Pension Schemes Act 1993

State scheme premiums E+W+S

55 Payment of state scheme premiums on termination of certified status. E+W+S

(1) [F1 If a scheme ceases to be a contracted-out scheme or an appropriate scheme (whether by being wound up or otherwise) a state scheme premium shall be payable—

(a) in respect of each earner whose accrued rights to guaranteed minimum pensions or protected rights under the scheme are not subject to approved arrangements and have not been disposed of so as to discharge the trustees or managers of the scheme under section 19 or 99;

(b) in the case of an occupational pension scheme other than a money purchase contracted-out scheme, in respect of each person who has then become entitled to receive a guaranteed minimum pension under the scheme and whose guaranteed minimum pension rights are not subject to approved arrangements; and

(c) in the case of a money purchase contracted-out scheme or a personal pension scheme, in respect of each person who has become entitled to receive a pension under the scheme giving effect to protected rights which are not subject to approved arrangements.]

(2) [F2 Where—

(a) an earner is serving in employment which is contracted-out employment by reference to an occupational pension scheme (other than a money purchase contracted-out scheme),

(b) paragraph (a) ceases to apply, by reason of any of the following circumstances, before the earner attains the scheme’s normal pension age or (if earlier) the end of the tax year preceding that in which the earner attains pensionable age, and

(c) the earner has served for less than two years in the employment,

the prescribed person [F3 shall, if subsection (2B) applies, pay and otherwise] may elect to pay a premium under this subsection (referred to in this Act as a “contributions equivalent premium”).

(2A) The circumstances referred to in subsection (2) are that—

(a) the earner’s service in the employment ceases otherwise than on the earner’s death,

(b) the earner ceases to be a member of the scheme otherwise than on the earner’s death,

(c) the earner’s service in the employment ceases on the earner’s death and the earner dies leaving a widow or widower,

(d) the scheme is wound up,

(e) the scheme ceases to be a contracted-out occupational pension scheme;

[F4 but paragraph (a), (b), (d) or (e) does not apply if the earner has an accrued right to short service benefit]]

[F5 (2B) Except in prescribed circumstances, this subsection applies in any case where the earner has no accrued right to any benefit under the scheme.

(2C) Where a contributions equivalent premium is required to be paid in respect of an earner by virtue of subsection (2), the prescribed person must notify the Inland Revenue of that fact within the prescribed period and in the prescribed manner.]

(3) [F6 The Secretary of State may by regulations provide that, in such cases and subject to such conditions as may be prescribed, if—

(a) an earner in employment to which an occupational pension scheme which is not a money purchase contracted-out scheme applies has ceased (whether before or after the commencement of this subsection) to be in that employment before attaining normal pension age;

(b) there has been a transfer from that scheme to another scheme of his accrued rights other than his accrued rights to guaranteed minimum pensions;

(c) the scheme to which his accrued rights are transferred is neither a contracted-out scheme nor one which was formerly contracted-out and in respect of which the Board have duties under section 53 at the time of the transfer;

(d) no premium under subsection (1)(a) is payable in respect of the earner; and

(e) the circumstances in which by virtue of paragraphs (a) and (b) of subsection (2) a premium is payable under that subsection do not exist,

a state scheme premium may be paid under this subsection.]

(4) [F6 Subject to subsection (5), where—

(a) an earner’s service in contracted-out employment by reference to an occupational pension scheme which is not a money purchase contracted-out scheme is terminated before he attains pensionable age (otherwise than by his death);

(b) no premium is payable in respect of the earner under subsection (1) or (2); and

(c) the weekly rate of the guaranteed minimum pensions to which he has accrued rights under the scheme will fall to be determined in accordance with provisions included in the scheme by virtue of section 16(2) and (3),

a state scheme premium shall be payable in respect of the earner under this subsection.]

(5) [F6 Subsection (4) does not apply if the provisions mentioned in paragraph (c) of that subsection conform with such additional requirements as may be prescribed.]

(6) [F6 In this Act—

(a) a premium payable under paragraph (a) of subsection (1) in the case of an occupational pension scheme other than a money purchase contracted-out scheme is referred to as an “accrued rights premium”;

(b) a premium payable under paragraph (b) of that subsection in such a case is referred to as a “pensioner’s rights premium”;

(c) a premium payable under paragraph (a) or (c) of that subsection in the case of a money purchase contracted-out scheme is referred to as a “contracted-out protected rights premium”;

(d) a premium payable under paragraph (a) or (c) of that subsection in the case of a personal pension scheme is referred to as a “personal pension protected rights premium”;

(e) a premium under subsection (2) is referred to as a “contributions equivalent premium”;

(f) a premium under subsection (3) is referred to as a “transfer premium”; and

(g) a premium under subsection (4) is referred to as a “limited revaluation premium”.]

Textual Amendments

F1 S. 55(1) repealed (6.4.1997) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 50, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

F2 S. 55(2)(2A) substituted for s. 52(2) (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), ss. 141(1), 180(1); S.I. 1996/778, art. 2(5)(a), Sch. Pt. V; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

F3 Words in s. 55(2) inserted (11.11.1999 for specified purposes) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 7(1)(a); S.I. 2001/4049, art. 2(3)(a)

F4 S. 55(2A)(e) repealed (11.11.1999 for specified purposes) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 7(1)(b), Sch. 13 Pt. I; S.I. 2001/4049, art. 2(3)(a)

F5 S. 55(2B)(2C) inserted (11.11.1999 for specified purposes) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 7(1)(c); S.I. 2001/4049, art. 2(3)(a)

F6 S. 55(3)-(6) repealed (6.4.1997) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 50, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

Modifications etc. (not altering text)

C2 Pt. III: power to modify conferred (1.6.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 149(1), 180(1); S.I. 1996/778, art. 2(6); S.I. 1997/664, art. 2(3), Sch. Pt. 2

C3 Pt. III applied (with modifications) (6.4.1997) by The Occupational Pension Schemes (Mixed Benefit Contracted-out Schemes) Regulations 1996 (S.I. 1996/1977), regs. 1(1), 2(4)(a)-(f)

C4 Pt. III applied (with modifications) (6.4.1997) by The Contracting-out (Transfer and Transfer Payment) Regulations 1996 (S.I. 1996/1462), regs. 1(1), 12, 13, Sch. 2 (with reg. 14, Sch. 4)

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

56 Provisions supplementary to s. 55. E+W+S

(1) [F7 Regulations may prescribe circumstances in which a contracted-out protected rights premium or a personal pension protected rights premium shall not be payable under section 55(1).]

(2) A premium under section 55 shall be paid by the prescribed person to the [F8 Inland Revenue] within the prescribed period[F9 or, in the case of a transfer premium, within a prescribed period after the prescribed event].

(3) [F10 It is hereby declared that on the withdrawal of an approval of arrangements under section 50 of an occupational pension scheme other than a money purchase contracted-out scheme after the winding up of the scheme a premium becomes payable in pursuance of section 55(1).]

(4) Where under the rules of the scheme transfer credits have been allowed in respect of the earner’s accrued rights under another scheme, the reference in section 55(2) to employment which is contracted-out by reference to the scheme shall include references to employment in any period of linked qualifying service which was contracted-out employment by reference to the other scheme.

(5) [F11 For the purposes of section 55(2), a scheme conforms to the appropriate extent with the preservation requirements if—

(a) it entitles the earner to short service benefit; or

(b) it makes any provision which under those requirements is permitted as an alternative to short service benefit (other than provision for return of contributions or for benefit in the form of a lump sum).]

[F11 The references in section 55(2A) to an accrued right to short service benefit include an accrued right to any provision which, under the preservation requirements, is permitted as an alternative to short service benefit (other than provision for return of contributions or for benefit in the form of a lump sum).]

(6) [F11 Subject to regulations made under paragraph 1 of Schedule 2, an employment which is terminated by the death of the employer shall be treated for the purposes of section 55(2) and (4) as terminated immediately before the death.]

[F11 Subject to regulations under paragraph 1 of Schedule 2, service in any employment which ceases with the death of the employer shall be treated for the purposes of section 55(2A) as ceasing immediately before the death]

Textual Amendments

F7 S. 56(1) repealed (6.4.1997) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 51(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

F8 Words in s. 56(2) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 54; S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F9 Words in s. 56(2) repealed (6.4.1997) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 51(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

F10 S. 56(3) repealed (6.4.1997) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 51(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

F11 S. 56(5)(6) substituted (6.4.1997) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 51(b); S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

Modifications etc. (not altering text)

C5 Pt. III: power to amend conferred (1.4.1999) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), ss. 23, 28(3); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

C6 Pt. III: power to transfer functions conferred (1.4.1999) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), ss. 23, 28(3); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

57 Elections to pay contributions equivalent premiums. E+W+S

(1) An election under section 55(2) must be made within the prescribed period and in the prescribed manner.

(2) Except in such cases as may be prescribed, the prescribed person shall not, in making or abstaining from making elections under that section, discriminate between different earners on any grounds other than their respective lengths of relevant service.

(3) In subsection (2) “relevant service” means service in contracted-out employment by reference to the scheme, together with any service in contracted-out employment which in relation to service in that employment is linked qualifying service.

(4) If [F12 the Inland Revenue consider] that the prescribed person is contravening subsection (2), [F12 they] may cancel any contracting-out certificate held by the earner’s employer in respect of the scheme in question.

Textual Amendments

F12 Words in s. 57(4) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 55; S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

58 Amount of premiums payable under s. 55. E+W+S

(1) [F13 Subject to section 63(3), the amount of an accrued rights premium shall be the cost of providing guaranteed minimum pensions for the earner and his widow in accordance with his accrued rights under the scheme.]

(2) [F13 Subject to section 63(3), the amount of a pensioner’s rights premium shall be the cost of providing or continuing to provide any guaranteed minimum pension under the scheme, whether for the earner (or former earner) or for his widow.]

(3) [F13 Subject to section 63(3), the amount of a contracted-out protected rights premium or a personal pension protected rights premium payable in respect of any person shall be the cash equivalent of the protected rights in question.]

[F14 (4) Subject to subsection (4A), the amount of the contributions equivalent premium shall be equal to the sum of the following amounts—

(a) the amount of every reduction made under section 41 (as from time to time in force) in the amount of Class 1 contributions payable in respect of the earner’s employment in employment which was contracted-out by reference to the scheme; and

(b) the total amount by which the reductions falling within paragraph (a) would have been larger if the amount of the contributions falling to be reduced had in each case been at least equal to the amount of the reduction of those contributions provided for by section 41.

(4A) The amounts brought into account in accordance with subsection (4)(b) shall not include any amount which, by virtue of regulations made under section 41(1D) so as to avoid the payment of trivial or fractional amounts, is an amount that was not payable by the Inland Revenue to the secondary contributor.]

(5) [F15 The amount of a transfer premium shall be determined in the manner in which the amount of an accrued rights premium under subsection (1) falls to be determined under subsection (1) (but subject to the provisions of sections 59(2) and 64(1)).]

(6) [F15 The amount of a limited revaluation premium shall be the difference between—

(a) the cost of providing the guaranteed minimum pensions in accordance with the provisions included in the scheme by virtue of section 16(2) and (3); and

(b) what would have been the cost of providing them if no such provisions had been included.]

(7) Section 56(4) applies for the purposes of subsection (4) as it applies for the purposes of section 55(2).

Textual Amendments

F13 S. 58(1)-(3) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 52, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F14 S. 58(4)(4A) substituted for s. 58(4) (28.7.2000) by Child Support, Pensions and Social Security Act 2000 (c. 19), s. 86(1)(b)(2), Sch. 5 para. 5(1) (with s. 83(6), Sch. 5 para. 4)

F15 S. 58(5)(6) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 52, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

59 Alternative basis for revaluation of earnings factors for calculation of certain premiums. E+W+S

[F16 (1) In determining the amount of any accrued rights premium or pensioner’s rights premium payable where one or more of the five tax years ending with the tax year in which the relevant scheme ceases to be contracted-out is a relevant year in relation to the earner, the costs referred to in subsections (1) and (2) of section 58 shall be calculated as follows—

(a) any relevant earnings factor shall be taken to be that factor as increased by the last order under section 21 of the M1 Social Security Pensions Act 1975 or section 148 of the M2 Social Security Administration Act 1992 to come into force before those five tax years; and

(b) any relevant earnings factor derived from contributions in respect of any year (“the relevant contributions year”) shall be treated as increased by 12 per cent. compound for each of those five tax years, other than any of those years which—

(i) constitutes or begins before the relevant contributions year, or

(ii) begins after the final relevant year in relation to the earner.

(2) Subsection (1) shall not apply if the person liable for the premium elects in the prescribed manner that it should not and, notwithstanding section 58(5), it shall not apply in the determination of the amount of a transfer premium.

(3) Regulations may provide that subsections (1) and (2) shall have effect with prescribed modifications in relation to a scheme which has ceased to be contracted-out and, immediately before it so ceased, contained provisions authorised by section 16(2) and (3).

(4) Subject to subsection (5), where a limited revaluation premium is payable in respect of an earner, and the case is one in which his service in contracted-out employment is terminated in consequence of the relevant scheme ceasing to be contracted-out, the costs referred to in subsection (6) of section 58 shall be calculated as follows—

(a) any relevant earnings factor shall be taken to be that factor as increased by the last order under section 21 of the M3 Social Security Pensions Act 1975 or section 148 of the M4 Social Security Administration Act 1992 to come into force before the five tax years ending with the tax year in which the scheme ceases to be contracted-out; and

(b) any relevant earnings factor derived from earnings upon which primary Class 1 contributions have been paid or treated as paid in respect of any year (“the relevant contributions year”) shall be treated as increased by 12 per cent. compound for each of those five tax years, other than any of those years which constitutes or begins before the relevant contributions year.

(5) Subsection (4) shall not apply in any case where its application would result in the amount of the premium being greater than it would have been apart from that subsection.

(6) In subsection (1) “relevant year” and “final relevant year” have the same meanings as in section 16, and references to the earner shall be construed as references to the earner in respect of whom the premium in question has become payable.]

Textual Amendments

F16 S. 59 repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 53, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Marginal Citations

M1 1975 c. 60.

M2 1992 c. 5.

M3 1975 c. 60.

M4 1992 c. 5.

60 Effect of payment of premiums on rights. E+W+S

(1) [F17 Payment of an accrued rights premium shall extinguish the earner’s rights to guaranteed minimum pensions under the scheme.]

(2) [F17 Payment of a pensioner’s rights premium shall extinguish any right to receive guaranteed minimum pensions under the scheme, whether for the earner (or former earner) or for the earner’s (or former earner’s) widow or widower.]

(3) [F17 Where a contracted-out protected rights premium or a personal pension protected rights premium is paid in respect of a person—

(a) the rights whose cash equivalent is included in the premium shall be extinguished; and

(b) sections 47(2) and (5) and 48(2) shall have effect in relation to that person and a widow or widower of that person as if any guaranteed minimum pension to which that person or any such widow or widower is treated as entitled under those provisions and which derives from the minimum payments, minimum contributions or transfer payment or payments from which those rights derive were reduced by the appropriate percentage.]

(4) Payment of a contributions equivalent premium in the circumstances mentioned in section [F18 55(2A)(a) and (b), (d) and (e)] shall extinguish the earner’s accrued rights to guaranteed minimum pensions under the relevant scheme [F19 or (in relation to service on or after the principal appointed day) rights to pensions under the scheme so far as attributable to the amount of the premium].

(5) Payment of a contributions equivalent premium in the circumstances mentioned in section [F20 55(2A)(c)] shall extinguish any such accrued rights in respect of the earner’s widow [F21 or widower].

(6) [F22 Payment of a transfer premium shall extinguish the earner’s accrued rights to guaranteed minimum pensions under the scheme from which his other accrued rights have been transferred.]

(7) [F22 In subsection (3) “the appropriate percentage” means, subject to the following provisions of this section—

where—

• X is the amount of the contracted-out protected rights premium or, as the case may be, the personal pension protected rights premium together, if the person in respect of whom it falls to be paid gives notice to the prescribed person within the prescribed period—

• (a) with the cash equivalent, paid to the Secretary of State within the prescribed period, of any other rights which he has under the scheme and specifies in the notice; and

• (b) with the amount of any voluntary contribution paid to the Secretary of State within the prescribed period by, or in respect of, the person concerned; and

• Y is the cost of providing any guaranteed minimum pension such as is mentioned in subsection (3).]

(8) [F22 If the appropriate percentage, as calculated under subsection (7), would fall between two whole numbers, it is to be taken to be the lower number.]

(9) [F22 If it would be over 100, it is to be taken to be 100.]

(10) [F22 The remainder after the reduction for which subsection (3) provides—

(a) if it would contain a fraction of 1p, is to be treated as the nearest lower whole number of pence; and

(b) if it would be less than a prescribed amount, is to be treated as nil.]

Textual Amendments

F17 S. 60(1)-(3) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 54(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F18 Words in s. 60(4) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 54(b)(i); S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F19 Words in s. 60(4) added (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 54(b)(ii); S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F20 Word in s. 60(5) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 54(c); S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F21 Words in s. 60(5) added (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 54(c); S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F22 S. 60(6)-(10) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 54(d), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

61 Deduction of contributions equivalent premium from refund of scheme contributions. E+W+S

(1) This section applies where—

[F23 (a) an earner’s service in contracted-out employment ceases or his employment ceases to be contracted-out employment, and]

(b) he (or, by virtue of a connection with him, any other person) is entitled to a refund of any payments made by or in respect of him towards the provision of benefits under the scheme by reference to which that employment was contracted-out; and

(c) a contributions equivalent premium falls to be paid by any person in respect of him.

(2) Where this section applies, then, subject to the following provisions of this section, the person by whom the premium falls to be paid shall be entitled on paying it to recover an amount equal to so much of the premium as is attributable to [F24 any actual reductions of] primary Class 1 contributions (and on paying any part of it to recover a proportionate part of that amount) from the person liable for the refund.

(3) The amount recoverable under this section shall not exceed the amount of the refund or so much of it as has not been made.

(4) Where the period taken into account in arriving at the amount mentioned in subsection (2) does not coincide with that in respect of which the refund is to be made, the sum recoverable under this section shall be determined by reference to so much of that amount and of the refund as are referable to the same period.

(5) Where the refund—

(a) is made in respect of more than one period of service, and one or more of those periods is a period of previous linked qualifying service; and

(b) includes any amount paid under a contracted-out scheme in relation to that service on or in connection with a transfer of accrued rights to another scheme,

the amount which may be recovered under this section shall be increased by such amount as may be prescribed.

(6) Where the person liable for the premium is himself liable for the refund, he shall be entitled to retain out of the refund the amount which he could recover under this section from another person liable for the refund.

(7) The amount of the refund shall be reduced by the amount recovered or retained under this section; and provision shall be made by regulations for requiring the making of refunds to be delayed for the purpose of enabling any right of recovery or retainer conferred by this section to be exercised, notwithstanding anything in any enactment relating to the making of the refund.

(8) Where—

[F25 (a) an earner’s service in contracted-out employment ceases or his employment ceases to be contracted-out employment]

(b) he (or, by virtue of a connection with him, any other person) is entitled to a refund of any payments made by or in respect of him under the scheme by reference to which that employment was contracted-out in relation to any previous contracted-out employment of his, being payments towards the provision of benefits under that scheme;

(c) a contributions equivalent premium falls to be paid in respect of him; and

(d) the period taken into account in arriving at the amount mentioned in subsection (2) includes the period of the previous contracted-out employment,

then the person liable for that premium shall have the like right of recovery from that refund (so far as the premium is not recoverable or retainable out of a refund in respect of a later employment) as a person has under this section where the refund relates to service in the employment on the [F26 cessation] of which the premium falls to be paid (and subsection (7) shall apply accordingly).

(9) This section shall apply in relation to such a refund as is referred to in subsection (1)(b) which becomes payable after the [F27 cessation] of an earner’s service in contracted-out employment as it applies to such a refund becoming payable on the [F27 cessation] of an earner’s service in such employment.

(10) Where the earner (or, by virtue of a connection with him, any other person) becomes entitled to any payment in lieu of benefit, this section shall apply in relation to the payment as if it were such a refund as is referred to in subsection (1)(b).

(11) For the purposes of subsection (10), a payment in lieu of benefit is any payment falling to be made to or for the benefit of, or in respect of, a person by virtue of his being or having been a member of an occupational pension scheme, being a payment which either—

(a) is made or to be made otherwise than out of the resources of the scheme; or

(b) is made or to be made out of those resources but by way of distribution on a winding up; or

(c) falls within such other description of payments as may be prescribed for the purposes of that subsection.

Textual Amendments

F23 S. 61(1)(a) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 55(a); S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F24 Words in s. 61(2) inserted (28.7.2000) by Child Support, Pensions and Social Security Act 2000 (c. 19), s. 86(1)(b)(2), Sch. 5 para. 5(2) (with s. 83(6), Sch. 5 para. 4)

F25 S. 61(8)(a) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 55(b)(i); S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F26 Word in s. 61(8) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 55(b)(ii); S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F27 Word in s. 61(9) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 55(c); S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

62 No recovery of state scheme premiums from earners etc. E+W+S

(1) Notwithstanding any contract to the contrary, a person shall not be entitled—

(a) to recover any part of a [F28 contributions equivalent] premium from any earner in respect of whom it is payable; or

(b) except in accordance with section 61, to recover or retain any part of such a premium out of any money payable to or for the benefit of the earner or any other person.

(2) [F29 Nothing in subsection (1) affects the right of the trustees or managers of a scheme—

(a) in a case where an accrued rights premium or a pensioner’s rights premium has been paid, to reduce the pension of the person in respect of whom the premium has been paid by the amount of his guaranteed minimum pension;

(b) in a case where a limited revaluation premium has been paid, to recoup it—

(i) out of the resources of the scheme, in so far as they derive from contributions; or

(ii) in prescribed cases, out of payments made to them in respect of an earner’s transfer to their scheme from some other scheme;

(c) in a case where a state scheme premium has been paid, to make the deduction for which section 96(3) provides when they calculate the cash equivalent to which the earner in respect of whom the premium has been paid has a right under Chapter IV of Part IV.]

Textual Amendments

F28 Words in s. 62(1) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 56(a); S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F29 S. 62(2) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 56(b), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

63 Further provisions concerning calculations relating to premiums. E+W+S

(1) The following amounts shall be certified by the [F30 Inland Revenue]—

(a) [F31 the costs mentioned in subsections (1), (2) and (6) of section 58,]

[F32 (b) the sum of the amounts specified in section 58(4);]

(c) [F33 the cost of providing the appropriate percentage of the guaranteed minimum pension for the purposes of section 60, and]

(d) the amount mentioned in section 61(2).

(2) [F34 The cash equivalents mentioned in section 58(3) and section 60(7)(a) shall be calculated and verified in the prescribed manner.]

(3) If the [F30 Inland Revenue]—

(a) [F35 cannot readily ascertain the amount of any earnings in any tax week relevant for determining the costs referred to in subsection (1) or (2) of section 58, or]

(b) [F36 are satisfied] that records of earnings relevant for determining the amount mentioned in [F37 section 58(4)] have not been maintained or retained or are otherwise unobtainable,

then [F36 they may] for that purpose—

(i) compute, in such manner as [F36 they think] fit, an amount which shall be regarded as the amount of those earnings; or

(ii) take their amount to be such sum as he may specify in the particular case,

[F38 and [F36 he may] [F36 they may] certify the costs referred to in section 58(1) and (2) accordingly.]

(4) [F39 Where the [F30 Inland Revenue] subsequently ascertains the amount of such earnings as are mentioned in paragraph (a) of subsection (3)—

(a) if it appears to him that the amount of the accrued rights premium or, as the case may be, the pensioner’s rights premium would have been less if he had not made the calculation on the basis described in subsection (3), he shall refund the difference to the prescribed person, and

(b) if it appears to the [F30 Inland Revenue] that that premium would have been greater if he had not made the calculation on that basis, the prescribed person shall pay the difference to him.]

(5) For the purposes of subsection (1) the [F30 Inland Revenue] may make such adjustments as [F40 they think] necessary for avoiding fractional amounts.

Textual Amendments

F30 Words in s. 63 substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 56(2); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F31 S. 63(1)(a) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 57(a)(i), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F32 S. 63(1)(b) substituted (28.7.2000) by Child Support, Pensions and Social Security Act 2000 (c. 19), s. 86(1)(b)(2), Sch. 5 para. 5(3) (with s. 83(6), Sch. 5 para. 4)

F33 S. 63(1)(c) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 57(a)(iii), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F34 S. 63(2) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 57(b), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F35 S. 63(3)(a) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 57(c)(i), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F36 Words in s. 63(3) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 56(3); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F37 Words in s. 63(3)(b) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 57(c)(ii); S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F38 Words in s. 63(3) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 57(c)(iii), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F39 S. 63(4) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 57(d), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F40 Words in s. 63(5) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 56(4); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

64 Actuarial tables for purposes of calculations relating to premiums. E+W+S

[F41 (1) In calculating and certifying the costs mentioned in subsections (1), (2) and (6) of section 58 and the cost of providing the appropriate percentage of the guaranteed minimum pension for the purposes of section 60 the Secretary of State shall apply whichever of the prescribed actuarial tables (as in force at the appropriate time) is applicable in accordance with the regulations prescribing the tables, but for the purpose of calculating the amount of a transfer premium the Secretary of State shall apply the actuarial table prescribed for the purpose of calculating the amount of an accrued rights premium in such manner as may be prescribed.

(2) In subsection (1) “the appropriate time” means the time when the scheme ceases to be contracted-out or, as the case may be, to be appropriate or, in the case of costs mentioned in section 58(6), the time when the earner’s service in contracted-out employment is terminated.

(3) The tables—

(a) shall embody whatever appears to the Secretary of State to be the best practical estimate of the average cost, expressed in actuarial terms and relative to a given period, of providing guaranteed minimum pensions for the purposes of the calculations required by section 58(1), (2), (5) or (6) or section 60(7), as the case may be; and

(b) shall assume for any period an average yield on investments which is not less than the average increase during that period in the general level of earnings obtaining in Great Britain,

but the regulations may provide for them to be adjusted according to whatever is from time to time the actual yield on prescribed investments or the average yield, as shown in prescribed published indices, on prescribed classes of investments.

(4) The tables to be used in calculating the costs referred to in section 58(6) shall be so framed as to embody the assumption that the increase of weekly equivalent required by section 16(3) is 5 per cent. compound for each relevant year after that in which the earner’s service is terminated; and that assumption shall prevail over any different provision made by the scheme.

(5) Regulations prescribing tables for the purposes of this section—

(a) shall be made only after consultation with the Government Actuary or the Deputy Government Actuary; and

(b) shall not be made unless a draft of them has been laid before Parliament and approved by a resolution of each House.

(6) The Secretary of State may from time to time, and shall when required by subsection (7), lay before each House of Parliament—

(a) a report by the Government Actuary or the Deputy Government Actuary on any changes since the preparation of the last such report in the factors affecting any of the actuarial tables prescribed for the purposes of any of the provisions to which this section applies (including changes affecting adjustments under the regulations); and

(b) a report by the Secretary of State stating whether he considers that the regulations ought to be altered in view of the report by the Government Actuary or Deputy Government Actuary and, if so, what alterations he proposes.

(7) The Secretary of State shall lay reports under this section at intervals of not more than five years.

(8) If in a report under this section the Secretary of State proposes alterations in the regulations, he shall prepare and lay before each House of Parliament with the report draft regulations which give effect to the alterations and are to be in force—

(a) from the beginning of such tax year as may be specified in the regulations (not being earlier than the second tax year after that in which the regulations are made); or

(b) where it appears to him to be expedient for reasons of urgency, an earlier date (not being earlier than the date on which the regulations are made).

(9) If the draft regulations are approved by resolution of each House, the Secretary of State shall make the regulations in the form of the draft.]

Textual Amendments

F41 S. 64 repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 58, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

65 Inclusion of former and future earners for some purposes of this Chapter. E+W+S

[F42 Any reference to earners in sections 50(1)(a) and (7), 58(1) and (2), 59(1) and (6) and 60(1) and (2) and in section 55(1)(a), as it applies in relation to an occupational pension scheme which is not a money purchase contracted-out scheme, includes, in relation to any particular time, not only a reference to earners who are in employment at that time but also a reference to earners who are not in employment at that time but who have been in employment before it or will be in employment after it.]

Textual Amendments

F42 S. 65 repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 59, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

66 Power to apply certain provisions to widowers. E+W+S

[F43 The following provisions shall be construed as if the references to a person entitled to receive a guaranteed minimum pension included references to a person so entitled by virtue of being the widower of an earner only in such cases as may be prescribed—

(a) section 50(1)(a)(ii);

(b) section 52(2); and

(c) section 55(1)(b);

and the references to a widow in section 58(1) and (2) shall be construed as including references to a widower and the reference in section 142(5) to guaranteed minimum pensions as including a reference to the guaranteed minimum pension of a widower only in those cases.]

Textual Amendments

F43 S. 66 repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 60, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

67 Non-payment of [F44 contributions equivalent premiums]. E+W+S

(1) If a person fails to pay any [F44 contributions equivalent premium] which is payable by him at or within the time prescribed for the purpose, he shall be liable on summary conviction to a fine of not more than level 3 on the standard scale.

(2) Where—

(a) a person is convicted of the offence under subsection (1) of failing to pay a premium, and

(b) the premium remains unpaid at the date of the conviction,

he shall be liable to pay to the [F45 Inland Revenue] a sum equal to the amount which he failed to pay.

(3) Subject to subsection (4), where a person is convicted of an offence mentioned in subsection (2), evidence may be given of any previous failure by him to pay [F44 contributions equivalent premiums] within the time prescribed for the purpose; and in that subsection “the conviction” and “the offence” mean respectively the conviction referred to in this subsection and the offence of which the person is convicted.

(4) Such evidence may be given only if notice of intention to give it is served with the summons or warrant or, in Scotland, the complaint on which the person appeared before the court which convicted him.

Textual Amendments

F44 Words in s. 67 substituted (6.4.1997) by virtue of Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 61; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F45 Words in s. 67(2) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 57; S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

68 Unpaid premiums: supplementary. E+W+S

(1) Where in England and Wales a person charged with an offence to which section 67(2) applies is convicted of that offence in his absence under section [F46 12(5)] of the M5 Magistrates’ Courts Act 1980, then if—

(a) it is proved to the satisfaction of the court, on oath or in the manner prescribed by rules under section 144 of that Act, that notice under section 67(4) has been duly served specifying the other premiums in respect of which the prosecutor intends to give evidence; and

(b) the [F47 justices' chief executive for] the court has received a statement in writing purporting to be made by the accused or by a solicitor acting on his behalf to the effect that if the accused is convicted in his absence of the offence charged he desires to admit failing to pay the other premiums so specified or any of them,

section 67(3) and (4) shall have effect as if the evidence had been given and the failure so admitted had been proved, and the court shall proceed accordingly.

(2) In England and Wales where—

(a) a person is convicted of an offence to which section 67(2) applies; and

(b) an order is made under [F48 section 12 of the Powers of Criminal Courts (Sentencing) Act 2000] discharging him absolutely or conditionally,

subsection (1) and section 67(2) to (4) shall apply as if it were a conviction for all purposes.

(3) In Scotland where—

(a) a person is convicted on indictment of, or is charged before a court of summary jurisdiction with, any such offence; and

(b) an order is made under the M6 Criminal Procedure (Scotland) Act 1975 discharging the offender absolutely or placing him on probation,

section 67(2) to (4) shall apply as if—

(i) the conviction on indictment were a conviction for all purposes; or

(ii) (as the case may be) the making of the order by the court of summary jurisdiction were a conviction.

(4) In England or Wales any sum which a person is liable to pay under subsection (1) or section 67(2) to (4) shall be recoverable from him as a penalty.

(5) [F49 Contributions equivalent premiums] recovered by the [F50 Inland Revenue] under those provisions shall be treated for all purposes as premiums paid to the [F50 Inland Revenue] in respect of the person in respect of whom they were originally payable.

Textual Amendments

F46 Word in s. 68(1) substituted (1.9.1998) by Magistrates' Courts (Procedure) Act 1998 (c. 15), ss. 4(2)(b), 5(2); S.I. 1998/1837, art. 2

F47 Words in s. 68(1)(b) substituted (1.4.2001) by Access to Justice Act 1999 (c. 22), s. 108(1), Sch. 13 para. 171 (with s. 107, Sch. 14 para. 7(2)); S.I. 2001/916, art. 2(a)(ii)

F48 Words in s. 68(2) substituted (25.8.2000) by Powers of Criminal Courts (Sentencing) Act 2000 (c. 6), s. 168(1), Sch. 9 para. 157

F49 Words in s. 68 substituted (6.4.1997) by virtue of Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 61; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 4(2)(3))

F50 Words in s. 68(5) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 58; S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Marginal Citations

M5 1980 c. 43.

M6 1975 c. 21.