejudice to the generality of sub-paragraph (2) above, the powers conferred by that sub-paragraph include power to provide that a scheme, an annuity or pension arrangements must satisfy requirements of the Inland Revenue.
- (3) Except in such circumstances as may be prescribed sub-paragraph (2) above is to be construed as if paragraph (c) were omitted.
- (4) A member may exercise the option conferred by sub-paragraph (2) above in different ways in relation to different portions of his cash equivalent, but a member who exercises that option must do so in relation to the whole of his cash equivalent or, where sub-paragraph (5) below applies, in relation to the whole of the sum mentioned in sub-paragraph (6) below.
- (5) Where—
- (a) the trustees or managers of an occupational pension scheme which is not a contracted:-out scheme, or of a personal pension scheme which is not an appropriate scheme, or of a self-employed pension arrangement within the meaning of regulation 2D of the Occupational Pension Schemes (Transfer Values) Regulations 1985 or regulation 2A of the Personal Pension Schemes (Transfer Values) Regulations 1987 are able or willing to accept a transfer payment only in respect of a member’s rights other than his accrued rights to guaranteed minimum pensions or his protected rights; and
- (b) the member has not required the trustees or managers of the scheme from which he is being transferred to use that portion of his cash equivalent that represents guaranteed minimum pensions or protected rights in any of the ways specified in sub-paragraph (2) above.
- (6) The sum referred to in sub-paragraph (5) above is the sum equal to the balance of the cash equivalent to which the member would be entitled if sub-paragraph (5) above did not apply, after deduction of an amount sufficient for the trustees or managers of the scheme from which he is being transferred to meet their liability in respect of his and his widow’s guaranteed minimum pensions or his protected rights.
- (5) Where—
- (a) the trustees or managers of an occupational pension scheme which is not a contracted-out scheme, or of a personal pension scheme which is not an appropriate scheme, or of a self-employed pension arrangement within the meaning of regulation 2D of the Occupational Pension Schemes (Transfer Values) Regulations 1985 or regulation 2A of the Personal Pension Schemes (Transfer Values) Regulations 1987 are able or Willing to accept a transfer payment only in respect of a member’s rights other than his protected fights within the meaning given by Schedule 1 to the Social Security Act 1986; and
- (b) the member has not required the trustees or managers of the scheme from which he is being transferred to use that portion of his cash equivalent that represents protected rights within the meaning given by Schedule 1 to te Social Security Act 1986 in either of the ways specified in sub-paragraph (2) above,
- (6) The sum referred to in sub-paragraph (5) above is the sum equal to the balance of the cash equivalent to which the member would be entitled if sub-paragraph (5) above did not apply, after deduction of an amount sufficient for the trustees or managers of the scheme from which he is being transferred to meet their liability in respect of his protected rights within the meaning given by Schedule 1 to the Social Security Act 1986.
##### 14
- (1) Cash equivalents are to be calculated and verified in the prescribed manner.
- (2) The power to make regulations conferred by sub-paragraph (1) above includes power to provide that cash equivalents are to be calculated and verified in such manner as may be approved in particular cases—
- (a) by prescribed persons; or
- (b) by persons with prescribed professional qualifications or experience; or
- (c) by persons approved by the Secretary of State
and power to provide that they shall be calculated and verified in accordance with guidance prepared by a prescribed body.
- (3) Regulations may provide—
- (a) that in calculating cash equivalents account shall be taken—
- (i) of any surrender, commutation or forfeiture of the whole or part of a member’s pension which occurs before the trustees or managers of the scheme of which he is a member do what is needed to comply with what he requires under paragraph 16 below;
- (ii) in a case where a paragraph 13(5) above applies, of the need to deduct an appropriate amount to provide guaranteed minimum pensions or give effect to protected rights; and
- (ii) in a case where paragraph 13(5) above applies, of the need to deduct an appropriate amount to make provision for protected rights; and
- (b) that in prescribed circumstances a cash equivalent shall be increased or reduced.
- (4) Without prejudice to the generality of sub-paragraph (3) above—
- (a) the circumstances that may be specified by virtue of paragraph (b) of that sub-paragraph include—
- (i) the length of time which elapses between the termination of a member’s pensionable service and his exercise of the option conferred by this Part of this Schedule or regulations under it;
- (ii) failure by the trustees or managers of a scheme to do what is needed to carry out what a member of the scheme requires within six months of the date on which they receive an application from him under paragraph 16 below; and
- (iii) the state of the funding of a scheme; and
- (b) regulations under that sub-paragraph may specify as the amount by which a cash equivalent is to be reduced such an amount that a member has no right to receive anything.
##### 15
- (1) A member may only exercise the option conferred by paragraph 13 above on or before the last option date.
- (2) In this paragraph “*the last option date*” means the date which falls—
- (a) one year before the date on which he attains normal pension age, or
- (b) six months after the date when his pensionable service terminates, whichever is the later.
- (3) A member loses the right to any cash equivalent under this Part of this Schedule—
- (a) if his pension or benefit in lieu of a pension or any part of it becomes payable before he attains normal pension age;
- (b) if he fails to exercise the option conferred by paragraph 13 above on or before the last option date; or
- (c) if the scheme is wound up.
##### 16
- (1) A member may only exercise the option conferred by paragraph 13 above by making an application in writing to the trustees or managers of the scheme.
- (2) In any case where—
- (a) a member has exercised that option; and
- (b) the trustees or managers of the scheme have done what is needed to carry out what the member requires.
the trustees or managers shall be discharged from any obligation to provide benefits to which the cash equivalent related except, in any such cases as are mentioned in paragraph 13(5) above, to the extent that an obligation to provide such guaranteed minimum pensions or give effect to such protected rights continues to subsist.
- (2) In any case where—
- (a) a member has exercised that option; and
- (b) the trustees or managers of the scheme have done what is needed to carry out what the member requires,
the trustees or managers shall be discharged from any obligation to provide benefits to which the cash equivalent related except, in any such cases as are mentioned in paragraph 1 3(5) above, to the extent that an obligation to make provision for such protected rights continues to subsist.
- (3) If the trustees or managers of a scheme receive an application under this paragraph, it shall be their duty, subject to the following provisions of this paragraph, to do what is needed to carry out what the member requires—
- (a) within twelve months of the date on which they receive the application; or
- (b) by the date on which the member attains normal pension age, whichever is the earlier.
- (4) If—
- (a) disciplinary proceedings or proceedings before a court have been commenced against a member at any time before the expiry of the period of twelve months beginning with the date when his pensionable service terminates; and
- (b) it appears to the trustees or managers of the scheme of which he is a member that the proceedings may lead to the whole or part of the pension or benefit in lieu of a pension payable to the member or his widow being forfeited,
it shall be the trustees’ or managers’ duty, subject to the following provisions of this paragraph, to do what is needed to carry out what the member requires before—
- (i) the date before which they would be obliged to do it under sub-paragraph (3) above; or
- (ii) the end of the period of three months after the conclusion of the disciplinary or court proceedings (including any proceedings on appeal),
whichever is the later.
- (5) The Occupational Pensions Board may grant an extension of the period within which the trustees or managers of a scheme are obliged to do what is needed to carry out what a member of the scheme requires—
- (a) in any case where in the opinion of the Board—
- (i) the scheme is being wound up or is about to be wound up;
- (ii) the scheme is ceasing to be a contracted-out scheme;
- (iii) the interests of the members of the scheme generally will be prejudiced if the trustees or managers of the scheme do what is needed to carry out what is required within that period; or
- (iv) the member has not taken all such steps as the trustees or managers can reasonably expect him to take in order to satisfy them of any matter which falls to be established before they can properly carry out what he requires;
- (b) in any case where the provisions of section 49 above apply; and
- (c) in any case where a request for an extension has been made on a ground specified in paragraph (a) or (b) above, and the Board’s consideration of the request cannot be completed before the end of that period.
- (6) A request under sub-paragraph (5) above may only be made by the trustees or managers.
- (7) The Board shall have power, if they are satisfied that there has been a relevant change of circumstances since they granted an extension, or that they granted an extension in ignorance of a material fact or on the basis of a mistake as to a material fact—
- (a) to direct that the extension shall end on a date earlier than that on which it would otherwise have ended; or
- (b) to revoke the grant of the extension.
- (8) An application to the trustees or managers of a scheme under this paragraph is to be taken to have been made if it is delivered to them personally, or sent by post in a registered letter or by the recorded delivery service.
##### 17
- (1) Subject to sub-paragraph (2) below, a member of a scheme may withdraw an application under paragraph 16 above by giving the trustees or managers of the scheme notice in writing that he no longer wishes them to do what is needed to carry out what he previously required.
- (2) Such a notice shall be of no effect if it is given to the trustees or managers at a time when, in order to comply with what the member previously required, they have already entered into an agreement with a third party to use the whole or part of the member’s cash equivalent in a way specified in paragraph 13(2)(a), (b) or (c) above.
- (3) A member who withdraws an application may make another.
- (4) A notice to the trustees or managers of a scheme under this paragraph is to be taken to have been given if it is delivered to them personally, or sent by post in a registered letter or by recorded delivery service.
##### 18
- (1) Subject to sub-paragraph (2) below, this Part of this Schedule overrides any provision of a scheme to the extent that it conflicts with this Part of this Schedule.
- (2) This Part of this Schedule does not override any provision of a scheme to the extent that it deals with priorities on a winding-up.
## Part III — SUPPLEMENTARY
##### 19
In making any calculation for the purposes of this Schedule—
- (a) any charge or lien on the whole or part of a pension; and
- (b) any set-off against the whole or part of a pension,
shall be disregarded.
##### 20
- (1) The Secretary of State may by regulations direct that this Schedule shall have effect, in such cases as he may specify in the regulations, subject to such modifications as he may there specify.
- (2) In sub-paragraph (1) above “*modification*” includes, without prejudice to the generality of that sub-paragraph, addition, omission and amendment.
##### 21
The Occupational Pensions Board may at any time, and shall if requested by the trustees or managers of an occupational pension scheme, advise on any question whether—
- (a) any provision of this Schedule (including, without prejudice to section 20(2) of the Interpretation Act 1978, any such provision as modified by regulations under paragraph 20 above) does or does not override any provision of the scheme;
- (b) any benefit is an average salary benefit, a flat rate benefit or a money purchase benefit.
##### 22
- (1) On an application made to them in respect of an occupational pension scheme (other than a public service pension scheme) by persons competent to make such an application in respect of it, the Occupational Pensions Board shall issue a determination on any such question as is mentioned in paragraph 21 above.
- (2) The persons competent to make an application under this paragraph in respect of a scheme are—
- (a) the persons mentioned in section 41E(2)(a) to (d) above; and
- (b) such other persons as regulations may specify, in relation to any category of schemes into which the scheme falls, as being proper persons to make an application for the purposes of this paragraph in respect of a scheme of that category.
##### 23
It is hereby declared that nothing in the foregoing provisions of this Schedule is to be taken to preclude a scheme from being framed or managed more favourably to beneficiaries than is called for by those provisions.
#### . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
## SCHEDULE 3A
### Interpretation
##### 1
In this Schedule—
- “*annual rate*”, in relation to a pension or the later or earlier service component of a pension, means the annual rate of the pension or component, as previously increased under the rules of the scheme or this Schedule;
- “*the appointed day*” means the day on which this Schedule and section 58A of this Act come into force;
- “*the appropriate percentage*”, in relation to an increase in the annual rate of a pension or a component of a pension, means the percentage specified in the last revaluation order made before the increase is to take effect as the revaluation percentage for the last revaluation period of twelve months;
- “*earlier service component*” means so much (if any) of the annual rate of the pension as is attributable to pensionable service before the appointed day;
- “*later service component*” means so much (if any) of the annual rate of the pension as is attributable to pensionable service on or after the appointed day;
- “*pension*”, in relation to a scheme, means any pension which commences or has commenced under the scheme but does not include—a guaranteed minimum pension or any increase in such a pension under section 37A above; orany money purchase benefit;
- “*pensionable service*” has the meaning given by paragraph 3 of Schedule 16 to the 1973 Act;
- “*qualifying scheme*” means a scheme to which section 58A of this Act applies;
- “*revaluation order*”, “*revaluation percentage*” and “*revaluation period*” shall be construed in accordance with section 52A above.
### Annual increase of later service component
##### 2
- (1) If, apart from this Schedule, the annual rate of a pension under a qualifying scheme would not be increased as mentioned in section 58A(1)(b) of this Act, the annual rate of its later service component shall be increased annually by at least an amount equal to the appropriate percentage of the annual rate of that component as applicable immediately before the increase takes effect.
- (2) The first increase by virtue of this paragraph in the rate of a pension shall take effect not later than the first anniversary of the commencement of the pension and subsequent increases shall take effect at intervals of not more than twelve months thereafter.
- (3) This paragraph is subject to paragraphs 4 to 7 below.
### Annual increase of earlier service component where scheme is in surplus
##### 3
- (1) If on any valuation day the value of a qualifying scheme’s assets, as determined in accordance with regulations, exceeds the value of its liabilities, as so determined, the amount of the excess (the “*valuation surplus*”) shall be applied in accordance with the following provisions of this paragraph in providing for annual increases, up to the aggregate referred to in sub-paragraph (6) below, in the annual rate of the earlier service component of each pension under the scheme that would not, apart from this Schedule, be increased as mentioned in section 58A(1)(b) of this Act.
- (2) The amount of each annual increase to be provided in pursuance of this paragraph in consequence of a valuation surplus shall be an amount equal to the appropriate percentage of the annual rate of the earlier service component of the pension in question as applicable immediately before that annual increase takes effect.
- (3) Except in a case where regulations otherwise provide, the days which are “*valuation days*” for the purposes of this paragraph are—
- (a) the appointed day; and
- (b) each subsequent day as at which the assets and liabilities of the scheme in question are actuarially valued for any purpose.
- (4) Where, in consequence of a valuation surplus, this paragraph requires provision to be made for annual increases in the annual rate of the earlier service component of a pension, the first of those increases shall take effect not later than the first anniversary of the later of—
- (a) the valuation day as at which the valuation was made which disclosed the valuation surplus; or
- (b) the commencement of the pension;
and subsequent increases shall take effect at intervals of not more than twelve months thereafter.
- (5) In any case where—
- (a) a valuation of the assets and liabilities of a qualifying scheme discloses a valuation surplus, but
- (b) the amount of the surplus is insufficient to provide in full for the annual increases otherwise required by this paragraph in pensions under the scheme,
the valuation surplus shall be applied in providing for the increases so required but only at the percentage rate that would apply year by year in relation to those increases if, for the maximum percentage of 5 per cent. specified in section 52A(9)(a) above, there were substituted such lower percentage as represents the greatest maximum percentage, as determined in accordance with regulations, by reference to which the valuation surplus is sufficient to provide for annual increases in the earlier service component of the pensions in question.
- (6) If a valuation surplus is disclosed on a valuation at any time when either—
- (a) provision has already been made by the scheme for the annual rate of the earlier service component of every such pension as is mentioned in sub-paragraph (1) above to be increased annually in the aggregate by at least the appropriate percentage of that rate, or
- (b) the application of part only of the valuation surplus would be sufficient to secure that result,
this paragraph does not require that valuation surplus or, as the case may be, the remaining part of it, to be applied in the provision of increases under this paragraph.
- (7) the powers conferred by sub-paragraphs (1) and (5) above to make regulations include, respectively, power to provide that the valuation of the scheme’s assets or liabilities is to be calculated and verified, or the percentage in question is to be determined,—
- (a) in such manner as may, in the particular case, be approved—
- (i) by a prescribed person;
- (ii) by a person with prescribed professional qualifications or experience; or
- (iii) by a person approved by the Secretary of State;
- (b) in accordance with guidance prepared by a prescribed body;
- (c) in accordance with prescribed principles and requirements; or
- (d) in accordance with principles determined by the person who performs the duties of calculation and verification.
- (8) This paragraph is subject to paragraphs 4 to 7 below.
### Proportional increases where first period is less than 12 months
##### 4
- (1) Where a pension commenced to be paid less than twelve months before the date on which its first increase under paragraph 2 above is to take effect, the amount of that first increase shall be determined by the application of the formula—
$M×I12$
- (2) This paragraph shall apply in relation to the first increase of a pension by virtue of paragraph 3 above in consequence of each successive valuation surplus as it applies in relation to the first increase of a pension under paragraph 2 above.
### Restriction on increases where member is under 55
##### 5
- (1) No increase under paragraph 2 or 3 above is required to be paid to or for a member of a scheme whose pension has commenced but who has not attained the age of 55 at the time when the increase takes effect, unless—
- (a) he is permanently incapacitated by mental or physical infirmity from engaging in regular full-time employment, or
- (b) he has retired on account of mental or physical infirmity from the office or employment in respect of which, or on retirement from which, the pension is payable,
in which case the pension shall be payable at the annual rate at which it would have been payable apart from this sub-paragraph.
- (2) The rules of a scheme may provide that if, in a case where a pension has been paid to or for a member under the age of 55 at an increased rate in consequence of paragraph (a) or (b) of sub-paragraph (1) above, the member—
- (a) ceases to suffer from the infirmity in question before he attains the age of 55, but
- (b) continues to be entitled to the pension,
any increases subsequently taking effect under paragraph 2 or 3 above in the annual rate of the pension shall not be paid or shall not be paid in full.
- (3) In any case where—
- (a) by virtue only of sub-paragraph (1) or (2) above, increases are not paid to or for a member or are not paid in full, but
- (b) the member attains the age of 55 or, in a case falling within sub-paragraph (2) above, again satisfies the conditions set out in paragraph (a) or (b) of sub-paragraph (1) above,
his pension shall thereupon become payable at the annual rate at which it would have been payable apart from sub-paragraph (1) or (2) above.
### Application of Schedule to pensions not attributable to pensionable service
##### 6
Regulations may provide that this Schedule (other than this paragraph) shall apply in relation to any pension under a qualifying scheme as if so much of the annual rate of the pension as would not otherwise be attributable to pensionable service were attributable in accordance with the regulations—
- (a) to pensionable service before the appointed day;
- (b) to pensionable service on or after that day; or
- (c) partly to pensionable service before, and partly to pensionable service on or after, that day;
and any reference to the earlier or later service component of the pension shall be construed accordingly.
### Regulations
##### 7
- (1) The Secretary of State may by regulations direct that section 58A of this Act and this Schedule shall have effect, in such cases as he may specify.
- (2) In sub-paragraph (1) above “*modification*”, without prejudice to the generality of that sub-paragraph, includes addition, omission, and amendment.
### Overriding effect of the increase provisions
##### 8
The provisions of section 58A of this Act, this Schedule and any regulations made under it override any provision of a qualifying scheme, other than a protected provision (within the meaning of paragraph 7 of Schedule 1A to this Act), to the extent that it conflicts with them.
### The Supplementary Benefit Act 1966
2004-07-22
Social Security Pensions Act 1975
1975-08-07
Social Security Pensions Act 1975
original version
Text at this date