The Occupational Pension Schemes (Transfer Values) Regulations 1996

[F1 Manner of calculation of initial cash equivalents for collective money purchase benefits E+W+S

7ZC.— (1) For collective money purchase benefits, the initial cash equivalent is the realisable value of the member’s share at the date of calculation of the available assets of the collective money purchase scheme, and is to be calculated—

(a) on an actuarial basis;

(b) using assumptions determined in accordance with this regulation; and

(c) in accordance with the scheme rules, to the extent that they are consistent with sub-paragraphs (a) and (b).

(2) Having taken the advice of the actuary, the trustees must—

(a) determine the economic, financial and demographic assumptions; and

(b) calculate the initial cash equivalent by using the assumptions so determined.

(3) In determining the demographic assumptions, the trustees must have regard to—

(a) the main characteristics of the members of the scheme; or

(b) where the members of the scheme do not form a large enough group to allow demographic assumptions to be made, the characteristics of a wider population sharing similar characteristics to the members.

(4) The trustees must have regard to the scheme’s investment strategy when deciding what assumptions will be included in calculating the discount rates in respect of the member.

(5) The trustees must determine the assumptions under this regulation with the aim that, taken as a whole, they should lead to the best estimate of the initial cash equivalent.

(6) In this regulation, “the available assets of the collective money purchase scheme” has the meaning given by section 2(2) of the Pension Schemes Act 2021 “the available assets of the scheme”.]

Textual Amendments

F1 Reg. 7ZC inserted (1.8.2022) by The Occupational Pension Schemes (Collective Money Purchase Schemes) (Modifications and Consequential and Miscellaneous Amendments) Regulations 2022 (S.I. 2022/337), regs. 1(3), 3(7)