(1) The condition to be satisfied for the purposes of regulation 9(1)(c)(iii) is that the employer discharged the debt due under section 144 of the 1993 Act or that no debt was due under that section when the scheme began to wind up.

(2) The condition to be satisfied for the purposes of regulation 9(1)(c)(v) is that the employer discharged the debt due under section 75 of the 1995 Act or that no debt was due under that section when the scheme began to wind up.

(3) The scheme manager may treat the condition in paragraph (1) or (2) as being satisfied where—

(a) it is satisfied that an appropriate proportion of the debt was discharged or is likely to be discharged; and

(b) in its opinion, it was reasonable that the debt due under section 144 of the 1993 Act, or section 75 of the 1995 Act as appropriate, has not been discharged.

(4) In this regulation the reference to the employer shall be interpreted in accordance with regulation 11(2).

12B

(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)(iv) is that—

(a) the debt due under section 144 of the 1993 Act was discharged by all the employers in that section of the scheme; or

(b) no debt was due under that section of that Act when the scheme began to wind up.

(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)(iv) is that—

(a) the debt due under section 144 of the 1993 Act was discharged by all the employers to which the scheme relates; or

(b) no debt was due under that section of that Act when the scheme began to wind up.

(3) In relation to a section of a sectionalised multi-employer scheme, the condition to be satisfied for the purposes of regulation 9(1)(c)(vi) is that—

(a) the debt due under section 75 of the 1995 Act was discharged by all the employers in that section of the scheme; or

(b) no debt was due under that section of that Act when the scheme began to wind up.

(4) 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)(vi) is that—

(a) the debt due under section 75 of the 1995 Act was discharged by all the employers to which the scheme relates; or

(b) no debt was due under that section of that Act when the scheme began to wind up.

(5) The scheme manager may treat any condition in paragraphs (1) to (4) as being satisfied where—

(a) it is satisfied that an appropriate proportion of the debt was, or is likely to be, discharged; and

(b) in its opinion, it was reasonable that the debt due under section 144 of the 1993 Act, or section 75 of the 1995 Act as appropriate, or a proportion of that debt has not been discharged.

(6) In this regulation—

(a) the references to the employer in paragraphs (1) and (3) shall be interpreted in accordance with regulation 12(3);

(b) the references to the employer in paragraphs (2) and (4) shall be interpreted in accordance with regulation 12(4); and

Insolvency events

Notification of details

Ill health payments

17A

(1) Except where the qualifying member is entitled to an annual payment under regulation 17(2), (3) or (3C) or 17C, where the scheme manager is satisfied that a qualifying member is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age, that member shall be entitled to a payment (“an ill health payment”) ... from—

(a) the day on which the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 come into force;

(b) subject to paragraph (2), the day on which the scheme manager is first notified that that member is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age; or

whichever is the latest.

(2) Where the scheme manager—

(a) has been notified that a qualifying member is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age;

(b) is not so satisfied or the qualifying member withdraws the notification; and

the day which is the day for the purposes of paragraph (1)(b) is the day of the later notification.

(3) Where—

(a) a qualifying member of a qualifying pension scheme has died and leaves a survivor or a surviving dependant; and

(b) that qualifying member was receiving an ill health payment or an interim ill health payment when he died,

the survivor and any surviving dependants of that qualifying member shall be entitled to an ill health payment from the day after the day on which that qualifying member died.

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

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

(a) the total of all ... instalments of an interim ill health 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 member in accordance with regulation 7 of the FAS Information and Payments Regulations (recovery of overpayments).

(6) Subject to paragraph (7), regulation 17C(7) and paragraph 10 of Schedule 2A, ill health payments which are payable to a qualifying member or survivor under this regulation shall continue for life.

(6A) Ill health payments which are payable to a surviving dependant under this regulation shall continue, subject to paragraph (7), 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.

(6B) Where an ill health payment ceases to be payable to a surviving dependant as a result of paragraph (6A)(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 ill health 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 (6A).

(7) Where a beneficiary dies or otherwise ceases to be entitled to an ill health payment—

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

(b) any instalment of an ill health 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 ill health payment shall be payable.

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

(a) Schedule 2A, where none of sub-paragraphs (b) to (i) nor paragraph (16) applies;

(b) Schedule 5, 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 product of C multiplied by 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 ill health payment to which that qualifying member would be entitled in accordance with Schedule 2A if that Schedule applied and sub-paragraphs (3A) to (3G) of paragraph 2 of Schedule 2 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 ill health payment in accordance with Schedule 5 immediately before the death of the member;

(d) Schedule 5, 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 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;

(bb) was entitled to an ill health payment immediately before the death of the qualifying member; and

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

(iv) the sum of—

(aa) the product of C multiplied by 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 ill health payment to which a survivor would be entitled in accordance with Schedule 2A if that Schedule applied and paragraph 2(2A) of that Schedule and paragraph 2(3A) to (3G) of Schedule 2 were omitted;

(e) Schedule 5, 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 beneficiary nor the qualifying member in respect of 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 beneficiary was entitled to an ill health payment immediately 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 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 ill health payment to which the beneficiary would be entitled in accordance with Schedule 2A if that Schedule applied and sub-paragraphs (3A) to (3G) of paragraph 2 of Schedule 2 were omitted;

(f) Schedule 6, 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 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 ill health payment to which the qualifying member would be entitled in accordance with Schedule 2A if that Schedule applied and paragraph 2(3A) to (3E) of Schedule 2 were omitted;

(g) Schedule 6, 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) either—

(aa) the beneficiary was receiving a present payment from the qualifying pension scheme under scheme rules as a result of the death of a qualifying member; or

(bb) the qualifying member in respect of 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 beneficiary was entitled to an ill health payment immediately 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 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 ill health payment to which the beneficiary would be entitled in accordance with Schedule 2A if that Schedule applied and paragraph 2(3A) to (3E) of Schedule 2 were omitted;

(h) Schedule 6, 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;

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

(cc) was entitled to an ill health payment when the qualifying member died; 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 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 day on which the qualifying member died until the day on which the transfer notice is given,

(i) Schedule 6, 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;

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

(cc) was entitled to an ill health payment when the qualifying member died; 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 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) and (16)—

(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;

(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; and

(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) and (d)(iv)—

“the revalued notional pension” means the aggregate of—the notional pension; andthe revaluation amount for the period—beginning on the calculation date; andending on the earlier of—the day on which the qualifying member became entitled to an ill health payment; andthe day on which the qualifying member began to receive a present payment from the scheme; and 30th March 2011, provided that the calculation date falls before 30th March 2011; and in any case where the calculation date falls on or before 30th March 2011 and the day on which the beneficiary became entitled to an ill health payment or began to receive a present payment from the scheme falls after 30th March 2011, the revaluation amount for the period beginning on 31st March 2011 and ending on the day on which the beneficiary became entitled to an ill health payment or began to receive a present payment from the scheme; and

“C” means—1, where the qualifying member was—entitled to an ill health payment on the calculation date; orreceiving a present payment from the scheme on the calculation date; andthe actuarial factor to be applied in respect of the beneficiary in accordance with Schedule 5, where the qualifying member was not receiving a present payment from the scheme on the calculation date and became entitled to an ill health payment after the calculation date.

(11) The revaluation amount for the period, or, where paragraph (10)(c) applies, the periods, referred to in the definition of “the revalued notional pension” in paragraph (10) 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 ill health payment or began to receive a present payment from the scheme prior to the calculation date,

nil; or

(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 sub-paragraphs (b) and (c) of the definition of “the revalued notional pension” in paragraph (10) 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 sub-paragraph (b) of the definition of “the revalued notional pension” in paragraph (10) 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 ill health payment under these Regulations, the date on which the beneficiary began to receive a present payment from the scheme;

(b) where the beneficiary became entitled to an ill health payment after the calculation date and prior to receiving a payment from the scheme, the date on which the beneficiary became so entitled; 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 ill health payment in accordance with this regulation is a qualifying member to whom regulation 17H applied, the ill health payment shall be determined in accordance with—

(a) Schedule 5, 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 ill health payment under this regulation is higher than the amount of the ill health payment to which the qualifying member would be entitled in accordance with Schedule 2A if that Schedule applied; and

(b) Schedule 6, 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 ill health payment under this regulation is higher than the amount of the ill health payment to which the qualifying member would be entitled in accordance with Schedule 2A if that Schedule applied.

Interim ill health payments

17B

(1) This regulation applies where ...—

(a) the scheme manager has been notified that, and is satisfied that, a qualifying member of a qualifying pension scheme is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age; or

(b) a qualifying member of that scheme—

(i) has died and leaves a survivor or a surviving dependant; and

(ii) was receiving an interim ill health payment when he died.

(2) Except where regulation 17C(8)(b)(i) applies, the scheme manager may, in its discretion, make an interim ill health payment, in anticipation of an ill health payment being payable under this Part and on account of such a payment—

(a) to the qualifying member with effect from—

(i) the day on which the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 come into force;

(ii) subject to paragraph (3), the day on which the scheme manager is first notified that that member is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age; or

(iii) the day on which the member attains the age which is 5 years less than normal retirement age,

whichever is the latest; or

(b) if the qualifying member has died, to a survivor and any surviving dependants of that qualifying member with effect from the day after the day on which that qualifying member died.

(3) Where the scheme manager—

(a) has been notified that a qualifying member is unable to work due to ill health and is likely to continue to be so unable to work until normal retirement age;

(b) is not so satisfied or the qualifying member withdraws the notification; and

the day which is the day for the purposes of paragraph (2)(a)(ii) is the day of the later notification.

(4) In exercising its discretion under paragraph (2), the scheme manager shall 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 the qualifying member; and

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

(5) 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 (2) and in determining the amount of interim ill health payment under Schedule 2A, deem that member, any such 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 2A makes provision for the determination of the amount of interim ill health payments and the circumstances in which an interim ill health payment is not payable.

(7) If the scheme manager determines that an interim ill health payment may be made under paragraph (2), the interim ill health payment is payable—

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

(i) would have been paid, or is paid, the first ... instalment of an ill health payment in accordance with regulation 19, if an ill health 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 ill health payment in accordance with regulation 19, if an ill health 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 day on which the surviving dependant—

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

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

whichever is the earlier.

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

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

(b) any instalment of an interim ill health 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 ill health payment shall be payable.

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

(10) The power to redetermine the amount of an interim ill health payment under paragraph (9) includes the power to redetermine the amount as a result of a change in the amount of interim pension being paid to the qualifying member.

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

Initial payments

3A

In section 134 (directions)—

(a) in subsection (1), for “there is an assessment period in relation to an eligible scheme” substitute “an occupational pension scheme is a qualifying pension scheme under section 286(2) which has not been fully wound up”;

(b) in subsection (2), for the words from the beginning to “is kept to a minimum” substitute “With a view to ensuring that any reduction in the scheme’s assets is kept to a minimum or that the assets of the scheme are invested in a way which, in the opinion of the scheme manager, is appropriate”;

(ba) in subsection (2), after paragraph (b) insert—

(ba) the determination of interim pensions,

(ca) in subsection (3), before paragraph (a) insert—

(za) “interim pension” has the meaning given by regulations under section 286(1),

(d) in subsection (3), after paragraph (a)(i) insert—

(ia) a professional adviser to the scheme; (ib) any other person appearing to the scheme manager to be a person who carries out, or is likely to carry out, activities relevant to the use of the assets of the scheme;

SCHEDULE 2A — DETERMINATION OF ILL HEALTH AND INTERIM ILL HEALTH PAYMENTS

Introductory

1

This Schedule applies for the purposes of determining the amount of an ill health payment or an interim ill health payment payable to or in respect of qualifying members of qualifying pension schemes who are unable to work due to ill health and are likely to continue to be so unable to work until normal retirement age.

Amount of an ill health payment

2

(1) The amount of an ill health payment payable to a qualifying member of a qualifying pension scheme shall be—

$C((A×0.9)−B)$

(2) Except where sub-paragraph (2A) applies, the amount of an ill health payment to a survivor of a qualifying member of a qualifying pension scheme shall be—

$Q2+S−B;$

(2A) Where a qualifying member was a party to a polygamous marriage, the amount of an ill health payment payable to each survivor shall be—

$(0.5×Q)+S−BN;$

(2B) Where a survivor of a qualifying member who was a party to a polygamous marriage dies, the ill health payment payable to each survivor of that qualifying member shall be redetermined with effect from the day after the day on which the survivor died.

(3) In this paragraph—

“A” means the amount of expected pension which would be determined in accordance with Schedule 2 if—the beneficiary were entitled to an annual payment; andthe modifications in paragraph 6 applied;

“B” means the amount of actual pension which would be determined in accordance with Schedule 2 if—the beneficiary were entitled to an annual payment; andthe modifications in paragraph 6 applied; ...

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied.

“N” means the number of survivors of that qualifying member.

“Q” means the sum of—the product of C multiplied by A multiplied by 0.9; andthe total amount of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled on the day on which the qualifying member died;

“S” means—where sub-paragraph (2B) applies, the total amount of any annual increases to which any survivor was entitled on the day on which the survivor died; andin all other cases, nil.

(4) This paragraph is subject to paragraph 7.

Amount of an interim ill health payment

3

(1) The amount of an interim ill health payment payable to a qualifying member of a qualifying pension scheme shall be—

$C((A×0.9)−D)$

(2) Except where sub-paragraph (2A) applies, the amount of an interim ill health payment payable to a survivor of a qualifying member of a qualifying pension scheme shall be—

$(C(A×0.9))+H2−E$

(2A) Where a qualifying member was a party to a polygamous marriage, the amount of an interim ill health payment payable to each survivor shall be—

$(C(A×0.9))+H2−FN$

(3) In this paragraph—

“A” means the amount of expected pension which would be determined in accordance with Schedule 2 if—the beneficiary were entitled to an initial payment; andthe modifications in paragraph 6 applied;

“C” means the actuarial factor, determined in accordance with paragraph 5, to be applied;

“D” means the amount of interim pension which would be determined in accordance with Schedule 2 if—the qualifying member were entitled to an initial payment; andthe modifications in paragraph 6 applied; ...

“E” means the amount of interim pension payable to the survivor which would be determined in accordance with Schedule 2 if—the survivor were entitled to an initial payment; andthe modifications in paragraph 6 applied.

“F” means the sum of the interim pensions of all the survivors which would have been determined in accordance with Schedule 2 if—the survivors had been entitled to initial payments; andthe modifications in paragraph 6 applied;

“H” means the aggregate of any annual increases determined in accordance with paragraph 9 to which the qualifying member was entitled on the day on which the qualifying member died; and

“N” means the number of survivors of that qualifying member.

(4) This paragraph is subject to paragraph 7.

Revaluation

4

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

Actuarial reduction

5

The actuarial factor to be applied in paragraphs 2 to 3A shall be determined ..., having regard to—

(a) the age of the qualifying member;

(b) the normal retirement age of the qualifying member; and

Modifications to Schedule 2

6

The following modifications to Schedule 2 apply for the purposes of paragraphs 2 and 3 of this Schedule—

(zza) in paragraph 1(2), in the definition of “revalued notional pension” for “regulation 17(10)” substitute “regulation 17A(10);

(za) in paragraph 2(1), for the words from “the later of” to the end of paragraph (b), substitute “the day on which the beneficiary is entitled to an ill health payment in accordance with regulation 17A”;

(zab) in paragraph 2(3H)(b), for “Schedule 4”, substitute “Schedule 6”;

(zac) in paragraph 3(3) and (3ZD), for “attains normal retirement age” substitute “becomes entitled to an ill health payment”.

(zb) in paragraph 4(3)—

(i) after paragraph (b) insert “and”;

(ii) after paragraph (c) omit “and”; and

(iii) omit paragraph (d);

(a) for paragraph 5(8)(b) substitute—

(b) ending on the day before the day on which the scheme began to wind up.

(b) in paragraph 4(7)(b)(i) for “the day on which the qualifying member attains normal retirement age” substitute “the day from which the qualifying member is entitled to an ill health payment in accordance with regulation 17A(1)

(bza) for paragraph 4(7A)(a) substitute—

(a) the day from which the qualifying member is entitled to an ill health payment in accordance with regulation 17A(1);

(ba) in paragraph 4(10A) for “annual payment” substitute “ill health payment”;

(b) ending on the earlier of— (i) the day on which the qualifying member became entitled to an ill health payment in accordance with regulation 17A(1); and (ii) 31st March 2011.

(ca) in paragraph 5(10A) for the words from “the earlier of” to the end substitute “the day from which the qualifying member became entitled to an ill health payment.”;

(d) omit paragraphs 2A, 4(13) to (13D), 4A, 7, 9 and 10; and

(e) for paragraph 10(ba) substitute—

(ba) for “regulation 17A(1)”, in each place it occurs, substitute “regulation 17B(2)”; (bb) for “ill health payment”, in each place it occurs, substitute “interim ill health payment”; (bc) for paragraph 4(7)(b) substitute— (“b) ending on the day from which the qualifying member is entitled to an interim ill health payment in accordance with regulation 17B(2).

Cap on expected pension and actual pension

7

(1) Where the amount of a qualifying member’s expected pension determined in accordance with paragraph 2, 3 or 3A multiplied by 0.9 exceeds the FAS cap—

(a) the amount of the ill health payment or interim ill heath payment payable to, or in respect of, that member under paragraph 2, 2A, 3 or 3A shall be determined on the basis that the product of that calculation was the amount of the FAS cap; and

(b) the amount “A” under paragraph 2 for the purposes of paragraph (b)(i) in the definition of “underlying rate” in paragraph 9 shall be the amount of the FAS cap;

(2) Where the amount of a qualifying member’s actual pension or interim pension determined in accordance with this Schedule exceeds—

(a) the amount of the qualifying member’s expected pension determined in accordance with paragraph 2 or 3 multiplied by 0.9; or

(b) the FAS cap,

no ill health payment or interim ill health payment shall be payable to, or in respect of, that member.

(3) In this paragraph, the standard amount is—

(a) where the qualifying member became entitled to an ill health payment in the period beginning on 1st April 2008 and ending on 31st March 2009, £27,987;

(b) where the qualifying member became entitled, or becomes entitled, to an ill health payment in the period beginning on 1st April 2009 and ending on 31st March 2010, £29,386; ...

(c) where the qualifying member becomes entitled to an ill health payment in the period beginning on 1st April 2010 and ending on 31st March 2011, £29,386; and

(d) where the beneficiary becomes entitled to an ill health payment after 31st March 2011, the amount determined in accordance with sub-paragraph (4).

(4) For each successive period of 12 months from 1st April 2011, the standard amount shall be—

(a) where paragraph (b) does not apply, the amount of the standard amount for the previous period of 12 months increased by the percentage increase in the general level of prices for the period of 12 months ending on the 30th September falling within that previous period of 12 months; or

(b) where there is no such percentage increase, the amount of the standard amount for the previous period of 12 months.

(5) Where the amount of the standard amount determined in accordance with sub-paragraph (3)(d) results in a fraction of a pound, that fraction shall be treated as a pound.

Rounding

8

Where the amount of an ill health payment or interim ill health payment determined in accordance with this Schedule results in a fraction of a penny, that fraction shall be treated as a penny.

Qualifying members for the purposes of section 286A

15A

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

Insufficient assets

Annual payments for certain applications in cases of severe ill health

17C

(1) A qualifying member shall be entitled to an annual payment determined in accordance with Schedule 2 where the conditions in paragraphs (2) and (3) are met.

(2) The condition in this paragraph is that, subject to paragraph (9), the qualifying member makes a written request for an annual payment under this regulation during the period of 12 months beginning with the date on which the Financial Assistance Scheme and Incapacity Benefit (Miscellaneous Amendments) Regulations 2009 come into force.

(3) The conditions in this paragraph are that the scheme manager is satisfied that the qualifying member—

(a) has attained the age of 55;

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

(4) The date from which a qualifying member is entitled to an annual payment under this regulation is—

(a) where the scheme manager is satisfied that the conditions in paragraph (3) were met before the date on which the scheme manager receives the written request mentioned in paragraph (2), whichever is the later of—

(i) the date on which the scheme manager is satisfied that the conditions in paragraph (3) would first have been met; or

(ii) 14th May 2004; or

(b) in all other cases, the date on which the scheme manager receives the written request mentioned in paragraph (2).

(5) In determining whether or not the scheme manager is satisfied in accordance with paragraph (4)(a), the scheme manager shall have regard to—

(a) the information available as to the length of time the qualifying member has met the conditions in paragraph (3);

(b) the medical evidence available, taking into account—

(i) such evidence as the scheme manager would have expected the qualifying member to have been able to provide in accordance with Schedule 2 to the FAS Information and Payments Regulations, and

(ii) the effect of the lapse of time on the availability of that evidence; and

(6) Paragraphs (4) to (7) of regulation 17 apply to annual payments made under this regulation.

(7) Paragraph (8) applies where—

(a) on the date the Financial Assistance Scheme and Incapacity Benefit (Miscellaneous Amendments) Regulations 2009 come into force, the qualifying member is receiving a payment in accordance with these Regulations (other than payments for a survivor by virtue of regulation 17(4), 17A(3), 17B(2)(b) or 18(4)); and

(b) the qualifying member is entitled to an annual payment in accordance with this regulation.

(8) Where this paragraph applies, from the date on which the scheme manager determines that the qualifying member is entitled to an annual payment in accordance with this regulation—

(a) the qualifying member is not entitled to—

(i) an annual payment under regulation 17(2);

(ii) an annual payment for terminal illness under regulation 17(3); or

(iii) an ill health payment under regulation 17A(1); and

(b) the scheme manager may not make—

(i) an initial payment under regulation 18 in anticipation of an annual payment being payable under regulation 17(2);

(ii) an interim ill health payment under regulation 17B(2); or

(iii) an initial payment for terminal illness by virtue of regulation 18(4).

(9) Where—

(a) a qualifying member has died;

(b) the scheme manager is satisfied that prior to death that qualifying member satisfied the conditions in paragraph (3); and

(c) the relevant representative makes a written request in respect of that qualifying member during the time period set out in paragraph (2);

that qualifying member shall be entitled to an annual payment in accordance with this regulation.

(10) Any annual payment (or initial payment under regulation 18) payable under paragraph (9) is payable to the estate of the deceased qualifying member.

(11) For the purposes of paragraph (9), references in these Regulations to “qualifying member” may be construed as references to the deceased qualifying member or to the deceased qualifying member’s estate, as the case requires.

(12) For the purposes of this regulation—

“relevant representative” means—the survivor of the deceased qualifying member referred to in paragraph (9), orwhere there is no survivor in relation to that qualifying member, that member’s personal representative; and

“personal representative” has the meaning given in regulation 2(1) of the FAS Information and Payments Regulations.

Initial payments

Payment for an entitlement under regulation 17C

5A

(1) This paragraph applies where a qualifying member is entitled to an annual payment in accordance with regulation 17C for a period during which that member has previously received a relevant payment.

(2) The annual payment payable to a qualifying member to whom this paragraph applies is determined in accordance with this Schedule.

(3) For any period for which an annual payment under regulation 17C is due to be paid and a relevant payment has previously been paid, the relevant payment is treated as a payment on account of the annual payment under regulation 17C.

(4) Where the amount of the relevant payment so treated equals the amount of the annual payment payable under sub-paragraph (2), no further payment under regulation 17C is due to the qualifying member.

(5) In this paragraph, “relevant payment” means a payment in accordance with these Regulations other than a payment for a survivor by virtue of regulation 17(4), 17A(3), 17B(2)(b) or 18(4).

Exclusion of certain benefits

Cap on expected pension and actual pension

De minimis rule

Revaluation

Initial payments

Rounding

Financial and other arrangements to enable or assist the Board of the Pension Protection Fund to carry out its functions in relation to the financial assistance scheme

Use of information

6A

(1) Information held by the Secretary of State or the Department for Social Development in Northern Ireland for the purposes of any of their functions relating to social security or the financial assistance scheme may be disclosed to—

(a) the scheme manager; or

(b) to 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) and who is authorised by the scheme manager to receive and use such information,

for any use connected with, or incidental to, the exercise of the scheme manager’s functions relating to the financial assistance scheme.

(2) Information obtained by the scheme manager, or a person referred to in paragraph (1)(b), in the exercise of the scheme manager’s functions in relation to the financial assistance scheme—

(a) may be disclosed to the Secretary of State or the Department for Social Development in Northern Ireland in any case in which disclosure is for the purpose of enabling or assisting the scheme manager to exercise its functions; and

(b) shall be disclosed to the Secretary of State or the Department for Social Development in Northern Ireland on request by the Secretary of State or, as the case may be, that Department in any case in which disclosure is for the purpose of enabling or assisting the Secretary of State or, as the case may be, the Department to exercise their functions relating to the financial assistance scheme.

Annual reports

Delegation

Working with qualifying pension schemes

14A

(1) The scheme manager may manage, or make arrangements in relation to the management of, the transfer of any property, rights and liabilities of qualifying pension schemes which have not been fully wound up.

(2) The power conferred by paragraph (1) includes, but is not limited to—

(a) the preparation of plans or other similar preparatory documentation;

(b) undertaking work calculated to assist in ensuring any transfer is carried out effectively and efficiently;

(d) the inspection, examination and auditing of data or other information relating to qualifying pension schemes.

Payments in relation to administration or other costs

14B

(1) Where the scheme manager is satisfied that—

(a) the trustees or managers of a qualifying pension scheme are not able to pay or meet administration or other costs which have been incurred or which are likely to be incurred in relation to that scheme from the assets of the scheme; and

(b) paying or meeting those administration or other costs is necessary in order to—

(i) assist the scheme in winding-up;

(ii) keep any reduction in the scheme’s assets to a minimum; or

(iii) increase the scheme’s assets,

the scheme manager may, on an application by the trustees or managers, pay to them such amounts as it considers appropriate for the purpose of enabling the trustees or managers to pay or meet those costs.

(2) The scheme manager may make a payment under paragraph (1) on such terms as the scheme manager thinks fit.

Survivors

16A

(1) Subject to paragraphs (2) and (3), a person is a survivor of a qualifying member who has died where that person is the qualifying member’s widow, widower or surviving civil partner.

(2) Where the conditions in paragraph (4) are satisfied—

(a) the qualifying member’s surviving partner is a survivor of that qualifying member; and

(b) where the qualifying member leaves a widow, widower or surviving civil partner, that widow, widower or surviving civil partner is not a survivor of that qualifying member.

(3) Where a person is regarded as a qualifying member by virtue of regulation 15(5) that person is not a survivor of the former member referred to in regulation 15(5)(b).

(4) The conditions for the purposes of paragraph (2) are that—

(a) immediately before the qualifying member’s death, the qualifying member had a partner (“the surviving partner”);

(b) the rules of the qualifying pension scheme include provision (whether discretionary or otherwise) to pay a survivor’s pension to a partner of the qualifying member;

(c) the scheme manager is satisfied that the surviving partner was living with the qualifying member immediately before the qualifying member’s death; and

(d) either—

(i) the qualifying member provided the scheme manager with a signed written notice nominating the surviving partner as that member’s survivor;

(ii) the qualifying member provided the trustees or managers of the qualifying pension scheme with a valid nomination in accordance with the rules of the qualifying pension scheme to pay a survivor’s pension to the surviving partner; or

(iii) where the qualifying member did not leave a widow, widower or surviving civil partner, the scheme manager is satisfied that the qualifying member and the surviving partner were financially interdependent or the surviving partner was financially dependent on the qualifying member.

(5) For the purposes of enabling the scheme manager to be satisfied or not satisfied that the conditions in paragraphs (4)(c) and (d)(ii) or (iii) are met, the surviving partner must provide evidence that those conditions are met to the scheme manager.

Surviving dependants

16B

(1) Subject to paragraph (2), a child of the family of a qualifying member is a surviving dependant of that qualifying member for the purposes of these Regulations where—

(a) the child was financially dependent on the member and is aged—

(i) less than 18; or

(ii) less than 23 and is—

(aa) attending a qualifying course; or

(bb) incapable of engaging in full time paid employment due to having a disability within the meaning of the Disability Discrimination Act 1995; and

(b) the scheme manager is provided with—

(i) in the case of a natural child or unborn child, a birth certificate demonstrating that the child was the natural child of the member;

(ii) in the case of an adopted child, the adoption certificate demonstrating that the child was the adopted child of the member;

(iii) in the case of any other child in respect of whom sub-paragraph (a) is satisfied, evidence demonstrating to the satisfaction of the scheme manager that the child was a dependent child of the member immediately before the qualifying member’s death.

(2) Where a person is regarded as a qualifying member by virtue of regulation 15(5) that person is not a surviving dependant of the former member referred to in regulation 15(5)(b).

3ZA

In section 113 (investment of funds)—

(a) at the beginning of subsection (1), insert “Subject to subsection (1A),”; and

(b) after subsection (1), insert—

(1A) The Board may hold any grant received in accordance with regulation 5(3) of the Financial Assistance Scheme Regulations 2005 (scheme manager) in an interest-bearing account but may not otherwise invest any such grant.

3ZB

After section 114(4) (investment principles), insert—

(4A) A statement of investment principles need not cover investments made in accordance with section 113(1A).

3ZC

In section 115(1)(a) (borrowing), after “any of its functions”, insert “except its functions relating to the financial assistance scheme”.

3ZD

In section 117(1)(b) (administration levy), after “section 116”, insert “except where such expenditure relates to the financial assistance scheme”.

3ZE

In section 119 (annual reports to Secretary of State)—

(a) in subsection (2)—

(i) after “the Board” insert “in relation to the financial assistance scheme”;

(ii) for “the report” substitute “any part of the report”; and

(iii) after “that section” insert “which relates to the financial assistance scheme”;

(b) in subsection (3), after paragraph (c) insert—

(“d) the operation of the financial assistance scheme including the number of persons who have received payments under the Financial Assistance Scheme Regulations 2005 and the total amount of those payments.”; and

(c) in subsection (6)(a), for “the date on which the Board is established” substitute “the date on which the Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009 come into force”.

17

In paragraph 18(2) of Schedule 5 (delegation)—

(a) after sub-paragraph (g), insert—

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The Financial Assistance Scheme Regulations 2005

Functions of the Board of the Pension Protection Fund in relation to the financial assistance scheme

5A

Funding

Annual reports

Delegation

Employer-related condition

12A

Employer-related condition: multi-employer schemes

12B

Insolvency events

Notification of details

Ill health payments

17A

Interim ill health payments

17B

Initial payments

3A

SCHEDULE 2A — DETERMINATION OF ILL HEALTH AND INTERIM ILL HEALTH PAYMENTS

Introductory

1

Amount of an ill health payment

2

Amount of an interim ill health payment

3

Revaluation

4

Actuarial reduction

5

Modifications to Schedule 2

6

Cap on expected pension and actual pension

7

Rounding

8

Qualifying members for the purposes of section 286A

15A

Insufficient assets

Annual payments for certain applications in cases of severe ill health

17C

Initial payments

Payment for an entitlement under regulation 17C

5A

Exclusion of certain benefits

Cap on expected pension and actual pension

De minimis rule

Revaluation

Initial payments

Rounding

Financial and other arrangements to enable or assist the Board of the Pension Protection Fund to carry out its functions in relation to the financial assistance scheme

Use of information

6A

Annual reports

Delegation

Working with qualifying pension schemes

14A

Payments in relation to administration or other costs

14B

Survivors

16A

Surviving dependants

16B

3ZA

3ZB

3ZC

3ZD

3ZE

17