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The Occupational Pension Schemes (Schemes that were Contracted-out) Regulations (Northern Ireland) 2016

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Payment of a lump sum instead of a pension

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9.—(1) A relevant scheme(1) may not provide for the payment of a lump sum instead of a pension that is attributable to section 5(2B) rights, unless the payment to be made is authorised under section 164(2) of the 2004 Act (authorised member payments) and the payment is—

(a)permitted by the lump sum rule in section 166(3) of the 2004 Act and qualifies as—

(i)a pension commencement lump sum for the purposes of paragraph 1(4) of Schedule 29 to the 2004 Act;

(ii)a serious ill-health lump sum for the purposes of paragraph 4(5) of that Schedule;

(iii)an uncrystallised funds pension lump sum for the purposes of paragraph 4A(6) of that Schedule;

(iv)a trivial commutation lump sum for the purposes of paragraph 7(7) of that Schedule, or

(v)a winding-up lump sum for the purposes of paragraph 10(8) of that Schedule;

(b)permitted by the lump sum death benefit rule in section 168(9) of the 2004 Act and qualifies as a trivial commutation lump sum death benefit for the purposes of paragraph 20(10) of Schedule 29 to the 2004 Act, or

(c)made by a registered pension scheme (within the meaning of section 150(2) of the 2004 Act), is a payment that is described in Part 2 of the Registered Pension Schemes (Authorised Payments) Regulations 2009(11) (commutation payments), and is made to or in respect of a member.

(2) Where, under the scheme—

(a)an earner qualifies for a lump sum payment on the ground of serious ill-health, and

(b)the earner’s widow, widower or surviving civil partner qualifies for a pension (“a survivor’s pension”),

the scheme is to continue to provide for a survivor’s pension notwithstanding the payment of a lump sum to the earner.

(1)

See section 33A(2) of the Pension Schemes (Northern Ireland) Act 1993 as inserted by paragraph 25 of Schedule 13 to the Pensions Act (Northern Ireland) 2015

(2)

Section 164 was amended by paragraph 6 of Schedule 23 to the Finance Act 2006 (c. 25), paragraph 1(2) of Schedule 29 to the Finance Act 2008 (c. 9), section 75(2)(a) of the Finance Act 2009 (c. 10), paragraph 63 of Schedule 16 to the Finance Act 2011 (c. 11) and paragraph 85 of Schedule 1 to the Taxation of Pensions Act 2014 (c. 30)

(3)

Section 166 was amended by paragraph 9 of Schedule 20 to the Finance Act 2007 (c. 11), paragraphs 2(2) and 5(1) of Schedule 5 to the Finance Act 2014, paragraphs 54 and 55 of Schedule 1 to the Taxation of Pensions Act 2014 and Article 25(3) of S.I. 2006/572

(4)

Paragraph 1 was amended by paragraph 34 of Schedule 10 to the Finance Act 2005 (c. 7), paragraph 21 of Schedule 23 to the Finance Act 2006, paragraph 11(2) and (3) of Schedule 20 to the Finance Act 2007, paragraphs 24 and 79(2) of Schedule 16 to the Finance Act 2011 and section 51(3) of the Finance Act 2013 (c. 29) and is modified by Articles 18, 23C (as inserted by Article 3 of S.I. 2009/1172) and 28(3) of S.I. 2006/572

(5)

Paragraph 4 was amended by paragraph 28 of Schedule 16 to the Finance Act 2011

(6)

Paragraph 4A was inserted by paragraph 57 of Schedule 1 to the Taxation of Pensions Act 2014

(7)

Paragraph 7 was amended by paragraph 29 of Schedule 16 and paragraph 4 of Schedule 18 to the Finance Act 2011, paragraph 71 of Schedule 1 to the Taxation of Pensions Act 2014 and section 42(1) of the Finance Act 2014

(8)

Paragraph 10 was amended by paragraph 12 of Schedule 20 to the Finance Act 2007 and paragraph 30 of Schedule 16 and paragraph 5 of Schedule 18 to the Finance Act 2011

(9)

Section 168 was amended by paragraph 5 of Schedule 19 to the Finance Act 2007, paragraph 65 of Schedule 16 to the Finance Act 2011 and paragraph 7 of Schedule 1 to the Taxation of Pensions Act 2014

(10)

Paragraph 20 is amended by paragraph 6 of Schedule 18 to the Finance Act 2011 and paragraph 74 of Schedule 1 to the Taxation of Pensions Act 2014

(11)

S.I. 2009/1171 as amended by regulation 8 of S.I. 2011/1751 and regulation 2 of S.I. 2012/522

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