PART IIOccupational Pensions
Modification of schemes
F1The subsisting rights provisions: interpretationC567A
1
In the subsisting rights provisions, each of the following expressions has the meaning given to it by the following provisions of this Article—
F7“prohibited modification”
“regulated modification”
“protected modification”
“detrimental modification”
“affected member”
“subsisting right”
“scheme rules”.
F81A
“Prohibited modification” means a modification of an occupational pension scheme which on taking effect would or might result in any subsisting right of—
a
a member of the scheme, or
b
a survivor of a member of the scheme,
which is not a right or entitlement to money purchase benefits becoming, or being replaced with, a right or entitlement to collective money purchase benefits under the scheme rules.
2
“Regulated modification” means a modification which is—
a
a protected modification, or
b
a detrimental modification,
or is both.
F123
“Protected modification” means a modification F9, other than a prohibited modification, of an occupational pension scheme which—
C4a
F10on taking effect would or might result in any subsisting right of—
i
a member of the scheme, or
ii
a survivor of a member of the scheme,
which is not a right or entitlement to money purchase benefits becoming, or being replaced with, a right or entitlement to money purchase benefits under the scheme rules,
F10on taking effect would or might result in a relevant transformation of any subsisting right of a member of the scheme or a survivor of a member of the scheme (see paragraph (3A)),
b
would or might result in a reduction in the prevailing rate of any pension in payment under the scheme rules F11, other than a pension that is a collective money purchase benefit, or
c
is of a prescribed description.
F12For the purposes of sub-paragraph (a), the reference in the definition of “money purchase benefits” in section 176(1) of the Pension Schemes Act to the widow or widower of a member of an occupational pension scheme is to be read as including any other survivor of the member.
F133A
For the purposes of paragraph (3)(a), there is a relevant transformation of a subsisting right where—
a
a subsisting right that is not a right or entitlement to money purchase benefits becomes, or is replaced with, a right or entitlement to money purchase benefits under the scheme rules,
b
a subsisting right that is a right or entitlement to money purchase benefits other than collective money purchase benefits becomes, or is replaced with, a right or entitlement to collective money purchase benefits under the scheme rules, or
c
a subsisting right that is a right or entitlement to collective money purchase benefits becomes, or is replaced with, a right or entitlement to money purchase benefits other than collective money purchase benefits under the scheme rules.
3B
For the purposes of paragraph (3A), the reference in the definition of “money purchase benefits” in section 176(1) of the Pension Schemes Act to the widow, widower or surviving civil partner of a member of an occupational pension scheme is to be read as including any other survivor of the member.
4
“Detrimental modification” means a modification F14, other than a prohibited modification, of an occupational pension scheme which on taking effect would or might adversely affect any subsisting right of—
a
any member of the scheme, or
b
any survivor of a member of the scheme.
5
A person is an “affected member”
a
in relation to a protected modification within sub-paragraph (a) or (b) of paragraph (3), if, at the time the modification takes effect, he is—
i
a member of the scheme, or
ii
a survivor of a member of the scheme,
and, on taking effect, the modification would or might affect any of his subsisting rights as mentioned in that sub-paragraph,
b
in relation to a protected modification within sub-paragraph (c) of that paragraph, if he is of a prescribed description, and
c
in relation to a detrimental modification which is not a protected modification if, at the time the modification takes effect, he is—
i
a member of the scheme, or
ii
a survivor of a member of the scheme,
and, on taking effect, the modification would or might adversely affect any of his subsisting rights.
C1C2C3C7C66
“Subsisting right” means—
a
in relation to a member of an occupational pension scheme, at any time—
i
any right which at that time has accrued to or in respect of him to future benefits under the scheme rules, or
ii
any entitlement to the present payment of a pension or other benefit which he has at that time, under the scheme rules, and
b
in relation to the survivor of a member of an occupational pension scheme, at any time, any entitlement to benefits, or right to future benefits, which he has at that time under the scheme rules in respect of the member.
For this purpose, “right” includes a pension credit right.
C1C2C3C7C67
At any time when the pensionable service of a member of an occupational pension scheme is continuing, his subsisting rights are to be determined as if he had opted, immediately before that time, to terminate that service.
8
“Scheme rules”, in relation to a scheme, means—
a
the rules of the scheme, except so far as overridden by a relevant legislative provision,
b
the relevant legislative provisions, to the extent that they have effect in relation to the scheme and are not reflected in the rules of the scheme, and
c
any provision which the rules of the scheme do not contain but which the scheme must contain if it is to conform with the requirements of Chapter 1 of Part IV of the Pension Schemes Act (preservation of benefit under occupational pension schemes).
9
For the purposes of paragraph (8)—
a
“relevant legislative provision” means any provision contained in any of the following provisions—
i
Schedule 5 to the Social Security (Northern Ireland) Order 1989 (equal treatment for men and women);
F4ii
Chapter 2 or 3 of Part 4 of the Pension Schemes Act (certain protection for early leavers) or regulations made under either of those Chapters;
iia
Chapter 1 or 2 of Part 4ZA of that Act (transfers and contribution refunds) or regulations made under either of those Chapters;
iii
Part IVA of that Act (requirements relating to pension credit benefit) or regulations made under that Part;
iv
section 106(1) of that Act (requirement as to resources for annual increase of guaranteed minimum pensions);
v
this Part (occupational pensions) or orders or regulations made or having effect as if made under this Part;
vi
Article 28 of the Welfare Reform and Pensions (Northern Ireland) Order 1999 (pension debits: reduction of benefit);
vii
any provision mentioned in Article 279(2) of the Pensions (Northern Ireland) Order 2005;
F2viii
section 61 of the Pension Schemes Act 2015;
ix
regulations made under section 62 or 63 of the Pension Schemes Act 2015;
F15x
regulations made under section 69(4) of or paragraph 1(6) of Schedule 5 to the Pension Schemes Act 2021;
xi
sections 85, 90, 92, 93 and 96 of the Pension Schemes Act 2021;
F5xii
sections 21, 23, 26, 28, 29 and 33 of and Schedule 1 to the Pension Schemes Act (Northern Ireland) 2021;
b
a relevant legislative provision is to be taken to override any of the provisions of the scheme if, and only if, it does so by virtue of any of the following provisions—
i
paragraph 3 of Schedule 5 to the Social Security (Northern Ireland) Order 1989;
ii
section 125(1) of the Pension Schemes Act;
iii
Article 114(1);
iv
Article 28(4) of the Welfare Reform and Pensions (Northern Ireland) Order 1999;
v
Article 279(1) of the Pensions (Northern Ireland) Order 2005.
F3vi
section 61(3) of the Pension Schemes Act 2015;
vii
regulations made under section 62(4) or 63(4) of the Pension Schemes Act 2015.
F16viii
sections 69(7)(b), 85(5), 90(6), 92(6), 93(2) and 96(5) of and paragraph 1(7) of Schedule 5 to the Pension Schemes Act 2021.
F6ix
sections 21(7), 23(7), 26(9), 28(6), 29(2) and 33(5) of and paragraph 1(7) of Schedule 1 to the Pension Schemes Act (Northern Ireland) 2021.
10
For the purposes of this Article—
a
“survivor”, in relation to a member of an occupational pension scheme, means a person who—
i
is the widow or widower of the member, or
ii
has survived the member and has any entitlement to benefit, or right to future benefits, under the scheme rules in respect of the member, and
b
a modification would or might adversely affect a person's subsisting right if it would alter the nature or extent of the
entitlement or right so that the benefits, or future benefits, to which the entitlement or right relates would or might be less generous.
11
In the subsisting rights provisions, in relation to—
a
the exercise of a power to modify an occupational pension scheme to which the subsisting rights provisions apply, or
b
a modification made, or to be made, in exercise of such a power,
references to “the scheme” are to be read as references to the scheme mentioned in sub-paragraph (a).