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The Financial Assistance Scheme Regulations 2005

Type Statutory-Instrument

Publication 2005-07-19

Last updated 2021-07-08

State In force

Department King's Printer of Acts of Parliament

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Made: 19th July 2005

Coming into force in accordance with regulation 1

Whereas a draft of this instrument was laid before Parliament in accordance with section 316(2)(n) of the Pensions Act 2004 and approved by resolution of each House of Parliament;

Now, therefore, the Secretary of State for Work and Pensions, in exercise of the powers conferred upon him by sections 286, 315(2) and 318(1), (4)(a) and (5) of that Act , and of all other powers enabling him in that behalf, hereby makes the following Regulations:

PART 1 — GENERAL

Citation, commencement and extent

1

(1) These Regulations may be cited as the Financial Assistance Scheme Regulations 2005 and shall come into force—

(a) for the purposes of this regulation, regulation 4 and paragraphs 4, 5, 15 and 16 of Schedule 1 in so far as they relate to regulation 4, for the purpose only of the making of regulations, on the day after the day on which these Regulations are made;

(b) in so far as these Regulations apply in relation to civil partnerships, on 5th December 2005; and

(2) These Regulations extend to Northern Ireland.

Interpretation

2

(1) In these Regulations—

“the Act” means the Pensions Act 2004 and references to a numbered section are, unless the context otherwise requires, to a section of the Act;

“the Northern Ireland Order” means the Pensions (Northern Ireland) Order 2005 and references to a numbered Article are, unless the context otherwise requires, to an Article of that Order;

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

“the 1995 Act” means the Pensions Act 1995;

“the FSMA” means the Financial Services and Markets Act 2000 ;

“the ICTA” means the Income and Corporation Taxes Act 1988;

“the FAS Information and Payments Regulations” means the Financial Assistance Scheme (Provision of Information and Administration of Payments) Regulations 2005;

“the Commissioners of HMRC” means the Commissioners of Her Majesty's Revenue and Customs;

“annual payment” means the amount payable to a beneficiary in respect of each year determined in accordance with regulation 17, 17C or 17E and Schedule 2, 3 or 4;

“asset share” in respect of a person means the assets available to discharge the liability of the scheme in respect of that person as determined in accordance with regulation 22(2), or, where it applies, regulation 28(1);

“beneficiary” means—a qualifying member or, after that qualifying member’s death, the survivor and surviving dependants of that qualifying member; andany person entitled to a payment in accordance with regulation 17G(1);

“calculation date” means the last day of the month in which the scheme manager instructs the trustees or managers of a qualifying pension scheme to obtain a valuation under regulation 22;

“employment” means any trade, business, profession, office or vocation;

“general level of prices” means, except where the revaluation percentage falls to be determined under regulation 17(13A) or 17A(13A) or paragraph 3(3C) or (3ZD) or 4(10) or (13C) of Schedule 2, the general level of prices in Great Britain determined in such manner as the Secretary of State thinks fit,and the Secretary of State shall publish from time to time the manner in which the general level of prices is to be determined;

“ill health payment” means the amount payable to a beneficiary in respect of each year determined in accordance with regulation 17A and Schedules 2A, 5 and 6;

“indexation date” means—the 1st January next falling after a beneficiary first becomes entitled to a payment under regulation 17G, a payment under regulation 17H, an annual payment or an ill health payment; andeach subsequent 1st January during that beneficiary’s lifetime;

“initial payment” means a payment made to a beneficiary in accordance with regulation 18;

“interim ill health payment” means a payment made to a beneficiary in accordance with regulation 17B;

“interim pension” has the meaning given in paragraph 2 of Schedule 2 as modified by paragraph 10 of that Schedule;

“multi-employer scheme” means an occupational pension scheme in relation to which there is or has been—a principal employer and at least one employer (who is not the principal employer in relation to that scheme); ormore than one employer,at the same time;

“notional pension” means the annual rate of annuity determined in accordance with regulation 27(1)(a);

“the Ombudsman” means the PPF Ombudsman or any person appointed under section 210(1) (deputy PPF Ombudsmen) to act as a deputy to the PPF Ombudsman;

“partner” means a person who was not married to, or in a civil partnership with, the qualifying member but who was living with that member as if that person and the qualifying member were a married couple or civil partners; “pension credit member” has the meaning given by section 124(1) of the 1995 Act;

“principal employer” has the meaning given in regulation 12(6)

“qualifying course” means a full time educational or vocational course at a recognised educational establishment where in pursuit of that course, the time spent receiving instruction or tuition, undertaking supervised study, examination or practical work or taking part in any exercise, experiment or project for which provision is made in the curriculum of the course exceeds 12 hours per week in normal term time, and shall include any gaps between the ending of one course and the commencement of another, where the person is enrolled on and commences the latter course;

“qualifying member” shall be construed in accordance with regulation 15;

“qualifying pension scheme” shall be construed in accordance with regulation 9;

“relevant accounts” for the purposes of identifying and valuing the assets of a scheme, means the audited accounts for the scheme which—show a true and fair view of—the financial transactions of the scheme during the period to which the accounts relate (“the accounting period”);the amount and disposition of the assets at the end of the accounting period; andthe liabilities of the scheme, other than the liabilities to pay pensions and benefits after the end of the accounting period;are in such manner and form as the scheme manager may request;include a report by the auditor in writing as to whether or not in the auditor’s opinion the requirements in paragraphs (a) and (b) above are satisfied; andare prepared in respect of the period ending with the calculation date;

“relevant public authority” has the meaning given in section 307(4) or, as the case may be, Article 280(4);

“scheme manager” shall be construed in accordance with regulation 5;

“scheme rules” means the rules of the qualifying pension scheme;

“scheme’s pension liabilities”, in respect of a member of a qualifying pension scheme, means the liabilities of the scheme to, or in respect of, the member in respect of pensions or other benefits (including increases in pensions);

“shared initial payment” means a payment which is not an initial payment and which is the amount payable to a survivor of a qualifying member who was a party to a polygamous marriage in accordance with regulation 18(4B) and paragraph 5(6A) of Schedule 2;

“surviving dependant” shall be construed in accordance with regulation 16B;

“survivor” shall be construed in accordance with regulation 16A;

“survivor notional pension” means the annual rate of annuity determined in accordance with regulation 27(1)(c);

“tax approved scheme” means a scheme which is approved or was formerly approved under section 590 (conditions for approval of retirement benefit schemes) or 591 (discretionary approval) of the ICTA or in respect of which an application for such approval has been duly made but has not been determined;

“transfer notice” means the notice given under regulation 29;

“trustees or managers” shall be construed in accordance with the definition in section 124(1) of the 1995 Act,

“valuation actuary” has the meaning given in regulation 22(5),

and other expressions have the meaning given to them in the Act or, as the case may be, in the Northern Ireland Order.

(1A) In these Regulations, “normal retirement age” means, subject to paragraph (1B), in relation to a member of an occupational pension scheme, the age specified in the rules of that scheme at which that member will normally retire.

(1AB) In paragraph (1A), “the rules of that scheme” means the rules of the occupational pension scheme on the date on which benefits ceased to accrue to that member.

(1B) Where the normal retirement age—

(a) determined in accordance with paragraph (1A) is—

(i) more than 65, that age shall be 65;

(ii) less than 60, that age shall be 60 except for the purposes of paragraph 2(3)(a) of Schedule 2;

(b) cannot be determined in accordance with paragraph (1A) from the rules of the qualifying pension scheme, that age shall be such age as the scheme manager shall determine having regard to the rules of that scheme and to such other information as it considers relevant.

(2) References in these Regulations to provisions of the 1993 Act, the 1995 Act, the Welfare Reform and Pensions Act 1999 and to the Social Security Contributions and Benefits Act 1992 include references to the provisions in force in Northern Ireland corresponding to those provisions.

(3) In these Regulations, “insurance company” means—

(a) a person who has permission under Part 4 of the FSMA to effect or carry out contracts of long-term insurance; ...

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

and in this paragraph, “contracts of long-term insurance” means contracts which fall within Part 2 of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.

(4) Paragraph (3) shall be read with—

(a) section 22 of the FSMA (regulated activities);

(b) any relevant order under that section; and

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) Subject to paragraphs (8) and (8A), in these Regulations, “appointed representative” means—

(a) a person whose name, address and appointment by a beneficiary or by a person who believes himself to be a beneficiary (“possible beneficiary”) for the purposes of—

(i) notifying the scheme manager of the details prescribed in regulation 14(1) and (3); or

(ii) receiving payments made under these Regulations,

have been notified to the scheme manager in a document signed by the beneficiary or possible beneficiary in question or by his legal representative and whose appointment has been consented to by the scheme manager; or

(b) where a beneficiary or a possible beneficiary—

(i) dies; or

(ii) is otherwise incapable of acting for himself,

and there is no person appointed under sub-paragraph (a) in respect of that beneficiary or possible beneficiary, a person who has been appointed by the scheme manager to act as the beneficiary's or the possible beneficiary's representative for the purposes of these Regulations.

(8) If a beneficiary or a possible beneficiary appoints a person under sub-paragraph (a) of paragraph (7), and then—

(a) dies, or

(b) becomes otherwise incapable of acting for himself,

the person appointed under sub-paragraph (a) of that paragraph is deemed to have been appointed under sub-paragraph (b) of that paragraph.

(8A) Subject to paragraph (8B), where a beneficiary or a possible beneficiary is a child aged less than 18, the scheme manager may regard—

(a) a parent of the child;

(b) a person with parental responsibility within the meaning of section 3 of the Children Act 1989 in relation to the child;

(c) a person with parental responsibility or parental rights under the Children (Scotland) Act 1995 in relation to the child; or

(d) a person with parental responsibility within the meaning of Article 6 of the Children (Northern Ireland) Order 1995 in relation to the child,

as the appointed representative of that child.

(8B) Where—

(a) no person referred to in paragraph (8A)(a) to (d) is known to the scheme manager, the scheme manager may appoint a person to act as the appointed representative of a child;

(b) more than one person referred to in paragraph (8A)(a) to (d) wishes to act as the child’s representative for the purposes of these Regulations, the scheme manager may appoint one of those persons as the appointed representative of that child.

(9) For the purposes of these Regulations, a person is “terminally ill” at any time if at that time he suffers from a progressive disease and his death, in consequence of that disease, can reasonably be expected within six months.

(10) For the purposes of these Regulations, a qualifying member who has died was “a party to a polygamous marriage” if, immediately before the member died, the member—

(a) was a party to a marriage entered into under a law which permits polygamy; and

(b) had more than one spouse.

Commencement of winding up

3

(1) For the purposes of these Regulations, the time when an occupational pension scheme begins to be wound up shall be determined in accordance with this regulation.

(2) Subject to paragraphs (3) to (6), where the rules of the scheme require or permit the scheme to be wound up and the scheme is wound up under those rules, the scheme begins to be wound up—

(a) either—

(i) at such time as the rules provide that it does so; or

(ii) if the rules make no provision as to that time, at such time as the trustees or managers determine that the scheme shall begin to be wound up; or

(b) as soon as there are no members who are in pensionable service under the scheme,

whichever is the later.

(3) Where the rules of the scheme require or permit the scheme to be wound up but the trustees or managers determine in pursuance of section 38 of the 1995 Act or otherwise that the scheme is not to be wound up for the time being, then for the purposes of paragraph (2), in so far as any provision made by the rules of the scheme as to the time when it begins to be wound up is inconsistent with the trustees' or managers' determination, that provision shall be disregarded.

(4) Where under the rules of the scheme, any person other than the trustees or managers may determine that the scheme is to be wound up, or is not to be wound up for the time being, then the references in paragraphs (2)(a)(ii) and (3) to the trustees' or managers' determination shall be taken, in a case where the winding up begins or is deferred by virtue of that other person's determination, as a reference to his determination.

(5) Paragraph (4) applies where such power is vested in the trustees or managers jointly with another person, or in some but not all of the trustees, as it applies where such a power is vested only in a person other than the trustees or managers.

(6) Where—

(a) the scheme manager is satisfied that the scheme began to wind up during the period prescribed in regulation 9(1)(b); but

(b) the exact date on which the scheme began to wind up cannot be determined,

the scheme begins to be wound up on such date, within that period, as the scheme manager determines.

(7) Where—

(a) a scheme is wound up in pursuance—

(i) of an order by the Determinations Panel on behalf of the Regulator under section 11 of the 1995 Act (see section 9); or

(ii) of an order of a court; and

(b) the order makes provision as to the time at which the scheme is to begin to be wound up,

the scheme begins to be wound up at the time specified in the order or, if none is so specified, the date on which the order takes effect.

Application of Parts 1 and 2 of the Act

4

(1) The provisions of Parts 1 and 2 of the Act specified in paragraph (2) apply for the purposes of these Regulations with the modifications prescribed in Schedule 1.

(2) The specified provisions are—

(a) section 68 (power for the Regulator to collect information relevant to the Board of the Pension Protection Fund);

(b) section 85 (power to enable the Regulator to disclose restricted information to the Board);

(ba) section 113 (investment of funds);

(bb) section 114 (investment principles);

(bc) section 115 (borrowing);

(bd) section 117 (administration levy);

(be) section 119 (annual reports to Secretary of State);

(bf) section 134 (directions);

(bg) sections 135 and 136 (provisions restricting winding up, discharge of liabilities etc and provisions regarding validation of contraventions of section 135);

(bh) section 161 (effect of Board assuming responsibility for a scheme);

(bi) section 165 (guaranteed minimum pensions);

(d) sections 190 to 204 ... (information gathering powers of the Board and provisions relating to disclosure of information by the Board); ...

(da) Schedule 5 (the Board of the Pension Protection Fund); and

(db) Schedule 6 (transfer of property, rights and liabilities to the Board); and

(e) Schedule 8 (permitted disclosures by the Board to facilitate exercise of functions).

(3) Subject to paragraph (5), the provisions of Parts 1 and 2 of the Act which are applied by paragraph (1), shall apply to Northern Ireland for the purposes of these Regulations, with the prescribed modifications, as if those provisions extended to Northern Ireland.

(4) Section 88(4) shall also apply to Northern Ireland for the purposes of these Regulations as if that provision extended to Northern Ireland.

(5) Sections 197 to ... 203 shall apply to Northern Ireland only in so far as they relate to disclosure or provision of information—

(a) by or to the scheme manager;

(b) by any person who receives information directly or indirectly from the scheme manager;

(d) by trustees or managers of occupational pension schemes in respect of matters relating to these Regulations.

(6) In so far as this regulation extends provisions to Northern Ireland—

(a) a person may not be required under or by virtue of those provisions to produce, disclose or permit the inspection of protected items within the meaning given in section 311(2) to (4); and

(b) if a person claims a lien on a document, its production under any provision made by, or by virtue of, those provisions, does not affect the lien.

PART 2 — ESTABLISHMENT OF THE FINANCIAL ASSISTANCE SCHEME

Scheme manager

5

(1) The financial assistance scheme established by these Regulations shall be managed by the Board of the Pension Protection Fund.

(2) References in these Regulations to the scheme manager are to the Board of the Pension Protection Fund acting in its capacity as manager of the financial assistance scheme.

(3) The Secretary of State shall pay a grant to the scheme manager in connection with its functions conferred by these Regulations.

(4) The scheme manager may not use the grant paid by the Secretary of State in accordance with paragraph (3) to make any payments which are required to be made to any beneficiary in accordance with these Regulations.

Funding

6

(1) The Secretary of State—

(a) shall make available such amounts as are necessary to enable—

(i) the scheme manager; or

(ii) a person with whom the scheme manager has made arrangements under paragraph 18 of Schedule 5 to the Act (as modified by Schedule 1 to these Regulations) to pay instalments of payments to beneficiaries,

to make any payments which are required to be made in accordance with these Regulations; and

(b) may make such arrangements as the Secretary of State considers appropriate to enable or assist the scheme manager to carry out its functions in relation to the financial assistance scheme.

(2) The arrangements in paragraph (1)(b) may, in particular, include the determination of any actuarial factor which is to be applied by the scheme manager when determining the amount of any payment in accordance with Schedule 2 or 2A.

Annual reports

7

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Delegation

8

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

PART 3 — QUALIFYING PENSION SCHEMES

Qualifying pension schemes

9

(1) An occupational pension scheme shall be a qualifying pension scheme for the purposes of these Regulations where—

(a) immediately before the time when the scheme began to wind up, it was neither a money purchase scheme nor a scheme of a description prescribed in regulation 10;

(b) except where paragraph (1B) or (1D) applies, the scheme began to wind up during the period beginning on 1st January 1997 and ending on 5th April 2005;

(i) the employer in relation to that scheme satisfies the condition in regulation 11;

(ii) in relation to a multi-employer scheme, the condition in regulation 12 is satisfied;

(iii) in relation to a scheme which is not a multi-employer scheme and which began to wind up before 6th April 1997, the condition in regulation 12A(1) is satisfied;

(iv) in relation to a multi-employer scheme which began to wind up before 6th April 1997, the condition in regulation 12B(1) or (2) is satisfied;

(v) in relation to a scheme which is not a multi-employer scheme and which began to wind up on or after 6th April 1997 but before 11th June 2003, the condition in regulation 12A(2) is satisfied; or

(vi) in relation to a multi-employer scheme which began to wind up on or after 6th April 1997, the condition in regulation 12B(3) or (4) is satisfied;

(ca) where paragraph (i) or (ii) of sub-paragraph (c) applies, there was, in the opinion of the scheme manager, a relevant link between the commencement of the winding up of the scheme and the fact that the relevant condition mentioned in those paragraphs is satisfied; and

(d) the details prescribed in regulation 14 have been notified to the scheme manager by a person, in the form and manner and before the date prescribed in that regulation.

(1A) The relevant link mentioned in paragraph (1)(ca) is deemed to be established in relation to any employer in respect of which the relevant condition mentioned in paragraph (1)(c) is satisfied before 1st January 2009.

(1B) This paragraph applies where—

(a) the scheme began to wind up during the period beginning on 6th April 2005 and ending on 22nd December 2008;

(b) paragraph (i) or (ii) of paragraph (1)(c) applies by virtue of an insolvency event which occurred before 6th April 2005; and

(c) there has not been an insolvency event in relation to the relevant employer which would be a qualifying insolvency event for the purposes of section 127 or Article 111 (duty to assume responsibility for schemes following insolvency event) if the scheme were an eligible scheme.

(1C) In paragraph (1B)—

“eligible scheme” has the meaning given in section 126 or, as the case may be, Article 110 (eligible schemes);

“relevant employer” means the employer in relation to the scheme or, in relation to a multi-employer scheme, any employer or employers in relation to the scheme.

(1D) This paragraph applies where—

(a) the scheme began to wind up during the period beginning on 23rd December 2008 and ending with the day before the day on which the Financial Assistance Scheme (Qualifying Pension Scheme Amendments) Regulations 2014 come into force;

(b) paragraph (i) or (ii) of paragraph (1)(c) applies by virtue of an insolvency event which occurred before 6th April 2005;

(c) there has not been an insolvency event in relation to the relevant employer which would be a qualifying insolvency event for the purposes of section 127 or Article 111 (duty to assume responsibility for schemes following insolvency event) if the scheme were an eligible scheme; and

(d) the relevant employer ceased to be an employer in relation to the scheme prior to 10th June 2011.

(1E) In paragraph (1D), “relevant employer” means the person who employed persons in the description or category of employment to which the scheme relates or related immediately before the time at which the scheme ceased to have any active members.

(1F) Where a scheme is a qualifying pension scheme for the purposes of these Regulations by virtue of paragraph (1D), that scheme is not an eligible scheme for the purposes of section 126(1)(b) or, as the case may be, Article 110(1)(b) (eligible schemes).

(2) The following shall be treated as separate schemes for the purposes of these Regulations—

(a) in relation to an occupational pension scheme which is not a tax approved scheme but contains one or more sections which, by virtue of section 611(3) of the ICTA (definition of “retirement benefits scheme”), are treated by the Commissioners of HMRC as a tax approved scheme, those sections which are so treated;

(b) sections of sectionalised multi-employer schemes as defined for the purposes of regulation 12,

and references in these Regulations to schemes shall be construed accordingly.

Other schemes which are not qualifying pension schemes

10

(1) The following are descriptions of schemes for the purposes of regulation 9(1)(a)—

(a) a public service pension scheme under the provisions of which there is no requirement for assets related to the intended rate or amount of benefit under the scheme to be set aside in advance (disregarding requirements relating to additional voluntary contributions);

(b) a scheme which is made under section 7 of the Superannuation Act 1972 or under Article 9 of the Superannuation (Northern Ireland) Order 1972 (superannuation of persons employed in local government service etc.) and provides pensions to persons employed in local government service;

(c) a scheme which is made under section 2 of the Parliamentary and Other Pensions Act 1987 (power to provide for pensions for Members of the House of Commons etc.);

(d) a scheme which is established under section 48 of the Northern Ireland Act 1998 (pensions of members), or which was established under Part 2 of the Ministerial Salaries and Members' Pensions Act (Northern Ireland) 1965 or Article 3 of the Assembly Pensions (Northern Ireland) Order 1976 ;

(e) a scheme in respect of which a relevant public authority has given a guarantee or made any other arrangements for the purposes of securing that the assets of the scheme are sufficient to meet its liabilities;

(f) a scheme which provides relevant benefits within the meaning of section 612(1) of the ICTA but which is neither a tax approved scheme nor a relevant statutory scheme within the meaning of section 611A of that Act (definition of “relevant statutory scheme”);

(g) a scheme—

(i) which has been categorised before 18th April 2005, by the Commissioners of Inland Revenue, and on or after that date, by the Commissioners of HMRC, for the purposes of its approval as a centralised scheme for non-associated employers;

(ii) was not contracted-out at any time before the second abolition date; and

(iii) under the provisions of which the only benefits that may be provided on or after retirement (other than money purchase benefits derived from the payment of voluntary contributions by any person) are lump sum benefits which are not calculated by reference to a member's salary;

(h) a scheme—

(i) the only benefits provided by which (other than money purchase benefits) are death benefits; and

(ii) under the provisions of which no member has accrued rights (other than rights to money purchase benefits);

(i) a scheme with such a superannuation fund as is mentioned in section 615(6) of the ICTA (exemption from tax in respect of certain pensions);

(j) a scheme which does not have its main place of administration registered in the United Kingdom;

(k) a scheme with fewer than two members;

(l) a scheme with fewer than 12 members where all the members are trustees of the scheme and either—

(i) the provisions of the scheme provide that any decision made by the trustees is made by the unanimous agreement of the trustees who are members of the scheme; or

(ii) the scheme has a trustee who is independent in relation to the scheme for the purposes of section 23 of the 1995 Act (power to appoint independent trustees) and is registered in the register maintained by the Pensions Regulator in accordance with regulations made under subsection (4) of that section;

(m) a scheme with fewer than 12 members where all the members are directors of a company which is the sole trustee of the scheme and either—

(i) the provisions of the scheme provide that any decision made by the company in its capacity as trustee is made by the unanimous agreement of the directors of that company who are members of the scheme; or

(ii) one of the directors of the company is independent in relation to the scheme for the purposes of section 23 of the 1995 Act and is registered in the register maintained by the Pensions Regulator in accordance with regulations made under subsection (4) of that section.

(2) In this regulation—

“contracted-out” is to be construed in accordance with section 7B(2) (meaning of “contracted-out scheme” etc.) of the 1993 Act; and

“the second abolition date” has the meaning given in section 181(1) (general interpretation) of the 1993 Act.

Condition to be satisfied by employer

11

(1) The condition to be satisfied by the employer for the purposes of regulation 9(1)(c)(i), where the scheme is not a multi-employer scheme, is that an insolvency event has occurred in relation to the employer ....

(2) The reference to the employer in paragraph (1)—

(a) is to the person who employed persons in the description or category of employment to which the scheme relates or related immediately before the time when the scheme began to wind up; or

(b) where the scheme had no active members immediately before the time it began to wind up, is to the person who employed persons in the description or category of employment to which the scheme relates or related immediately before the time at which the scheme ceased to have any active members.

Condition to be satisfied: multi-employer schemes

12

(1) In relation to a section of a sectionalised multi-employer scheme, the condition to be satisfied for the purposes of regulation 9(1)(c)(ii) is that an insolvency event has occurred ...—

(a) in relation to the principal employer in that section; or

(b) where either there is no principal employer in that section or, where the principal employer is not an employer, there has been no insolvency event in relation to such a principal employer in that section—

(i) in relation to the employer in that section; or

(ii) where there is more than one employer in that section, in relation to all the employers in that section.

(2) In relation to a multi-employer scheme which is not a sectionalised multi-employer scheme, the condition to be satisfied for the purposes of regulation 9(1)(c)(ii) is that an insolvency event has occurred ...—

(a) in relation to the principal employer; or

(b) where either there is no principal employer or, where the principal employer is not an employer, there has been no insolvency event in relation to such a principal employer—

(i) in relation to the employer; or

(ii) where there is more than one employer, in relation to all the employers.

(3) The references to the employer (other than in the phrase “principal employer”) in paragraph (1) ...—

(a) include every person who employed persons in the description or category of employment to which the section of the scheme relates or related immediately before the time when the scheme began to wind up; or

(b) where the scheme had no active members immediately before the time it began to wind up, to the person who was the employer of persons in the description or category of employment to which the section of the scheme relates or related immediately before the time when the scheme ceased to have any active members in relation to that section.

(4) The references to the employer (other than in the phrase “principal employer”) in paragraph(2)...—

(a) include every person who employed persons in the description or category of employment to which the scheme relates or related immediately before the time when the scheme began to wind up; or

(b) where the scheme had no active members immediately before the time it began to wind up, to the person who was the employer of persons in the description or category of employment to which the scheme relates or related immediately before the time when the scheme ceased to have any active members in relation to it.

(5) The references to the principal employer (who may or may not be an employer within the meaning of paragraph (3) or (4)) in paragraphs (1) and (2) are to the person who was the principal employer immediately before the time when the scheme began to wind up.

(6) In this regulation—

“principal employer” means the person who—is the principal employer for the purposes of the scheme, or of a section of a sectionalised multi-employer scheme, in accordance with the rules of the occupational pension scheme; orhas power to act on behalf of all the employers in the scheme, or in a section of a sectionalised multi-employer scheme, in relation to the rules of that scheme;

“sectionalised multi-employer scheme” means a multi-employer scheme which is divided into two or more sections and the provisions of the scheme are such that—different sections of the scheme apply or applied to different employers or groups of employers (whether or not more than one section applies or applied to any particular employer or groups including any particular employer);any contributions payable or paid to the scheme by an employer, or by a member in employment under that employer, are allocated to that employer's section (or if more than one section applies or applied to the employer, to the section which is, or was, appropriate in respect of the employment in question); anda specified part or proportion of the assets of the scheme is, or was, attributable to each section of the scheme and cannot or could not be used for the purpose of any other section of the scheme.

Insolvency events

13

(1) “Insolvency event” shall, for the purposes of regulations 11 and 12, be interpreted in accordance with—

(a) section 121(2) to (4) (other than subsection (3)(f) of that section); or

(b) Article 105(2) to (4) and (12) (other than paragraph (3)(f) of that Article),

and the following provisions of this regulation.

(2) Where the employer in relation to an occupational pension scheme is a person specified in paragraph (3), an insolvency event shall be treated as having occurred in relation to that employer for the purposes of regulations 11 and 12 where the scheme manager is satisfied that—

(a) that employer was unlikely to continue as a going concern; and

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

(3) The persons specified in this paragraph are—

(a) a public body—

(i) in relation to which it is not possible for an insolvency event within the meaning of section 121 or Article 105 to occur; and

(ii) which is not the employer in relation to an occupational pension scheme in respect of which a relevant public authority has either—

(aa) given a guarantee in relation to any part of the scheme, any benefits payable under the scheme or any member of the scheme; or

(bb) made any other arrangements for the purposes of securing that the assets of the scheme are sufficient to meet any part of its liabilities;

(b) a charity (as construed in accordance with the Charities Act 1993 or the Charities Act (Northern Ireland) 1964 ) which is not a company or other body corporate; or

(c) a trade union within the meaning given in section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992 or in Article 3(1) of the Industrial Relations (Northern Ireland) Order 1992 in relation to which it is not possible for an insolvency event within the meaning of section 121 or Article 105 to occur.

(3A) Where the scheme manager is satisfied that the employer in relation to an occupational pension scheme is unlikely to continue as a going concern, the scheme manager may treat an insolvency event as having occurred in relation to that employer for the purposes of regulations 11 and 12 where it is satisfied that ... all of the following circumstances applied to that employer—

(a) no insolvency event referred to elsewhere in this regulation has occurred or is likely to occur in relation to the employer;

(b) the value of the assets of the employer is less than the amount of its liabilities, taking into account its contingent and prospective liabilities; and

(4) An insolvency event also occurs for the purposes of regulations 11 and 12 where any of the following events occur ...—

(a) in relation to a company—

(i) where an administration order is made—

(aa) by the court in relation to the company under, or by virtue of any enactment which applies, Part 2 of the 1986 Act (administration orders) (with or without modification); or

(bb) by the High Court in relation to the company under, or by virtue of any statutory provision which applies, Part 3 of the Insolvency (Northern Ireland) Order (administration orders) (with or without modification);

(ii) where a resolution is passed for a voluntary winding up of the company with a declaration of solvency under section 89 of the 1986 Act or under Article 75 of the Insolvency (Northern Ireland) Order; or

(iii) where notice is published in the Gazette that the company has been struck off the register pursuant to section 652 or 652A of the Companies Act 1985 or Article 603 or 603A of the Companies (Northern Ireland) Order 1986;

(b) in relation to a relevant body, where—

(i) any of the events referred to—

(aa) in section 121(3) occurs in relation to that body by virtue of the application (with or without modification) of any provision of the 1986 Act or by or under any other enactment; or

(bb) in Article 105(3) (insolvency events) occurs in relation to that body by virtue of the application (with or without modification) of any provision of the Insolvency (Northern Ireland) Order or by or under any other statutory provision; or

(ii) an administration order is made by the court in respect of the relevant body by virtue of any enactment which applies Part 2 of the 1986 Act or Part 3 of the Insolvency (Northern Ireland) Order (with or without modification);

(c) in relation to a limited liability partnership, where notice has been published in the Gazette that the partnership has been struck off the register pursuant to section 652 or 652A of the Companies Act 1985 or Article 603 or 603A of the Companies (Northern Ireland) Order 1986;

(d) in relation to a building society, where there is dissolution by consent of the members under section 87 of the Building Societies Act 1986 (dissolution by consent);

(e) in relation to a friendly society, where there is dissolution by consent of the members under section 20 of the Friendly Societies Act 1992 (dissolution by consent); and

(f) in relation to a registered society, where there is dissolution by consent of the members under section 119 of the Co-operative and Community Benefit Societies Act 2014 (dissolution of society by an instrument of dissolution) or under section 67 of the Industrial and Provident Societies Act (Northern Ireland) 1969 (instrument of dissolution).

(4A) An insolvency event also occurs for the purposes of regulations 11 and 12 where the scheme manager is satisfied that ...—

(a) an event has occurred in any jurisdiction outside the United Kingdom, in relation to an employer, that substantially corresponds to any event referred to in—

(i) section 121(2) to (4) (other than subsection (3)(f) of that section),

(ii) Article 105(2) to (4) and (12) (other than paragraph (3)(f) of that Article), and

(iii) paragraph (4) of this regulation; and

(b) that employer is unlikely to continue as a going concern.

(4B) The scheme manager may also, for the purposes of regulations 11 and 12, treat an insolvency event as having occurred in relation to the employer in relation to an occupational pension scheme where—

(a) the trustees of such a scheme entered into a binding agreement, with the employer against whom it arose, to compromise the debt that arose under section 75 of the 1995 Act, and

(b) the scheme manager is satisfied that had that agreement not been entered into—

(i) the value of that employer’s assets would have been less than the amount of its liabilities, taking into account its contingent and prospective liabilities, or

(ii) the employer would have been unable to pay its debts as they fell due.

(5) In this regulation, a reference to Part 2 of the 1986 Act (administration orders) shall, in so far as it relates to a company or society listed in section 249(1) of the Enterprise Act 2002 (special administration regimes), have effect as if it referred to Part 2 of the 1986 Act as it had effect immediately before the coming into force of section 248 of the Enterprise Act 2002 (replacement of Part 2 of the 1986 Act).

(6) In this regulation—

“the 1986 Act” means the Insolvency Act 1986 ;

“the Insolvency (Northern Ireland) Order” means the Insolvency (Northern Ireland) Order 1989 ;

“administration order” means an order whereby the management of the company or relevant body, as the case may be, is placed in the hands of a person appointed by the court or, in Northern Ireland, by the High Court;

“employer” includes a person who is a principal employer for the purposes of regulation 12;

“the Gazette” means, in respect of companies or limited liability partnerships registered—in England and Wales, the London Gazette;in Scotland, the Edinburgh Gazette; orin Northern Ireland, the Belfast Gazette;

“public body” means a government department or any non-departmental public body established by—in relation to Great Britain, an Act of Parliament or by a statutory instrument made under an Act of Parliament to perform functions conferred on it under, or by virtue of, that Act or instrument or any other Act or instrument;in relation to Northern Ireland, a statutory provision to perform functions conferred on it under that statutory provision or any other such statutory provision;

“registered society” means a society, other than a society registered as a credit union, which is—a registered society within the meaning given by section 1(1) of the Co-operative and Community Benefit Societies Act 2014 (meaning of “registered society”); ora society registered or deemed to be registered under the Industrial and Provident Societies Act (Northern Ireland) 1969;

“relevant body” means—a credit union within the meaning given in section 31(1) of the Credit Unions Act 1979 or Article 2(2) of the Credit Unions (Northern Ireland) Order 1985 (interpretation);a limited liability partnership within the meaning given in section 57(6) or Article 53(6) (partnerships and limited liability partnerships);a building society within the meaning given in section 119 of the Building Societies Act 1986 (interpretation);a person who has permission to act under Part 4 of the FSMA (permission to carry out regulated activities);the society of Lloyd's and Lloyd's members who have permission under Part 19 of the FSMA (Lloyd's);a friendly society within the meaning given in the Friendly Societies Act 1992; or a registered society.

“statutory provision” has the meaning given in section 1(f) of the Interpretation Act (Northern Ireland) 1954 .

Notification of details

14

(1) Where an occupational pension scheme is winding up, the prescribed details for the purposes of regulation 9(1)(d) are—

(a) the name of the scheme;

(b) the pension scheme registration number which is allocated to that scheme in the register;

(c) the name (and if there has been a change of name, the previous name) and address of any employer of earners in employment to which the scheme relates or has related;

(d) the name and address of at least one trustee of the scheme.

(2) The persons who may supply the details in paragraph (1) are—

(a) any trustee of the scheme including a trustee appointed by the Regulator under section 7 or 23(1) of the 1995 Act ;

(b) a member of the scheme or his appointed representative;

(d) any professional adviser in relation to the scheme.

(3) Where an occupational pension scheme has wound up, the prescribed details for the purposes of regulation 9(1)(d) are—

(a) the name of the scheme; and

(b) the name (and if there has been a change of name, the previous name) and address of any employer of earners in employment to which the scheme related.

(4) The persons who may supply the details in paragraph (3) are—

(a) a former trustee or manager of the scheme;

(b) a former member of the scheme or his appointed representative;

(d) any former professional adviser in relation to the scheme; or

(e) any insurance company which is paying annuities to former members of that scheme.

(5) The details in paragraphs (1) and (3) must—

(a) be notified in writing; and

(b) have been notified to the scheme manager—

(i) no earlier than 1st September 2005; but

(ii) by no later than 28th February 2006 or by no later than such later date by which the scheme manager has indicated that it may accept notification of those details in the case of any particular scheme.

PART 4 — QUALIFYING MEMBERS

Qualifying members

15

(1) A member or a former member of a qualifying pension scheme is a qualifying member of that scheme for the purposes of—

(a) section 286A (restriction on purchase of annuities); and

(b) these Regulations,

where the conditions in paragraphs (2) to (3A) are satisfied in relation to that member or former member or would have been satisfied in relation to that member or former member had that member or former member not died before the coming into force of these Regulations.

(2) The condition in this paragraph is that the member or former member must have an accrued right to a benefit under the scheme.

(3) The condition in this paragraph is that the member or former member—

(a) was a member of the qualifying pension scheme immediately before the scheme began to wind up; or

(b) was not a member of the scheme at that time but became a pension credit member of the scheme on or after the day on which the scheme began to wind up.

(3A) The condition in this paragraph is that the scheme’s pension liabilities have not been satisfied in full in respect of that member.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Except for the purposes of regulations 17A and 17B, a person who is not a member or a former member of a qualifying pension scheme is to be regarded as a qualifying member of such a scheme for the purposes of these Regulations where—

(a) he was entitled to a present payment from a qualifying pension scheme immediately before the scheme began to wind up;

(b) that payment was attributable to the pensionable service of a former member of that scheme who has died;

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Insufficient assets

16

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

PART 5 — ANNUAL AND INITIAL PAYMENTS

Annual payments

17

(1) Schedules 2, 3 and 4 make provision for the determination of the amount of annual payments to be paid to, or in respect of, qualifying members of qualifying pension schemes including provision for a cap to be imposed on such amounts.

(2) Except where paragraph (3), (3A) or (3C) or regulation 17C applies or where the qualifying member is receiving an ill health payment under regulation 17A(1) or an interim ill health payment under regulation 17B(2), a qualifying member of a qualifying pension scheme shall be entitled to an annual payment ... from—

(a) 14th May 2004; or

(b) the day on which the qualifying member attains normal retirement age,

whichever is the later.

(3) Except where the qualifying member is receiving a payment under paragraph (3C) or an ill health payment under regulation 17A(1) or an interim ill health payment under regulation 17B(2) or an annual payment under regulation 17C, where the scheme manager is satisfied that a qualifying member is terminally ill ..., that member shall be entitled to an annual payment ... from the day on which the scheme manager is first notified that that member may be terminally ill.

(3A) Where a person is regarded as a qualifying member under regulation 15(5)—

(a) that member shall be entitled to an annual payment ... from—

(i) 14th May 2004; or

(ii) the date on which he became entitled to a present payment from the qualifying pension scheme;

whichever is the later; and

(b) ... instalments of the annual payment which would have been payable to that member shall cease to be payable from the date on which that member would have ceased to be entitled to the payment referred to in regulation 15(5)(a) in accordance with the rules of the qualifying pension scheme.

(3B) Where the date referred to in paragraph (3A)(b) cannot be determined from the rules of the qualifying pension scheme, the date on which annual payments shall cease to be payable shall be such date as the scheme manager shall determine having regard to the rules of that scheme and to such other information as it considers relevant.

(3C) Except where regulation 17C applies, a qualifying member shall be entitled to an annual payment ... where—

(a) that member makes a written request for such a payment;

(b) the member is—

(i) not receiving any payments under these Regulations; or

(ii) receiving only payments for a survivor by virtue of paragraph (4), regulation 17A(3), 17B(2)(b) or 18(4); and

(3D) The conditions in this paragraph are that the qualifying member—

(a) has attained the age of 55;

(b) suffers from a progressive disease and as a consequence—

(i) cannot reasonably be expected to die within six months; and

(ii) can reasonably be expected to die within five years;

(c) is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age; and

(d) is not regarded as a qualifying member by virtue of regulation 15(5).

(3E) The date from which a qualifying member is entitled to an annual payment under paragraph (3C) is the date on which the scheme manager receives the written request mentioned in paragraph (3C)(a).

(4) Except where regulation 17A(3) applies and subject to paragraph (4C), a survivor of a qualifying member of a qualifying pension scheme shall be entitled to an annual payment ... from—

(a) 14th May 2004; or

(b) the day after the day on which that qualifying member died,

whichever is the later.

(4A) Except where regulation 17A(3) applies and subject to paragraph (4C), a surviving dependant of a qualifying member of a qualifying pension scheme shall be entitled to an annual payment ... from—

(a) 14th May 2004;

(b) the day after the day on which that qualifying member died; or

(c) where a surviving dependant is an unborn child on the day on which the qualifying member died, the day on which that surviving dependant is born,

whichever is the latest.

(4B) An annual payment payable to a surviving dependant under paragraph (4A) shall continue, subject to paragraph (5B), until the surviving dependant—

(a) where neither sub-paragraph (b) nor (c) applies, attains the age of 18;

(b) where the surviving dependant is attending a qualifying course—

(i) attains the age of 23; or

(ii) leaves the qualifying course,

whichever is the earlier; or

(c) where the surviving dependant is incapable of engaging in full time paid employment due to having a disability within the meaning of the Disability Discrimination Act 1995, attains the age of 23.

(4C) A survivor or surviving dependant of a person who is regarded as a qualifying member under regulation 15(5) is not entitled to an annual payment as a survivor or surviving dependant of that qualifying member.

(4D) Where an annual payment ceases to be payable to a surviving dependant as a result of paragraph (4B)(a) or (b)(ii) and the surviving dependant subsequently—

(a) attends a qualifying course; or

(b) becomes incapable of engaging in full time paid employment due to having a disability within the meaning of the Disability Discrimination Act 1995,

before attaining the age of 23, that surviving dependant shall be entitled to an annual payment ... from the day on which the scheme manager is satisfied that the surviving dependant satisfies sub-paragraph (a) or (b) until a day determined in accordance with paragraph (4B).

(5) The year in respect of which the annual payment is to be made shall be the year starting on the day on which an instalment of the annual payment or, as the case may be, an initial payment, is first payable to a beneficiary by virtue of regulation 19 and in respect of subsequent years, on each anniversary of that day.

(5A) In determining the amount of annual payment that is payable to, or in respect of, a beneficiary entitled to an annual payment in accordance with Schedule 2 for any previous year or years (“arrears payable”)—

(a) the total of all ... instalments of an initial payment that have been made to, or in respect of, the beneficiary for any previous year or years is to be deducted from the amount of arrears payable to that beneficiary; and

(b) if the total of all such ... instalments is greater than that amount of arrears payable—

(i) the amount to be paid in respect of arrears payable is nil, and

(ii) the difference between that total and the amount of arrears payable is recoverable from the beneficiary in accordance with regulation 7 of the FAS Information and Payments Regulations (recovery of overpayments).

(5B) Where a beneficiary dies or otherwise ceases to be entitled to an annual payment—

(a) subject to sub-paragraph (b), any further instalments of an annual payment that would have been payable to that beneficiary, in respect of that year, cease to be payable;

(b) any instalment of an annual payment which is payable in respect of a period which includes the day on which the beneficiary has died or otherwise ceased to be entitled to an annual payment shall be payable.

(6) Subject to paragraphs (3A)(b) and (5B), regulation 17C(8) and paragraphs 2A and 4A of Schedule 2, annual payments which are payable to a qualifying member or survivor under this Part shall continue for life.

(7) Paragraphs 7 and 8 of Schedule 2 provide for the circumstances in which an annual payment is not payable under this Part.

(8) Subject to paragraphs (16) and (17), and until such time, if any, as regulation 17E applies, where a beneficiary is entitled to an annual payment in accordance with this regulation, that annual payment shall be determined in accordance with—

(a) Schedule 2, where none of sub-paragraphs (b) to (k) nor paragraph (16) or (17) applies;

(b) Schedule 3, where—

(i) a transfer notice has been given in respect of the qualifying pension scheme;

(ii) the beneficiary is a qualifying member who was not receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010; and

(iii) the sum of—

(aa) the revalued notional pension in relation to the qualifying member; and

(bb) the total amount of any annual increases which the scheme manager considers could have been paid from the relevant date until the day on which the transfer notice is given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with paragraph (11),

is higher than the amount of the annual payment to which that qualifying member would be entitled in accordance with Schedule 2 if that Schedule applied and sub-paragraphs (3A) to (3G) of paragraph 2 of that Schedule were omitted;

(i) a transfer notice has been given in respect of the qualifying pension scheme;

(ii) the beneficiary is a survivor or surviving dependant; and

(iii) the qualifying member in respect of the beneficiary was entitled to an annual payment in accordance with Schedule 3 immediately before the death of the member;

(d) Schedule 3, where—

(i) a transfer notice has been given in respect of the qualifying pension scheme;

(ii) the beneficiary is a survivor or surviving dependant;

(iii) the qualifying member in respect of the beneficiary was not receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010;

(iv) the qualifying member died—

(aa) before becoming entitled to an annual payment; and

(bb) on or after the calculation date; and

(v) the sum of—

(aa) one half of the revalued notional pension in relation to the qualifying member;

(bb) one half of the total amount of any annual increases which the scheme manager considers could have been paid from the relevant date until the date on which the qualifying member died, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with paragraph (11); and

(cc) the total amount of any annual increases which the scheme manager considers could have been paid to a survivor from the day after the day on which the qualifying member died until the day on which the transfer notice is given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with paragraph (11),

is higher than the amount of the annual payment to which a survivor would be entitled in accordance with Schedule 2 if that Schedule applied and paragraphs 2(3A) to (3G) and 5(6A) of that Schedule were omitted;

(e) Schedule 3, where—

(i) a transfer notice has been given in respect of the qualifying pension scheme;

(ii) the beneficiary is a survivor or surviving dependant;

(iii) the qualifying member in respect of the beneficiary was not receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010;

(iv) the qualifying member died—

(aa) after becoming entitled to an annual payment; and

(bb) on or after the calculation date,

but before the day on which the transfer notice was given;

(v) the sum of—

(aa) one half of the revalued notional pension in relation to the qualifying member;

(bb) one half of the total amount of any annual increases which the scheme manager considers could have been paid from the relevant date until the date on which the qualifying member died, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with paragraph (11); and

(cc) the total amount of any annual increases which the scheme manager considers could have been paid to a survivor from the day after the day on which the qualifying member died until day on which the transfer notice is given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with paragraph (11),

(f) Schedule 3, where—

(i) a transfer notice has been given in respect of the qualifying pension scheme;

(ii) the beneficiary is a survivor or surviving dependant;

(iii) neither the qualifying member in respect of the beneficiary nor the beneficiary was receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010;

(iv) the qualifying member died before the calculation date; and

(v) the sum of—

(aa) the survivor notional pension determined in respect of the beneficiary; and

(bb) the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the relevant date until the day on which the transfer notice is given,

is higher than the amount of the annual payment to which the beneficiary would be entitled in accordance with Schedule 2 if that Schedule applied and paragraph 2(3A) to (3G) of that Schedule were omitted;

(g) Schedule 4, where—

(i) a transfer notice has been given in respect of the qualifying pension scheme;

(ii) the beneficiary is a qualifying member who was receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010; and

(iii) the sum of—

(aa) the notional pension in relation to that qualifying member; and

(bb) the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which the transfer notice is given,

is higher than the amount of the annual payment to which the beneficiary would be entitled in accordance with Schedule 2 if that Schedule applied and paragraph 2(3A) to (3E) of that Schedule were omitted;

(h) Schedule 4, where—

(i) a transfer notice has been given in respect of the qualifying pension scheme;

(ii) the beneficiary is a survivor or surviving dependant;

(iii) the qualifying member in respect of the beneficiary—

(aa) was receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010; and

(bb) died before the calculation date; and

(iv) the sum of—

(aa) the survivor notional pension determined in respect of the beneficiary; and

(bb) the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the relevant date until the day on which the transfer notice is given,

(i) Schedule 4, where—

(i) a transfer notice has been given in respect of the qualifying pension scheme;

(ii) the beneficiary is a survivor or surviving dependant who was receiving a present payment from the qualifying pension scheme under scheme rules as a result of the death of a qualifying member before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010; and

(iii) the sum of—

(aa) the survivor notional pension determined in respect of the beneficiary; and

(bb) the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the relevant date until the day on which the transfer notice is given,

(j) Schedule 4, where—

(i) a transfer notice has been given in respect of the qualifying pension scheme;

(ii) the beneficiary is a survivor or surviving dependant;

(iii) the qualifying member in respect of the beneficiary—

(aa) was receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010; and

(bb) died on or after the calculation date, but before the day on which the transfer notice was given; and

(iv) the sum of—

(aa) the proportion of the notional pension which relates to the beneficiary;

(bb) the relevant proportion of the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the date on which the qualifying member died; and

(cc) the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the relevant proportion of the notional pension from the day after the qualifying member died until the day on which the transfer notice is given,

(k) Schedule 4, where—

(i) a transfer notice has been given in respect of the qualifying pension scheme;

(ii) the beneficiary is a survivor or surviving dependant;

(iii) the qualifying member in respect of the beneficiary—

(aa) was receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010; and

(bb) died on or after the day on which the transfer notice was given; and

(iv) the sum of—

(aa) the proportion of the notional pension which relates to the beneficiary;

(bb) the relevant proportion of the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which the transfer notice was given; and

(cc) the relevant proportion of the total amount of any annual increases to which the qualifying member was entitled on the day on which the qualifying member died,

(9) For the purposes of paragraphs (8), (16) and (17)—

(a) a qualifying member is treated as receiving a present payment from a pension scheme before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010, notwithstanding that no payment has been received, if, prior to the coming into force of those Regulations—

(i) the qualifying member was entitled to a payment under the scheme rules; and

(ii) the trustees or managers of the scheme received confirmation from the qualifying member that payment should commence; and

(iii) the qualifying member’s entitlement became payable, as a result of paragraphs (i) and (ii) being satisfied.

(b) a survivor or surviving dependant is treated as receiving a present payment from a pension scheme before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010, notwithstanding that no payment has been received, if, prior to the coming into force of those Regulations, the beneficiary was entitled to ongoing payments as a result of the death of the qualifying member.

(10) In paragraph (8)(b)(iii), (d)(v) and (e)(v), “the revalued notional pension” means the aggregate of—

(a) the notional pension; and

(b) the revaluation amount for the period—

(i) beginning on the calculation date; and

(ii) ending on the earliest of—

(aa) the day on which the beneficiary becomes entitled to an annual payment;

(bb) the day on which the beneficiary began to receive a present payment from the scheme; ...

(cc) the day on which the qualifying member died;or

(dd) 30th March 2011, provided that the calculation date falls before 30th March 2011; and

(c) in any case where the calculation date falls on or before 30th March 2011 and the day determined in accordance with paragraphs (i) to (iii) falls after 30th March 2011, the revaluation amount for the period beginning on 31st March 2011 and ending on—

(i) the day on which the beneficiary became entitled to an annual payment;

(ii) the day on which the beneficiary began to receive a present payment from the scheme; or

(iii) the day on which the qualifying member died,

whichever is the earliest.

(11) The revaluation amount for the period referred to in paragraph (10)(b), or, where sub-paragraph (c) applies, the periods referred to in paragraph (10)(b) and (c) is—

(a) where—

(i) the period—

(aa) referred to in paragraph (10)(b) where sub-paragraph (c) does not apply; or

(bb) covered by both periods referred to in paragraph (10)(b) and (c) where sub-paragraph (c) applies,

is less than one month; or

(ii) the qualifying member became entitled to an annual payment or began to receive present payment from the scheme prior to the calculation date,

nil; and

(b) in any other case, the revaluation percentage of the notional pension.

(12) In paragraph (11), “the revaluation percentage” means the lesser of—

(a) the percentage increase in the general level of prices ... during the revaluation period or periods determined in accordance with paragraph (10); and

(b) the maximum revaluation rate.

(13) Subject to paragraph (13A), the method for determining the percentage increase in the general level of prices during the revaluation periods determined in accordance with paragraph (10)(b) and (c) is—

$$(100×(A÷B))−100$where—A is the general level of prices for the month which falls two months before the month in which the last day of the revaluation period falls; andB is the general level of prices for the month which falls two months before the month in which the first day of the revaluation period falls.$

(13A) Where the entire period determined in accordance with paragraph (10)(b) falls before 31st March 2011, the method for determining the percentage increase in the general level of prices during that period is—

$$(100×(A÷B))−100$where—A is the level of the retail prices index for the month which falls two months before the month in which the last day of the revaluation period falls; andB is the level of the retail prices index for the month which falls two months before the month in which the calculation date falls.$

(14) In paragraph (12)(b), “the maximum revaluation rate” is—

(a) if the period covered by the period or periods mentioned in paragraph (12)(a) is a period of 12 months, 5%; or

(b) in any other case, the percentage that would be the percentage mentioned in paragraph (12)(a) had the general level of prices, whether determined in accordance with paragraph (13) or (13A), increased at the rate of 5% compound per annum during that period.

(15) In paragraph (8), “relevant date” means—

(a) where the beneficiary began to receive a payment from the scheme after the calculation date and prior to becoming entitled to an annual payment under these Regulations, the date on which the beneficiary began to receive a present payment from the scheme;

(b) where the beneficiary is a qualifying member to whom sub-paragraph (a) does not apply, but to whom paragraph (3) or (3C) applies, the date on which the qualifying member became entitled to an annual payment under that paragraph; and

(c) in all other cases, the date from which the notional pension or survivor notional pension could have been payable as determined in accordance with regulation 27(3) and (4).

(16) Where a qualifying member entitled to an annual payment in accordance with this regulation is a qualifying member to whom regulation 17H applied, the annual payment shall be determined in accordance with—

(a) Schedule 3, where—

(i) the qualifying member was not receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010; and

(ii) the payment which was payable to the qualifying member under Schedule 7, taking into account any reduction made to that payment under paragraph 1(2) or (5) of that Schedule, immediately before the qualifying member became entitled to an annual payment under this regulation is higher than the amount of the annual payment to which the qualifying member would be entitled in accordance with Schedule 2 if that Schedule applied; and

(b) Schedule 4, where—

(i) the qualifying member was receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010; and

(ii) the payment which was payable to the qualifying member under Schedule 7, taking into account any reduction made to that payment under paragraph 1(2) or (5) of that Schedule, immediately before the qualifying member became entitled to an annual payment under this regulation is higher than the amount of the annual payment to which the member would be entitled in accordance with Schedule 2 if that Schedule applied.

(17) Where a beneficiary is entitled to an annual payment in accordance with this regulation because they are the survivor or surviving dependant of a qualifying member to whom, immediately before the qualifying member’s death, regulation 17H applied, the annual payment shall be determined in accordance with—

(a) Schedule 3, where—

(i) the qualifying member was not receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010; and

(ii) one half of the payment which was payable to the qualifying member under Schedule 7, disregarding any reduction made to that payment under paragraph 1(2) or (5) of that Schedule, on the day on which the qualifying member died is higher than the amount of the annual payment to which a survivor would be entitled in accordance with Schedule 2 if that Schedule applied and paragraph 5(6A) of that Schedule were omitted; and

(b) Schedule 4, where—

(i) the qualifying member was receiving a present payment from the qualifying pension scheme under scheme rules before the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010; and

(ii) the relevant proportion of the payment which was payable to the qualifying member in accordance with Schedule 7, disregarding any reduction made to that payment under paragraph 1(2) or (5) of that Schedule, on the day on which the qualifying member died is higher than the amount of the annual payment to which the beneficiary would be entitled in accordance with Schedule 2 if that Schedule applied.

(18) In paragraph (8) and paragraph (17), “relevant proportion” means the proportion of the notional pension which relates to the beneficiary.

Initial payments

18

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Except where paragraph (4B) or regulation 17C(8)(b)(i) or (iii) applies, the scheme manager may, in its discretion, make a payment (“an initial payment”) to, or in respect of, a qualifying member, the qualifying member’s surviving dependants or his survivor—

(a) in anticipation of an annual payment being payable under this Part to the qualifying member, the qualifying member’s surviving dependants or his survivor, and on account of such a payment; and

(b) before any ... instalment of that annual payment is made.

(4A) An initial payment under paragraph (4) may be made—

(a) except where sub-paragraph (c) applies, to the qualifying member with effect from whichever is the later of—

(i) 14th May 2004; or

(ii) the earliest of—

(aa) the day on which the qualifying member attains normal retirement age; or

(bb) the day on which the scheme manager is first notified that the qualifying member is terminally ill; or

(cc) the day on which the qualifying member becomes entitled to a payment under regulation 17(3C) or 17C;

(b) if the qualifying member has died, to a survivor and any surviving dependants of that qualifying member with effect from whichever is the later of—

(i) 14th May 2004; or

(ii) the day after the day on which that qualifying member died; or

(c) if the qualifying member is regarded as a qualifying member under regulation 15(5), to that member with effect from whichever is the later of—

(i) 14th May 2004; or

(ii) the date on which he became entitled to a present payment from the qualifying pension scheme.

(4B) Where a qualifying member who has died was a party to a polygamous marriage the scheme manager may, in its discretion, make a payment (“a shared initial payment”) to each survivor—

(a) in anticipation of an annual payment being payable under this Part to those survivors;

(b) before any instalment of that annual payment is made; and

(i) 14th May 2004; and

(ii) the day after the day on which that qualifying member died.

(4C) In exercising its discretion under paragraph (4B), the scheme manager may only have regard to—

(a) the amount, if any, of any interim pension that was in payment, is in payment, or is proposed to be paid, from the qualifying pension scheme to any of the survivors of the qualifying member; and

(b) any circumstances relating to the scheme which, in the opinion of the scheme manager, are relevant to determining whether a shared initial payment should be made.

(4D) Paragraphs (5A) and (7) to (9A) shall apply to a shared initial payment under paragraph (4B) with the following modifications—

(a) for “paragraph (4)” in each place it occurs, substitute “paragraph (4B)”; and

(b) for “initial payment” in each place it occurs, substitute “shared initial payment”.

(5) In exercising its discretion under paragraph (4), the scheme manager may only have regard to—

(a) the amount, if any, of any interim pension that was in payment, is in payment, or is proposed to be paid, from the qualifying pension scheme—

(i) to a qualifying member up until his death; or

(ii) after his death, to his survivor or surviving dependants ; and

(b) any circumstances relating to the scheme which, in the opinion of the scheme manager, are relevant to determining whether an initial payment should be made.

(5A) Where the trustees or managers have determined the amount of interim pension that would be paid to the qualifying member, any surviving dependants or the survivor of that qualifying member, but do not propose to pay that interim pension for administrative reasons, the scheme manager may, in exercising its discretion under paragraph (4) and in determining the amount of initial payment under Schedule 2, deem that member, that surviving dependant or that survivor to be receiving that interim pension, if in the scheme manager’s opinion it is reasonable to do so.

(6) Schedule 2 makes provision for the determination of the amount of initial payments and shared initial payments.

(7) If the scheme manager determines that an initial payment may be made under paragraph (4), the initial payment is payable—

(a) to a qualifying member from the relevant day mentioned in that paragraph until the day on which that qualifying member—

(i) would have been paid, or is paid, the first ... instalment of an annual payment in accordance with regulation 19, if an annual payment were payable, or is payable, to him under this Part; or

(ii) dies,

whichever is the earlier; ...

(b) in respect of a qualifying member who has died, to a survivor of that qualifying member from the day after the day on which that qualifying member died until the day on which his survivor—

(i) would have been paid, or is paid, the first ... instalment of an annual payment in accordance with regulation 19, if an annual payment were payable, or is payable, to him under this Part; or

(ii) dies,

whichever is the earlier; and

(c) in respect of a qualifying member who has died, to a surviving dependant of that qualifying member from the day after the day on which that qualifying member died until the surviving dependant—

(i) would have been paid, or is paid, the first instalment of an annual payment in accordance with regulation 19, if an annual payment were payable, or is payable, to that surviving dependant under this Part; or

(ii) dies or otherwise ceases to be entitled to an annual payment in accordance with regulation 17,

whichever is the earlier.

(8) Where a beneficiary dies or otherwise ceases to be entitled to an annual payment—

(a) subject to sub-paragraph (b), any further instalments of an initial payment that would have been payable to that beneficiary, in respect of that year, cease to be payable;

(b) any instalment of an initial payment which is payable in respect of a period which includes the day on which the beneficiary has died or otherwise ceased to be entitled to an annual payment shall be payable.

(9) The scheme manager may, at any time before the amount of the annual payment is determined, redetermine the amount of any initial payment paid under paragraph (4) if it is satisfied that the amount being paid by way of initial payment, as determined in accordance with Schedule 2, may be incorrect.

(9ZA) The power to redetermine the amount of an initial payment under paragraph (9) includes the power to redetermine that amount as a result of a change in the amount of interim pension being paid to the beneficiary.

(9A) If, having determined that an initial payment may be made under paragraph (4), the scheme manager subsequently determines, in accordance with Schedule 2, that no annual payment is payable to or in respect of that qualifying member or that qualifying member’s survivor or surviving dependant, then the total of all ... instalments of an initial payment made to or in respect of that qualifying member or that qualifying member’s survivor or surviving dependant is recoverable in accordance with regulation 7 of the FAS Information and Payments Regulations.

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART 6 — ADMINISTRATION OF PAYMENTS

Time and manner of payment: general provisions

19

(1) The scheme manager shall pay the annual payment, the ill health payment, an interim ill health payment, a payment under regulation 17G or 17H or an initial payment to the beneficiary or to his appointed representative, in instalments of no more than 52 in a year on a day specified by the scheme manager for the making of such payments to that beneficiary.

(2) For the purposes of paragraph (1), where the amount of an instalment would, but for this paragraph, include a fraction of a penny, that fraction shall be disregarded if it is less than half a penny and shall otherwise be treated as a penny.

(3) The scheme manager shall start to pay the ... instalments payable to a beneficiary on the first day specified in paragraph (1) which is as soon as reasonably practicable after the day on which—

(a) the beneficiary becomes entitled to an annual payment under regulation 17(2) to (4); ...

(b) the scheme manager determines that an initial payment may be made under regulation 18(4).

(d) the scheme manager determines that an interim ill health payment may be made under regulation 17B(2).

(e) the beneficiary becomes entitled to a payment under regulation 17G or 17H;

(4) ... instalments shall be paid by means of direct credit transfer or by such other means as appear to the scheme manager to be appropriate in the circumstances of any particular case.

Direct credit transfer

20

(1) Subject to paragraphs (3) and (4), payments under regulation 18A and ... instalments under regulation 19 may, by an arrangement between the scheme manager and the beneficiary or his appointed representative, be paid by way of direct credit transfer into a bank or other account—

(a) in the name of the beneficiary, his appointed representative or any other person with the consent of the beneficiary; or

(b) in the joint names of the beneficiary and any other person or the appointed representative and any other person.

(2) ... instalments shall be paid in accordance with paragraph (1) within seven days of the day on which each instalment is payable under regulation 19(1).

(3) The scheme manager may make a particular payment by direct credit transfer otherwise than in accordance with paragraph (1) if it appears to it to be appropriate to do so for the purpose of paying any arrears.

(4) The arrangements under this regulation may be terminated—

(a) by the beneficiary or his appointed representative, by notice in writing delivered or sent to the scheme manager; or

(b) by the scheme manager if the arrangement seems to it to be no longer appropriate to the circumstances of the particular case.

(5) A direct credit transfer into the account of an appointed representative or of any person to whom an amount is paid with the consent of the beneficiary, shall be a good discharge to the scheme manager for any sum paid under these Regulations.

SCHEDULE 1 — MODIFICATION OF CERTAIN PROVISIONS OF PARTS 1 AND 2 OF THE ACT

1

In section 68 (power for the Regulator to collect information relevant to the Board of the Pension Protection Fund), for “the Board of the Pension Protection Fund”, substitute “ the scheme manager of the financial assistance scheme which are conferred on it by regulations made under, or by virtue of, section 286 ”.

2

In section 85 (disclosure by the Regulator for facilitating the exercise of functions by the Board)—

(a) for “Section 82 does not preclude” substitute “ Neither section 82 nor Article 77 of the Pensions (Northern Ireland) Order 2005 precludes ”;

(b) for the words “the Board of the Pension Protection Fund to exercise its functions”, substitute “ the scheme manager of the financial assistance scheme to exercise functions conferred on it by regulations made under or by virtue of section 286, and Part 2 of the Pensions (Northern Ireland) Order 2005 shall be read accordingly ”.

3

In section 88(4) (disclosure of tax information by the Regulator), after “subsection (3)” insert “ or as mentioned in Article 83(3) of the Pensions (Northern Ireland) Order 2005 ”.

4

In section 168 (administration of compensation payable by the Board)—

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