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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

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(b) may give a copy of the transfer notice to any other person to whom, in the opinion of the scheme manager, the transfer notice is relevant.

(3) Where the trustees or managers have been discharged from their obligations to provide pensions or other benefits to or in respect of any persons in accordance with section 161 as modified, the scheme manager shall notify those persons, or where such person has an appointed representative, that appointed representative within 28 days of the transfer notice being given.

Terms and conditions of contracts

30

(1) Where a transfer notice has been given to the trustees or managers of a qualifying pension scheme and the scheme manager considers that a contract relating to the property, rights and liabilities of the scheme contains terms or conditions that the scheme manager considers onerous, the scheme manager may—

(a) disapply any such term or condition; or

(b) substitute for the term or condition, a term or condition that the scheme manager considers to be reasonable.

(2) Where—

(a) any rights or liabilities under a relevant contract of insurance are transferred to the Secretary of State by virtue of section 161 of, and Schedule 6 to, the Pensions Act as modified; and

(b) as a result of the transfer, the Secretary of State is required, by reason of a term of that contract, to pay a specified amount or specified amounts to a specified person who, immediately before the time the transfer notice was given, was a member of the scheme or a person entitled to benefits in respect of such a member,

the scheme manager may modify that term of the contract so that any benefit under that contract shall be payable to the Secretary of State.

PART 9 — Miscellaneous payments and residual assets

Payments where amounts relating to money purchase benefits are transferred to the Secretary of State

31

(1) Subject to paragraph (3), where the property transferred to the Secretary of State under section 161 (as modified by Schedule 1 to these Regulations) includes property representing the value of rights in respect of money purchase benefits under the scheme rules, the scheme manager must make arrangements to facilitate a payment or payments to be made to any person in respect of whom the qualifying pension scheme held the assets.

(2) The scheme manager must be satisfied that the arrangement made under paragraph (1) is made in respect of the full value of the assets transferred as at the date the arrangement is made.

(3) Where the person in respect of whom the assets were held has died, the arrangement under paragraph (1) shall be made in respect of the estate of the deceased person.

Payments to estates where a person in receipt of a payment from a scheme dies prior to entitlement and prior to transfer of assets

32

(1) This regulation applies where—

(a) a person in respect of whom an asset share has been determined dies on or after the calculation date and prior to the day on which the transfer notice is given;

(b) that person was not entitled to an annual payment or an ill health payment on the day on which that person died;

(d) the scheme manager is satisfied that the amount of any interim pension from the scheme paid to that person in respect of any year from the later of—

(i) the day on which the person began to receive a payment from the scheme; and

(ii) the day on which the scheme began to wind up,

until the day on which the person died is lower than the sum of the notional pension and any annual increases which the scheme manager has determined under regulation 27 could be paid, in respect of that year.

(2) Where this regulation applies, the scheme manager may, after the transfer notice has been given, make a payment to the person’s estate, having regard to—

(a) the amount of any interim pension which was paid to the person;

(b) the amount of the sum of—

(i) the notional pension; and

(ii) any annual increases determined in accordance with regulation 27; and

Transfer of residual assets to the Secretary of State where Part 7 does not apply

33

(1) This regulation applies where—

(a) Part 7 does not apply to a qualifying pension scheme because the liabilities to or in respect of all members and former members have been discharged;

(b) the trustees or managers continue to hold assets for the scheme;

(c) the trustees or managers have notified the scheme manager in writing that they wish to transfer the assets to the Secretary of State; and

(d) the scheme manager is satisfied that—

(i) either—

(aa) the cost of distributing the remaining assets to the members or former members of the scheme would be disproportionate; or

(bb) the distribution of the remaining assets would not be of overall benefit to the members or former members of the scheme;

(ii) the assets can be transferred to the Secretary of State; and

(iii) it is appropriate that the assets are transferred to the Secretary of State.

(2) Where this regulation applies, the trustees or managers of a qualifying pension scheme to which Part 7 does not apply may transfer the remaining assets to the Secretary of State at such time as the Secretary of State may decide.

3B

In section 135 (restrictions on winding up, discharge of liabilities etc)—

(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)”;

(b) omit subsections (2), (3), (5) to (7) and (11);

(i) for the words before paragraph (a) substitute “Except where subsection (4A) applies—

(ii) in paragraph (a), for “member’s” substitute “qualifying member’s”; and

(iii) for paragraph (b) substitute—

(b) no steps may be taken to discharge any liability of the scheme to or in respect of a qualifying member of the qualifying pension scheme by way of making a payment which would be— (i) a winding-up lump sum under paragraph 10 of Schedule 29 to the Finance Act 2004 (c.12); or (ii) a trivial commutation lump sum under paragraph 7 or 7A of that Schedule.

(d) after subsection (4) insert—

(4A) This subsection applies where— (a) before 26th September 2007 the trustees or managers entered into a binding commitment to purchase an annuity for the qualifying member; (b) the purchase of an annuity has been approved by the scheme manager under section 286A(2)(b); (c) the transfer or discharge of liability has been approved by the scheme manager under subsection (4C) on the application of the trustees or managers of the scheme and any condition imposed under subsection (4D) is satisfied; (d) before the date on which the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010 came into force, the trustees or managers of the scheme offered a trivial commutation lump sum to the qualifying member; (e) before the date on which those Regulations came into force— (i) an application under section 93A of the Pension Schemes Act 1993 or section 89A of the Pension Schemes (Northern Ireland) Act 1993 (salary related schemes: right to statement of entitlement) for a statement of entitlement had been received by the trustees or managers of the scheme for the qualifying member; (ii) the trustees or managers of the scheme have provided the qualifying member with such a statement; and (iii) the qualifying member has made, within the relevant period, and not withdrawn, an application under section 95 of the Pension Schemes Act 1993 or section 91 of the Pension Schemes (Northern Ireland) Act 1993 (ways of taking right to cash equivalent); (f) the transfer or discharge of liability relates only to money purchase benefits; or (g) the transfer or discharge of liability relates only to benefits derived from the payment of voluntary contributions. (4B) For the purposes of subsection (4A)(e), “the relevant period” means— (a) where section 94(1)(aa) of the Pension Schemes Act 1993 or section 90(1)(aa) of the Pension Schemes (Northern Ireland) Act 1993 (right to cash equivalent) applies, three months beginning with the guarantee date, as defined in those Acts, in respect of the statement of entitlement; or (b) where regulation 14 of the Occupational Pension Schemes (Transfer Values) Regulations 1996 or regulation 14 of the Occupational Pension Schemes (Transfer Values) Regulations (Northern Ireland) 1996 (extension of time within which a member may exercise option to take a guaranteed cash equivalent) applies, the three month period for making a relevant application determined in accordance with that regulation. (4C) The scheme manager may approve a transfer referred to in subsection (4)(a) or any steps to discharge any liability of the scheme to or in respect of a qualifying member of the qualifying pension scheme by way of making a payment referred to in subsection (4)(b) if the scheme manager thinks it appropriate to do so. (4D) An approval under subsection (4C) may be made subject to such conditions (if any) as the scheme manager thinks appropriate.

; and

(e) in subsection (9) for “Board” substitute “scheme manager”.

3C

In section 136 (power to validate contraventions of section 135)—

(a) in each place it occurs, for “Board” substitute “scheme manager”;

(b) in subsection (1) for the words “to do so is consistent” to the end, substitute “it is appropriate to do so”;

(d) after subsection (2) insert—

(2A) The scheme manager may copy the notice under subsection (2) to any other person to whom, in the opinion of the scheme manager, the determination is relevant.

(e) in subsection (3) for “Board’s” substitute “scheme manager’s”; and

(f) omit subsections (4) and (5).

3D

In section 161 (effect of Board assuming responsibility for a scheme)—

(a) in subsection (1)—

(i) after “given” insert “under regulation 29 of the Financial Assistance Scheme Regulations 2005 (transfer notice)”;

(ii) for “an eligible scheme” substitute “a qualifying pension scheme under section 286(2)”; and

(iii) for the words from “the Board” to the end substitute—

(a) the property, rights and liabilities of the scheme are transferred to the Secretary of State, without further assurance, with effect from the time the trustees or managers are given the transfer notice, (b) the trustees or managers of the scheme are discharged from their pension obligations from that time, and (c) any liabilities other than those transferred under paragraph (a) or liabilities in respect of money purchase benefits referred to in subsection (4A) are discharged.

(b) omit subsection (2);

(i) after “liabilities of the scheme” insert “means any liabilities which are liabilities of the scheme as a direct result of the rights or property referred to in subsection (1)(a) being held by or vested in the trustees or managers of the scheme, but”; and

(ii) omit the words from “, other than” to the end;

(d) in subsection (4)—

(i) after the words in brackets insert “which are not pensions or benefits in respect of money purchase benefits referred to in subsection (4A)”; and

(ii) omit paragraph (b) and the “and” which precedes it;

(e) after subsection (4) insert—

(4A) Subsection (1)(a) does not transfer any property which is, or rights which are, held by or vested in the trustees or managers of the scheme in respect of money purchase benefits where the scheme manager is satisfied that appropriate arrangements have been made or are being made for the discharge of the scheme’s liabilities relating to money purchase benefits. (4B) The trustees or managers of the scheme may discharge their liabilities in respect of money purchase benefits irrespective of any rules of the scheme which may provide that such liabilities must be discharged together with benefits which are not money purchase benefits.

(f) in subsection (7) for “Board” substitute—

(i) where it first occurs, “scheme manager”; and

(ii) for the subsequent occurrences, “Secretary of State”;

(g) after subsection (7) insert—

(7A) Neither paragraph (b) nor (c) of subsection (1) affects any rights transferred to the Secretary of State in accordance with paragraph (a) of that subsection.

; and

(h) in each place it occurs, for “subsection (2)” substitute “subsection (1)”.

3E

In section 165 (guaranteed minimum pensions)—

(a) in subsection (1)—

(i) for “Board” substitute “scheme manager”;

(ii) for “Commissioners of Inland Revenue” substitute “Commissioners for Her Majesty’s Revenue and Customs”; and

(iii) for “it assuming responsibility for an eligible scheme in accordance with this Chapter” substitute “the scheme manager giving a transfer notice under regulation 29 of the Financial Assistance Scheme Regulations 2005 (transfer notice)”; and

(b) after subsection (3) insert—

(4) In subsection (8) of that section (as inserted by subsection (3) above) for “on the Board of the Pension Protection Fund assuming responsibility for the scheme” substitute “when a transfer notice was given under regulation 29 of the Financial Assistance Scheme Regulations 2005”.

14A

In section 202 (tax information)—

(a) in each place it occurs, for “the Board” substitute “the scheme manager”;

(b) in subsection (1) for “tax functions” substitute “a function of the Revenue and Customs”;

(c) in subsection (2) for “section 182 of the Finance Act 1989 (c.26)” substitute “sections 18 and 19 of the Commissioners for Revenue and Customs Act 2005 (c.11)”;

(d) in subsection (4) for “Commissioners of Inland Revenue or the Commissioners of Customs and Excise” substitute “Commissioners for Her Majesty’s Revenue and Customs”; and

(e) for subsection (5) substitute—

(5) In subsection (1), “a function of the Revenue and Customs” has the same meaning as in section 18 of the Commissioners for Revenue and Customs Act 2005.

19

In Schedule 6 (transfer of property, rights and liabilities to the Board)—

(a) after paragraph 3(2) insert—

(3) Where any liabilities in respect of an existing or future cause of action are not transferred as a result of sub-paragraph (2), the trustees or managers are not discharged from any obligations in respect of such causes of action.

(b) after paragraph 5 insert—

(5A) Any contract which does not form part of any rights or liabilities transferred to the Secretary of State shall be treated as terminated.

(a) so far as necessary for the purposes of giving effect to the transfer as a reference to the Secretary of State, and (b) so far as necessary for the purposes of giving effect to paragraph 6A(1) as a reference to the scheme manager.

(d) after paragraph 6 insert—

(6A) (1) The rights, powers and obligations of the Secretary of State in relation to the property, rights and liabilities are exercisable by the scheme manager without limitation. (2) Where, by virtue of sub-paragraph (1), any amount becomes payable, or is to be paid, to the scheme manager, that amount must be paid to the Secretary of State.

(e) in paragraph 7(1) in the first place in which it occurs for “Board” substitute “scheme manager”;

(f) in all other places in which it occurs for “Board” substitute “Secretary of State”; and

(g) after paragraph 7 add—

(8) (1) Where, by virtue of paragraph 3(1), an application to the Pensions Ombudsman under Part 10 of the Pension Schemes Act 1993 (c.48) or Part 10 of the Pension Schemes (Northern Ireland) Act 1993 (c.49) is to be continued by or against the Secretary of State, any reference in section 146 of the Pension Schemes Act 1993 or section 142 of the Pension Schemes (Northern Ireland) Act 1993 to the trustees or managers of an occupational pension scheme shall have effect, so far as necessary, for the purpose of giving effect to paragraph 3(1), as a reference to the Secretary of State. (2) Where, as a result of such an application being continued against the Secretary of State, a direction is given by the Ombudsman under section 151 of the Pension Schemes Act 1993 or section 147 of the Pension Schemes (Northern Ireland) Act 1993, the Secretary of State may require the scheme manager to carry out a review under regulation 10 of the Financial Assistance Scheme (Internal Review) Regulations 2005.

SCHEDULE3 — Determination of certain annual payments

Introductory

1

(1) This Schedule applies for the purposes of determining the amount of an annual payment payable to a beneficiary to whom regulation 17(8)(b) to (f) or (16)(a) applies.

(2) In this Schedule—

“A” means—where the qualifying member is a qualifying member to whom regulation 17D applied, the amount by which the qualifying member’s annual payment has been commuted; andin all other cases, nil;

“B” means—where either or both sub-paragraphs (3) or (6) apply, the amount by which the scheme manager determines the annual payment which would otherwise be payable under this Schedule is to be reduced;where the beneficiary is a qualifying member to whom regulation 17H applied, the amount, if any, by which the scheme manager determined the payment which would otherwise have been payable under Schedule 7 should be reduced; andin all other cases, nil;

“D” means—subject to paragraph (b), where sub-paragraph (4) of paragraph 4 applies, the total amount of annual increases to which any surviving dependant was entitled under this Schedule on the day on which the event referred to in paragraphs (a) to (c) of that sub-paragraph occurred;where paragraph 4(4)(a) applies and, as a result, the annual payment payable to a surviving dependant is redetermined under paragraph 4(3)(a), nil; andin all other cases, nil;

“J” means—where the qualifying member became entitled to an annual payment or began to receive a present payment from the qualifying scheme prior to the day on which the transfer notice was given, 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 regulation 17(11); andin all other cases, nil;

“N” means—in paragraph 3, the number of survivors of that qualifying member; andin paragraph 4, the number of surviving dependants of that qualifying member;

“Q” means—where the beneficiary is a person to whom regulation 17(17)(a) applies, the payment to which the qualifying member was entitled in accordance with Schedule 7 immediately before the qualifying member died; andin all other cases, the sum of—R-A;the total amount of any annual increases which the scheme manager considers could have been paid, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17(11), from the relevant date until the earlier of—the day on which the transfer notice is given; andthe day on which the qualifying member died;where the qualifying member died after the calculation date but before the day on which the transfer notice was given, double the total amount of any annual increases which the scheme manager considers could have been paid to a survivor (on the basis that there is one 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 regulation 17(11); andwhere the qualifying member died on or after the day on which the transfer notice was given, the total amount of any annual increases to which the qualifying member was entitled in accordance with paragraph 6 on the day on which the qualifying member died;

“R” means the amount of the revalued notional pension as construed in accordance with regulation 17(10);

“S” means—where paragraph 3(2) applies, the total amount of increases to which any survivor was entitled under this Schedule on the day on which the survivor died; andwhere sub-paragraph (4) of paragraph 4 applies, the total amount of increases to which any survivor was entitled under this Schedule on the day on which the event referred to in paragraphs (a) to (c) of that sub-paragraph occurred; andin all other cases, nil; and

“relevant date” means—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;where the beneficiary is a qualifying member to whom 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; andin 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).

(3) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before the day on which a transfer notice is given, a debt to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the annual payment which would otherwise be payable under this Schedule is to be reduced, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(4) Sub-paragraph (6) applies where the scheme manager is satisfied that the sum of the interim pension paid to a beneficiary and any payment made under these Regulations in respect of any year in the period determined in accordance with sub-paragraph (5) is higher or lower than the sum of—

(a) the revalued notional pension, or the survivor notional pension, as the case may be; and

(b) any annual increases or proportion of annual increases, which the scheme manager considers could have been paid in respect of that year, taking into account—

(i) the determination under regulation 27(1)(d);

(ii) the revaluation amount determined in accordance with regulation 17(11); and

(iii) the proportion of that year which falls after the 1st January.

(5) For the purposes of sub-paragraph (4), the period is the period from—

(a) the earlier of—

(i) the day on which the beneficiary became entitled to a payment under these Regulations; and

(ii) the day on which the beneficiary became entitled under the scheme rules to a pension or other benefit; or

(b) the day on which the qualifying pension scheme began to be wound up if that is later than the day determined in accordance with paragraph (a),

until the day on which the scheme manager gave a transfer notice to the scheme trustees or managers.

(6) Where this sub-paragraph applies, the scheme manager may—

(a) determine the amount by which the annual payment which would otherwise be payable under this Schedule in respect of the beneficiary is to be reduced, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the revalued notional pension or survivor notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii) the amount of any payments made under these Regulations prior to the scheme manager giving the transfer notice; and

(iv) such other matters as the scheme manager considers relevant; and

(b) where the sum of the interim pension paid and any payments made under these Regulations in respect of any year is lower than the sum of the amounts referred to in sub-paragraph (4)(a) and (b) in respect of that year, make a payment to the beneficiary or, where the beneficiary has died prior to the scheme manager making this determination, to the beneficiary’s estate, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the revalued notional pension or survivor notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii) the amount of any payments made under these Regulations prior to the scheme manager giving the transfer notice; and

(iv) such other matters as the scheme manager considers relevant.

Amount of an annual payment – qualifying members

2

The annual payment payable to a qualifying member to whom this Schedule applies shall be—

$R−A+J−B.$

Amount of an annual payment - survivors

3

(1) Where this Schedule applies, the annual payment payable to a survivor of a qualifying member shall be—

(a) where regulation 17(8)(f) applies, the amount which is the sum of—

(i) the survivor notional pension determined in respect of that survivor; and

(ii) 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,

less the amount, if any, by which the scheme manager determines the payment should be reduced in accordance with paragraph 1(3) or (6); and

(b) where regulation 17(8)(c) to (e) or (16)(a) applies—

(i) where sub-paragraph (ii) does not apply—

$Q2+S;$

(ii) where the qualifying member was a party to a polygamous marriage—

$(0.5×Q)+SN.$

(2) Where a survivor to whom sub-paragraph (1)(b)(ii) applies dies, the annual payment payable to all remaining survivors of the qualifying member shall be redetermined with effect from the day after the day on which the survivor died.

Surviving Dependants

4

(1) Where this Schedule applies, the annual payment payable to a surviving dependant of a qualifying member shall be—

(a) where regulation 17(8)(f) applies, the amount which is the sum of—

(i) the survivor notional pension determined in respect of that surviving dependant; and

(ii) 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,

less the amount, if any, by which the scheme manager determines the payment should be reduced in accordance with paragraph 1(3) or (6); and

(b) where regulation 17(8)(c) to (e) or (16)(a) applies, determined in accordance with sub-paragraphs (2) to (4).

(2) Where an annual payment is also payable to a survivor of a qualifying member and—

(a) there is only one surviving dependant, the amount of the annual payment shall be—

$0.5×Q2+D;$

(b) there are two or more surviving dependants, the amount of the annual payment shall be—

$(0.5×Q)+DN.$

(3) Where an annual payment is not payable to a survivor of a qualifying member and—

(a) there is only one surviving dependant, the amount of the annual payment shall be—

$Q2+S+D;$

(b) there are two or more surviving dependants, the amount of the annual payment shall be—

$Q+S+DN.$

(4) Where—

(a) a survivor of a qualifying member dies;

(b) a person ceases to be a surviving dependant of a qualifying member; or

the annual payment payable to a surviving dependant of that qualifying member shall be redetermined with effect from the day after the day on which the event referred to in paragraphs (a) to (c) occurred.

Rounding

5

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

Annual increases to an annual payment

6

(1) Except where there is no percentage increase in the general level of prices for the period of 12 months ending with 31st May last falling before the indexation date, a beneficiary entitled to an annual amount determined in accordance with this Schedule shall be entitled, on each indexation date after the day on which the transfer notice is given, to an increase of—

(a) the appropriate percentage of the amount of the underlying rate immediately before that date; or

(b) where the beneficiary first became entitled to an annual payment during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the annual payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—the percentage increase in the general level of prices for the period of 12 months ending with the 31st May last falling before the indexation date; and2.5%;

“underlying rate” means the aggregate of—the product of X multiplied by—where the beneficiary is a qualifying member or a survivor or surviving dependant of a qualifying member who died on or after the calculation date—where the qualifying member is not a qualifying member to whom regulation 17D applied, so much of the revalued notional pension as is attributable to post-1997 service; orwhere the qualifying member is a qualifying member to whom regulation 17D applied, so much of the sum of R-A as is attributable to post-1997 service; andwhere the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, so much of the survivor notional pension as is attributable to the qualifying member’s post-1997 service;where the beneficiary is a qualifying member, 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 was given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17(11);where the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, 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;where the beneficiary is a survivor or a surviving dependant of a qualifying member who died on or after the calculation date but before the day on which the transfer notice was given, the sum of—the product of X multiplied by 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 regulation 17(11); andthe total amount of any annual increases which the scheme manager considers could have been paid to the beneficiary 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 regulation 17(11);where the beneficiary is the survivor or surviving dependant of a qualifying member who died after the day on which the transfer notice was given, the product of X multiplied by the sum of—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 was given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17(11); andthe total amount of any annual increases to which the qualifying member was entitled in accordance with sub-paragraph (1) on the day on which the qualifying member died; andany annual increases to which the beneficiary is entitled under this Schedule immediately before the indexation date;

“post-1997 service” means—pensionable service (either actual or notional) which occurred on or after 6th April 1997; orwhere the pension was payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred on or after 6th April 1997;

“X” means—1, where the beneficiary is the qualifying member or a survivor or surviving dependant in respect of whom a survivor notional pension has been determined;0.5, where the beneficiary is a survivor who is neither—a survivor to whom paragraph 3(1)(b)(ii) applies; nora survivor in respect of whom a survivor notional pension has been determined;the product of 0.5 divided by Y, where the beneficiary is a survivor to whom paragraph 3(1)(b)(ii) applies;the product of 1 divided by Z, where the beneficiary is a surviving dependant in respect of whom a survivor notional pension has not been determined and the qualifying member does not have a survivor; orthe product of 0.5 divided by Z, where the beneficiary is a surviving dependant in respect of whom a survivor notional pension has not been determined and an annual payment is also payable to a survivor of the qualifying member;

“Y” means the number of survivors of the qualifying member; and

“Z” means—where there is only one surviving dependant, 2; orwhere there is more than one surviving dependant, the number of surviving dependants of the qualifying member.

(3) In determining the underlying rate where a qualifying member is a qualifying member to whom regulation 17D applied, the amount of R-A that is attributable to post-1997 service is determined by attributing the sum to pre-1997 service and post-1997 service in the same proportions as the revalued notional pension would have been attributed had regulation 17D not applied.

SCHEDULE4 — Determination of annual payments where a present payment was being received on the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010

Introductory

1

(1) This Schedule applies for the purposes of determining the amount of an annual payment payable to a beneficiary to whom regulation 17(8)(g) to (k) or (16)(b) applies.

(2) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before a transfer notice is given, a debt to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the annual payment which would otherwise be payable under this Schedule is to be reduced, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(3) Sub-paragraph (5) applies where the scheme manager is satisfied that the sum of the interim pension paid to a beneficiary and any payment made under these Regulations in respect of any year in the period determined in accordance with sub-paragraph (4) is higher or lower than the sum of—

(a) the notional pension, or the survivor notional pension, as the case may be; and

(b) any annual increases or proportion of annual increases, which the scheme manager considers could have been paid in respect of that year, taking into account—

(i) the determination under regulation 27(1)(d); and

(ii) the proportion of that year which falls after the 1st January.

(4) For the purposes of sub-paragraph (3), the period is the period from—

(a) the earlier of—

(i) the day on which the beneficiary became entitled to a payment under these Regulations; and

(ii) the day on which the beneficiary became entitled under the scheme rules to a pension or other benefit; or

(b) the day on which the qualifying pension scheme began to be wound up if that is later than the day determined in accordance with paragraph (a),

until the day on which the scheme manager gave a transfer notice to the scheme trustees or managers.

(5) Where this sub-paragraph applies, the scheme manager may—

(a) determine the amount by which the annual payment which would otherwise be payable under this Schedule in respect of the beneficiary is to be reduced, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the notional pension or survivor notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii) the amount of any payments made under these Regulations prior to the scheme manager giving the transfer notice; and

(iv) such other matters as the scheme manager considers relevant; and

(b) where the sum of the interim pension paid and any payments made under these Regulations in respect of any year is lower than the sum of the amounts referred to in sub-paragraph (3)(a) and (b) in respect of that year, make a payment to the beneficiary or, where the beneficiary has died prior to the scheme manager making this determination, to the beneficiary’s estate, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the notional pension or survivor notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii) the amount of any payments made under these Regulations prior to the scheme manager giving the transfer notice; and

(iv) such other matters as the scheme manager considers relevant.

(6) In this Schedule—

“relevant date” means 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); and

“relevant proportion”, in relation to a beneficiary, means the proportion of the notional pension which relates to the beneficiary.

(7) Where—

(a) the beneficiary is a qualifying member to whom regulation 17H applied; and

(b) the scheme manager made a determination in accordance with paragraph 1(2) or (5) of Schedule 7, to reduce the payment under that Schedule by any amount,

the scheme manager shall reduce the amount of the annual payment payable under this Schedule by the same amount.

Qualifying members

2

Where this Schedule applies, the annual payment payable to a qualifying member shall be the sum of—

(a) the notional pension determined in respect of the qualifying member; and

(b) 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,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2), (5) or (7).

Survivors

3

Where this Schedule applies, the annual payment payable to a survivor of a qualifying member shall be—

(a) where regulation 17(8)(h) or (i) applies, the amount which is the sum of—

(i) the survivor notional pension determined in respect of that survivor; and

(ii) 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 day after the qualifying member died until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5);

(b) where regulation 17(8)(j) applies, the amount which is the sum of—

(i) the proportion of the notional pension which relates to a pension payable to the survivor;

(ii) 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 qualifying member died; and

(iii) 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 was given;

(i) the proportion of the notional pension which relates to a pension payable to the survivor;

(ii) 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 transfer notice was given; and

(iii) 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; and

(d) where regulation 17(17)(b) applies, the relevant proportion of the payment to which the qualifying member was entitled in accordance with Schedule 7 immediately before the qualifying member died.

Surviving Dependants

4

Where this Schedule applies, the annual payment payable to a surviving dependant of a qualifying member shall be—

(a) where regulation 17(8)(h) or (i) applies, the amount which is the sum of—

(i) the survivor notional pension determined in respect of that surviving dependant; and

(ii) 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 day after the qualifying member died until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5);

(b) where regulation 17(8)(j) applies, the amount which is the sum of—

(i) the proportion of the notional pension which relates to a pension payable to the surviving dependant;

(ii) the relevant proportion of the 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 qualifying member died; and

(iii) 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 was given;

(i) the proportion of the notional pension which relates to a pension payable to the surviving dependant;

(ii) 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 transfer notice was given; and

(iii) 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; and

(d) where regulation 17(17)(b) applies, the relevant proportion of the payment to which the qualifying member was entitled in accordance with Schedule 7 immediately before the qualifying member died.

Redetermination

5

(1) This paragraph applies where the notional pension or survivor notional pension includes an amount in respect of an amount which under scheme rules—

(a) would be payable for a period which is shorter than the period in respect of which the remainder of a pension would be payable; or

(b) would be payable as a result of a qualifying member dying within a period specified in scheme rules which begins on the day on which the member became entitled to a pension from the scheme, or the day on which the pension was first paid.

(2) Where this paragraph applies, the scheme manager shall redetermine the annual payment payable to the beneficiary with effect from the date on which the amount referred to in sub-paragraph (1)(a) would have ceased to be payable, or the period referred to in sub-paragraph (1)(b) would have ended.

(3) When redetermining an annual payment under sub-paragraph (2), the scheme manager shall redetermine the notional pension or survivor notional pension having regard to the amount referred to in sub-paragraph (1).

Rounding

6

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

Annual increases to an annual payment

7

(1) Except where there is no percentage increase in the general level of prices for the period of 12 months ending with 31st May last falling before the indexation date, where the asset share determined in respect of the beneficiary was sufficient to be applied to the amounts referred to in regulation 27(7)(a)(ii) or (10)(a)(ii), a beneficiary shall be entitled, on each indexation date after the day on which the transfer notice is given, to an increase of—

(a) the appropriate percentage of the amount of the underlying rate immediately before that date; or

(b) where the beneficiary first became entitled to an annual payment during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the annual payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—the percentage increase in the general level of prices for the period of 12 months ending with 31st May last falling before the indexation date; and2.5%;

“underlying rate” means—where the beneficiary is a qualifying member or a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, the aggregate of—so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) or (10)(a)(ii) could be increased;the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension, or survivor notional pension, as the case may be, from the relevant date until the day on which the transfer notice is given; andany annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date;where the beneficiary is a survivor or surviving dependant of a qualifying member who died after the day on which the transfer notice was given, the aggregate of—the relevant proportion of so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) could be increased;the relevant proportion of the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid to the qualifying member on the notional pension from the relevant date until the day on which the transfer notice is given;the relevant proportion of any annual increases to which the qualifying member was entitled in accordance with this Schedule on the day on which the qualifying member died; andany annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date; andwhere the beneficiary is a survivor or surviving dependant of a qualifying member who died after the calculation date but prior to the day on which the transfer notice was given, the aggregate of—the relevant proportion of so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) could be increased;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 relevant date until the day on which the qualifying member died;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 was given; andany annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date.

(3) In the definition of “underlying rate” in sub-paragraph (2), the reference to annual payments is to the amount of annual payment prior to any reduction made by the scheme manager under paragraph 1(2) or (5).

SCHEDULE5 — Determination of certain ill health payments

Introductory

1

(1) This Schedule applies for the purposes of determining the amount of an ill health payment payable to a beneficiary to whom regulation 17A(8)(b) to (e) applies.

(2) In this Schedule—

“A” means—where the qualifying member is a qualifying member to whom regulation 17D applied, the amount by which the qualifying member’s ill health payment has been commuted; andin all other cases, nil;

“B” means—where either or both sub-paragraphs (3) or (6) apply, the amount by which the scheme manager determines the ill health payment which would otherwise be payable under this Schedule is to be reduced;where the beneficiary is a qualifying member to whom regulation 17H applied, the amount, if any, by which the scheme manager determined the payment which would otherwise have been payable under Schedule 7 should be reduced; andin all other cases, nil;

“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 for the purposes of this Schedule, 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;

“D” means—subject to paragraph (b), where sub-paragraph (4) of paragraph 4 applies, the total amount of annual increases to which any surviving dependant was entitled under this Schedule on the day on which the event referred to in paragraphs (a) to (c) of that sub-paragraph occurred;where paragraph 4(4)(a) applies and, as a result, the ill health payment payable to a surviving dependant is redetermined under paragraph 4(3)(a), nil; andin all other cases, nil;

“J” means—where the qualifying member became entitled to an ill health payment or began to receive a present payment from the qualifying scheme prior to the day on which the transfer notice was given, 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 regulation 17A (11); andin all other cases, nil;

“N” means—in paragraph 3, the number of survivors of that qualifying member; andin paragraph 4, the number of surviving dependants of that qualifying member;

“Q” means the sum of—the product of C multiplied by the revalued notional pension in respect of the qualifying member;the total amount of any annual increases which the scheme manager considers could have been paid, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17A(11), from the relevant date until the earlier of—the day on which the transfer notice is given; andthe day on which the qualifying member died;where the qualifying member died after the calculation date but before the day on which the transfer notice was given, double the total amount of any annual increases which the scheme manager considers could have been paid to a survivor (on the basis that there is one 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 regulation 17A(11); andthe total amount of any annual increases to which the qualifying member was entitled in accordance with paragraph 6 on the day on which the qualifying member died,less, where the qualifying member was a qualifying member to whom regulation 17D applied, the amount by which the qualifying member’s ill health payment has been commuted;

“R” means the revalued notional pension as construed in accordance with regulation 17A(10);

“S” means—where paragraph 3(2) applies, the total amount of annual increases to which any survivor was entitled under this Schedule on the day on which the survivor died;where sub-paragraph (4) of paragraph 4 applies, the total amount of annual increases to which any survivor was entitled under this Schedule on the day on which the event referred to in paragraphs (a) to (c) of that sub-paragraph occurred; andin all other cases, nil;

“relevant date” means—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;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; andin 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).

(3) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before a transfer notice is given, a debt to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the ill health payment which would otherwise be payable under this Schedule is to be reduced, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(4) Sub-paragraph (6) applies where the scheme manager is satisfied that the sum of the interim pension paid to a beneficiary and any payment made under these Regulations in respect of any year in the period determined in accordance with sub-paragraph (5) is higher or lower than the sum of—

(a) the revalued notional pension, or the survivor notional pension, as the case may be; and

(b) any annual increases or proportion of annual increases, which the scheme manager considers could have been paid in respect of that year, taking into account—

(i) the determination under regulation 27(1)(d);

(ii) the revaluation amount determined in accordance with regulation 17A(11); and

(iii) the proportion of that year which falls after the 1st January.

(5) For the purposes of sub-paragraph (4), the period is the period from—

(a) the earlier of—

(i) the day on which the beneficiary became entitled to a payment under these Regulations; and

(ii) the day on which the beneficiary became entitled under the scheme rules to a pension or other benefit; or

(b) the day on which the qualifying pension scheme began to be wound up if that is later than the day determined in accordance with paragraph (a),

until the day on which the scheme manager gave a transfer notice to the scheme trustees or managers.

(6) Where this sub-paragraph applies, the scheme manager may—

(a) determine the amount by which the annual payment which would otherwise be payable under this Schedule in respect of the beneficiary is to be reduced, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the revalued notional pension or survivor notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii) the amount of any payments made under these Regulations prior to the scheme manager giving the transfer notice; and

(iv) such other matters as the scheme manager considers relevant; and

(b) where the sum of the interim pension paid and any payments made under these Regulations in respect of any year is lower than the sum of the amounts referred to in sub-paragraph (4)(a) and (b) in respect of that year, make a payment to the beneficiary or, where the beneficiary has died prior to the scheme manager making this determination, to the beneficiary’s estate, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the revalued notional pension or survivor notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii) the amount of any payments made under these Regulations prior to the scheme manager giving the transfer notice; and

(iv) such other matters as the scheme manager considers relevant.

Amount of an ill health payment – qualifying members

2

The ill health payment payable to a qualifying member to whom this Schedule applies shall be—

$(C×R)−A+J−B.$

Amount of an ill health payment - survivors

3

(1) Where this Schedule applies, the ill health payment payable to a survivor of a qualifying member shall be—

(a) where regulation 17A(8)(e) applies, the amount which is the sum of—

(i) the survivor notional pension determined in respect of that survivor; and

(ii) 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,

less the amount, if any, by which the scheme manager determines the payment should be reduced in accordance with paragraph 1(3) or (6); and

(b) where regulation 17A(8)(c) or (d) applies—

(i) where sub-paragraph (ii) does not apply—

$Q2+S;$

(ii) where the qualifying member was a party to a polygamous marriage—

$(0.5×Q)+SN.$

(2) Where a survivor to whom sub-paragraph (1)(b)(ii) applies dies, the ill health payment payable to all remaining survivors of the qualifying member shall be redetermined with effect from the day after the day on which the survivor died.

Amount of an ill health payment - surviving dependants

4

(1) Where this Schedule applies, the ill health payment payable to a surviving dependant of a qualifying member shall be—

(a) where regulation 17A(8)(e) applies, the amount which is the sum of—

(i) the survivor notional pension determined in respect of that surviving dependant; and

(ii) 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,

less the amount, if any, by which the scheme manager determines the payment should be reduced in accordance with paragraph 1(3) or (6); and

(b) where regulation 17A(8)(b) to (d) applies, determined in accordance with sub-paragraphs (2) to (4).

(2) Where an ill health payment is also payable to a survivor of a qualifying member and—

(a) there is only one surviving dependant, the amount of the ill health payment shall be—

$0.5×Q2+D;$

(b) there are two or more surviving dependants, the amount of the ill health payment shall be—

$(0.5×Q)+DN.$

(3) Where an ill health payment is not payable to a survivor of a qualifying member and—

(a) there is only one surviving dependant, the amount of the ill health payment shall be—

$Q2+S+D;$

(b) there are two or more surviving dependants, the amount of the ill health payment shall be—

$Q+S+DN.$

(4) Where—

(a) a survivor of a qualifying member dies;

(b) a person ceases to be a surviving dependant of a qualifying member; or

the ill health payment payable to a surviving dependant of that qualifying member shall be redetermined with effect from the day after the day on which the event referred to in paragraphs (a) to (c) occurred.

Rounding

5

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

Annual increases to an ill health payment

6

(1) Except where there is no percentage increase in the general level of prices for the period of 12 months ending with 31st May last falling before the indexation date, a beneficiary entitled to an amount determined in accordance with this Schedule shall be entitled, on each indexation date after the day on which the transfer notice is given, to an increase of—

(a) the appropriate percentage of the amount of the underlying rate immediately before that date; or

(b) where the beneficiary first became entitled to an ill health payment during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the ill health payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—the percentage increase in the general level of prices for the period of 12 months ending with the 31st May last falling before the indexation date; and2.5%;

“underlying rate” means the aggregate of—the product of X multiplied by (C x V);where the beneficiary is a qualifying member, 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 was given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17A(11);where the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, 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;where the beneficiary is a survivor or a surviving dependant of a qualifying member who died on or after the calculation date but before the day on which the transfer notice was given, the sum of—the product of X multiplied by 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 regulation 17A(11); andthe total amount of any annual increases which the scheme manager considers could have been paid to the beneficiary 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 regulation 17A(11);where the beneficiary is the survivor or surviving dependant of a qualifying member who died after the day on which the transfer notice was given, the product of X multiplied by the sum of—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 was given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17A(11); andthe total amount of any annual increases to which the qualifying member was entitled in accordance with sub-paragraph (1) on the day on which the qualifying member died; andany annual increases to which the beneficiary is entitled under this Schedule immediately before the indexation date;

“post-1997 service” means—pensionable service (either actual or notional) which occurred on or after 6th April 1997; orwhere the pension was payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred on or after 6th April 1997;

“V” means—where the beneficiary is a qualifying member or a survivor or surviving dependant of a qualifying member who died on or after the calculation date—where the qualifying member is not a qualifying member to whom regulation 17D applied, so much of the revalued notional pension as is attributable to post-1997 service; orwhere the qualifying member is a qualifying member to whom regulation 17D applied, so much of the sum of R-A as is attributable to post-1997 service; andwhere the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, so much of the survivor notional pension as is attributable to the qualifying member’s post 1997 service;

“W” means the amount of any annual increases to which the qualifying member was entitled in accordance with sub-paragraph (1) on the day on which the qualifying member died;

“X” means—1, where the beneficiary is the qualifying member or a survivor or surviving dependant in respect of whom a survivor notional pension has been determined;0.5, where the beneficiary is a survivor who is neither—a survivor to whom paragraph 3(1)(b)(ii) applies; nora survivor in respect of whom a survivor notional pension has been determined;the product of 0.5 divided by Y, where the beneficiary is a survivor to whom paragraph 3(1)(b)(ii) applies;the product of 1 divided by Z, where the beneficiary is a surviving dependant in respect of whom a survivor notional pension has not been determined and the qualifying member does not have a survivor; orthe product of 0.5 divided by Z, where the beneficiary is a surviving dependant in respect of whom a survivor notional pension has not been determined and an annual payment is also payable to a survivor of the qualifying member;

“Y” means the number of survivors of the qualifying member; and

“Z” means—where there is only one surviving dependant, 2; orwhere there is more than one surviving dependant, the number of surviving dependants of the qualifying member.

(3) In determining the underlying rate where a qualifying member is a qualifying member to whom regulation 17D applied, the amount of R-A that is attributable to post-1997 service is determined by attributing the sum to pre-1997 service and post-1997 service in the same proportions as the revalued notional pension would have been attributed had regulation 17D not applied.

SCHEDULE6 — Determination of ill health payments where a present payment was being received on the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010

Introductory

1

(1) This Schedule applies for the purposes of determining the amount of an ill health payment payable to a beneficiary to whom regulation 17A(8)(f) to (i) applies.

(2) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before a transfer notice is given, a debt to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the ill health payment which would otherwise be payable under this Schedule is to be reduced, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(3) Sub-paragraph (5) applies where the scheme manager is satisfied that the sum of the interim pension paid to a beneficiary and any payment made under these Regulations in respect of any year in the period determined in accordance with sub-paragraph (4) is higher or lower than the sum of—

(a) the notional pension, or the survivor notional pension, as the case may be; and

(b) any annual increases or proportion of annual increases, which the scheme manager considers could have been paid in respect of that year, taking into account—

(i) the determination under regulation 27(1)(d); and

(ii) the proportion of that year which falls after the 1st January.

(4) For the purposes of sub-paragraph (3), the period is the period from—

(a) the earlier of—

(i) the day on which the beneficiary became entitled to a payment under these Regulations; and

(ii) the day on which the beneficiary became entitled under the scheme rules to a pension or other benefit; or

(b) the day on which the qualifying pension scheme began to be wound up if that is later than the day determined in accordance with paragraph (a),

until the day on which the scheme manager gave a transfer notice to the scheme trustees or managers.

(5) Where this sub-paragraph applies, the scheme manager may—

(a) determine the amount by which the annual payment which would otherwise be payable under this Schedule in respect of the beneficiary is to be reduced, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the notional pension or survivor notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii) the amount of any payments made under these Regulations prior to the scheme manager giving the transfer notice; and

(iv) such other matters as the scheme manager considers relevant; and

(b) where the sum of the interim pension paid and any payments made under these Regulations in respect of any year is lower than the sum of the amounts referred to in sub-paragraph (3)(a) and (b) in respect of that year, make a payment to the beneficiary or, where the beneficiary has died prior to the scheme manager making this determination, to the beneficiary’s estate, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the notional pension or survivor notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii) the amount of any payments made under these Regulations prior to the scheme manager giving the transfer notice; and

(iv) such other matters as the scheme manager considers relevant.

(6) In this Schedule—

“relevant date” means 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); and

“relevant proportion”, in relation to a beneficiary, means the proportion of the notional pension which relates to the beneficiary.

(7) Where—

(a) the beneficiary is a qualifying member to whom regulation 17H applied; and

(b) the scheme manager made a determination in accordance with paragraph 1(2) or (5) of Schedule 7, to reduce the payment under that Schedule by any amount,

the scheme manager shall reduce the amount of the ill health payment payable under this Schedule by the same amount.

Qualifying members

2

Where this Schedule applies, the ill health payment payable to a qualifying member shall be the sum of—

(a) the notional pension determined in respect of the qualifying member; and

(b) 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,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2), (5) or (7).

Survivors

3

Where this Schedule applies, the ill health payment payable to a survivor of a qualifying member shall be—

(a) where regulation 17A(8)(g) applies, the amount which is the sum of —

(i) the survivor notional pension determined in respect of that survivor; and

(ii) 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 day after the qualifying member died until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5);

(b) where regulation 17(8)(h) applies, the amount which is the sum of—

(i) the proportion of the notional pension which relates to a pension payable to the survivor;

(ii) the relevant proportion of the 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 qualifying member died; and

(iii) 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 was given; and

(i) the proportion of the notional pension which relates to a pension payable to the survivor;

(ii) 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 transfer notice was given; and

(iii) 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.

Surviving Dependants

4

Where this Schedule applies, the ill health payment payable to a surviving dependant of a qualifying member shall be—

(a) where regulation 17A(8)(g) applies, the amount which is the sum of—

(i) the survivor notional pension determined in respect of that surviving dependant; and

(ii) 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 day after the qualifying member died until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5);

(b) where regulation 17A(8)(h) applies, the amount which is the sum of—

(i) the proportion of the notional pension which relates to a pension payable to the surviving dependant;

(ii) the relevant proportion of the 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 qualifying member died; and

(iii) 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 was given; and

(i) the proportion of the notional pension which relates to a pension payable to the surviving dependant;

(ii) 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 transfer notice was given; and

(iii) 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.

Redetermination

5

(1) This paragraph applies where the notional pension or survivor notional pension includes an amount in respect of an amount which under scheme rules—

(a) would be payable for a period which is shorter than the period in respect of which the remainder of a pension would be payable; or

(b) would be payable as a result of a qualifying member dying within a period specified in scheme rules which begins on the day on which the member became entitled to a pension from the scheme, or the day on which the pension was first paid.

(2) Where this paragraph applies, the scheme manager shall redetermine the ill health payment payable to the beneficiary with effect from the date on which the amount referred to in sub-paragraph (1)(a) would have ceased to be payable, or the period referred to within sub-paragraph (1)(b) would have ended.

(3) When redetermining an ill health payment under sub-paragraph (2), the scheme manager shall redetermine the notional pension or survivor notional pension having regard to the amount referred to in sub-paragraph (1).

Rounding

6

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

Annual increases to an ill health payment

7

(1) Except where there is no percentage increase in the general level of prices for the period of 12 months ending with 31st May last falling before the indexation date, where the asset share determined in respect of the beneficiary was sufficient to be applied to the amounts referred to in regulation 27(7)(a)(ii) or (10)(a)(ii), a beneficiary shall be entitled, on each indexation date after the day on which the transfer notice is given, to an increase of—

(a) the appropriate percentage of the amount of the underlying rate immediately before that date; or

(b) where the beneficiary first became entitled to an ill health payment during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the ill health payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—the percentage increase in the general level of prices for the period of 12 months ending with 31st May last falling before the indexation date; and2.5%; and

“underlying rate” means—where the beneficiary is a qualifying member or a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, the aggregate of—so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) or (10)(a)(ii) could be increased;the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension, or survivor notional pension, as the case may be, from the relevant date until the day on which the transfer notice is given; andany annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date;where the beneficiary is a survivor or surviving dependant of a qualifying member who died after the day on which the transfer notice was given, the aggregate of—the relevant proportion of so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) could be increased;the relevant proportion of the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid to the qualifying member on the notional pension from the relevant date until the day on which the transfer notice is given;the relevant proportion of any annual increases to which the qualifying member was entitled in accordance with this Schedule on the day on which the qualifying member died; andany annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date; andwhere the beneficiary is a survivor or surviving dependant of a qualifying member who died after the calculation date but prior to the day on which the transfer notice was given, the aggregate of—the relevant proportion of so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) could be increased;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 relevant date until the day on which the qualifying member died;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 was given; andany annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date.

(3) In the definition of “underlying rate” in sub-paragraph (2), the reference to annual payments is to the amount of annual payment prior to any reduction made by the scheme manager under paragraph 1(2) or (5).

SCHEDULE7 — Determination of payments to early retirees and other beneficiaries

Introductory

1

(1) This Schedule applies for the purposes of determining the amount of a payment payable to a person to whom regulation 17G or 17H applies.

(2) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before a transfer notice is given, a debt to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the payment which would otherwise be payable under this Schedule is to be reduced, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(3) Sub-paragraph (5) applies where the scheme manager is satisfied that the amount of interim pension paid to a beneficiary in respect of any year in the period determined in accordance with sub-paragraph (4) is higher or lower than the sum of—

(a) the notional pension; and

(b) any annual increases or proportion of annual increases, which the scheme manager considers could have been paid in respect of that year, taking into account—

(i) the determination under regulation 27(1)(d); and

(ii) the proportion of that year which falls after the 1st January.

(4) For the purposes of sub-paragraph (3), the period is the period from the later of—

(a) the day on which the beneficiary began to receive a payment from the scheme; and

(b) the day on which the qualifying pension scheme began to be wound up,

until the day on which the scheme manager gave a transfer notice to the scheme trustees or managers.

(5) Where this sub-paragraph applies, the scheme manager may—

(a) determine the amount by which the payment which would otherwise be payable under this Schedule in respect of the beneficiary is to be reduced, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid; and

(iii) such other matters as the scheme manager considers relevant; and

(b) where the interim pension paid in respect of any year is lower than the sum referred to in sub-paragraph (3) in respect of that year, make a payment to the beneficiary or, where the beneficiary has died prior to the scheme manager making this determination, to the beneficiary’s estate, having regard to—

(i) the amount of interim pension which was paid to the beneficiary;

(ii) the amount of the sum of—

(aa) the notional pension; and

(bb) any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid; and

(iii) such other matters as the scheme manager considers relevant.

Amount of the payment where regulation 17G applies

2

Where a person is entitled to a payment in accordance with regulation 17G, the amount of that payment shall be sum of—

(a) the amount of the notional pension determined in respect of that person; and

(b) 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 day on which the scheme’s liability to provide a pension or other benefit to the person arose until the day on which the transfer notice was given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5).

Amount of the payment where regulation 17H applies

3

Where a qualifying member is entitled to a payment in accordance with regulation 17H, the amount of that payment shall be the sum of—

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

(b) 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 later of—

(i) the date on which the qualifying member began to receive a present payment from the scheme; and

(ii) the date on which the scheme began to be wound up,

until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5).

Annual increases

4

(1) Except where there is no percentage increase in the general level of prices for the period of 12 months ending with 31st May last falling before the indexation date, where the asset share determined in respect of a person to whom an amount is payable in accordance with this Schedule was sufficient to be applied to annual increases, that person shall be entitled, on each indexation date after the day on which the transfer notice is given, to an increase of—

(a) the appropriate percentage of the amount of the underlying rate immediately before that date; or

(b) where that person first became entitled to a payment in accordance with regulation 17G or 17H during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—the percentage increase in the general level of prices for the period of 12 months ending with 31st May last falling before the indexation date; and2.5%;

“relevant date” means—in the cases of a person to whom regulation 17G applies, the day on which the scheme’s liability to provide a pension or other benefit to the person arose; andin the case of a person to whom regulation 17H applies, the later of—the day from which the beneficiary began to receive a present payment from the scheme; andthe day on which the scheme began to be wound up.

“underlying rate” means—the aggregate of—where regulation 17G applies, so much of the payment as the scheme manager determined under regulation 27(7)(b)(ii) could be increased; andwhere regulation 17H applies, so much of the payment as the scheme manager determined under regulation 27(7)(a)(ii) could be increased;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; andany annual increases to which the person is entitled in accordance with sub-paragraph (1) immediately before the indexation date.

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