The Financial Assistance Scheme Regulations 2005

• (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

• (c) where regulation 17A(8)(i) 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 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

• (c) where regulation 17A(8)(i) 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 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.

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

Meaning of “the FAS cap”

17AA

• (1) This regulation gives the meaning of “the FAS cap” for the purposes of—

• (a) Schedule 2 (determination of annual and initial payments); and

• (b) Schedule 2A (determination of ill health and interim ill health payments).

• (2) In this regulation, “the standard amount” means the appropriate amount given in—

• (a) paragraph 7(3) of Schedule 2 in the case of an annual or initial payment; and

• (b) paragraph 7(3) of Schedule 2A in the case of an ill health or interim ill health payment.

• (3) The FAS cap for or in respect of a person who has 20 or fewer years of pensionable service at the time when the person first becomes entitled to an annual payment or (as the case may be) an ill health payment is the standard amount.

• (4) Subject to paragraph (6), the FAS cap for or in respect of a person who has more than 20 years of pensionable service at that time is the sum of—

• (a) the standard amount, and

• (b) for each whole year of pensionable service that exceeds 20 years of pensionable service, the amount found by multiplying the standard amount by 3%.

• (5) If the total amount calculated under paragraph (4)(b) would exceed the standard amount, it is to be treated as being equal to the standard amount.

• (6) The FAS cap for the purposes of determining the amount of an initial payment or an interim ill health payment is the standard amount.

• (7) In any case where—

• (a) the scheme manager cannot determine the length of some or all of a person’s pensionable service under the scheme rules; or

• (b) the person has benefits under the rules which are not attributable to a particular period of pensionable service,

the scheme manager must treat the person as having a length of pensionable service as the scheme manager considers appropriate (which is in addition to any other pensionable service the person has for the purposes of this regulation), having regard to the scheme rules and to such other information as the scheme manager considers relevant.

• (8) When calculating a person’s pensionable service for the purpose of determining the amount of the FAS cap in relation to a qualifying pension scheme, no account is to be taken of any pensionable service that the person may have under a different pension scheme.

• (9) A person who is regarded as a qualifying member under regulation 15(5) (qualifying members) must be treated for the purposes of this regulation as having pensionable service of the same length as the deceased former member (which is in addition to any pensionable service that the person is treated as having under paragraph (7)).

• (10) A pension credit member credited with a length of notional pensionable service because of pension credit rights must be treated for the purposes of this regulation as having pensionable service of that length (which is in addition to any pensionable service that the person is treated as having under paragraph (7)).

Interim ill health payments

Annual payments for certain applications in cases of severe ill health

Lump sum payments

Redetermination of an annual payment previously determined in accordance with Schedule 4

Redetermination of an ill health payment previously determined in accordance with Schedule 6

Payments to beneficiaries other than qualifying members, survivors and surviving dependants

Payments to qualifying members receiving a pension from the qualifying pension scheme before entitlement to an annual payment or ill health payment

Initial payments

Death benefit guarantees