The Personal Pension Schemes (Transfer Values) Regulations 1987

Made: 25th June 1987

Laid before Parliament: 6th July 1987

Coming into force: 27th July 1987

The Secretary of State for Social Services, in exercise of the powers conferred upon him by section 168(1) of, and Schedule 20 to, the Social Security Act 1975 , and paragraphs 13 and 14 of Schedule 1A to the Social Security Pensions Act 1975 , and of all other powers enabling him in that behalf, by this instrument, which is made before the end of a period of 12 months from the commencement of the enactments under which it is made, makes the following regulations:

Citation, commencement and interpretation

1

• (1) These Regulations may be cited as the Personal Pension Schemes (Transfer Values) Regulations 1987 and shall come into force on 27th July 1987.

• (2) In these Regulations, unless the context otherwise requires—

• “the Act” means the Pension Schemes Act 1993;

• ...

• “cash equivalent” has the same meaning as in Chapter 1 of Part 4ZA of the Act as it applies to personal pension schemes;

• “initial cash equivalent” means the amount calculated in accordance with regulation 3(2) to (4);

• “member” means a member of a personal pension scheme to whom Chapter 1 of Part 4ZA of the Act applies;

• ...

• ...

• “personal pension scheme” has the same meaning as in section 181(1) of the Act;

• ...

• “receiving scheme” means a scheme under whose rules transfer credits or rights are to be acquired by a member in exercise of his choice under section 95(3)(a) or (b) of the Act;

• “scheme” means occupational pension scheme or personal pension scheme;

• “trustees”, in relation to a scheme which is not set up or established under a trust, means the managers of the scheme;

and other expressions have the same meaning as in Chapter 1 of Part 4ZA of the Act as it applies to personal pension schemes.

Requirements to be satisfied

2

• (1) The prescribed requirements referred to in section 95(3)(a) and (b) of the Act (cash equivalent of member’s rights under a personal pension scheme to be used for acquiring transfer credits or rights under another scheme) are that—

• (a) the receiving scheme—

• (i) is registered under section 153 of the Finance Act 2004 (registration of pension schemes), or

• (ii) is a qualifying recognised overseas pension scheme as defined in section 169 of that Act (recognised transfers),

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) Paragraph (1)(a)(i) shall not apply if the receiving scheme was immediately before the 6th April 2006 approved under Chapter III of Part XIV of the Income and Corporation Taxes Act 1988 (retirement annuities), unless the transfer is from a contract or scheme which was immediately before 6th April 2006 approved under Chapter III of Part XIV of that Act.

Manner of calculation and verification of cash equivalents

3

• (1) Cash equivalents are to be calculated and verified by calculating the initial cash equivalent in accordance with this regulation and then making any increases or reductions in accordance with regulation 4.

• (2) The initial cash equivalent is the realisable value at the date of calculation of any benefits to which the member is entitled.

• (3) The trustees must calculate that realisable value—

• (a) in accordance with the scheme rules; and

• (b) in a manner which is—

• (i) approved by the trustees; and

• (ii) consistent with Chapter 1 of Part 4ZA of the Act.

• (4) The realisable value must include any increases to the benefits resulting from a payment of interest made in accordance with the scheme rules.

Increases and reductions of cash equivalents

4

• (1) Initial cash equivalents may, or as the case may be must, be increased or reduced in accordance with this regulation.

• (2) If the whole or any part of the benefits referred to in section 94 of the Act (right to cash equivalent) is or has been surrendered, commuted or forfeited before the trustees of the personal pension scheme do what is needed to comply with what the member requires, the initial cash equivalent must be reduced in proportion to the reduction in the total value of the benefits.

• (3) If the trustees of a personal pension scheme fail without reasonable excuse to do what is needed to carry out what a member of the scheme requires within 6 months of the relevant date, that member’s initial cash equivalent must be increased by—

• (a) the interest on that initial cash equivalent, calculated on a daily basis over the period from the relevant date to the date on which the trustees carry out what the member requires, at the same rate as that payable for the time being on judgment debts by virtue of section 17 of the Judgment Act 1838 (judgment debts to carry interest); or if it is greater,

• (b) the amount, if any, by which that initial cash equivalent falls short of what it would have been if the relevant date had been the date on which the trustees carry out what the member requires.

• (4) In a case where both paragraphs (2) and (3) fall to be applied to a calculation, paragraph (2) must be applied first.

Signed

Signed by authority of the Secretary of State for Social Services.

Nicholas Scott — Minister of State, — 1987-06-25

Explanatory note

(This note is not part of the Regulations)

Footnotes

[^f00001]: 1975 c. 14. See definitions of “prescribe” and “regulations” in Schedule 20. Section 168(1) applies, by virtue of section 66(2) of the Social Security Pensions Act 1975 (c. 60), to the exercise of certain powers conferred by that Act.

[^f00002]: 1975 c. 60. Schedule 1A was inserted by the Social Security Act 1985 (c. 53) section 2, and Part II of Schedule 1. Paragraphs 13 and 14 of Schedule 1A were amended by the Social Security Act 1986 (c. 50), section 86 and Schedule 10, paragraph 30, and have effect as modified, in relation to personal pension schemes, by virtue of the Personal and Occupational Pension Schemes (Modification of Enactments) Regulations 1987 (S.I. 1987/1116), regulation 3(10) and Schedule 4.

[^f00003]: S.I. 1987/1116.

[^f00004]: 1986 c. 50.

[^f00005]: 1970 c. 24.

[^f00006]: S.I. 1987/1118.

[^f00007]: 1 & 2 Vic. c. 110; the rate of interest was amended by S.I. 1985/437.

Use of cash equivalents for subscribing to self-employed pension arrangements

2A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Manner of calculation and verification of cash equivalents

Increases and reductions of cash equivalents

Editorial notes

[^c2180679]: 1975 c. 14. See definitions of “prescribe” and “regulations” in Schedule 20. Section 168(1) applies, by virtue of section 66(2) of the Social Security Pensions Act 1975 (c. 60), to the exercise of certain powers conferred by that Act.

[^c2180680]: 1975 c. 60. Schedule 1A was inserted by the Social Security Act 1985 (c. 53) section 2, and Part II of Schedule 1. Paragraphs 13 and 14 of Schedule 1A were amended by the Social Security Act 1986 (c. 50), section 86 and Schedule 10, paragraph 30, and have effect as modified, in relation to personal pension schemes, by virtue of the Personal and Occupational Pension Schemes (Modification of Enactments) Regulations 1987 (S.I. 1987/1116), regulation 3(10) and Schedule 4.

[^key-716d98d783f3a6eccdfbc48f2bb179e7]: Words in reg. 1(2) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 17(2)(a)

[^key-bd5f7c5ec4c7fef709a1be16fa7c93cd]: Words in reg. 1(2) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 17(2)(b)

[^key-18aa95f419dfa46a33088069c7cdec82]: Words in reg. 1(2) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 17(2)(c)

[^key-bcc30b910a4bea83088aa9dacd2a8f8d]: Words in reg. 1(2) omitted (12.5.1994) by virtue of The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 17(2)(d)

[^key-966c084c0d2f3f209a52b36d9edac62a]: Words in reg. 1(2) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 17(2)(g)

[^key-436e82d7ea8e41ab7d330efb40b31c5b]: Words in reg. 1(2) substituted (12.5.1994) by The Occupational and Personal Pension Schemes (Consequential Amendments) Regulations 1994 (S.I. 1994/1062), reg. 1(2), Sch. 2 para. 17(2)(h)

[^key-72ba3b4b6e956accf53265109c24961e]: Reg. 2 substituted (6.4.2006) by Taxation of Pension Schemes (Consequential Amendments of Occupational and Personal Pension Schemes Legislation) Order 2006 (S.I. 2006/744), arts. 1, 4(2)

[^key-a51f700e8642f62c02549342eddc0d22]: Reg. 2A omitted (6.4.2006) by virtue of Taxation of Pension Schemes (Consequential Amendments of Occupational and Personal Pension Schemes Legislation) Order 2006 (S.I. 2006/744), arts. 1, 4(3)

[^key-a3ee9e16eac130666b1c53869af4dd3f]: Words in reg. 1(2) inserted (1.10.2008) by Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 (S.I. 2008/1050), reg. 1(1), Sch. 2 para. 1(a)(i)

[^key-ac651c5173c0ffb50526bf8fb6feef52]: Words in reg. 1(2) substituted (1.10.2008) by Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 (S.I. 2008/1050), reg. 1(1), Sch. 2 para. 1(a)(ii)

[^key-a92b1db0a4650eb77ed652bcfad999c9]: Words in reg. 1(2) omitted (1.10.2008) by virtue of Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 (S.I. 2008/1050), reg. 1(1), Sch. 2 para. 1(a)(iii)

[^key-d00cab356e377d8a4f715012c531ec14]: Reg. 3 substituted (1.10.2008) by Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 (S.I. 2008/1050), reg. 1(1), Sch. 2 para. 1(b)

[^key-25fc3862f74d654602e1832dfa886061]: Reg. 4 substituted (1.10.2008) by Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 (S.I. 2008/1050), reg. 1(1), Sch. 2 para. 1(c)

[^key-38e3f7335b9e64a37be2674ec93b2d0a]: Words in reg. 3(2) inserted (13.10.2008) by Occupational and Personal Pension Schemes (Transfer Values) (Amendment) Regulations 2008 (S.I. 2008/2450), regs. 1, 2(2)

[^key-612537f824f2dd55d04fca0721bf0eec]: Words in reg. 1(2) omitted (6.4.2012) by virtue of The Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) Order 2011 (S.I. 2011/1246), arts. 1(2)(a), 3(2)

[^key-25c060bdbab0fc0715233ceaa827c781]: Reg. 2(1)(b) omitted (6.4.2012) by virtue of The Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) Order 2011 (S.I. 2011/1246), arts. 1(2)(a), 3(3)

[^key-4c3d7868e1f1871b8646ced137c6b48d]: Words in reg. 1 substituted (6.4.2015) by The Occupational and Personal Pension Schemes (Transfer Values) (Amendment and Revocation) Regulations 2015 (S.I. 2015/498), regs. 1(2), 12(2)

[^key-674c7a1bfa7b7a3e88118e5ccf5d697c]: Words in reg. 3 substituted (6.4.2015) by The Occupational and Personal Pension Schemes (Transfer Values) (Amendment and Revocation) Regulations 2015 (S.I. 2015/498), regs. 1(2), 12(2)

[^key-5a66f9646bf34a302e0c8ef84b757c0e]: Words in reg. 4(2) substituted (6.4.2015) by The Occupational and Personal Pension Schemes (Transfer Values) (Amendment and Revocation) Regulations 2015 (S.I. 2015/498), regs. 1(2), 12(3)