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The New Firefighters’ Pension Scheme Order (Northern Ireland) 2007

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PART 12TRANSFERS INTO AND OUT OF THE SCHEME

CHAPTER 1INTERPRETATION OF PART 12 AND ENTITLEMENT TO TRANSFER VALUE PAYMENT

Interpretation of Part 12

71.  In this Part—

“guaranteed cash equivalent transfer value payment” means a payment of the description mentioned in article 74(2); and

“public sector transfer arrangements” means arrangements approved by HM Treasury as providing reciprocal arrangements for the payment and receipt of transfer values between this Scheme and other occupational pension schemes.

Entitlement to transfer value payment

72.—(1) This Part supplements the rights conferred by Chapter IV of Part IV of the 1993 Act (transfer values) (“Chapter IV”).

(2) A firefighter member or deferred member—

(a)to whom Chapter IV applies(1); and

(b)who is not a pension credit member or pensioner member of this Scheme,

is entitled to require the payment of a transfer value in respect of the rights to benefit that have accrued to or in respect of him under this Scheme.

(3) Subject to the provisions of this Part, any former firefighter member, other than a pensioner member, is entitled to require such a payment as if such rights had accrued to or in respect of him by reference to the pensionable service he is entitled to count under this Scheme (and references in this Part to his accrued rights or benefits are to be read accordingly).

(4) Paragraph (3) does not apply if the contributions the former member has paid during the period of service ending with his ceasing to be a firefighter member are refunded under article 18 and, where applicable, in accordance with Chapter V of Part IV of the 1993 Act.

(5) Paragraphs (2) and (3) do not apply to rights that are directly attributable to a pension credit.

CHAPTER 2TRANSFERS OUT OF THE SCHEME

Applications for statements of entitlement

73.—(1) A member who requires a transfer value payment to be made must apply in writing to the Board for a statement of the amount of the cash equivalent of the member’s accrued benefits under the Scheme at the guarantee date (“a statement of entitlement”).

(2) In this Chapter, “the guarantee date” means any date that—

(a)falls within the required period;

(b)is chosen by the Board;

(c)is specified in the statement of entitlement; and

(d)is within the period of thirty days ending with the date on which the member is provided with the statement of entitlement.

(3) In counting the period of thirty days referred to in paragraph (2)(d), Saturdays, Sundays, Christmas Day, New Year’s Day and Good Friday are excluded.

(4) In paragraph (2) “the required period” means—

(a)the period of three months beginning with the date of the member’s application for a statement of entitlement; or

(b)such longer period (not exceeding six months beginning with that date) as may reasonably be required if, for reasons beyond the control of the Board, the requisite information cannot be obtained to calculate the amount of the cash equivalent.

(5) The member may withdraw the application for a statement of entitlement by notice in writing at any time before the statement is provided.

(6) Where, in any period of twelve consecutive months, a member—

(a)has made, and not withdrawn, two applications for a statement of entitlement; and

(b)makes a third (or subsequent) application;

the Board shall not be required to entertain the application if it is not accompanied by a payment of such amount as the Board may reasonably require.

Applications for transfer value payments

74.—(1) A member who has applied for and received a statement of entitlement under article 73 may apply in writing to the Board for a transfer value payment to be made.

(2) On making such an application a member becomes entitled to payment of an amount equal, or amounts equal in aggregate, to the amount specified in the statement of entitlement (or such other amount as may be payable by virtue of paragraph (9)).

(3) An application under paragraph (1) must be made before the end of the period of three months beginning with the guarantee date, and the payment must be made no later than—

(a)six months after that date; or

(b)if it is earlier, the date on which the member reaches normal benefit age.

(4) The application must specify the pension scheme or other arrangement to which the payment or payments should be applied.

(5) Subject to paragraph (6), an application by a person who is entitled to apply for a guaranteed cash equivalent transfer value payment under Chapter IV of Part IV of the 1993 Act may only be made before—

(a)the beginning of the period of one year ending with the date on which the member reaches normal benefit age; or

(b)the end of the period of six months beginning with the day after that on which the member’s pensionable service ends, provided that service ends at least one year before normal benefit age,

whichever is the later.

(6) An application for a transfer value payment to be made under public sector transfer arrangements may only be made—

(a)before the first anniversary of the day on which the member becomes eligible to be an active member of the scheme to which the transfer is to be made; and

(b)before the member reaches normal benefit age.

(7) An application by a person who is not entitled to apply for a guaranteed cash equivalent transfer value payment under Chapter IV of Part IV of the 1993 Act may only be made—

(a)on or before the first anniversary of the day on which the applicant ceases to be an active member of this Scheme; and

(b)before the member reaches normal benefit age.

(8) An application under this article may be withdrawn by notice in writing, unless an agreement for the application of the whole or part of the guaranteed cash equivalent transfer value payment has been entered into with a third party before the notice is given.

(9) If the payment is made later than six months after the guarantee date, the amount of the payment to which the member is entitled must be increased by—

(a)the amount by which the amount specified in the statement of entitlement falls short of the amount it would have been if the guarantee date had been the date on which the payment is made; or

(b)if it is greater and there was no reasonable excuse for the delay in payment, interest on the amount specified in the statement of entitlement, calculated on a daily basis over the period from the guarantee date to the date when the payment is made at an annual rate of one per cent above base rate.

(10) In this article—

“base rate” means the base rate for the time being quoted by the reference banks or, where there is for the time being more than one such base rate, the rate which, when the base rate quoted by each bank is ranked in descending order of sequence of seven, is fourth in the sequence; and

“the reference banks” means the seven largest persons for the time being who—

(a)

have permission under Part IV of the Financial Services and Markets Act 2000 (permission to carry on regulated activities)(2) to accept deposits;

(b)

are incorporated in the United Kingdom and carrying on there a regulated activity of accepting deposits; and

(c)

quote a base rate in sterling,

and for the purpose of this definition the size of a person at any time is to be determined by reference to the gross assets denominated in sterling of that person, together with any subsidiary (as defined in Article 4 of the Companies (Northern Ireland) Order 1986 (“subsidiary”, “holding company” and “wholly owned subsidiary”))(3), as shown in the audited end-of-year accounts last published before that time.

Ways in which transfer value payments may be applied

75.—(1) A member who is entitled to a guaranteed cash equivalent transfer value payment under Chapter IV of Part IV of the 1993 Act may only require the Board to apply the guaranteed cash equivalent transfer value payment in one or more of the ways permitted under section 91 of that Act.

(2) A member who is not entitled to a guaranteed cash equivalent transfer value payment under Chapter IV of Part IV of the 1993 Act may only require the Board to apply the guaranteed cash equivalent transfer value payment in one of the ways permitted under section 91 of that Act.

(3) The whole of the guaranteed cash equivalent transfer value payment must be applied, unless paragraph (3) applies.

(4) The benefits attributable to—

(a)the member’s accrued rights to a guaranteed minimum pension; or

(b)the member’s accrued rights attributable to service in contracted-out employment on or after 6th April 1997,

may be excluded from the guaranteed cash equivalent transfer value payment if section 92(2) of the 1993 Act applies (trustees or managers of certain receiving schemes or arrangements able and willing to accept a transfer payment only in respect of the member’s other rights).

(5) A transfer payment may only be made to—

(a)a pension scheme that is registered under Chapter 2 of Part 4 of the Finance Act 2004; or

(b)an arrangement that is a qualifying recognised overseas pension scheme for the purposes of that Part(4).

Calculating amounts of transfer value payments

76.—(1) Subject to paragraph (3), the amount of the guaranteed cash equivalent transfer value payment is to be calculated in accordance with guidance and tables provided by the Scheme Actuary for use at the guarantee date.

(2) In preparing those tables the Scheme Actuary must use such factors as he considers appropriate, having regard to section 93 of the 1993 Act and regulations under that Act (whether or not the payment is in respect of a person entitled to a guaranteed cash equivalent transfer value payment under that Act).

(3) If the amount calculated in accordance with paragraph (1) is less than the minimum transfer value, the amount of the guaranteed cash equivalent transfer value payment is to be equal to that value instead.

(4) In paragraph (3) “the minimum transfer value”, in relation to any person, means the sum of—

(a)any transfer value payments that have been made to the Scheme in respect of him; and

(b)any contributions paid by him under article 63.

(5) If the transfer value payment is made under public sector transfer arrangements, the amount of the transfer value payment is calculated—

(a)in accordance with those arrangements rather than paragraphs (1) to (3);and

(b)by reference to the guidance and tables provided by the Scheme Actuary for the purposes of this paragraph that are in use on the date used for the calculation.

Effect of transfers-out

77.  Where a transfer value payment is made under this Chapter in respect of a person’s rights under this Scheme, those rights are extinguished.

CHAPTER 3TRANSFERS INTO THE SCHEME

Applications for acceptance of transfer value payment from another scheme

78.—(1) Subject to the provisions of this Part, a firefighter member may apply for a transfer value payment in respect of some or all of the rights that have accrued to or in respect of him under—

(a)another occupational pension scheme registered under Chapter 2 of Part 4 of the Finance Act 2004;

(b)an arrangement that is a qualifying recognised overseas pension scheme for the purposes of that Part(5); or

(c)a personal pension scheme,

to be accepted by the Board for the purposes of this Scheme.

(2) Paragraph (1) does not apply to rights that are directly referable to a pension credit.

(3) Paragraph (1) does not apply if the member is on unpaid absence that does not count as pensionable service.

Procedure for applications under article 78

79.—(1) An application under article 78

(a)must be made in writing;

(b)must specify the scheme or arrangement from which the transfer value payment is to be made and the anticipated amount of the payment; and

(c)subject to paragraphs (2), must be made—

(i)before the beginning of the period of one year ending with the date on which the member reaches normal retirement age; and

(ii)in the case of a transfer value payment from a non-occupational pension scheme, during the period of one year beginning with the day on which the member becomes eligible to be a firefighter member, or such longer period as the Board may allow.

(2) In the case of a transfer value payment to be made under public sector transfer arrangements, the application under article 78

(a)must be made during the period of one year beginning with the day on which the member becomes eligible to be a firefighter member, or such longer period as the Board may allow; and

(b)must be received by the Board before the applicant reaches the age which is the normal pension age under the scheme by which the transfer value payment is to be made.

Acceptance of transfer value payments

80.—(1) Subject to paragraph (3) and paragraphs (2) and (3) of article 56 (reckoning of pensionable service), where an application is duly made by a member under article 78, the Board may accept the transfer value payment.

(2) If the Board accepts the payment, the member is entitled to count the period calculated in accordance with article 81 as pensionable service for the purposes of this Scheme.

(3) The Board may not accept a transfer value payment if—

(a)it would be paid otherwise than under public sector transfer arrangements;

(b)it would be applied in whole or in part in respect of the member’s or the member’s spouse’s or civil partner’s entitlement to a guaranteed minimum pension; and

(c)it is less than the amount required for that purpose, as calculated in accordance with guidance and tables prepared by the Scheme Actuary for the purposes of this paragraph.

Calculation of transferred-in pensionable service

81.—(1) Subject to paragraph (3), the period of pensionable service that a member is entitled to count under article 80(2) shall be calculated as at the date on which the transfer value payment is received by the Board and in accordance with guidance and tables provided by the Scheme Actuary for the purpose.

(2) For the purposes of that calculation, the member’s pensionable earnings are to be taken to be the amount of those earnings as at—

(a)two months after the application under article 78 is received; or

(b)the date on which the transfer value payment is received,

whichever is the later; and, in a case where the transfer value payment is received earlier than two months after that application is received, any necessary adjustment shall be made to that calculation to reflect any change in the amount of those earnings.

(3) If the transfer payment is accepted under public sector transfer arrangements, the period that the member is entitled to count shall be calculated—

(a)subject to paragraph (4), in accordance with those arrangements; and

(b)by reference to the guidance and tables provided by the Scheme Actuary for the purposes of this paragraph, that are in use on the date that is used by the transferring scheme for calculating the transfer value payment.

(4) If the period that the member would be entitled to count would be greater if the transfer value payment were accepted otherwise than under public sector transfer arrangements—

(a)those arrangements shall not apply to the extent that they provide for the calculation of the period, and

(b)paragraph (1) shall apply instead.

CHAPTER 4MIS-SOLD PENSIONS AND RESTITUTION PAYMENTS

Interpretation of Chapter 4

82.—(1) In this Chapter—

“calculated amount” means the amount which, in accordance with article 84, the Board calculates would need to be made as a restitution payment in respect of the firefighter concerned;

“methods and assumptions” means the methods and assumptions notified by the Scheme Actuary for the calculation of cash equivalent values for occupational pension schemes; and

“relevant period”, in relation to a firefighter, means the total of any periods of opted-out and, where appropriate, transferred-out service.

(2) For the purposes of this Chapter—

(a)a person shall be taken to have opted out if he had made a contributions election and for any period during which he was a firefighter he instead made contributions to a personal pension scheme; and

(b)a person shall be taken to have transferred out if the Board has made a transfer value payment in respect of him under Chapter 2 of this Part to the administrator of a personal pension scheme.

Mis-sold pensions

83.—(1) This article applies to a firefighter who—

(a)has opted out or transferred out, or both; and

(b)has suffered actionable loss as a result of a contravention which is actionable under section 62 of the Financial Services Act 1986 or section 150 of the Financial Services and Markets Act 2000(6) (actions for damages in respect of contraventions of rules etc made under the Act).

(2) A firefighter to whom this article applies who has given notice—

(a)under article 9 cancelling his contributions election; or

(b)under article 59(7) of the 2007 Scheme (cancellation of election not to pay contributions),

may give written notice to the Board that he wishes it to accept a transfer value payment in order to create or restore his pensionable service.

(3) Paragraph (4) or (5) applies where, within twelve months of the date of a notice given under paragraph (2) or such longer period as the Board may allow, the Board has accepted a transfer value payment in relation to the firefighter who gave the notice (whether or not he has ceased to be a firefighter after the date of the notice) not exceeding the calculated amount.

(4) Where the amount of the transfer value payment is equal to the calculated amount—

(a)the whole of the relevant period shall be treated as pensionable service; and

(b)for the purposes of calculating any award under this Scheme, the firefighter who gave the notice shall be treated as having made pension contributions throughout that period.

(5) Where the amount of the transfer value payment is less than the calculated amount—

(a)the Board shall, in accordance with the methods and assumptions, calculate the period of pensionable service that the transfer value payment represents, and treat that period as pensionable service;

(b)for the purposes of calculating any award under this Scheme, the firefighter who gave the notice shall be treated as having made pension contributions throughout that period; and

(c)that period shall be treated as a continuous period with the same final date as the final date of the relevant period.

(6) Where a firefighter who is being credited under paragraph (4) or (5) with a period of pensionable service has previously been credited, in respect of the relevant period, with—

(a)an additional period of pensionable service calculated in accordance with this Part, or

(b)an additional period of reckonable service calculated in accordance with Part 4 of Schedule 6 to the 2007 Scheme (amount of transfer value),

the Board may adjust the amount of the transfer value payment that it accepts under this article to ensure that no part of the additional period of pensionable or reckonable service that was previously credited is included in the period of pensionable service credited under paragraph (4) or (5).

Calculation of amount of restitution payment

84.—(1) The Board shall, in accordance with paragraph (2), calculate the restitution payment that would need to be made to it in respect of a person to whom article 83 applies to create or restore his position to what it would have been if he had not opted-out or, where relevant, transferred-out.

(2) The restitution payment is an amount equal to the sum of—

(a)the capitalised value at the material date, determined in accordance with the methods and assumptions, which would produce a service credit equal to his total period of opted-out service, including the capitalised value of any rights under the Pensions (Increase) Act (Northern Ireland) 1971(7) and the Pensions (Increase) (Northern Ireland) Order 1974(8); and

(b)in the case of a firefighter who also transferred out, the greater of—

(i)any transfer value paid by the Board to the administrator of a personal pension scheme in respect of the firefighter’s transferred-out service under Chapter 2 of this Part, increased by interest calculated at a rate approved by the Scheme Actuary over the period from the date of payment of that transfer value to the assumed calculation date; and

(ii)the cash equivalent transfer value that would be payable by the Board in respect of that transferred-out service if it were to pay a cash equivalent transfer value in respect of that service determined in accordance with the methods and assumptions applicable immediately after the assumed calculation date.

(3) In this article—

“assumed calculation date” means the date on which it is assumed, for the purpose of calculating a restitution payment, that a transfer value will be paid to the Board; and

“material date” means the date on which the Board receives a notice under article 83.

(1)

See section 89(1)(a) of the Pension Schemes (Northern Ireland) Act 1993 (c.49).

(2)

2000 c.8, to which there are amendments not relevant to this Order.

(3)

S.I. 1986/1032 (N.I. 6) Article 4 was substituted by Article 62 of the Companies (No 2) (Northern Ireland) Order 1990 S.I. 1990/1504 (N. I. 10).

(4)

See section 169(2) of that Act

(5)

See section 169(2) of the Finance Act 2004 (c.12).

(6)

2000 c.8, to which there are amendments not relevant to this Order.

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