Scottish Parliamentary Pensions Act 2009

SCHEDULE 1 Scottish Parliamentary Pension Scheme

(introduced by section 1(1))

1 This schedule sets out the rules of the Scottish Parliamentary Pension Scheme (“the scheme”).

Part A The Pension Fund

The Pension Fund

2 “The Pension Fund” means the Scottish Parliamentary Contributory Pension Fund.

Payments to and from Fund

3 (1) The following payments are to be made from the Pension Fund—

(a) all pensions and lump sums payable under the scheme, and

(b) all amounts payable by the Fund trustees under the scheme.

(2) The Fund trustees must pay all sums they receive under the scheme into the Pension Fund.

Part B Fund trustees

Fund trustees

4 The “Fund trustees” are the individuals appointed under and holding office in accordance with this Part.

Functions

5 The Fund trustees' principal function is to administer the Pension Fund, and to manage and apply its assets, in accordance with the scheme.

Number of trustees

6 There are to be at least 3 but no more than 6 Fund trustees.

Eligibility

7 A person who is prevented by the Pensions Act 1995 (c. 26), or by any other enactment or rule of law, from being a pension scheme trustee is barred from being a Fund trustee.

Appointment of Fund trustees

8 (1) The Scottish Parliament may resolve to appoint as a Fund trustee any individual nominated by the SPCB as suitable to hold that office.

(2) The SPCB must, when deciding who to nominate—

(a) do its best to ensure that the Fund trustees include a participating member and a scheme pensioner, and

(b) have regard to any recommendation by the incumbent Fund trustees.

(3) A Fund trustee appointment has immediate effect (unless the Scottish Parliament resolves otherwise).

(4) The Court of Session may appoint a Fund trustee only on an application under section 19(2) of the Trusts (Scotland) Act 1921 (c. 58).

(5) The Fund trustees do not have power to assume new trustees.

Remuneration, allowances and expenses

9 (1) A Fund trustee may be remunerated, or receive allowances, from the Pension Fund for acting as a Fund trustee only if the following conditions are met—

Condition 1	The Fund trustee is not a scheme member (or a pension credit member).
Condition 2	The other Fund trustees (if any), before appointment, recommend to the SPCB that the Fund trustee be remunerated or entitled to allowances.
Condition 3	The SPCB’s nomination to the Scottish Parliament specifies that remuneration or allowances are to be paid.

(2) Expenses properly incurred by the Fund trustees in connection with the performance of their functions are to be paid from the Pension Fund.

Resignation

10 (1) A Fund trustee may resign by giving notice of resignation to—

(a) the Presiding Officer, and

(b) the other Fund trustees.

(2) A resignation has effect immediately on the notice of resignation being given.

(3) This rule does not apply where there is a sole trustee.

Removal

11 (1) A Fund trustee is removed from office only if—

(a) the Scottish Parliament resolves to end the Fund trustee’s tenure,

(b) the Fund trustee becomes barred from being a Fund trustee (see rule 7), or

(c) the Fund trustee’s tenure ends under rule 12.

(2) A Parliamentary resolution passed on a division for the purposes of this rule has effect only if voted for by at least two-thirds of the voting MSPs.

Change of status

12 (1) This rule applies—

(a) where a Fund trustee who was a participating member when appointed becomes a deferred pensioner or a scheme pensioner,

(b) where a Fund trustee who was a deferred pensioner when appointed—

(i) becomes a participating member or a scheme pensioner, or

(ii) has his or her rights to receive scheme benefits extinguished under rule 80, and

(c) where a Fund trustee who was a scheme pensioner when appointed becomes an MSP or the holder of a pensionable office.

(2) Where this rule applies—

(a) the Fund trustee must give notice of change of circumstance to—

(i) the Presiding Officer, and

(ii) the other Fund trustees, and

(b) the Fund trustee’s tenure ends 6 months after the change of circumstance occurs (unless the Scottish Parliament resolves otherwise).

Member-nominated trustees

13 Nothing in the scheme overrides section 241 of the Pensions Act 2004 (c. 35).

Accordingly—

(a) the SPCB must nominate as suitable to be a Fund trustee any individual who the Fund trustees recommend for the purposes of fulfilling their obligations under that section, and

(b) rule 6 does not prevent the SPCB from so nominating an individual (or the appointment of an individual) if the appointment—

(i) would result in more than 6 Fund trustees holding office, and

(ii) would ensure that at least one-third of the Fund trustees are appointed in accordance with that section.

Procedure

14 The Fund trustees may regulate their own procedure (in so far as not regulated by the scheme).

Quorum

15 A meeting of the Fund trustees is quorate if—

(a) 3 or more Fund trustees are present, or

(b) where fewer than 3 Fund trustees hold office, if both trustees are (or the sole trustee is) present.

Staff and advisers

16 The Fund trustees may—

(a) employ staff on such terms as they think fit,

(b) seek advice from any person.

Fund management

17 The Fund trustees must monitor the performance of any fund manager they appoint.

Indemnity insurance

18 The Fund trustees may obtain insurance designed to indemnify them against any personal liability arising in connection with the performance (or purported performance) of their functions.

Delegation

19 (1) The Fund trustees may authorise any person (including one or more of themselves) to perform, or to authorise others to perform, any of their functions to the extent authorised.

(2) An authorisation does not affect the Fund trustees' responsibility for delegated functions or their ability to perform those functions themselves.

Validity of acts

20 (1) A decision, authorisation or other act of the Fund trustees is not invalidated—

(a) by any change to the individuals (or to the status or eligibility of individuals) holding office as Fund trustees,

(b) by any defect in the nomination or appointment of a Fund trustee, or

(c) by the fact that it is done when fewer than 3 Fund trustees held office.

(2) The Fund trustees are free to vary or revoke any previous decision or authorisation (but such a variation or revocation may reduce the scheme benefits to which any individual is entitled only if made in accordance with any other scheme rule).

Part C Participating members

MSP members

21 Every serving MSP aged under 75 is to participate in the scheme as an “MSP member” (unless the MSP opts out under rule 23).

Office-holder members

22 (1) Every individual aged under 75 holding a pensionable office is to participate in the scheme as an “office-holder member” (unless the individual opts out under rule 24).

(2) An individual holds a pensionable office by being—

(a) the Presiding Officer,

(b) a deputy Presiding Officer,

(c) one of the Scottish Ministers, or

(d) a junior Scottish Minister.

MSP opt-out

23 (1) An MSP may opt out of participating in the scheme by giving notice to the Fund trustees.

This rule does not prevent an MSP who is also a holder of a pensionable office from opting out as an office-holder member only under rule 24 (but such an MSP may not opt out as an MSP member only).

(2) Where an MSP opts out within 3 months of first being elected as an MSP—

(a) the MSP is to be treated—

(i) as having never been an MSP member, and

(ii) as having not been an office-holder member for any period since the election, and

(b) any scheme member contributions made since being elected are to be repaid to the MSP.

(3) In any other case, an MSP who opts out stops being a participating member on whatever date the Fund trustees decide is the earliest practicable date after they receive the opt-out notice.

Office-holder opt-out

24 (1) The holder of a pensionable office may opt out of participating in the scheme as an office-holder member only by giving notice to the Fund trustees.

(2) Where the holder of a pensionable office opts out within 3 months of being appointed to that office—

(a) the office-holder is to be treated as having not been an office-holder member since being appointed, and

(b) any scheme member contributions made in respect of office-holder’s salary since being appointed are to be repaid to the office-holder.

(3) In any other case, a holder of a pensionable office who opts out stops being an office-holder member on whatever date the Fund trustees decide is the earliest practicable date after they receive the opt-out notice.

MSP opt-in

25 An individual who has opted out of participating in the scheme may, if subsequently elected as an MSP, opt back into the scheme as an MSP member with effect from the election date by—

(a) giving notice to the Fund trustees within 3 months of being elected, and

(b) paying to the Fund trustees by the due date the amount which they certify as the amount of scheme member contributions which would have been made from the individual’s MSP salary payments between the election date and the next day on which a scheme member contribution is to be made.

• “due date” means the 28th day after the Fund trustees give their certification to the MSP (or any later day as the Fund trustees may specify).

Office-holder opt-in

26 (1) An individual who has opted out of participating in the scheme (or who has opted out of participating as an office-holder member only) may, if subsequently appointed to hold any pensionable office, opt back into the scheme as an office-holder member with effect from the appointment date by—

(a) giving notice to the Fund trustees within 3 months of being appointed, and

(b) paying to the Fund trustees by the due date the amount which they certify as the amount of scheme member contributions which would have been made from the individual’s office-holder salary payments between the appointment date and the next day on which a scheme member contribution is to be made.

• “due date” means the 28th day after the Fund trustees give their certification to the office-holder (or any later day as the Fund trustees may specify).

(2) An MSP may not opt back into the scheme as an office-holder member unless that individual also opts back in as (or already is) an MSP member.

Part D Contributions

Scheme member contributions

27 The person responsible for paying a participating member’s salary must—

(a) deduct an amount (a “scheme member contribution”) from each salary payment (but see rule 30), and

(b) pay the scheme member contribution to the Fund trustees.

References in other scheme rules to scheme member contributions being made are to be read as references to amounts deducted and paid under this rule.

Amount of scheme member contribution

28 Higher rate scheme member contributions are be deducted under rule 27 (unless the participating member concerned chooses to make lower rate scheme contributions).

Procedure for changing scheme member contribution rate

29 (1) A participating member may, by giving notice to the Fund trustees, choose to make lower rate scheme member contributions instead of higher rate scheme member contributions (or vice versa).

(2) Such a notice may be given only within 3 months of—

(a) being elected (or re-elected) as an MSP, or

(b) where the participating member is not an MSP, being appointed (or re-appointed) as the holder of a pensionable office.

(3) The notified change has effect from the day of the election or appointment and—

(a) the Fund trustees must pay the participating member an amount equal to any excess of scheme member contributions made in respect of that period, or (as the case may be)

(b) the participating member must pay any shortfall in scheme member contributions made in respect of that period to the Fund trustees.

(4) If a participating member fails to repay a shortfall, the Fund trustees may recover the shortfall by directing the person responsible for paying the participating member’s salary to adjust subsequent scheme member contributions accordingly.

Relief from liability to make scheme member contributions

30 (1) An MSP member is to stop making scheme member contributions from MSP salary when he or she obtains sufficient reckonable service as an MSP to entitle him or her to the maximum annual MSP pension permitted by rule 38(2).

(2) Such an MSP member is to begin making scheme member contributions again only if his or her MSP salary increases.

(3) Those contributions are to be made—

(a) only in respect of the amount by which the MSP salary is increased, and

(b) at the rate which applied when the MSP member stopped making scheme member contributions in respect of his or her full MSP salary.

(4) Scheme member contributions are not to be made from the office-holder salary of an office-holder member whose reckonable service as an office-holder already entitles him or her to the maximum office-holder pension entitlement permitted by rule 39(4).

(5) Such an office-holder member is to begin making scheme member contributions again only if his or her office-holder salary increases.

(6) Those contributions are to be made—

(a) only in respect of the amount by which the office-holder salary is increased, and

(b) at the rate which applied when the office-holder member stopped making scheme member contributions in respect of his or her full office-holder salary.

(7) If—

(a) the Fund trustees have accepted an individual’s application to buy added years, but

(b) the individual has not yet paid for those added years in full,

the individual’s reckonable service as an MSP or office-holder is to be treated for the purposes of this rule as including the period by which his or her reckonable service will be increased on payment of the last instalment or lump sum.

Contributions when salary not drawn

31 The person responsible for paying the salary of a participating member who chooses not to draw that salary (or any part of it) must—

(a) deduct amount A from the funds available to pay the salary (or that part of it), and

(b) pay that amount to the Fund trustees.

“amount A” is an amount equal to the scheme member contributions which would have been deducted had that salary (or that part of it) been paid.

Contributions from SPCB

32 (1) The SPCB must pay a sum into the Pension Fund in respect of each financial year.

(2) The SPCB must, when determining the amount of each annual sum, have regard to—

(a) the scheme actuary’s recommended rate for future contributions (see rule 103(3)(c)), and

(b) any advice from the Fund trustees on the rate of future contributions.

Part E Reckonable service

Reckonable service as an MSP

33 (1) A period for which an MSP member makes scheme member contributions from salary payments in respect of MSP salary is a period of reckonable service as an MSP.

(2) An individual’s “reckonable service as an MSP” means the total of—

(a) the period described in rule 33(1) or (if more than one) the total of such periods, and

(b) any amount by which that period is increased under Part N (transfers) or Part O (added years).

Reckonable service as an office-holder

34 (1) A period for which an office-holder member makes scheme member contributions from salary payments in respect of office-holder salary is a period of reckonable service as an office-holder.

(2) An individual’s “reckonable service as an office-holder” means the total of—

(a) the period described in rule 34(1) or (if more than one) the total of such periods, and

(b) any amount by which that period is increased under Part N (transfers) or Part O (added years).

Total reckonable service

35 An individual’s “total reckonable service” is the total of any periods in which the individual obtains—

(a) reckonable service as an MSP only under rule 33(1),

(b) reckonable service as an office-holder only under rule 34(1), and

(c) reckonable service as both an MSP and office-holder under both those rules.

Measuring reckonable service

36 A period of reckonable service is measured in years and fractions of a year (unless the contrary intention appears).

Part F Pensions

Scheme pension

37 (1) A pension (a “scheme pension”) is to be paid to every individual who—

(a) has reckonable service as an MSP or office-holder,

(b) is aged 65 or over, and

(c) is neither an MSP nor the holder of a pensionable office.

(2) Unless the scheme otherwise provides, the annual scheme pension payable to such an individual is an amount equal to the total of—

(a) the annual MSP pension payable in accordance with rule 38, and

(b) the annual office-holder pension payable in accordance with rule 39.

Amount of MSP pension

38 (1) The annual MSP pension payable to an individual is an amount equal to—

where—

• “A” is the individual’s reckonable service as an MSP during which lower rate scheme member contributions were made, and

• “B” is the individual’s reckonable service as an MSP during which higher rate scheme member contributions were made.

(2) Where an individual’s annual MSP pension (including any enhancement made by virtue of other scheme rules) exceeds the individual’s annual MSP pension cap, the annual MSP pension payable to the individual is to be reduced to the individual’s annual MSP pension cap.

An individual’s “annual MSP pension cap” is two-thirds of the individual’s final salary as an MSP (ignoring any reduction in final salary by virtue of section 82(2) of the Scotland Act 1998 (c. 46)).

Amount of office-holder pension

39 (1) The annual office-holder pension payable to an individual is an amount equal to the total of the individual’s office-holder pension entitlements.

(2) An individual obtains an office-holder pension entitlement in respect of each period for which he or she holds a pensionable office.

(3) The amount of an office-holder pension entitlement for such a period is calculated as follows—

where—

• “A” is the individual’s reckonable service as an office-holder accrued when holding the office concerned in respect of which the individual made lower rate scheme member contributions, and

• “B” is the individual’s reckonable service as an office-holder accrued when holding the office concerned during which the individual made higher rate scheme member contributions.

(4) Where an individual’s annual office-holder pension (including any enhancement made by virtue of other scheme rules) exceeds the individual’s annual office-holder pension cap, the annual office-holder pension payable to the individual is to be reduced to the individual’s annual office-holder pension cap.

An individual’s “annual office-holder pension cap” is—

(a) two-thirds of the final salary amount used to calculate the individual’s office-holder pension entitlement, or

(b) where an individual has more than one such entitlement, two-thirds of the highest such final salary amount.

Duration of scheme pension

40 (1) A scheme pension is payable from the day on which the individual concerned is first entitled to receive it.

(2) Pension payments need not begin unless the individual entitled to the scheme pension has—

(a) notified the Fund trustees that he or she wishes pension payments to begin, and

(b) given the Fund trustees such information as they may reasonably require—

(i) about the individual’s entitlement to any other pension,

(ii) to calculate their liability for a lifetime allowance charge or any other tax,

(iii) to make the payments.

This rule does not affect the date from which a scheme pension is payable.

(3) Pension payments are to continue for the rest of the individual’s life (see rule 41 for exception).

(4) Pension payments are to be made monthly in arrears (or in other instalments of no longer than one year as the Fund trustees may determine).

Suspension of scheme pension

41 (1) Where a scheme pensioner becomes an MSP or the holder of a pensionable office, pension payments are to be suspended until the individual concerned stops being an MSP or the holder of that office.

(2) The amount of any lump sum payable under Part K in respect of an individual who dies when such a suspension has effect is to be reduced by an amount equal to the total of—

(a) the amount of scheme pension already paid to the individual,

(b) the amount of any retirement lump sum paid to the individual, and

(c) the amount of any pension or lump sum payable in respect of the individual under Part L.

(3) When such a suspension ends in relation to an individual who was entitled to an ill-health pension before the suspension began—

(a) the individual is to be treated from then on as if he or she had not been entitled to an ill-health pension, and

(b) a corresponding reduction is to be made—

(i) to the individual’s pension payments, and

(ii) to any added years obtained by virtue of rule 86(2)(a)).

Part G Retirement lump sums

Right to commute pension into a lump sum

42 (1) An individual may commute a portion of the individual’s scheme pension into a lump sum (a “retirement lump sum”) by giving notice (a “commutation notice”) to the Fund trustees.

(2) A commutation notice is valid only if it—

(a) is given before the earlier of—

(i) the day on which a scheme pension is first paid to the individual, and

(ii) the individual’s 75th birthday,

(b) specifies the proportion of the individual’s scheme pension that the individual wants to commute into a retirement lump sum, and

(c) provides the Fund trustees with such other information as they may reasonably require to—

(i) determine the amount payable, and

(ii) satisfy themselves that, if paid, the retirement lump sum would be a “pension commencement lump sum” for the purposes of Part 1 of Schedule 29 to the Finance Act 2004 (c. 12).

Payment of retirement lump sum and corresponding reduction in pension

43 (1) An individual who gives a valid commutation notice is to be paid a retirement lump sum of an amount equal to the lower of—

(a) the amount which the Fund trustees determine to be equivalent to the proportion of the individual’s scheme pension specified in the commutation notice, or

(b) the permitted maximum (construed in accordance with paragraph 2 of Schedule 29 to the Finance Act 2004 (c. 12)).

(2) The annual scheme pension payable to an individual who is to be paid a retirement lump sum is to be reduced by an amount which the Fund trustees determine to be appropriate in consequence of the individual’s entitlement to the retirement lump sum.

(3) A determination of the Fund trustees' for the purposes of this rule must be—

(a) certified by the scheme actuary, or

(b) made in accordance with guidance and tables prepared by the scheme actuary.

Special rule for commutation by individual approaching the age of 75

44 (1) This rule applies to an individual who—

(a) gives a valid commutation notice before reaching the age of 75, and

(b) would not (but for this rule) be entitled to be paid a scheme pension at that time by reason only of being a serving MSP or the holder of a pensionable office.

(2) Despite rule 37(1)(c)—

(a) an individual to whom this rule applies is to be entitled to be paid a scheme pension from the day before the member’s 75th birthday, but

(b) the amount of scheme pension so payable is to be nil until the individual is neither an MSP nor the holder of a pensionable office.

Commuting trivial amounts

45 (1) The Fund trustees may pay a lump sum (a “one-off lump sum”) to an individual if the following conditions are met—

Condition 1	The individual applies to the Fund trustees for payment of a one-off lump sum instead of a scheme pension.
Condition 2	The Fund trustees are satisfied that, if paid, the one-off lump sum would be a “trivial commutation lump sum” for the purposes of Part 1 of Schedule 29 to the Finance Act 2004 (c. 12).

(2) The amount of one-off lump sum to which an individual is entitled on any day is an amount equal to the value of the individual’s uncrystallised rights under the scheme on that day (as determined by the Fund trustees in accordance with section 212 of the Finance Act 2004 (c. 12)).

(3) A determination of the Fund trustees must be—

(a) certified by the scheme actuary, or

(b) made in accordance with guidance and tables prepared by the scheme actuary.

(4) Payment of a one-off lump sum extinguishes the rights of all persons to receive scheme benefits in respect of the recipient.

Part H Early retirement

Early retirement

46 (1) An individual is eligible to take early retirement if the individual is—

(a) 55 or over but is not yet 65, and

(b) neither an MSP nor the holder of a pensionable office.

(2) An eligible individual may take early retirement by giving notice (an “early retirement notice”) to the Fund trustees.

(3) Despite rule 37(1), an individual who takes early retirement is entitled to be paid his or her scheme pension from—

(a) the date on which the early retirement notice is given, or

(b) such later date as the individual may specify in the early retirement notice.

(4) The annual scheme pension payable to an individual is to be reduced by the appropriate percentage.

• “appropriate percentage” is calculated as follows—

  

(5) The reduction in scheme pension is to continue to have effect after the individual reaches the age of 65.

Part I Ill-health

Serious ill-health pension

47 An individual is entitled to a serious ill-health pension if the Fund trustees are satisfied that the following conditions are met—

Condition 1	The individual resigns as or otherwise stops being an MSP or, as the case may be, the holder of a pensionable office as a direct consequence of a health condition.
Condition 2	At that time, the individual would be entitled to a scheme pension but for the fact that the individual is not yet 65 years old.
Condition 3	The individual applies to the Fund trustees for a serious ill-health pension.
Condition 4	The health condition prevents the individual from doing any gainful work.
Condition 5	The health condition is expected to be permanent and to continue to prevent the individual from doing gainful work.
Condition 6	The application is accompanied by evidence that a doctor is satisfied that conditions 4 and 5 are met.

Ordinary ill-health pension

48 An individual is entitled to an ordinary ill-health pension if the Fund trustees are satisfied that the following conditions are met—

Condition 1	The individual resigns as or otherwise stops being an MSP or, as the case may be, the holder of a pensionable office as a direct consequence of a health condition.
Condition 2	At that time, the individual would be entitled to a scheme pension but for the fact that the individual is not yet 65 years old.
Condition 3	The individual applies to the Fund trustees for an ordinary ill-health pension.
Condition 4	The health condition— (a) prevents the individual from adequately performing the duties of an MSP or, as the case may be, the holder of a pensionable office, but (b) does not prevent the individual from doing other gainful work.
Condition 5	The health condition is expected to be permanent and to continue to prevent the individual from adequately performing the duties mentioned in condition 4(a).
Condition 6	The application is accompanied by evidence that a doctor is satisfied that conditions 4(a) and 5 are met.

Deferred pensioner’s ill-health pension

49 A deferred pensioner is entitled to a deferred pensioner’s ill-health pension if the Fund trustees are satisfied that the following conditions are met—

Condition 1	The deferred pensioner applies to the Fund trustees for a deferred pensioner’s ill-health pension.
Condition 2	The deferred pensioner is under 65.
Condition 3	The deferred pensioner has stopped doing gainful work as a direct consequence of a health condition.
Condition 4	At the time of stopping work the deferred pensioner would be entitled to a scheme pension but for the fact that the deferred pensioner is not yet 65 years old.
Condition 5	The health condition prevents the deferred pensioner from doing gainful work.
Condition 6	The health condition is expected to be permanent and to continue to prevent the deferred pensioner from doing gainful work.
Condition 7	The application is accompanied by evidence that a doctor is satisfied that conditions 4 and 5 are met.

Amount of serious ill-health pension

50 (1) Part F (Pensions) applies with the following modifications to an individual who is entitled to a serious ill-health pension and who has reckonable service as an MSP—

(a) the individual is to be treated as having been aged 65 on the relevant day,

(b) the individual’s reckonable service as an MSP is to be increased by a period equal to the period of reckonable service as an MSP that the individual would obtain if the individual were to be an MSP member from the relevant day until the individual’s 65th birthday,

(c) if the individual was a dual mandate MSP on the relevant day (or would have been had he or she been an MSP on that day), that increased period of reckonable service as an MSP is to be reduced by the same proportion as the MSP’s salary was (or would have been) reduced on that day,

(d) the individual is to be treated as having made scheme member contributions during that increased period of reckonable service as an MSP at the rate which applied to the individual on the relevant day, and

(e) the individual’s reckonable service as an office-holder (if any) is not increased.

(2) Part F (Pensions) applies with the following modifications to an individual who is entitled to a serious ill-health pension and who has reckonable service as an office-holder only—

(a) the individual is to be treated as having been aged 65 on the relevant day, and

(b) the amount of annual office-holder pension payable to the individual is to be increased by an amount equal to—

where—

• “A” is the annual salary payable to an MSP by virtue of section 81(1) of the Scotland Act on the relevant day,

• “B” is the period of reckonable service as an office-holder that the individual would have obtained if the individual had continued to hold a pensionable office from the relevant day until the individual’s 65th birthday, and

• “C” is—

  (i)

  if higher rate scheme member contributions were being made on the relevant day, 40,

  (ii)

  if lower rate scheme member contributions were being made on the relevant day, 50.

(3) In this rule, “relevant day” means the day on which the individual resigned as or otherwise stopped being, an MSP or, as the case may be, the holder of a pensionable office.

Amount of ordinary ill-health pension

51 Rule 37 applies to an individual who is entitled to an ordinary ill-health pension as if the individual reached the age of 65 on the day on which the individual resigned as or otherwise stopped being an MSP or, as the case may be, the holder of a pensionable office.

Amount of deferred pensioner’s ill-health pension

52 Rule 37 applies to an individual who is entitled to a deferred pensioner’s ill-health pension as if the individual reached the age of 65 on the day on which the application for the pension was made.

Review of ill-health pension entitlements

53 (1) The Fund trustees may review an individual’s entitlement to an ill-health pension at any time before the individual reaches the age of 65 (and may carry out such a review at regular intervals determined by them).

(2) The Fund trustees may require an individual whose entitlement is being reviewed to provide evidence from a doctor on the individual’s state of health.

(3) The Fund trustees may, if satisfied following a review that the individual’s state of health no longer prevents the individual from doing gainful work, determine that the individual—

(a) is no longer to be entitled to a ill-health pension, or

(b) is to be entitled to an ordinary ill-health pension instead of a serious ill-health pension (where they remain satisfied that the individual’s state of health still prevents the individual from adequately performing the duties of an MSP or a holder of a pensionable office).

(4) The Fund trustees may determine that an individual who refuses to be examined in accordance with rule 54, or who otherwise fails to co-operate with a review, is no longer to be entitled to an ill-health pension.

(5) If the Fund trustees make a determination under this rule—

(a) pension payments are to stop or, as the case may be, be reduced from the date of the determination, and

(b) the scheme is to operate in relation to the individual from then onwards as if the individual had not been entitled to an ill-health pension or, as the case may be, to a serious ill-health pension.

Medical examinations

54 (1) The Fund trustees may require—

(a) an applicant for an ill-health pension, or

(b) an individual whose entitlement to an ill-health pension is being reviewed,

to be examined by a doctor nominated by them.

(2) The cost of any doctor’s examination is to be borne by the Fund trustees or the examinee (as the Fund trustees may determine).

Ill-health lump sums: life expectancy of less than one year

55 (1) An individual is entitled to be paid a lump sum (an “ill-health lump sum”) instead of a scheme pension if the following conditions are met—

Condition 1	The individual applies to the Fund trustees for an ill-health lump-sum.
Condition 2	The individual is neither an MSP nor the holder of a pensionable office.
Condition 3	The individual has reckonable service as an MSP or as an office-holder.
Condition 4	The Fund trustees are otherwise satisfied that, if paid, the ill-health lump sum will be a “serious ill-health lump sum” for the purposes of Part 1 of Schedule 29 to the Finance Act 2004 (c. 12).

(2) An ill-health lump sum is to be equal to 5 times the annual scheme pension—

(a) in the case of an applicant aged 65 or over, which would otherwise be payable to the individual,

(b) in the case of an applicant aged under 65, which would be payable if the individual became entitled to a serious ill-health pension from the day on which the ill-health lump sum is payable.

(3) Payment of an ill-health lump sum extinguishes all the recipient’s rights to receive scheme benefits.

Part J Surviving partners and children

Chapter 1 Scheme pension entitlement

Meaning of “scheme pension entitlement”

56 (1) References in this Part to a deceased individual’s “scheme pension entitlement” are to be construed in accordance with this rule.

(2) The “scheme pension entitlement” of an individual who died while being a participating member—

(a) where if the individual died when aged 65 or over, is the annual amount of scheme pension which would have been payable to the deceased if he or she had not been an MSP or the holder of a pensionable office on the day on which he or she died,

(b) where if the individual died when aged under 65, is the annual amount of scheme pension which would have been payable to the deceased if he or she had become entitled to (and had been paid) a serious ill-health pension on the day on which he or she died.

(3) The “scheme pension entitlement” of an individual who died while being a deferred pensioner—

(a) where if the individual died when aged 65 or over, is the annual amount of scheme pension which would have been payable to the deceased if he or she had not been an MSP or the holder of a pensionable office on the day on which he or she died,

(b) where if the individual died when aged under 65, is the annual amount of scheme pension which would have been payable to the deceased if he or she had been aged 65 on the day on which he or she died.

(4) The “scheme pension entitlement” of an individual who died while being a scheme pensioner—

(a) where the deceased received a retirement lump sum, is the annual amount of scheme pension which would have been payable to the deceased immediately before he or she died had the pension not been reduced under rule 43(2),

(b) where the deceased did not receive a retirement lump sum, is the annual amount of scheme pension being paid to the deceased immediately before he or she died.

(5) The “scheme pension entitlement” of a deceased individual whose entitlement to scheme benefits was extinguished by rule 55(3) before he or she died is the annual amount of scheme pension which would have been payable to the deceased if—

(a) the ill-health lump sum had not been paid to the deceased,

(b) the deceased had stopped being a participating member on the day on which the ill-health lump sum was paid,

(c) the deceased had become entitled to a scheme pension on that day, and

(d) where that day was before the deceased’s 65th birthday—

(i) the deceased had been entitled to a serious ill-health pension from that day (see rule 47), and

(ii) the deceased’s scheme pension had been enhanced and paid accordingly (see rule 50).

(6) Where an individual dies when his or her pension payments are suspended under rule 41—

(a) the deceased individual is to be treated for the purposes of this rule as a scheme pensioner (regardless of whether also a participating member at that time), and

(b) the suspension is to be treated as having been lifted immediately before the individual died.

(7) A deceased individual who was a scheme pensioner when he or she died only because of rule 44(2) is to be treated for the purposes of this rule as having been a deferred pensioner at that time.

Chapter 2 Partner’s pension etc.

Partner

57 (1) “Partner”, in relation to any deceased individual, means—

(a) the individual’s spouse or civil partner, or

(b) where no such person survives the deceased, any individual falling within this rule.

(2) An individual falls within rule 57(1)(b) if—

(a) the deceased nominated the individual as his or her partner by giving notice to the Fund trustees at least 6 months before death, and

(b) the Fund trustees are satisfied—

(i) that the individual and the deceased lived together as if they were husband and wife or, as the case may be, civil partners for the period of 2 years which immediately preceded the deceased’s death,

(ii) that neither the individual nor the deceased lived with any other person in such a relationship (or with a spouse or civil partner) during that period,

(iii) that, during that period—

(A) the individual was financially dependant on the deceased, or

(B) the individual’s financial relationship with the deceased was one of mutual dependence, and

(iv) that the individual and the deceased were not, immediately before the deceased died, prevented by law from either marrying or becoming civil partners.

Partner’s pension

58 (1) A pension (a “partner’s pension”) is to be paid to a surviving partner of any scheme member who dies.

(2) The annual partner’s pension so payable is 5/8ths of the deceased’s scheme pension entitlement.

Enhancement of initial partner’s pension

59 (1) This rule applies where amount A is less than amount B for any part of the 3 month period following the death of a participating member or a scheme pensioner.

(2) Amount A is the total of—

(a) the amount of partner’s pension to be paid to the surviving partner for the 3 month period (or the relevant part of it), and

(b) the amount of children’s pension to be paid to the surviving partner for the 3 month period (or the relevant part of it) on condition that the partner applies it for the benefit of an eligible child.

(3) Amount B is—

(a) where the deceased was a participating member, the amount of the salary payments which would have been paid for the 3 month period (or the relevant part of it) if the deceased had lived and had continued to be paid the same salary, or

(b) where the deceased was a scheme pensioner, the amount of scheme pension which would have been payable for the 3 month period (or the relevant part of it) if the deceased had lived.

(4) Where this rule applies, the partner’s pension is to be increased by the difference between amount A and amount B.

(5) An individual who dies while being both—

(a) a participating member, and

(b) a scheme pensioner whose pension payments are suspended under rule 41,

is to be treated for the purposes of this rule as a participating member.

Duration of partner’s pension

60 (1) A partner’s pension is payable from the day after the day on which the deceased partner died.

(2) Pension payments need not begin unless the individual entitled to them has given the Fund trustees—

(a) notice of that entitlement, and

(b) such information as they may reasonably require—

(i) about the surviving partner’s entitlement to any other pension,

(ii) to calculate their liability for a lifetime allowance charge or any other tax,

(iii) to make the payments.

This rule does not affect the date from which a partner’s pension is payable.

(3) Pension payments are to continue for the rest of the surviving partner’s life.

(4) Pension payments are to be made monthly in arrears (or in such other instalments of no longer than one year as the Fund trustees may determine).

Partner’s trivial lump sum

61 (1) The Fund trustees may pay a lump sum (a “partner’s trivial lump sum”) to an individual who is entitled to a partner’s pension if the following conditions are met—

Condition 1	The individual applies to the Fund trustees for payment of a partner’s trivial lump sum instead of a partner’s pension.
Condition 2	No payment relating to the deceased has been made to the individual by way of— (a) a partner’s pension, or (b) a death in service lump sum.
Condition 3	The individual is not entitled to receive pension payments under rule 69.
Condition 4	The Fund trustees are satisfied that, if paid, the partner’s trivial lump sum would be a “trivial commutation lump sum death benefit” for the purposes of Part 2 of Schedule 29 to the Finance Act 2004 (c. 12).

(2) The amount of a partner’s trivial lump sum is to be an amount equal to the value of the individual’s scheme benefits (as determined by the Fund trustees).

(3) Such a determination must be—

(a) certified by the scheme actuary, or

(b) made in accordance with guidance or tables prepared by the scheme actuary.

(4) Payment of a partner’s trivial lump sum extinguishes all the individual’s rights to receive scheme benefits in respect of the deceased.

Chapter 3 Children’s pensions

Children’s pensions

62 (1) A pension (a “children’s pension”) is to be paid in respect of any period during which there are eligible children of any scheme member who dies.

(2) The annual children’s pension so payable is—

(a) when a partner’s pension is also payable, amount A,

(b) when no partner’s pension is payable, amount B.

(3) Amount A is—

(a) where there is one eligible child, 1/4 of the deceased’s scheme pension entitlement,

(b) where there are two or more eligible children, 3/8ths of deceased’s scheme pension entitlement.

(4) Amount B is—

(a) where there is one eligible child entitled to receive the pension, 5/16ths of the deceased’s scheme pension entitlement,

(b) where there are two or more eligible children entitled to receive the pension, 5/8ths of deceased’s scheme pension entitlement.

Eligible children

63 (1) A “child”, in relation to a deceased individual, includes—

(a) an adopted child, and

(b) a stepchild who, when the deceased died, was—

(i) financially dependant on the deceased, or

(ii) dependant on the deceased because of physical or mental impairment.

(2) A deceased’s child is an “eligible child” for any period starting on or after the date of the deceased’s death during which any of the following conditions are met—

Condition 1	The child is born and aged 17 or under.
Condition 2	The child— (a) is aged over 17 but under 23, (b) was, when the deceased died— (i) financially dependant on the deceased, or (ii) aged 17 or under, and (c) would, in the opinion of the Fund trustees, be financially dependant on the deceased had the deceased survived.
Condition 3	The child— (a) was dependant on the deceased because of physical or mental impairment when he or she died, and (b) would, in the opinion of the Fund trustees, still be so dependant had the deceased survived.

Payment of children’s pension

64 (1) A children’s pension is payable—

(a) from the start of the first period in respect of which rule 62(1) requires it to be paid, and

(b) during the rest of that period (and any subsequent period in respect of which that rule requires it to be paid).

(2) It is for the Fund trustees to decide to who a children’s pension (or any part of it) is to be paid.

(3) Where a children’s pension (or any part of it) is paid to a person other than the eligible children in respect of whom it is paid (the “intended beneficiaries”), the recipient must—

(a) apply such proportion of the amount paid as the Fund trustees may direct for the benefit of each intended beneficiary, or

(b) where no direction is made, apply the amount paid (without discretion) for the benefit of the intended beneficiaries.

(4) If the recipient does not so apply a pensions payment (or any part of it), the Fund trustees may—

(a) recover the misappropriated amount from the recipient, and

(b) take such action as they think fit in order to ensure that any recovered amount is applied for the benefit of the intended beneficiary.

For example, the Fund trustees may deduct an amount equal to the misappropriated amount from any future amount to be paid to the recipient under the scheme.

(5) The Fund trustees may withhold payment of a children’s pension (or any part of it) if they are not satisfied that arrangements are in place to ensure that it will be applied for the benefit of the intended beneficiary.

Any withheld amounts are to be paid as soon as the Fund trustees are satisfied that such arrangements are in place.

(6) Pension payments need not begin unless the Fund trustees have received—

(a) notice of an eligible child’s entitlement, and

(b) such information as they may reasonably require—

(i) about the eligible child’s entitlement to any other pension,

(ii) to calculate their liability for a lifetime allowance charge or any other tax,

(iii) to make the payments.

This rule does not affect the date from which a children’s pension is payable.

(7) Pension payments are to be made monthly in arrears (or in other instalments of no longer than one year as the Fund trustees may determine).

Part K Lump sum death benefits

Death in service lump sum

65 (1) The Fund trustees may pay a lump sum (a “death in service lump sum”) on the death of a participating member—

(a) to the deceased’s nominee, or

(b) where there is no such nominee, to the deceased’s personal representatives.

But they may do so only if satisfied that, if paid, the death in service lump sum would be a “defined benefits lump sum death benefit” for the purposes of Part 2 of Schedule 29 to the Finance Act 2004 (c. 12).

(2) A death in service lump sum is to be the greater of—

(a) 4 times the participating member’s annual salary at the time of death, or

(b) the scheme member contributions, with interest, paid before death.

Nominations for death in service lump sum

66 (1) A participating member may nominate any person as his or her nominee by giving notice to the Fund trustees in such form as they may require.

Such a nomination may—

(a) nominate 2 or more persons, and

(b) where it does so, may specify the proportion of any death in service lump sum which is to be paid to each nominee.

(2) A participating member may withdraw a nomination at any time by giving notice to the Fund trustees in such form as they may require.

(3) A nomination in force when the participating member dies is invalid in so far as—

(a) it nominates an individual who was the participating member’s partner when the nomination was made but was not his or her partner when he or she died, or

(b) the Fund trustees consider that it would not be reasonably practicable to pay a death in service lump sum to a nominee.

(4) The proportion of any death in service lump sum which would, but for rule 66(3), have been paid to invalidated nominees is to be paid to the deceased’s personal representatives.

Deferred pensioner lump sum

67 (1) A lump sum (a “deferred pensioner lump sum”) is to be paid to the personal representatives of a deferred pensioner who dies while aged under 75 leaving no—

(a) surviving partner, or

(b) surviving child who, at the time of death, is an eligible child or is unborn.

But such a payment may be made only if the Fund trustees are satisfied that, if paid, the deferred pensioner lump sum would be a “defined benefits lump sum death benefit” for the purposes of Part 2 of Schedule 29 to the Finance Act 2004 (c. 12).

(2) A deferred pensioner lump sum is to be equal to the amount of scheme member contributions, with interest, made by a deferred pensioner.

Part L 5 year guarantee

Initial pension period

68 A scheme pensioner’s “initial pension period” is the period of 5 years beginning on the day on which he or she is first entitled to receive a scheme pension (not counting any intervening period of less than 5 years in which pension payments are suspended under rule 41 or reduced under rule 44).

Guaranteed pension for surviving partner

69 (1) Where a scheme pensioner dies during his or her initial pension period and leaves a surviving partner—

(a) the surviving partner’s entitlement to be paid a partner’s pension is suspended for the remainder of the initial pension period, and

(b) the deceased’s scheme pension is to continue to be paid for the remainder of his or her initial pension period (but is to be paid to the surviving partner instead of to the deceased).

(2) Where a children’s pension is payable in respect of the deceased, the pension payable under this rule is to be reduced—

(a) for the 3 months following death, by the amount of children’s pension payable to the surviving partner during that period, and

(b) for the remainder of the initial pension period, by the total amount of children’s pension payable during that period.

(3) Where the surviving partner dies during the deceased’s initial pension period, the pension payable under this rule is to be paid to the surviving partner’s personal representatives.

Guaranteed lump sum where scheme pensioner dies aged under 75 with no surviving partner

70 (1) A lump sum (a “guaranteed lump sum”) is to be paid to the personal representatives of any scheme pensioner who—

(a) dies before the end of his or her initial pension period,

(b) was aged under 75 when he or she died, and

(c) does not leave a surviving partner.

(2) A guaranteed lump sum is to be equal to—

(a) the amount of scheme pension which would have been paid to the deceased from time of death until the end of his or her initial pension period, less

(b) the amount of children’s pension (if any) which the Fund trustees consider likely to be payable from that time until the end of that period.

(3) An additional lump sum is to be paid to the deceased’s personal representatives if the Fund trustees consider that the amount of any guaranteed lump sum (or any previous additional lump sum) should have been more than the amount paid (because they have revised their estimate of the amount of children’s pension which they consider likely to be payable).

(4) An additional lump sum is to be equal to the difference between the amount of the guaranteed lump sum (together with any previous additional lump sum) and the amount which the Fund trustees consider should have been paid.

(5) A guaranteed lump sum or additional lump sum may be paid under this rule only if the Fund trustees are satisfied that, if paid, the lump sum would be a “defined benefits lump sum death benefit” for the purposes of Part 2 of Schedule 29 to the Finance Act 2004 (c. 12).

Guaranteed pension where scheme pensioner dies aged 75 or over with no surviving partner

71 (1) Where a scheme pensioner—

(a) dies before the end of his or her initial pension period,

(b) was aged 75 or over when he or she died, and

(c) does not leave a surviving partner,

the deceased’s scheme pension is to continue to be paid for the remainder of his or her initial pension period (and is to be paid to the deceased’s personal representatives).

(2) A pension payable under this rule is to be reduced by the amount of any children’s pension payable during the same period.

Part M Short service refunds

Payment of short service refunds

72 (1) A sum (a “short service refund”) is to be paid to an individual if the following conditions are met—

Condition 1	The individual is no longer a participating member.
Condition 2	The individual is not a scheme pensioner.
Condition 3	The individual has fewer than 3 months total reckonable service.
Condition 4	The individual has applied to the Fund trustees for payment of a short service refund.
Condition 5	The Fund trustees are satisfied that, if paid, the full amount of the short service refund will be a “short service refund lump sum” for the purposes of Part 1 of Schedule 29 to the Finance Act 2004 (c. 12).

(2) A short service refund is to be equal to—

(a) the amount of scheme member contributions paid by the individual, less

(b) the amount of any contributions equivalent premium paid in respect of the individual (see section 55(2) of the Pension Schemes Act 1993 (c. 48)).

Extinction of scheme benefits

73 Payment of a short service refund extinguishes the rights of all persons to receive scheme benefits in respect of the recipient.

Part N Transfers

Chapter 1 Transfers out

Statement of entitlement

74 (1) An individual’s “transferable sum” is the amount of cash equivalent set out in a statement of entitlement which the Fund trustees provide to the individual under section 93A of the Pension Schemes Act 1993 (c. 48) (but see rules 76 to 78 which provide for enhancement and reduction of transferable sums).

(2) That section applies for the purposes of the scheme in relation to an individual who—

(a) is aged 64 or over, and

(b) stopped being a participating member no longer than 6 months ago,

in the same way as it applies in relation to an individual aged under 64.

Transfers to other pension schemes

75 An individual’s transferable sum must be transferred from the Pension Fund if the following conditions are met—

Condition 1	The individual— (a) has been but is no longer a participating member, and (b) is not a scheme pensioner.
Condition 2	The individual has total reckonable service of at least 3 months.
Condition 3	The Fund trustees have given the individual a statement of entitlement in pursuance of section 93A of the Pension Schemes Act 1993 (c. 48).
Condition 4	The individual gives the Fund trustees notice (a “transfer-out notice”)— (a) specifying the way in which the transferable sum is to be transferred, and (b) setting out any other information which the Fund trustees may reasonably require in relation to the transfer.
Condition 5	The transfer-out notice is given before the later of— (a) the day falling 6 months after the individual stopped being a participating member, and (b) the individual’s 64th birthday.
Condition 6	The transfer-out notice is given within 3 months of the guarantee date relating to the statement of entitlement (see section 93A(2) of the Pension Schemes Act 1993 (c. 48)).
Condition 7	The way in which the transferable sum is to be transferred is permitted by section 95(2) of the Pension Schemes Act 1993 (c. 48).
Condition 8	The transfer— (a) would be a recognised transfer for the purposes of section 169 of the Finance Act 2004 (c. 12), and (b) is not prohibited by any other enactment.

Enhancement of transferable sum

76 (1) A transferable sum of less than amount A is to be increased to amount A.

(2) Amount A, in relation to an individual, means the total of—

(a) the individual’s scheme member contributions,

(b) any transfer-in sums paid into the Pension Fund in relation to the individual, and

(c) any instalments or lump sums paid by the individual to buy added years.

Reduction of transferable sum

77 Where section 96(2) of the Pension Schemes Act 1993 (c. 48) applies in relation to a transfer under rule 75, the Fund trustees may reduce the transferable sum by an amount equal to the proportion of that sum which represents the individual’s accrued rights—

(a) to a guaranteed minimum pension, or

(b) attributable to service in contracted-out employment (within the meaning of section 8 of the Pension Schemes Act 1993 (c. 48)).

Transfer payment

78 (1) Where rule 75 requires a transfer to be made, the transferable sum is to be paid from the Pension Fund in the way specified in the transfer-out notice by no later than—

(a) the individual’s 65th birthday, or

(b) if later, the day falling 6 months after the transfer notice was given.

(2) If payment is made later than 6 months after the guarantee date relating to the statement of entitlement by reference to which the transferable sum was determined, the transferable sum is to be increased by—

(a) the amount, if any, by which it falls short of what the transferable sum would have been if the guarantee date had been the date of payment, or

(b) if greater, the amount of interest on the transferable sum calculated on a daily basis over the period from the guarantee date to the date of payment (calculated at an annual rate of 1% above the Bank of England base rate).

Time limits

79 The Fund trustees may extend any time limit set out in this Chapter in relation to a particular transfer if they think it reasonable to do so.

Extinction of scheme benefits

80 A transfer under rule 75 extinguishes the rights of all persons to receive scheme benefits in respect of the individual (other than any accrued rights in respect of which the transferable sum was reduced under rule 77).

Chapter 2 Transfers in

Transfer in

81 A sum (a “transfer-in sum”) may be paid from another pension scheme into the Pension Fund in relation to a participating member if the following conditions are met—

Condition 1	The participating member gives the Fund trustees notice (a “transfer-in notice”) specifying— (a) the amount of the transfer-in sum, and (b) the pension scheme which is to make the payment.
Condition 2	The transfer-in notice is given before the participating member’s 64th birthday.
Condition 3	The participating member has at least 3 months total reckonable service.
Condition 4	The pension scheme which is to make the payment is— (a) registered for the purposes of Part 4 of the Finance Act 2004 (c. 12) (see section 150 of that Act), or (b) a qualifying recognised overseas pension scheme for the purposes of that Part (see section 169 of that Act).
Condition 5	The transfer-in sum is the amount, if any, which requires to be applied in relation to any entitlement to a guaranteed minimum pension arising in respect of the transfer-in sum.
Condition 6	The transfer is not prohibited by rule 83.
Condition 7	Any condition imposed by the Fund trustees in relation to the transfer is met to their satisfaction.

Effect of transfer in

82 (1) The reckonable service of any participating member in respect of whom a transfer-in sum is paid into the Pension Fund is to be increased as follows—

(a) where the participating member is an MSP member, the participating member’s reckonable service as an MSP is to be increased by an amount determined by the Fund trustees,

(b) where the participating member is an office-holder member but not an MSP—

(i) the participating member’s reckonable service as an office-holder is to be increased by an amount determined by the Fund trustees, and

(ii) that increase is, for the purposes of rule 39(3), to be attributed to the period in office being served when the transfer-in sum is paid.

(2) The increased period of reckonable service is, for the purposes of rule 38(1) or, as the case may be, 39(3), to be treated as a period during which higher rate scheme member contributions were made.

(3) The Fund trustees must determine the amount by which a participating member’s reckonable service is to be so increased—

(a) as at the date on which the transfer-in sum is paid into the Fund, and

(b) in accordance with guidance and tables prepared by the scheme actuary.

Limitation on transfers in

83 (1) A transfer-in sum is not to be paid if the Fund trustees consider that the corresponding increase in reckonable service, when taken with the participating member’s anticipated reckonable service, would (but for rule 38(2) or 39(4)) entitle the participating member to—

(a) an annual MSP pension of more than the individual’s annual MSP pension cap, or

(b) an annual office-holder pension of more than the individual’s annual office-holder pension cap.

(2) An applicant’s “anticipated reckonable service” is the reckonable service as an MSP or, as the case may be, office-holder which the participating member would obtain if he or she—

(a) continued as an MSP member (and continued making scheme member contributions at the same rate) until the next ordinary general election day, or (as the case may be)

(b) continued to hold the same office and to be an office-holder member (and continued making scheme member contributions at the same rate) until the next ordinary general election day (or such other day as the Fund trustees may determine).

Part O Added years

Added years

84 (1) A participating member may increase his or her reckonable service by buying added years in accordance with this Part.

(2) Added years can be bought as years and as fractions of years.

(3) An individual who is an MSP member may apply to buy added years in respect of reckonable service as an MSP only.

(4) An individual who is an office-holder member but not an MSP may apply to buy added years in respect of reckonable service as an office-holder only.

Buying added years by instalments

85 (1) The Fund trustees may accept a participating member’s application to buy added years by monthly instalments payable if the following conditions are met—

Condition 1	The application states the number of added years which the applicant wishes to buy.
Condition 2	The application states whether the applicant wishes to pay instalments for a period ending on— (a) his or her 65th birthday, or (b) the next ordinary general election day.
Condition 3	The applicant has satisfied the Fund trustees that he or she is in good health.
Condition 4	The applicant has given the Fund trustees any information that they reasonably require in relation to the application.
Condition 5	Rule 89 does not require the Fund trustees to reject the application.

(2) An accepted application is irrevocable.

(3) The person responsible for paying the participating member’s salary must—

(a) deduct instalments from each salary payment made from the first day of the month following acceptance until the end of the period for which instalments are payable, and

(b) pay them to the Fund trustees.

(4) The amount of the instalments is to be determined—

(a) by the scheme actuary, or

(b) by the Fund trustees in accordance with guidance or tables prepared by the scheme actuary.

(5) On payment of the last instalment, the participating member’s reckonable service as an MSP or, as the case may, as an office-holder is increased by the number of added years bought.

(6) The increased period of reckonable service is, for the purposes of rule 38(1) or, as the case may be, 39(3), to be treated as a period during which higher rate scheme member contributions were made.

(7) Where added years are bought by an office-holder member who is not an MSP, the increase in reckonable service is, for the purposes of rule 39(3), to be attributed to the period in office being served when the added years are bought.

Interruption of service

86 (1) This rule applies—

(a) where an MSP member buying added years by monthly instalments stops being an MSP before paying the last instalment, and

(b) where an office-holder member (who is not an MSP) buying added years by monthly instalments stops holding his or her current office (or becomes an MSP) before paying the last instalment.

(2) Where this rule applies no more instalments are payable and the individual’s reckonable service as an MSP or, as the case may be, office-holder is increased—

(a) where the individual died or left the scheme in circumstances entitling him or her to a serious ill-health pension, by the number of added years by which it would have increased if all the instalments had been paid, or

(b) where the individual leaves the scheme in any other circumstance, by a number of added years calculated as follows—

where—

• “A” is the number of added years the individual applied to buy,

• “B” is the period (in days) in respect of which instalments have been paid, and

• “C” is the period (in days) for which instalments would have been paid had the individual remained in the scheme continuously.

Resumption of service as MSP member

87 (1) This rule applies where—

(a) an MSP member’s application to buy added years by monthly instalments is accepted by the Fund trustees but the individual concerned stops being an MSP member before paying the last instalment,

(b) the individual subsequently rejoins the scheme as an MSP member before the end of the period for which instalments were originally payable, and

(c) the individual, within 3 months of so rejoining, notifies the Fund trustees of his or her intention to resume paying instalments.

(2) Where this rule applies—

(a) instalments (of the same amount as before) are payable from the day on which the individual rejoined the scheme until the end of the period for which instalments were originally payable,

(b) the individual’s reckonable service as an MSP is reduced by the amount by which it was previously increased under rule 86(2), and

(c) when the last instalment is paid (or, if earlier, when the individual next leaves the scheme), the individual’s reckonable service as an MSP is increased by a number of added years calculated as follows—

where—

• “A” is the number of added years the individual applied to buy,

• “B” is the total of the periods (in days) before and after the break in service in respect of which instalments have been paid, and

• “C” is the period (in days) for which instalments would have been paid had the individual remained in the scheme continuously.

Buying added years by lump sum

88 (1) The Fund trustees may accept a participating member’s application to buy added years by lump sum if the following conditions are met.

Condition 1	The application states the number of added years which the applicant wishes to buy.
Condition 2	The applicant has satisfied the Fund trustees that he or she is in good health.
Condition 3	The applicant has given the Fund trustees any information that they reasonably require in relation to the application.
Condition 4	Rule 89 does not require the Fund trustees to reject the application.

(2) The lump sum is payable by the participating member during the period of 6 months following acceptance (and the right to buy added years in pursuance of an accepted application is extinguished at the end of that period).

(3) The amount of the lump sum is to be determined by the Fund trustees by reference to the MSP’s or, as the case may be, the office-holder’s salary on the day he or she applied to buy added years.

(4) Such a determination must be—

(a) certified by the scheme actuary, or

(b) made in accordance with guidance or tables prepared by the scheme actuary.

(5) On payment of the lump sum, the participating member’s reckonable service as an MSP or, as the case may, as an office-holder is increased by the number of added years bought.

(6) The increased period of reckonable service is, for the purposes of rule 38(1) or, as the case may be, 39(3), to be treated as a period during which higher rate scheme member contributions were made.

(7) Where added years are bought by an office-holder member who is not an MSP, the increase in reckonable service is, for the purposes of rule 39(3), to be attributed to the period in office being served when the added years are bought.

Limitations on buying added years

89 (1) The Fund trustees must reject an application to buy added years if the corresponding increase in reckonable service, when taken with the applicant’s anticipated reckonable service, would (but for rule 38(2) or 39(4)) entitle the applicant to—

(a) an annual MSP pension of more than the individual’s annual MSP pension cap, or

(b) an annual office-holder pension of more than the individual’s annual office-holder pension cap.

(2) An applicant’s “anticipated reckonable service” is the reckonable service as an MSP or, as the case may be, office-holder which the applicant would obtain if he or she—

(a) continued as an MSP member (and continued making scheme member contributions at the same rate) until—

(i) where applying to buy by monthly instalments, the end of the period for which instalments are payable, or

(ii) where applying to buy by lump sum, the next ordinary general election day, or

(b) continued to hold the same office and to be an office-holder member (and continued making scheme member contributions at the same rate) until—

(i) where applying to buy by monthly instalments, the end of the period for which instalments are payable, or

(ii) where applying to buy by lump sum, the next ordinary general election day (or such other day as the Fund trustees may determine).

(3) The Fund trustees must reject an application to buy added years if they consider—

(a) that an annual allowance charge may arise under section 227 of the Finance Act 2004 (c. 12) in respect of the applicant in any tax year in which an instalment or lump sum would be payable if the application were accepted,

(b) that a lifetime allowance charge may arise under section 214 of the Finance Act 2004 (c. 12) in respect of the applicant (or may so arise if the application were accepted), or

(c) that the total of—

(i) the amount which the applicant would pay for added years in any tax year, and

(ii) the amount of scheme member contributions to be made by the applicant in that year,

would exceed 20% of the salary payments to be made to the applicant in that year.

Multiple applications

90 The Fund trustees may accept more than one application by a participating member to buy added years by instalment or lump sum (and may, in particular, accept two or more applications to buy added years by instalments payable in overlapping periods).

Part P Pension sharing

Pension credit members

91 (1) A “pension credit member” is an individual on whom rights are conferred by the Fund trustees in accordance with paragraph 1(2) of Schedule 5 to the Welfare Reform and Pensions Act 1999 (c. 30).

(2) It is for the Fund trustees to determine the benefits to which a pension credit member is to be entitled.

But those benefits may consist only of—

(a) a right to be paid a pension from the age of 65,

(b) a right to commute a portion of that pension into a lump sum,

(c) a right to take early retirement when aged between 60 and 65 and accordingly to be paid a reduced pension,

(d) a right to be paid a lump sum instead of a pension where the member has not yet received a pension and is not expected to live for longer than one year because of a health condition,

(e) a right to be paid a lump sum instead of a pension where that lump sum would be a trivial commutation lump sum for the purposes of Part 1 of Schedule 29 to the Finance Act 2004 (c. 12),

(f) where a pension credit member dies within 5 years of first receiving a pension, a right to have the pension paid to a surviving partner, dependant children or personal representatives for the remainder of the 5 year period,

(g) where a pension credit member dies before first receiving a pension, a right to have a lump sum paid to a surviving partner, dependant children or personal representatives of an amount equal to 25% of the cash equivalent of the benefits attributable to the corresponding pension credit (within the meaning of Chapter 4 of Part 4 to the Pension Schemes Act 1993 (c. 48)).

(3) An individual’s benefits as a pension credit member are to be provided separately from any other benefits to which the individual may be entitled under the scheme.

(4) A rule which extinguishes an individual’s right to receive scheme benefits on being paid a lump sum does not extinguish any separate rights which the individual may have to receive benefits as a pension credit member (or as a surviving partner, dependant child or personal representative of such a member).

Pension debit members

92 (1) A “pension debit member” is an individual whose scheme benefits have been reduced under section 31 of the Welfare Reform and Pensions Act 1999 (c. 30).

(2) When calculating a deceased individual’s “scheme pension entitlement” for the purposes of Chapter 3 of Part J (see rule 56), any reduction of the deceased’s scheme benefits by way of a pension debit is to be ignored.

(3) A pension debit member may not replace scheme benefits by buying added years which the member would not have been able to buy had those benefits not been reduced.

(4) This rule applies for the purposes of calculating the amount of any death in service lump sum or deferred pensioner lump sum payable in respect of a pension debit member.

The proportion of scheme member contributions attributable to the period before the pension debit member’s scheme benefits became subject to the pension debit is to be reduced by the percentage by which those benefits were reduced.

Part 4 of the Welfare Reform and Pensions Act 1999 (c. 30) sets out—

(a) when a pension debit member’s scheme benefits become subject to a pension debit (see sections 28 and 29 of that Act), and

(b) the percentage by which those benefits are to be reduced (see section 31 of that Act).

Death of ex-partner before discharge of pension credit liability

93 (1) This rule applies where an individual entitled to a pension credit (see section 29(1)(b) of the Welfare Reform and Pensions Act 1999 (c. 30)) dies before the Fund trustees have discharged their liability in respect of that credit.

(2) Where this rule applies, the Fund trustees may pay a lump sum to the individual’s personal representatives of any amount they think fit (up to a maximum of 25% of the pension credit).

Part Q Dual mandate MSPs

Dual mandate MSPs

94 A “dual mandate MSP” is a serving MSP whose salary is reduced under section 82 of the Scotland Act 1998 (c. 46).

Pension reduction for dual mandate MSPs

95 The following adjustments are to be made when doing the calculation set out in rule 38(1) in respect of any individual who was a dual mandate MSP during any period in which the individual was an MSP member—

(a) any reduction in final salary by virtue of section 82(2) of the Scotland Act 1998 (c. 46) is to be ignored,

(b) when determining A, any period of reckonable service as an MSP in respect of which the individual—

(i) made lower rate scheme member contributions, and

(ii) was a dual mandate MSP,

is to be reduced by the same proportion as the MSP’s salary was reduced during that period by virtue of section 82(2) of the Scotland Act 1998 (c. 46), and

(c) when determining B, any period of reckonable service as an MSP in respect of which the individual—

(i) made higher rate scheme member contributions, and

(ii) was a dual mandate MSP,

is to be reduced by the same proportion as the MSP’s salary was reduced during that period by virtue of section 82(2) of the Scotland Act 1998 (c. 46).

Part R Taxes

2004 Act terms

96 In this Part—

• “the 2004 Act” means the Finance Act 2004 (c. 12),

• “event” means a benefit crystallisation event listed in the table in section 216 of the 2004 Act,

• “lifetime allowance charge” has the meaning given by section 214 of the 2004 Act,

• “scheme administrator” means the scheme administrator of the scheme for the purposes of section 217 of the 2004 Act (see sections 270 to 274 of the 2004 Act), and

• “unauthorised charge” means an unauthorised payments charge (see section 208 of the 2004 Act) or an unauthorised payments surcharge (see section 210 of the 2004 Act).

Payment of lifetime allowance charge by scheme administrator

97 (1) The scheme administrator may pay a lifetime allowance charge for which the administrator is liable under section 217 of the 2004 Act.

(2) But such a payment may be made only if the individual with whom the scheme administrator is jointly and severally liable—

(a) requests the scheme administrator to make the payment on or before the date of the event in respect of which the lifetime allowance charge arises, and

(b) pays the amount concerned to the scheme administrator on or before that date.

Payment of lifetime allowance charge from Pension Fund

98 (1) If rule 97(2) prevents the scheme administrator from paying a lifetime allowance charge for which the administrator is liable under section 217 of the 2004 Act, the charge is to be paid from the Pension Fund.

(2) Following such a payment, a reduction is to be made—

(a) where liability arose in respect of event 8, to the amount or value of the transferred sums or assets, or

(b) where liability arose in respect of any other event, to the amount or value of the benefits payable from the Fund to or in respect of the individual with whom the scheme administrator was jointly and severally liable.

(3) A reduction under rule 98(2) must, in the scheme actuary’s opinion, fully reflect the corresponding amount paid under rule 97.

Deductions for tax arising on lump sum payments

99 Any tax due under section 205 of the 2004 Act in respect of a short service lump sum (see rule 72) is to be deducted from that sum before it is paid.

Reduction of benefits which would otherwise attract unauthorised charge

100 Where an unauthorised charge would (but for this rule) arise in respect of any payment from the Pension Fund, that payment must be—

(a) reduced to an amount just below the amount which would otherwise cause that charge to arise, or

(b) where no such reduction is possible, withheld in accordance with rule 101.

Prohibition on payments which would give rise to liability for certain taxes

101 Nothing in the scheme authorises any payment from the Pension Fund if making that payment would give rise to liability for a scheme sanction charge (see section 239 of the 2004 Act) or a de-registration charge (see section 242 of the 2004 Act).

Any payment which would, but for this rule, be made under the scheme is not to be made.

Part S Accounts, audit and actuarial reports

Accounts and audit

102 (1) The Fund trustees must keep proper accounts (and must, in particular, prepare annual statements of account for each financial year).

(2) The Fund trustees must, within 7 months of the end of each financial year—

(a) arrange for the audit of the annual accounts for that year, and

(b) lay a copy of the annual accounts and audit report before the Scottish Parliament.

Actuarial reports

103 (1) The “scheme actuary” is the person appointed by the Fund trustees in accordance with section 47(1)(b) of the Pensions Act 1995 (c. 26).

(2) The Fund trustees may obtain an actuarial report on the scheme at any time they think fit (and must do so at intervals of no more than 3 years).

(3) An actuarial report is to include—

(a) a report on the general financial position of the Pension Fund,

(b) an actuarial valuation of the Pension Fund’s assets and liabilities, and

(c) the scheme actuary’s recommended rate for future contributions under rule 32 (expressed as a percentage of participating member salary payments).

(4) The Fund trustees must lay a copy of each actuarial report before the Scottish Parliament within 3 months of obtaining it.

Part T Miscellaneous

Dispute resolution procedure

104 Section 50 of the Pensions Act 1995 (c. 26) requires the Fund trustees to make and implement arrangements for the resolution of disputes.

Guaranteed minimum pension

105 (1) Any individual who is entitled to a guaranteed minimum pension under the scheme in respect of any transfer-in sum is, on attaining pensionable age, to be paid a pension for the rest of the individual’s life at a weekly rate of not less that his or her guaranteed minimum (if any) under sections 14 to 16 of the Pension Schemes Act 1993 (c. 48).

• “pensionable age” is to be construed in accordance with paragraph (a) of the definition of that term in section 181 of the Pension Schemes Act 1993 (c. 48).

(2) The commencement of payment of a pension payable under this rule is to be postponed if the individual concerned is an MSP or the holder of a pensionable office on the day on which it becomes payable.

(3) Such a postponement is to last—

(a) until the earlier of—

(i) the day on which the individual is neither an MSP nor the holder of a pensionable office, or

(ii) the day falling 5 years after the first day of the postponement, or

(b) for such longer period as the individual may consent to.

Restriction on assignability etc.

106 Despite paragraphs (a) to (c) of section 91(5) of the Pensions Act 1995 (c. 26), assignations, surrenders and commutations of the type described in those paragraphs are not permitted in relation to scheme benefits (except insofar as permitted explicitly by any scheme rule).

Payments due in respect of deceased individuals

107 (1) This rule applies where a deceased’s scheme entitlement is no more than the amount for the time being applicable in relation to the enactments mentioned in section 6 of the Administration of Estates (Small Payments) Act 1965 (c. 32).

A deceased’s “scheme entitlement” is the total of—

(a) any amounts due to the deceased under the scheme at the time of death, and

(b) any amounts payable to the deceased’s personal representatives under the scheme (ignoring any amounts due by way of interest accruing after death).

(2) Where this rule applies, the Fund trustees need not require confirmation or other proof of title before paying amounts due to—

(a) the deceased’s personal representatives, or

(b) any person appearing to the Fund trustees to be beneficially entitled to the deceased’s estate.

(3) The recipient of any amount so paid is to be liable to account for that amount (and the Fund trustees are to be relieved from any such liability).

Formal communications

108 (1) A “formal communication” means any—

(a) notice,

(b) application,

(c) request, or

(d) certification,

made or given under or for the purposes of this Act.

(2) A formal communication must be in writing.

(3) A formal communication is made or given to a person if it is—

(a) delivered, or sent by post, to—

(i) where the formal communication is being delivered to the Fund trustees or an MSP, the Scottish Parliament,

(ii) where the formal communication is being sent to the holder of a pensionable office (who is not an MSP), the office-holder’s principal office, or

(iii) in any other case, the usual or last known abode of the person to whom the formal communication is delivered or sent, or

(b) sent in some other way (including by electronic means) which the sender reasonably considers likely to cause it to be delivered on the same or next day.

(4) A formal communication which is sent by electronic means is to be treated as being in writing if it is received in a form which is legible and capable of being used for subsequent reference.

(5) A formal communication sent in the way described in rule 108(3)(b) is, unless the contrary is proved, to be treated as having been delivered on the day after it is sent (or, if that day falls on a weekend or a bank holiday, on the next weekday which is not a bank holiday).

• “bank holiday” means a day which is a bank holiday in Scotland by virtue of the Banking and Financial Dealings Act 1971 (c. 80).

Part U Key terms

Interpretation

109 (1) In the scheme—

• “deferred pensioner” means an individual (other than a participating member or a scheme pensioner whose pension payments are suspended under rule 41) who is not entitled to receive a scheme pension by virtue only of being—

  (a)

  aged under 65, or

  (b)

  an MSP, or the holder of a pensionable office, who is aged 65 or over,

• “doctor” means a fully registered person within the meaning of the Medical Act 1983 (c. 54),

• “elected” means returned as an MSP by virtue of the Scotland Act 1998 (c. 46) (and includes being appointed as an MSP by virtue of section 10 of that Act),

• “final salary”, in relation to an MSP or the holder of a pensionable office, means—

  (a)

  the MSP salary or, as the case may be, office-holder salary paid to the individual during the last 12 months (whether continuous or not) during which the individual was an MSP member or, as the case may be, office-holder member, or

  (b)

  if the individual made scheme member contributions from MSP salary or, as the case may be, office-holder salary for fewer than 12 months, the amount determined by doing the following calculation—

  

  where—

  • “A” is the MSP salary or, as the case may be, office-holder salary paid to the individual during the period for which the individual was an MSP member or, as the case may be, office-holder member, and

  • “B” is the number of days for which the individual was an MSP member or, as the case may be, office-holder member,

• “financial year” means a year ending with 31 March,

• “guaranteed minimum pension” has the meaning given by section 8 of the Pension Schemes Act 1993 (c. 48),

• “higher rate scheme member contribution” is a scheme member contribution of 11% of salary,

• “ill-health pension” means—

  (a)

  a serious ill-health pension,

  (b)

  an ordinary ill-health pension, or

  (c)

  a deferred pensioner’s ill-health pension,

• “lower rate scheme member contribution” is a scheme member contribution of 6% of salary,

• “MSP” means a member of the Scottish Parliament (but also includes an individual to whom an MSP salary is payable after dissolution by virtue of section 83(4) of the Scotland Act 1998 (c. 46)),

• “ordinary general election day” means a day on which an ordinary general election is scheduled to be held under section 2(2) of the Scotland Act 1998 (c. 46),

• “participating member” means an individual who is an MSP member or an office-holder member (or both an MSP member and an office-holder member),

• “rule” means a rule set out in the scheme,

• “salary” means—

  (a)

  in relation to an MSP, the salary payable by virtue of section 81(1) of the Scotland Act 1998 (c. 46) (including any salary payable because of section 83(4) of that Act), and

  (b)

  in relation to an office-holder, the salary payable for holding office,

  and “MSP salary” and “office-holder salary” are to be construed accordingly,

• “salary payment” means—

  (a)

  in relation to a participating member who is an MSP member only, a payment in respect of the member’s MSP salary,

  (b)

  in relation to a participating member who is an office-holder member only, a payment in respect of the member’s office-holder salary,

  (c)

  in relation to a participating member who is both an MSP member and an office-holder member, a payment in respect of the member’s MSP salary or office-holder salary (or both salaries),

• “scheme member” means an individual who is—

  (a)

  a participating member,

  (b)

  a deferred pensioner, or

  (c)

  a scheme pensioner,

• “scheme pensioner” means an individual—

  (a)

  entitled to receive a scheme pension, or

  (b)

  who would be so entitled but for rule 41(1),

• “SPCB” means the Scottish Parliamentary Corporate Body,

• “work” includes work—

  (a)

  under a contract of employment, service or apprenticeship,

  (b)

  as the holder of an office, or

  (c)

  as a self-employed person.

(2) References in the scheme to the amount of an individual’s scheme pension are references to the amount of scheme pension payable to the individual under rule 37(2) and, unless the contrary intention appears, are to be read as including any reduction or enhancement to that amount attributable to—

(a) rules 43(2), 44(2), 46(4), 50 or 95, or

(b) section 31 of the Welfare Reform and Pensions Act 1999 (c. 30) or any other enactment,

and references to the annual amount of an individual’s scheme pension are to be construed accordingly.

(3) References in the scheme to an amount of scheme member contributions “with interest” are references an amount equal to—

(a) the amount of those contributions, and

(b) compound interest of 4% each year accruing from the date each contribution was paid (calculated with annual rests).

Index

110 The words and expressions listed in the left column of the following table are defined or otherwise explained for the purposes of the scheme by the rules indicated in the right column.

Words and expressions	Interpretation rules
“added years”	rule 84
“annual MSP pension”	rule 38(1)
“annual MSP pension cap”	rule 38(2)
“annual office-holder pension”	rule 39(1)
“annual office-holder pension cap”	rule 39(4)
“child”	rule 63(1)
“children’s pension”	rule 62(1)
“commutation notice”	rule 42(1)
“death in service lump sum”	rule 65(1)
“deferred pensioner”	rule 109(1)
“deferred pensioner’s ill-health pension”	rule 49
“deferred pensioner lump sum”	rule 67(1)
“doctor”	rule 109(1)
“dual mandate MSP”	rule 94
“early retirement notice”	rule 46(2)
“elected”	rule 109(1)
“eligible child”	rule 63(2)
“final salary”	rule 109(1)
“financial year”	rule 109(1)
“formal communication”	rule 108(1)
“Fund trustees”	rule 4
“guaranteed lump sum”	rule 70(1)
“guaranteed minimum pension”	rule 109(1)
“higher rate scheme member contribution”	rule 109(1)
“holder of a pensionable office”	rule 22(2)
“ill-health lump sum”	rule 55(1)
“ill-health pension”	rule 109(1)
“initial pension period”	rule 68
“interest”	rule 109(3)
“lower rate scheme member contribution”	rule 109(1)
“MSP”	rule 109(1)
“MSP member”	rule 21
“MSP salary”	rule 109(1)
“ordinary ill-health pension”	rule 48
“office-holder member”	rule 22(1)
“office-holder pension entitlement”	rule 39
“office-holder salary”	rule 109(1)
“one-off lump sum”	rule 45(1)
“ordinary general election day”	rule 109(1)
“participating member”	rule 109(1)
“partner”	rule 57(1)
“partner’s pension”	rule 58(1)
“partner’s trivial lump sum”	rule 61(1)
“pension debit member”	rule 92(1)
“pension credit member”	rule 91(1)
“Pension Fund”	rule 2
“reckonable service as an MSP”	rule 33(2)
“reckonable service as an office-holder”	rule 34(2)
“retirement lump sum”	rule 42(1)
“rule”	rule 109(1)
“salary”	rule 109(1)
“salary payment”	rule 109(1)
“scheme”	rule 1
“scheme actuary”	rule 103
“scheme member”	rule 109(1)
“scheme member contribution”	rule 27(a)
“scheme pension”	rule 37(1)
“scheme pension entitlement”	rule 56(1)
“scheme pensioner”	rule 109(1)
“serious ill-health pension”	rule 47
“short service refund”	rule 72(1)
“SPCB”	rule 109(1)
“total reckonable service”	rule 35
“transfer-in sum”	rule 81
“transferable sum”	rule 74(1)
“work”	rule 109(1)

SCHEDULE 2 Grants payable on leaving office

(introduced by section 2)

MSP resettlement grant

1 (1) The SPCB must pay a grant (an “MSP resettlement grant”) to each individual who—

(a) is an MSP immediately before a dissolution of the Scottish Parliament, but

(b) is not returned as an MSP at the next general election held under Part 1 of the Scotland Act 1998 (c. 46).

(2) An MSP resettlement grant is not payable to the personal representatives of an individual who dies before the election concerned.

MSP ill-health retirement grant

2 (1) The SPCB must pay a grant (an “MSP ill-health retirement grant”) to an ex-MSP who applies for such a grant if—

(a) the applicant resigned as an MSP at any time other than immediately before a dissolution of the Scottish Parliament, and

(b) the SPCB is satisfied that the resignation was a direct consequence of a health condition which prevented the applicant from performing adequately his or her duties as an MSP.

(2) The SPCB may, for the purposes of so satisfying itself, require—

(a) an applicant to provide evidence from a doctor of the applicant’s state of health,

(b) an examination of the applicant by a doctor nominated by the SPCB (with examination costs borne as the SPCB may determine).

Amount of MSP grants

3 (1) The amount of an MSP resettlement grant or MSP ill-health retirement grant is to be equal to the appropriate percentage of the annual MSP salary payable in accordance with section 81(1) of the Scotland Act 1998 (c. 46) when the individual stopped being an MSP.

• “appropriate percentage” means the higher of—

  (a)

  50%, and

  (b)

  X%, “X” being equal to—

  

  where “A” is the number of complete continuous years for which the individual has been an MSP (up to a maximum of 12).

(2) When determining “A”, any period during which the individual to whom the grant is payable was a dual mandate MSP is to be reduced by the same proportion as the individual’s MSP salary was reduced during that period by virtue of section 82(2) of the Scotland Act 1998 (c. 46)).

(3) Sub-paragraph (2) does not apply in relation to any period—

(a) during which an individual who is an MSP on the day on which this paragraph comes into force is an MSP, and

(b) which occurs before the first general election held under Part 1 of the Scotland Act 1998 (c. 46) after that day.

Office-holder resettlement grant

4 (1) The SPCB must pay a grant (an “office-holder resettlement grant”) to an individual who—

(a) stops being the holder of a pensionable office, and

(b) is not appointed as the holder of a pensionable office during the following 90 days.

(2) The amount of an office-holder resettlement grant is to be equal to the appropriate percentage of the annual office-holder salary payable to the individual when the individual left office.

• “appropriate percentage” means—

  (a)

  in the case of the Presiding Officer or First Minister, the higher of—

  (i)

  50%, and

  (ii)

  X%, “X” being equal to—

  

  where “A” is the number of complete continuous years for which the individual has been Presiding Officer or First Minister (up to a maximum of 12),

  (b)

  in any other case, 25%.

(3) An office-holder resettlement grant is not payable—

(a) to the personal representatives of an individual who—

(i) stops holding a pensionable office because he or she dies, or

(ii) dies during the period of 90 days after the individual stops holding a pensionable office, or

(b) to any individual who, on the day this paragraph comes into force, is or has been—

(i) the Presiding Officer, or

(ii) the First Minister.

Key terms

5 The following terms have the same meaning in this schedule as they have in the Scottish Parliamentary Pension Scheme (see schedule 1)—

• “doctor”

• “dual mandate MSP”

• “holder of a pensionable office”

• “MSP”

• “MSP salary”

• “office-holder salary”

• “SPCB”

SCHEDULE 3 Transitional provisions and savings

(introduced by section 1(3))

Introductory

1 (1) In this schedule—

• “new rules day” means the first day of the month which follows the month which includes the day falling 6 months after the Bill for this Act receives Royal Assent,

• “new scheme rules” means the rules set out in schedule 1 which govern the scheme from the new rules day,

• “1999 scheme rules” means the provisions of the 1999 pensions order which governed the scheme before the new rules day.

(2) Other words and expressions used in this schedule have the same meaning as they have in the new scheme rules (unless the contrary intention appears).

Continuation of scheme and transfer of Pension Fund

2 Despite article A3 of the 1999 pensions order—

(a) that order continues to have effect in so far as needed to give effect to section 1(1) of this Act, and

(b) article B1 of the 1999 scheme rules continue to have effect in so far as it establishes the Pension Fund.

Scheme participation

3 An individual is not entitled to participate in the scheme as an office-holder member if, on the new rules day, the individual is or has been—

(a) the Presiding Officer, or

(b) the First Minister.

Scheme member contributions

4 (1) An “existing participating member” is an individual who—

(a) participates in the scheme in accordance with the 1999 scheme rules when this paragraph comes into force, and

(b) would become a participating member in accordance with the new scheme rules if still participating in the scheme on the new rules day.

(2) Despite new scheme rule 28, an existing participating member is to continue to make lower rate scheme member contributions after the new rules day if he or she notifies the SPCB that he or she wishes to do so.

(3) Such a notice is valid only if received at least 14 days before the new rules day.

(4) The SPCB must inform the Fund trustees of every valid notice given to it under this paragraph.

(5) This paragraph does not prevent the existing participating member from subsequently changing the amount of scheme member contributions in accordance with new scheme rule 29.

Contributions from SPCB

5 The determination under article D3(2) of the 1999 scheme rules which has effect immediately before the new rules day is to have effect after that day as if made under new scheme rule 32(2).

Reckonable service as an MSP

6 (1) This paragraph applies to an individual who—

(a) was a “participating member” under the 1999 scheme rules, but

(b) is not, immediately before the new rules day, a “pensioner member” under the 1999 scheme rules.

(2) After the new rules day—

(a) the “aggregate period of reckonable service as a participating member” which an individual to whom this paragraph applies has obtained under the 1999 scheme rules is to be treated as a period of reckonable service as an MSP for the purposes of the new scheme rules, and

(b) the individual concerned is to be treated as having made lower rate scheme member contributions during that period.

(3) Where an individual to whom this paragraph applies—

(a) is purchasing added years by periodical contributions in accordance with Schedule 5 to the 1999 pensions order immediately before the new rules day, or

(b) has had an application to purchase added years accepted by the SPCB in accordance with Schedule 5 to the 1999 pensions order but has not yet made the lump sum payment,

no part of the added years concerned are to be treated as forming part of the individual’s “aggregate period of reckonable service as a participating member” for the purposes of this paragraph.

Reckonable service as an office-holder

7 (1) This paragraph applies to an individual who—

(a) was a “participating office holder” under the 1999 scheme rules, but

(b) is not, immediately before the new rules day, a “pensioner member” under the 1999 scheme rules.

(2) After the new rules day—

(a) the “aggregate period of reckonable service as a participating office holder” which an individual to whom this paragraph applies has obtained under the 1999 scheme rules is to be treated as a period of reckonable service as an office-holder under the new scheme rules, and

(b) the individual concerned is, for the purposes of new scheme rule 39, to be treated as having obtained a single office-holder pension entitlement in respect of that “aggregate period of reckonable service as a participating office holder” to be calculated as follows—

where “highest office-holder salary” means—

(i)

the highest office-holder salary paid to the individual during any period of 12 months (whether continuous or not and whether before or spanning the new rules day) for which the individual participates in the scheme (as a “participating office holder” under the 1999 scheme rules or as an “office-holder member” under the new scheme rules) in respect of a pensionable office to which he or she was appointed before the new rules day, or

(ii)

where the individual so participates for fewer than 12 months, the amount determined by doing the following calculation—

where—

• “A” is the office-holder salary paid to the individual during the period in which he or she so participates, and

• “B” is the number of days for which the individual so participates.

Total reckonable service

8 The total reckonable service of an individual who participated in the scheme before the new rules day (see new scheme rule 35) includes the “actual period of reckonable service as a participant” which the individual obtained under the 1999 scheme rules.

Special provision for participants reaching age of 75 before the new rules day

9 (1) This paragraph applies to an individual who—

(a) is participating in the scheme in accordance with the 1999 scheme rules, and

(b) is aged under 75 when this paragraph comes into force but will reach the age of 75 before the new rules day.

(2) An individual to whom this paragraph applies may, before reaching the age of 75, give notice to the SPCB that he or she desires to commute into a lump sum such part of his or her pension as is specified in the notice.

(3) An individual who gives such a notice is to be treated for the purposes of Part G of the 1999 scheme rules as having given an equivalent notice under article G1(1) (and Part G is to apply accordingly).

(4) Despite article F1(a) and (b) and article F2 of the 1999 scheme rules—

(a) the fact that an individual who gives such a notice is—

(i) an MSP, or

(ii) the holder of a qualifying office (within the meaning of article C2(3) of the 1999 scheme rules),

does not prevent the individual from being entitled to receive a pension, from the day before the individual’s 75th birthday, in accordance with article F1 or F2 of the 1999 scheme rules, but

(b) the amount of pension so payable is to be nil until the individual is neither an MSP nor the holder of such an office.

Payment of pensions due on new rules day etc.

10 Despite article A3 of the 1999 pensions order, the 1999 scheme rules are to continue to have effect (instead of the new scheme rules) in relation to any individual who, immediately before the new rules day, is entitled to receive a pension in accordance with the 1999 scheme rules.

But the SPCB’s functions, rights, liabilities and obligations under the 1999 scheme rules which relate to such individuals are transferred to and vest in the Fund trustees.

Entitlement of partners and children after new rules day

11 Despite the preceding paragraph, the new scheme rules are to govern an individual’s entitlement to receive scheme benefits by virtue of being the partner or child of an individual who—

(a) is entitled to receive a pension on the new rules day, or

(b) died before the new rules day.

This paragraph does not affect payments due or withheld in respect of any period before the new rules day.

Early retirement

12 (1) An individual falls within this paragraph if the individual—

(a) participated in the scheme before the new rules day,

(b) accumulates at least 15 years relevant service before the cut-off date, being service which is the total of—

(i) any period of service as an MSP during which the individual participated in the scheme (under the 1999 scheme rules or the new scheme rules), and

(ii) any period of service as a member of the European Parliament or the House of Commons that is not concurrent with any such period of service as an MSP, and

(c) where the individual is under 55, has a “protected pension age” of under 55 in relation to the scheme for the purposes of paragraph 22(8) of Schedule 36 to the Finance Act 2004 (c. 12).

(2) Rule 46 applies to an individual falling within this paragraph with the following modifications—

(a) in rule 46(1)(a), for “55” substitute “50”,

(b) the proportion of the amount of annual scheme pension attributable to reckonable service accumulated before the cut-off date is to be reduced under rule 46(4) by no more than the appropriate percentage specified in the table set out in schedule 4 to the 1999 pensions order.

(3) In this paragraph “cut-off date” means the date of the first general election held under Part 1 of the Scotland Act 1998 (c. 46) after the new rules day.

Partner’s and children’s pensions

13 (1) An individual falls within this paragraph if the individual—

(a) participated in the scheme before the new rules day,

(b) accumulates at least 15 years relevant service before the date of the first general election held under Part 1 of the Scotland Act 1998 (c. 46) after the new rules day, being service which is the total of—

(i) any period of service as an MSP during which the individual participated in the scheme (under the 1999 scheme rules or the new scheme rules), and

(ii) any period of service as a member of the European Parliament or the House of Commons that is not concurrent with any such period of service as an MSP, and

(c) takes early retirement after the new rules day.

(2) The reduction made under new scheme rule 46(4) to the scheme pension of an individual falling within this paragraph is to be ignored when calculating the individual’s “scheme pension entitlement” for the purposes of new scheme rule 56.

5 year guarantee

14 (1) The Fund trustees may, instead of continuing to pay a deceased scheme pensioner’s scheme pension under new scheme rule 71, pay to the deceased’s personal representatives an amount equal to the lump sum which would have been payable under article M4 of the 1999 scheme rules if those had continued in force.

(2) But such a lump sum may be paid only if—

(a) the deceased participated in the scheme before the new rules day, and

(b) the payment would, by virtue of paragraph 36 of Schedule 36 to the Finance Act 2004 (c. 12), be permitted by the lump sum death benefit rule (see section 168 of that Act).

Deferred pensioner lump sums

15 (1) This paragraph applies where a deferred pensioner lump sum is payable under new scheme rule 67(1) in respect of a deceased individual who participated in the scheme under the 1999 scheme rules.

(2) Where this paragraph applies, any sums deducted from the deceased’s salary in accordance with Part D of the 1999 scheme rules are to be treated for the purposes of new scheme rule 67(2) as being scheme member contributions made by the deceased.

Short service refunds

16 (1) Condition 3 of new scheme rule 72(1) does not apply in relation to an individual who participated in the scheme before the new rules day (but such an individual is entitled to a short service refund only if he or she has fewer than 2 years total reckonable service).

(2) Any sums deducted from the salary of such an individual in accordance with Part D of the 1999 scheme rules are to be treated for the purposes of new scheme rule 72(2) as being scheme member contributions made by the individual.

Transfers

17 (1) When applying rule 76 in relation to an individual who participated in the scheme before the new rules day, amount A is to include—

(a) any contributions made in respect of the individual under article D1 of the 1999 scheme rules,

(b) any sums received in respect of the individual under article P6 of the 1999 scheme rules, and

(c) any payments made by the individual under Schedule 5 to the 1999 scheme rules.

(2) Condition 2 in new scheme rule 81 does not apply during the 12 months following the new rules day in relation to an individual who is a participating member on the new rules day.

Added years

18 (1) This paragraph applies where an individual—

(a) is purchasing added years by periodical contributions in accordance with Schedule 5 to the 1999 scheme rules immediately before the new rules day, or

(b) has had an application to purchase added years accepted by the SPCB in accordance with Schedule 5 to the 1999 scheme rules but has not yet made the lump sum payment.

(2) Where this paragraph applies—

(a) Part Q of (and Schedule 5 to) the 1999 scheme rules are, despite article A3 of the 1999 pensions order, to continue to have effect in relation to those purchases,

(b) the individual’s reckonable service as an MSP is to be increased by any added years in respect of which the periodical contributions (including any paid before the new rules day) or lump sum has been paid, and

(c) that increased period of reckonable service is, for the purposes of new scheme rule 38(1), to be treated as a period during which lower rate scheme member contributions were made.

(3) The reference in new scheme rule 89(3)(c)(ii) to scheme member contributions is, in relation to any tax year including or after the new rules day, to include any contributions made during that year under paragraph 4 of Schedule 6 to the 1999 scheme rules.

AVC Scheme

19 (1) Despite article A3 of the 1999 pensions order, the scheme for making additional voluntary contributions set out in Part R of (and Schedule 6 to) the 1999 scheme rules is to continue to have effect with the following modifications—

(a) all the SPCB’s functions, rights, liabilities and obligations in relation to the AVC scheme are transferred to and vest in the Fund trustees,

(b) no individual may become a contributor to the AVC scheme after the new rules day (and sub-paragraphs (1) and (3) of paragraph 3 of Schedule 6 is accordingly to cease to have effect),

(c) in paragraph 3(2) of Schedule 6, the words from “but” to “participant” are to cease to have effect,

(d) no transfers may be made to the AVC scheme after the new rules day (and paragraph 4 (4) of Schedule 6 is accordingly to cease to have effect),

(e) in paragraph 9 of Schedule 6—

(i) in sub-paragraph (1)(a), for the words from “an” to “1993” substitute “another pension scheme subject to that transfer being a recognised transfer for the purposes of section 169 of the Finance Act 2004 (c. 12)”, and

(ii) in sub-paragraph (1)(c), for “2 years” substitute “3 months”,

(f) paragraphs 10 and 11 of Schedule 6 are to cease to have effect.

(2) New scheme rule 3 does not apply in relation to benefits payable and AVC contributions received under the AVC scheme.

Guaranteed minimum pension

20 The reference in new scheme rule 105(1) to a “transfer-in sum” includes reference to any sum received under article P6 of the 1999 scheme rules.

Presiding Officer and First Minister pension scheme

21 (1) Despite article A3 of the 1999 pensions order, Part S of the 1999 order is to continue to have effect in relation to—

(a) any individual who is, or who has been, the First Minister or the Presiding Officer on or before the new rules day, and

(b) the rights of any person to receive benefits under Part S of the 1999 order in respect of such an individual.

(2) The SPCB is to continue as the manager of the scheme established by Part S of the 1999 order and, in particular, is to determine the extent of any benefits conferred on an individual in respect of that scheme in accordance with paragraph 2(2) of Schedule 5 to the Welfare Reform and Pensions Act 1999 (c. 30).

(3) When calculating an individual’s entitlement to benefits under article S2 of the 1999 scheme rules, any reduction of the deceased’s pension by way of a pension debit arising under the Welfare Reform and Pensions Act 1999 (c. 30) is to be ignored.

General saving

22 Despite article A3 of the 1999 pensions order, the 1999 scheme rules are to continue to have effect in so far as they are needed to give effect to any provisions saved by this schedule.

Disapplication of scheme modifications

23 The modifications set out in regulations made under paragraph 3 of Schedule 36 to the Finance Act 2004 (c. 12) no longer apply in relation to the scheme