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The British Transport (Pensions of Employees) (No. 2) Order 1969

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Funded schemes

3.—(1) Subject to the provisions of this Order, this and the next two succeeding Articles shall apply to every discharged officer who at the date of his discharge has accrued pension rights under a funded scheme.

(2) In respect of a discharged officer to whom this Article applies, the responsible body may, not later than 3 months after the date of his discharge, make such arrangements with the persons administering the scheme as shall secure to him his accrued pension rights.

(3) Any arrangements made under the last foregoing paragraph may be terminated by the responsible body at any time upon giving to the persons administering the scheme 3 months' previous notice in writing.

(4) Notwithstanding anything to the contrary in any such scheme as aforesaid or any statutory provisions relating thereto or trust deeds, rules or other instruments made for the purposes thereof, the persons administering the scheme shall be authorised to make such arrangements (including the disposal of funds held for the purposes of the scheme) as are referred to in paragraph (2) of this Article and the said scheme, statutory provisions, trust deeds, rules and other instruments shall be construed accordingly and as though provision was duly made in the scheme for any arrangements so made.

4.—(1) Where no such arrangements as are mentioned in Article 3 of this Order are made in relation to a discharged officer to whom this Article applies, or where such arrangements, if made, have been duly terminated, the persons in whom any funds held for the purposes of the scheme are vested shall transfer to the responsible body a sum which equals in amount either—

(a)the transfer value at the date of his discharge or the date on which the arrangements are terminated, as the case may be, of his pension rights as defined for the purposes of the scheme, or

(b)in the absence of such a definition, the estimated capital value at that date of his accrued pension rights,

with compound interest from the date of his discharge or the date on which the arrangements are terminated, as the case may be, until such sum is transferred to the responsible body; and upon such sum being transferred, the responsible body shall indemnify the persons in whom the said sum is vested against any liability for the payment of income tax in respect of the sum transferred to that body, and, without prejudice to their liability under arrangements made in accordance with Article 3 of this Order or under the preceding provisions of this Article, as from the date of the discharge of such discharged officer, the persons administering the scheme, and the persons in whom the said fund is vested, shall be discharged from all liability under the scheme to or in respect of that discharged officer or to any other person by reason of the transfer.

(2) The reference in paragraph (1) of this Article to compound interest shall be construed as a reference to compound interest at the same rate and with the same rests as were applied—

(a)in a case where the sum to be transferred is that referred to in sub-paragraph (a) of the said paragraph, for the purposes of the last periodical actuarial valuation of the fund held for the purposes of the scheme; and

(b)in any other case, for the purposes of calculating the estimated capital value of the accrued pension rights referred to in that paragraph.

(3) The sum to be transferred to the responsible body under the provisions of paragraph (1) of this Article shall be transferred within 6 months after the date of the discharge of the officer concerned or, where any such arrangements as are referred to in paragraph (2) of the last preceding Article have been made, the date on which the arrangements are duly terminated, as the case may be.

(4) The sum referred to in paragraph (1)(b) of this Article shall be determined by an actuary appointed by the responsible body and the fees of any actuary so appointed shall be defrayed by the responsible body.

5.—(1) Subject to the provisions of this Article, where in relation to a discharged officer to whom this Article applies a sum has been transferred to the responsible body under the provisions of the last preceding Article, the responsible body shall pay to or in respect of that officer:—

(a)as from his reaching normal retiring age, or as from the happening of any other contingency carrying entitlement to pension under the scheme, the payment or payments comprised in his accrued pension rights; or

(b)at the option of the responsible body in any case where the sum does not exceed £250 and where the officer concerned has not at any time before his discharge been in non-participating employment or, if he has so been, a payment in lieu of graduated contributions has been made in respect of his non-participating employment in accordance with section 58 of the National Insurance Act 1965, (such option to be exercised not later than 6 months after the date of his discharge), a lump sum equal in amount to the estimated capital value of his accrued pension rights at the date when the option is exercised, as determined by an actuary appointed by the responsible body, reduced by the aggregate of—

(i)any sum which the persons in whom the fund held for the purposes of that scheme is vested may become liable to pay by way of income tax in respect of the amount transferred by way of transfer value or estimated capital value, and

(ii)in a case where a payment in lieu of graduated contributions has been made under section 58 of the National Insurance Act 1965 on the discharge of the officer concerned and the period taken into account in fixing the amount of that payment includes any period of his pensionable service under that scheme, the smaller of the following two sums—

(A)one-half of so much of that payment in lieu of graduated contributions as is referable to that period of pensionable service, and

(B)the estimated capital value (determined as aforesaid) of the pension rights which have accrued to him under that scheme in respect of that period of pensionable service:

Provided that for the purposes of this paragraph, the expression “accrued pension rightsexcludes any pension payable during the period for which any such arrangements as are referred to in Article 3(2) of this Order are in force.

(2) Except as provided in paragraph (1)(b) of this Article, the payment or payments comprised in the accrued pension rights of a discharged officer to whom this Article applies shall not be capable of surrender, commutation or assignment otherwise than in accordance with the rules of his pension scheme.

(3) The responsible body may discharge its liability under paragraph (1)(a) of this Article by making such arrangements with a life assurance company as will secure to or in respect of the discharged officer concerned, as from his reaching normal retiring age or as from the happening of any other contingency carrying entitlement to pension under his pension scheme, the payment or payments comprised in his accrued pension rights.

(4) Except as aforesaid, the responsible body shall be under no liability to or in respect of the discharged officer concerned by reason of any rights under or arising out of his membership of the scheme.

Insurance schemes

6.—(1) Subject to the provisions of this Order, this Article shall apply to every discharged officer who at the date of his discharge has accrued pension rights under an insurance scheme.

(2) In respect of a discharged officer to whom this Article applies, the responsible body shall, not later than 3 months after the date of his discharge, make such arrangements with the persons administering the scheme and the life assurance company concerned as shall secure to or in respect of that discharged officer on his reaching normal retiring age, or on the happening of any other contingency carrying entitlement to pension under the scheme, the payment or payments comprised in his accrued pension rights.

(3) Any arrangements made under paragraph (2) of this Article shall, in any case where the payments to be secured thereunder to or in respect of a discharged officer on his reaching normal retiring age do not exceed £13 per annum and where the officer concerned has not at any time before his discharge been in non-participating employment or, if he has so been, a payment in lieu of graduated contributions has been made in respect of his non-participating employment in accordance with section 58 of the National Insurance Act 1965, provide that the life assurance company may, at any time within 3 months of the making of the arrangements, discharge its liability thereunder by paying to or in respect of the discharged officer concerned a lump sum equal in amount to the estimated capital value of his accrued pension rights as at the date on which the arrangements are made, determined in such manner as may be provided by the arrangements so made, and adjusted, in such manner as may be provided by the arrangements, in respect of the aggregate of:—

(a)any sum which the persons administering the scheme may become liable to pay by way of income tax in consequence of the payment of the said lump sum, and

(b)in a case where a payment in lieu of graduated contributions has been made under section 58 of the National Insurance Act 1965 on the discharge of the officer concerned and the period taken into account in fixing the amount of that payment includes any period of his pensionable service under that scheme, the smaller of the following two sums—

(i)one-half of so much of that payment in lieu of graduated contributions as is referable to that period of pensionable service, and

(ii)the estimated capital value (determined as aforesaid) of the pension rights which have accrued to him under that scheme in respect of that period of pensionable service.

(4) Notwithstanding anything to the contrary in such scheme as aforesaid or any statutory provisions relating thereto or trust deeds, rules or other instruments made for the purposes thereof, the persons administering the scheme and the life assurance company concerned shall be authorised to make such arrangements (including the disposal of any funds held for the purposes of the scheme) as are referred to in paragraph (2) of this Article and the said scheme, statutory provisions, trust deeds, rules and other instruments shall be construed accordingly and as though provision was duly made in the scheme for any arrangements so made.

(5) Except as provided in paragraph (3) of this Article, the arrangements aforesaid shall ensure that the payment or payments comprised in the accrued pension rights of the officer concerned shall not be capable of surrender, commutation or assignment otherwise than in accordance with the rules of his pension scheme.

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