The Police Pensions (Additional Voluntary Contributions) Regulations 1991

[^key-b9755203db7252bb78ec5c5e4c563cc9]: Word in reg. 2(3) omitted (31.12.2020) by virtue of The Law Enforcement and Security (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/742), regs. 1, 129(2)(a); 2020 c. 1, Sch. 5 para. 1(1)

[^key-55ae5329b95ba9ee732dabe7a12ae480]: Words in reg. 2(3) omitted (31.12.2020) by virtue of The Law Enforcement and Security (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/742), regs. 1, 129(2)(b); 2020 c. 1, Sch. 5 para. 1(1)

[^M_F_419f51b4-2303-4537-ac83-44b15471f449]: By The Police Pensions Amendment (Scotland) Regulations 2006 (S.S.I. 2006/285), reg. 1(2), sch. 2 para. 4, it is provided that (S.) (with effect from 5.12.2005) there be inserted the words “or civil partner” [Editorial note: The purported insertion was not applied because the affected provision does not extend to Scotland]

[^M_F_529f218d-21c0-4ad0-fa6e-10360749b399]: By The Police Pensions Amendment (Scotland) Regulations 2006 (S.S.I. 2006/285), reg. 1(2), sch. 2 para. 2, it is provided that (S.) (with effect from 5.12.2005) for the heading of reg. 10B “Pension sharing on divorce or nullity of marriage or on the dissolution or nullity of a civil partnership” is substituted [Editorial note: The purported substitution was not applied because the affected provision does not extend to Scotland]

Outward transfers

10A

• (1) This regulation applies where a police pension authority receive a request in writing from a participator that they are to apply to the approved additional voluntary contributions provider to realise the pension investment held by the provider in respect of the participator and pay an amount representing the value of the investments made in relation to the participator under these Regulations to the police pension authority for transmission to the administrator of a scheme or arrangement within paragraph (4) who is willing to receive such a payment in respect of him.

• (2) On receiving such a request the police pension authority shall transmit it to the approved additional voluntary contributions provider in question and on receiving that amount they shall pay it to the administrator of that scheme or arrangement.

• (3) the payment under paragraph (2) of an amount representing all pension investments in respect of the participator discharges the police pension authority from all liability in respect of the participator under these Regulations.

• (4) A scheme or arrangement is within this paragraph if—

• (a) the participator is a participator in the scheme or arrangement, and

• (b) it is a scheme or arrangement for the time being approved by the Board of Inland Revenue as a scheme or arrangement to which transfers of rights in respect of additional voluntary contributions may be made in the circumstances which apply in the case of the request by the participator in question.

Retirement pensions

Lump sum death benefit

Pension sharing on divorce

12A

• (1) Pension sharing within the meaning of Part IV of the 1999 Act is available under the AVC scheme in respect of all or part of a person’s shareable rights as set out in this Regulation except as otherwise provided, and a police authority shall discharge its liability in respect of a pension credit which derives from the AVC Scheme in accordance with paragraph 1 of Schedule 5 to the 1999 Act (pension credits: mode of discharge: funded pension schemes).

• (2) Upon the taking effect of a pension sharing order, an amount representing the pension credit member’s share of the pension debit member’s accumulated additional voluntary contributions calculated in accordance with regulation 10(4) of the Pension Sharing (Implementation and Discharge of Liability) Regulations 2000 shall be invested by the police authority in accordance with the wishes of the pension credit member in one or more of the ways prescribed in regulation 9(2).

• (3) The benefits that may be provided in accordance with this regulation under a pension policy purchased as described in regulation 11(12) as it applies in the circumstances of this regulation are a pension and one or more dependant’s pensions.

• (4) The pension will commence not earlier than the date on which the pension credit member attains the age of 60 and is payable for life.

• (5) A dependant’s pension is a pension which would become payable to a dependant on the death of the pension credit member after his pension has commenced as provided in paragraph (4) and is payable for life, except that, in the case of a dependant to whom Part D of the 1987 regulations would apply if the pension credit member were a member of the Police Pensions Scheme, it shall cease to be payable when a child’s allowance would cease to be payable under that Part.

• (6) Upon the death of a person after a pension sharing order has been made but before a police authority has discharged its liability in respect of the pension credit to which that person would otherwise be entitled, a lump sum equal to the value of the pension credit at the date of that person’s death shall be paid to his personal representatives.

• (7) Regulation 11 applies in the circumstances of this regulation, with the following modifications wherever the words to be modified appear:–

• (a) the reference to participator shall be a reference to pension credit member;

• (b) the reference to retirement shall be a reference to the date on which the pension commences under regulation 12A(4);

• (c) the reference to lifetime annuity shall be a reference to a pension credit member’s lifetime annuity;

• (d) the reference in paragraph (8) to serious ill-health shall be a reference to ill-health which is such as to give rise to a life expectancy of less than one year from the date on which the commutation is applied for; ...

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) In regulation 15, wherever regulation 11 is referred to, it shall include a reference to that regulation as modified by this regulation in relation to pension credits.

Benefit limits

Repayment in certain cases

Payment by police authority

Information

Appeals

Retrospective effect: incidental provision

Pension sharing on divorce or nullity of marriage

10A

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

Retirement pensions

Lump sum death benefit

Pension sharing on divorce

Benefit limits

Repayment in certain cases

Payment by police authority

Information

Appeals

Retrospective effect: incidental provision

SCHEDULE 1A — PENSION SHARING

Discharge of liability in respect of a pension credit

1

• (1) Where a relevant police pension authority discharge their liability in respect of a pension credit which derives from the scheme constituted by these Regulations (“a scheme pension credit”) in accordance with paragraph 1(2) of Schedule 5 to the 1999 Act (pension credits: mode of discharge: funded pension schemes— conferring rights under the scheme from which the rights derive), they must do so by investing the amount of the credit to provide for the purchase from an insurance company of an annuity which meets the conditions in sub-paragraph (4).

• (2) The investment shall be made by the authority, in accordance with an election made by the person entitled to the pension credit, in one or more funds managed by a pension provider meeting the requirements referred to in regulations 12 to 14 of the Pension Sharing (Pension Credit Benefit) Regulations 2000.

• (3) The pension credit member may vary an election under sub-paragraph (2) by a further election at any time before the authority have completed the arrangements for the investment of the amount of the credit.

• (4) The conditions referred to in sub-paragraph (1) are that—

• (a) the annuity provides a pension which begins not earlier than normal benefit age and is payable to the pension credit member for life,

• (b) any other pensions which are payable under the annuity—

• (i) are payable only to dependants,

• (ii) are payable only on the death of the pension credit member after he has reached normal benefit age,

• (iii) if they are payable to the pension credit member’s child, are payable only if at the date of the pension credit member’s death the child is one who is eligible for an allowance under Part D of the 1987 Regulations in respect of the death (or would be if at the date of death the pension credit member had been a pensionable policeman), and

• (iv) subject to paragraph (5), are payable to the dependant for life, and

• (c) the annuity is not capable in whole or in part of surrender, assignment or commutation.

• (5) If the dependant to whom the annuity is payable is within sub-paragraph (4)(b)(iii), the pension must cease to be payable when he ceases to be a dependent child.

• (6) For the purposes of sub-paragraph (5), a person ceases to be a dependent child at the time when, if he were the child of a pensionable policeman, he would cease to be eligible for any allowance under Part D of the 1987 Regulations.

• (7) In this paragraph “dependant”, in relation to a pension credit member, means a person who at the date of the member’s death—

• (a) is the pension credit member’s spouse or civil partner and, if separated from the member by an order or decree of a competent court, is receiving from the member regular contributions for the person’s support or the support of the person’s child in consequence of such an order or decree, or

• (b) is a person who would be the pension credit member’s child within the meaning of Schedule A of the 1987 Regulations if at the date of the pension credit member’s death the member had been a pensionable policeman.

Discharge of liability in respect of a pension credit following the death of the person entitled to the pension credit

2

• (1) If the person entitled to a scheme pension credit dies before liability in respect of it has been discharged, the relevant police pension authority shall discharge their liability in respect of it by making a payment of a lump sum in accordance with regulation 6(2)(a)(i) of the Pension Sharing (Implementation and Discharge of Liability) Regulations 2000.

• (2) The lump sum payable under this paragraph is to be of an amount equal to the realisable value of the investments made under paragraph 1 and shall be paid in accordance with regulation 15.

Pension credit benefit

3

• (1) The benefit to which a pension credit member is entitled under the scheme constituted by these Regulations shall be a pension.

• (2) The pension shall be payable not earlier than when the pension credit member reaches normal benefit age and shall be payable to him for life.

• (3) The value of the pension referred to in this paragraph shall equal the value of the pension credit rights which have accrued to or in respect of the pension credit member.

• (4) Not earlier than one month before the pension credit member reaches normal benefit age, a pension credit member shall, by giving notice to the relevant police pension authority, make a benefits election specifying—

• (a) whether only a pension payable for life is to be provided;

• (b) for whom, if anyone, a dependant’s pension is to be provided;

• (c) if more than one pension is to be provided, either—

• (i) the proportion of the amount secured by the total investments made under paragraph 1 that is to be applied to the purchase of each of them; or

• (ii) the dependants' pensions to be provided expressed as a percentage of the pension for life;

• (d) in respect of every pension to be provided, whether the annual rate of the pension—

• (i) is to be fixed; or

• (ii) is to vary in accordance with the Index; or

• (iii) is to increase yearly by a specified percentage or, if lower than that percentage, by the increase in the Index for the year in question;

• (e) the pension provider listed in Schedule 1 from whom each pension is to be purchased (being a provider meeting the requirements referred to in regulations 12 to 14 of the Pension Sharing (Pension Credit Benefit) Regulations 2000), and

• (f) whether, if the pension credit member dies before the expiry of the period of five years beginning with the date on which the pension begins to be payable, the balance that would have been payable during the remainder of that period, if the payments of pension had continued at the rate in force at the date of death, is to be payable as a lump sum.

• (5) On receipt of a notice of election under sub-paragraph (4) the police pension authority must, as soon as is reasonably practicable, realise the investments made under paragraph 1 and apply the proceeds to the purchase from the specified pension provider of the benefits specified in the notice of election.

• (6) If a pension credit member who reached normal benefit age after 1st December 2000 has—

• (a) reached the age of 75; and

• (b) failed to give a notice of election under sub-paragraph (4) on or before the date of his 75th birthday,

the relevant police pension authority may realise the investments made under paragraph 1 and apply the proceeds to the purchase of a pension policy which meets the requirements of regulations 12 to 14 of the Pension Sharing (Pension Credit Benefit) Regulations 2000 from an insurance company in order to provide such benefits as appear to them to be suitable having regard to the pension credit member’s family circumstances, age and health.

Outward transfers

4

• (1) The relevant police pension authority shall, upon receipt of a notice in writing under section 101F(1) of the 1993 Act (power to give transfer notice), pay a transfer value in respect of the member’s pension credit rights in accordance with the provisions of Chapter II of Part IVA of the 1993 Act (requirements relating to pension credit benefit: transfer values) and Part III of the Pension Sharing (Pension Credit Benefit) Regulations 2000 (transfer values).

• (2) That transfer value must be calculated in accordance with regulation 24 of the Pension Sharing (Pension Credit Benefit) Regulations 2000 (manner of calculation and verification of cash equivalents).

Commutation of the whole of pension credit benefit before normal benefit age

5

• (1) A pension credit member shall be entitled to the commutation of the whole of the benefits payable to or in respect of him under the scheme constituted by these Regulations by virtue of rights attributable (directly or indirectly) to a pension credit before reaching normal benefit age if the pension credit member is suffering from serious ill-health before normal benefit age.

• (2) In sub-paragraph (1) “serious ill-health” means ill-health giving rise to a life expectancy of less than one year from the date on which commutation is applied for.

• (3) In the case of such a member the relevant police pension authority may realise the investments made under paragraph 1 without purchasing an annuity and pay the proceeds to the pension credit member as a lump sum.

Commutation of the whole of pension credit benefit at normal benefit age

6

• (1) A pension credit member shall be entitled to the commutation of the whole of the benefits payable to or in respect of him under the scheme constituted by these Regulations by virtue of rights attributable (directly or indirectly) to a pension credit at normal benefit age in the following circumstances.

• (2) They are if—

• (a) the pension credit member is suffering from serious ill health at normal benefit age, or

• (b) the aggregate of total benefits payable to the pension credit member, including those attributable (directly or indirectly) to pension credit rights, does not exceed £260 per annum at normal benefit age.

• (3) In the case of such a pension credit member the relevant police pension authority may realise the investments made under paragraph 1 without purchasing an annuity and pay the proceeds to the member as a lump sum.

• (4) In sub-paragraph (2)(a) “serious ill-health” means ill-health giving rise to a life expectancy of less than one year from the date on which notice is given under paragraph 3(4).

Pension credit member dies before pension becomes payable

7

If a pension credit member dies before any benefit becomes payable under paragraph 3, the relevant police pension authority may realise the investments made under paragraph 1 without purchasing an annuity and pay the proceeds to the member’s personal representatives as a lump sum.

Separate treatment of pension credit rights

8

Where a pension credit member has rights under the scheme constituted by these Regulations apart from his pension credit rights, the pension credit rights are to be treated as provided separately for the purposes of all requirements of the Inland Revenue in relation to limits on benefits.

Payment by police authority responsible person

Pension sharing on divorce or nullity of marriage

10B

Schedule 1A has effect for making provision in relation to pension credit rights and pension credit payable under the scheme constituted by these Regulations.

Retirement pensions

Lump sum death benefit

Pension sharing on divorce

Benefit limits

Repayment in certain cases

Payment by police authority responsible person

Information

Appeals

Retrospective effect: incidental provision

Payment by responsible person

Pension sharing on divorce or on the dissolution of a civil partnership

Retirement Benefits: England and Wales

10C

• (1) A participator may apply some or all of the proceeds of an investment made under regulation 9 to an arrangement with a pension provider for one or more of the following—

• (a) payment of a lifetime annuity;

• (b) payment of a lifetime annuity and a pension commencement lump sum;

• (c) a lump sum commutation payment that—

• (i) reflects the value of benefits referred to in sub-paragraph (a) or (b), and

• (ii) meets the requirements of regulations 11 and 12 of the Registered Pensions Schemes (Authorised Payments) Regulations 2009 (de minimis rule and payments by larger pension schemes), or

• (d) a relevant payment to the participator that complies with the requirements of the Finance Act 2004 (“the 2004 Act”).

• (2) Paragraph (1) is subject to paragraphs (8), (11) and (12).

• (3) The pension provider must provide a participator with an option to receive benefits under paragraph (1)(a) to (c) in accordance with paragraphs (4) and (5).

• (4) Any annuity payable under paragraph (1)(a) or (b) must—

• (a) be incapable, in whole or in part, of surrender, assignation or commutation;

• (b) commence not earlier than the participator’s normal minimum pension age; and

• (c) be payable to the participator for life.

• (5) A lump sum commutation payment referred to in paragraph (1)(c) may be paid in respect of benefits payable under paragraph (1)(a), (b) or (d).

• (6) The pension provider may, in addition to providing a participator with benefits under paragraph (3), provide a participator with alternative benefits options under paragraph (1)(d).

• (7) A participator must, no earlier than 3 months before the date from which the participator wishes benefits under these Regulations to be provided, make a benefits election to the police pension authority specifying—

• (a) whether and which benefits are to be provided under paragraph (3) or, alternatively, paragraph (6);

• (b) the pension provider who is to provide each benefit;

• (c) for whom, if anyone, a dependant’s benefit is to be provided;

• (d) if more than one benefit is to be provided, either—

• (i) the proportion of the amount secured by the total investments made under regulation 9 that is to be applied to the purchase or arrangement of each of them, or

• (ii) the dependants’ benefits to be provided expressed as a percentage of the participator’s benefits;

• (e) in respect of every annuity to be provided—

• (i) the annual rate of the annuity,

• (ii) whether it is to be payable for life or for a fixed period,

• (iii) whether its rate is to be fixed or to vary and, if it is to vary, how that variation is to be calculated,

• (iv) whether the rate may reduce, and

• (f) in the case of a participator who chooses a life-time annuity referred to in paragraph (1)(a) or (b) and who dies within a specified period, whether, if the annuity had continued at the rate in force at the time of the participator’s death, a lump sum is to be paid and if so, how that lump sum is to be calculated.

• (8) If there are exceptional circumstances of serious ill-health, the police pension authority may in their discretion realise the investments made under regulation 9 without purchasing any annuity, and in that event the amount obtained becomes payable as a lump sum.

• (9) More than one benefits election may be made under paragraph (7) and an election must—

• (a) be in writing, and

• (b) contain such information as the police pension authority request.

• (10) Upon receipt of a notice of election under paragraph (7), the police pension authority must, as soon as reasonably practicable, realise the investments made under regulation 9 and apply the proceeds in the manner specified in it.

• (11) Where a participator dies before retirement or after retirement but before benefits under this regulation are paid, the police pension authority must realise the investments made under regulation 9 which are to be payable as a lump sum in accordance with regulation 15(2).

• (12) The police pension authority must realise the investments made under regulation 9 and apply the proceeds to the purchase of benefits under these Regulations from a pension provider in such form as appears to the police pension authority to be suitable where the conditions in paragraph (13) are satisfied.

• (13) Those conditions are—

• (a) the date the participator reaches normal minimum pension age is on or after 1st December 1999, and

• (b) the participator has attained the age of 75 and has not given a notice of election under paragraph (7) before doing so.

• (14) In this regulation—

• (a) normal minimum pension age has the same meaning as in section 279(1) of the 2004 Act;

• (b) the pension providers means the bodies listed in Schedule 1;

• (c) a relevant payment means a Member’s Flexi-Access Drawdown Payment, a Short-term Annuity or a Pension Payment out of Uncrystallised Funds;

• (d) a Member’s Flexi-Access Drawdown Payment means—

• (i) a payment from member’s flexi-access drawdown fund within the meaning of paragraph 8A of Schedule 28 to the 2004 Act,

• (ii) a payment from a dependant’s flexi-access drawdown fund within the meaning of paragraph 22A of Schedule 28 to the 2004 Act, or

• (iii) a flexi-access drawdown fund lump sum death benefit within the meaning of paragraph 17A of Schedule 29 to the 2004 Act;

• (e) a Short-term Annuity means a member’s short-term annuity within the meaning of paragraph 6 of Schedule 28 to the 2004 Act;

• (f) a Pension Payment out of Uncrystallised Funds means an uncrystallised funds pension lump sum within the meaning of paragraph 4A of Schedule 29 to the 2004 Act.

Retirement pensions

Lump sum death benefit

Pension sharing on divorce or on the dissolution of a civil partnership

Benefit limits

Repayment in certain cases

Payment by responsible person

Information

Appeals

Retrospective effect: incidental provision