The Local Government Superannuation Regulations 1986

PART C PAYMENTS BY EMPLOYEES

Appropriate superannuation fund

C1.—(1) Subject to paragraphs (2) and (3), in relation to a pensionable employee of an administering authority the appropriate superannuation fund is the fund maintained by that authority.

(2) In relation to a person who—

(a) is a pensionable employee of a London borough council or of the Common Council, and

(b) immediately before 1st April 1974 was by virtue of article 14 or 15 of the London Authorities (Superannuation) Order 1965(1) entitled to participate in the benefits of the superannuation fund maintained under Part I of the Act of 1937 by the Greater London Council, and

(c) became a pensionable employee on 1st April 1974, and

(d) during the period beginning on 1st April 1974 and ending with 28th February 1986 continued in the employment of the same London borough council, or, as the case may be, of the Common Council,

the appropriate superannuation fund is, so long as he continues in the employment of the body in question, the fund maintained by the Greater London Council.

(3) In relation to a pensionable employee who was transferred after 30th June 1985 by or under the Greater London Council (Staff Transfer and Protection) Order 1979(2), the appropriate superannuation fund is, for any period before 1st April 1986 during which he continues to be employed by the authority to which he was transferred, the superannuation fund maintained by the Greater London Council.

(4) In relation to a person who—

(a) is a pensionable employee by virtue of regulation B1(11) and

(b) immediately before 1st April 1974 was entitled to participate in the benefits of the superannuation fund maintained under Part I of the Act of 1937 by—

(i) the Greater London Council, or

(ii) Newham London borough council,

the appropriate superannuation fund is the fund maintained by the same body.

(5) In relation to a person who—

(a) is a pensionable employee by virtue of regulation B1(13), or

(b) is a pensionable employee of the probation committee for any area in Greater London other than the City of London probation area, or

(c) is a pensionable employee of the London Residuary Body,

the appropriate superannuation fund is the fund maintained by the Greater London Council.

(6) In relation to a pensionable employee of a water authority, the appropriate superannuation fund is the fund which the Severn-Trent Water Authority became required to maintain by virtue of regulation 5 of the Local Government Superannuation (National Water Council Dissolution) Regulations 1983(3) (“the dissolution regulations”).

(7) In relation to a person to whom these regulations apply by virtue of an agreement made under regulation B3 with the Severn-Trent Water Authority, the appropriate superannuation fund is the second fund which that authority became required to maintain by virtue of regulation 3 of the dissolution regulations.

(8) Subject to paragraph (9), in relation to a pensionable employee whose case does not fall within paragraphs (1) to (6) the appropriate superannuation fund is the fund maintained by the administering authority within whose area lies the greater part of the area of his employing authority.

(9) Where paragraph (8) applies to any pensionable employees of a scheduled body the Secretary of State may, after consultation with the bodies appearing to him to be concerned, by direction substitute as the appropriate superannuation fund in relation to those employees or any of them the fund maintained by some other administering authority (“the substituted fund”).

(10) A direction under paragraph (9) may—

(a) require the making of financial adjustments between the funds, whether by way of a payment to the substituted fund or of a transfer of assets or both, or

(b) contain provision as to the transfer of liabilities to the substituted fund and any other consequential and incidental matters.

Payment and amount of employee's contributions

C2.—(1) Subject to paragraph (3), a pensionable employee shall, at such intervals as the appropriate administering authority may determine, make contributions to the appropriate superannuation fund in respect of every employment in which he is a pensionable employee.

(2) The amount of the contribution to be made for any period is—

(a) in the case of a manual worker, 5%, and

(b) subject to paragraph (5), in the case of an officer, 6%,

of his remuneration in the employment; and any reduction in remuneration by reason of the actual or assumed enjoyment by the employee during any period of absence from duty of any statutory entitlement shall be disregarded.

(3) A pensionable employee shall not make contributions in respect of any employment in relation to which he is entitled to reckon 45 years' reckonable service.

(4) For the purposes of paragraph (3) reckonable service does not include reckonable service before attaining the age of 60 years beyond a total of 40 years.

(5) In the case of an officer who—

(a) is a designated employee, and

(b) has not had a disqualifying break of service, and

(c) has not, before entering the employment in which he is a pensionable employee, ceased to hold another local government employment and—

(i) become entitled to benefits under these regulations or the 1974 regulations otherwise than under regulation E2(1)(c), or

(ii) having become entitled under regulation E2(1)(c), given notice under regulation E2(9)(c),

the amount of the contribution to be made for any period is 5% of his remuneration in the employment.

Leave of absence from duty

C3.—(1) A pensionable employee who is on leave of absence from duty in an employment, otherwise than by reason of illness or injury, with reduced remuneration or without remuneration, shall not make any contribution under regulation C2 in respect of the employment for the period of his absence.

(2) The employee shall for a period of 30 days beginning on the first day of the leave of absence, or for the period of absence if shorter, make contributions to the appropriate superannuation fund of amounts equal to the contributions he would have been required to make under regulation C2 on the remuneration he would have received during that period but for the leave of absence.

(3) If the employee gives notice in writing for the purpose to the employing authority not later than 30 days after—

(a) the day on which he returns to duty, or

(b) the day on which he ceases to be employed by that authority,

whichever is the earlier, he shall make such contributions as are mentioned in paragraph (2) for 36 months, or for the period of his absence if shorter.

(4) Where the leave of absence was given to enable the employee to attend—

(a) for jury service in pursuance of a summons under the Juries Act 1974(4), or

(b) as a juror at an inquest under the Coroners Act 1887(5),

and such attendance continues after the expiration of the period of 30 days mentioned in paragraph (2), the employee shall be deemed to have given such a notice as is mentioned in paragraph (3).

Absence due to trade dispute

C4.—(1) This regulation applies to a person who—

(a) has been absent from duty, otherwise than on leave of absence, for a period of one or more days during and in consequence of a trade dispute, and

(b) immediately before—

(i) the period of absence, or

(ii) where two or more periods of absence occurred in consequence of a single trade dispute, the first of those periods,

was a pensionable employee.

(2) For the purposes of paragraph (1)—

(a) a person whose contract of employment is terminated in consequence of a trade dispute is, notwithstanding the termination, to be treated as having been absent from duty after the termination if, not later than the day after the end of the trade dispute, he again becomes a pensionable employee of the same scheduled body, and

(b) it is immaterial whether or not—

(i) the person was participating in or financing or otherwise directly interested in the trade dispute, or

(ii) the employing authority were a party to the trade dispute.

(3) In this regulation, unless the context otherwise requires—

“relevant absence” means a period for which a person to whom this regulation applies was absent from duty as mentioned in paragraph (1);

"relevant contribution period' means a period which—

(a)

is coextensive with one of the intervals at which a person to whom this regulation applies was required under regulation C2(1) to contribute to the appropriate superannuation fund, and

(b)

includes all or part of a relevant absence;

“remuneration” does not include any guarantee payment under Part II of the Employment Protection (Consolidation) Act 1978(6); and

“trade dispute” has the meaning given by section 29 of the Trade Union and Labour Relations Act 1974(7).

(4) Subject to paragraphs (5), (6) and (8), if notice in writing is given for the purpose by—

(a) a person to whom this regulation applies, or

(b) the personal representatives of a person to whom this regulation applied who has died before the end of the period of 3 months specified in paragraph (6) without giving such notice (referred to in this regulation as a “deceased employee”),

the amount specified in paragraph (7) is payable in respect of a relevant contribution period to the authority to whom notice was given; and the authority shall pay to the appropriate superannuation fund any sum they receive by way of full or part payment of that amount.

(5) Where all or part of more than one relevant contribution period is included in a relevant absence or relevant absences which occurred in consequence of a single trade dispute, notice given for the purpose mentioned in paragraph (4) in respect of any one of those periods is of no effect unless notice is given in respect of all those periods.

(6) Notice for the purpose mentioned in paragraph (4) must be given in writing, within the period of 3 months beginning on the day after the last day of the relevant contribution period or, where paragraph (5) applies, of the last of the relevant contribution periods, in respect of which it is given, or in the case of a deceased employee within the period of 12 months beginning on the date of his death, or in either case within such longer period as the authority may allow, to the authority who are, or as the case may be were last, the employing authority in relation to the person by or in respect of whom notice is given.

(7) The amount mentioned in paragraph (4) is an amount equal to 16% of the difference between—

(a) the person's remuneration (if any) for the relevant contribution period, and

(b) the remuneration he would have received for that period if it had not included any relevant absence or part of a relevant absence.

(8) Notwithstanding anything in regulation C11, but without prejudice to the power of the appropriate administering authority under that regulation to deduct from any payment by way of benefits under these regulations any sum remaining due on account of an amount payable under this regulation—

(a) an employing authority shall not accept from a pensionable employee, or deduct from his remuneration, and

(b) an administering authority shall not recover from a pensionable employee,

in any period of 12 months ending with 5th April, by way of full or part payment of so much of any amount payable under this regulation as is attributable to any relevant absence during that period, any sum which, when aggregated with any such amounts as are mentioned in Schedule 7, would exceed 15% of his remuneration for that period.

Lump sum payment to increase reckonable service

C5.—(1) Subject to paragraph (3), a pensionable employee may, by notice in writing given to the appropriate administering authority within 12 months after having first become a pensionable employee under these regulations or the 1974 regulations, elect to make a payment into the appropriate superannuation fund in order to become entitled under regulation D4 to reckon an additional period as reckonable service in relation to an employment in which he is a pensionable employee.

(2) The length of the period is not to exceed the maximum calculated in accordance with Schedule 3, the amount of the payment is to be calculated in accordance with Part I of Schedule 4, and the payment is to be made within 1 month after the date on which notice was given.

(3) An employee may not make an election under this regulation if he has attained the age of 65 years.

Periodical payments to increase reckonable service

C6.—(1) Subject to paragraph (4), a pensionable employee may at any time, by notice in writing given to the appropriate administering authority, elect to make additional contributions to the appropriate superannuation fund in order to become entitled under regulation D5 to reckon an additional period as reckonable service in relation to an employment in which he is a pensionable employee.

(2) The length of the period is not to exceed the maximum calculated in accordance with Schedule 3 and the additional contributions are to be calculated in accordance with Part II of Schedule 4.

(3) The additional contributions—

(a) are payable, at such intervals as the appropriate administering authority may determine, from the employee's birthday next following the date of the election, and

(b) subject to paragraph (5), cease to be payable on the day before the birthday on which, or as the case may be his last birthday before, the employee attains pensionable age.

(4) An employee may not make an election under this regulation if—

(a) he has attained the age of 64 years, or

(b) he was precluded by regulation D13(5)(b) of the 1974 regulations from making an election under that regulation, or

(c) the appropriate administering authority have resolved that he should (at his own expense) undergo a medical examination and he has not done so to their satisfaction.

(5) Payment in accordance with paragraph (3) may be discontinued if the employee satisfies the appropriate administering authority' that its continuance would cause financial hardship.

Payment by manual worker in respect of previous service

C7.—(1) A whole-time manual worker who becomes a pensionable employee by virtue of regulation B1(3)(c) may make a payment into the appropriate superannuation fund in order to become entitled under regulation D9 to reckon as reckonable service in relation to the employment in which he is a pensionable employee the period during which he was in that employment before becoming a pensionable employee.

(2) The amount of the payment is an amount equal to the contributions which he would have been required to make under regulation C2 in respect of the employment if he had throughout the period been a pensionable employee, and the payment is to be made, unless the employing authority allow a longer period, within the period of 6 months beginning on the date on which he becomes a pensionable employee.

(3) The payment is to be treated for the purposes of these regulations as if it consisted of contributions made under regulation C2 in respect of employment in which the person was a pensionable employee.

Payments to avoid reduction of retiring allowance and death grant

C8.—(1) This regulation applies to a pensionable employee whose retiring allowance would be subject to reduction under regulation E3(7) or (8) (reduction in respect of reckonable service before 1st April 1972, etc.).

(2) Subject to paragraphs (3) to (9), a person to whom this regulation applies may, by notice in writing given to the appropriate administering authority, elect to make payment to the appropriate superannuation fund in order to avoid all or part of the reduction in his retiring allowance, and in any death grant that may become payable under regulation E11.

(3) A notice under paragraph (2) must specify whether the reckonable service in respect of which the reduction is to be avoided is the whole, and if not what part it is, of his reckonable service before, as the case may be—

(a) 1st April 1972, or

(b) in the case of a male employee, any earlier date on which he became a widower or was judicially separated from his wife or on which his marriage was dissolved.

(4) An election may not be made in respect of a period of reckonable service of less than one year unless—

(a) the whole of the person's reckonable service before 1st April 1972, or

(b) where he has previously made an election in respect of part of that service, the remainder of it,

amounts to less than one year.

(5) A notice under paragraph (2) must specify whether payment is to be made—

(a) by a lump sum, or

(b) by instalments, or

(c) by way of additional contributions.

(6) An election to make payment by a lump sum or by instalments must be made within 12 months after first becoming a person to whom this regulation applies.

(7) An election to make payment by a lump sum may not be made after attaining the age of 65 years.

(8) An election to make payment by instalments may not be made—

(a) before attaining the age of 60 years or after attaining the age of 65 years, or

(b) after making an election to make payment by way of additional contributions, or

(c) if in the particular case the appropriate administering authority so resolve, without having, at his own expense, undergone a medical examination to their satisfaction.

(9) Elections to make payment by way of additional contributions may be made from time to time, but not—

(a) after attaining the age of 64 years, or

(b) after making an election to make payment by instalments, or

(c) if in the particular case the appropriate administering authority so resolve, without having, at his own expense, undergone a medical examination to their satisfaction.

(10) Subject to paragraph (11) and to Part IV of Schedule 5, payment is to be made—

(a) in the case of an election to make payment by a lump sum, in accordance with Part I of Schedule 5,

(b) in the case of an election to make payment by instalments, in accordance with Part II of that Schedule, and

(c) in the case of an election to make payment by way of additional contributions, in accordance with Part III of that Schedule.

(11) Payment in accordance with paragraph (10) may be discontinued if the employee satisfies the appropriate administering authority that its continuance would cause financial hardship.

Continuation of certain payments

C9.—(1) Where immediately before 1st March 1986 any payments remained to be made under a provision of the 1974 regulations specified in column (1) of the Table below, they shall be deemed to be payments due under the corresponding provision of these regulations specified in column (2).

TABLE

(1)	(2)
1974 regulations	These regulations
Regulation CIA (trade disputes)	Regulation C4
Regulation C2A (avoidance of reduction of retiring allowance, etc.)	Regulation C8
Regulation D12 (increase of reckonable service on lump sum payment)	Regulation C5
Regulation D13 (increase of reckonable service on periodical payments)	Regulation C6
Regulation D14A (whole-time manual workers)	Regulation C7

(2) Where immediately before 1st March 1986 any payments remained to be made under a provision of the 1974 regulations specified in paragraph (3), they remain payable notwithstanding the revocation of the 1974 regulations by these regulations.

(3) The payments mentioned in paragraph (2) are payments under regulations D6 (non-contributing service), D7 (previous employment treated as non-contributing service), D8 (additional contributory payments under former regulations), D10 (added years) and D11 (payments under former regulations for added years) of the 1974 regulations.

(4) Schedule 6 applies in relation to any payments under regulation D6, D7 or D8 of the 1974 regulations which remain payable by virtue of paragraph (2).

Statement of remuneration received otherwise than from employing authority

C10.—(1) A pensionable employee who receives any part of his remuneration otherwise than from the employing authority shall provide the employing authority with half-yearly statements of his receipts in respect of that part.

(2) The statements are to relate to the periods 1st April to 30th September and 1st October to 31st March, and are to be provided not later than 31st October and 30th April respectively.

(3) As soon as is reasonably practicable after receiving a request in writing from the employing authority the employee shall provide them with a statutory declaration verifying the correctness of any statement specified in the request.

Deduction and recovery of employee's contributions

C11.—(1) An employing authority may deduct from the remuneration payable by them to a pensionable employee—

(a) contributions payable under regulations C2 and C3,

(b) any amount payable under regulation C4, and

(c) any instalments or additional contributions payable to the appropriate superannuation fund.

(2) If and so far as deductions are not made under paragraph (1), the appropriate administering authority may recover any sum remaining due—

(a) as a simple contract debt in any court of competent jurisdiction, or

(b) by deducting it from any payment by way of benefits under these regulations.

Return of employee's contributions in certain cases

C12.—(1) This regulation applies to a pensionable employee who—

(a) ceases to be employed by a scheduled body,

(b) on so ceasing to be employed does not become entitled to a retirement pension, and

(c) does not, within one month and one day after so ceasing to be employed, become a pensionable employee in any employment with any scheduled body.

(2) For the purposes of this regulation a person is to be treated as not becoming entitled to a retirement pension if—

(a) he ceases to be employed in the circumstances mentioned in regulation E2(1)(c) and does not—

(i) make an election under regulation E2(6), or

(ii) fall within regulation E2(6)(a), or

(b) he falls within regulation E2(1)(d) and does not make an election under regulation E2(8)(a), or

(c) he falls within regulation E2(2).

(3) A person to whom this regulation applies who is entitled to reckon an aggregate of less than 5 years' reckonable service and qualifying service and whose relevant remuneration has not in any income tax year exceeded £5,000 is, subject to paragraphs (8) and (11), entitled to receive a payment under paragraph (7).

(4) A person to whom this regulation applies who is entitled to reckon an aggregate of less than 5 years' reckonable service and qualifying service and whose relevant remuneration has exceeded £5,000 in any income tax year is, subject to paragraphs (8) and (11), entitled to receive a payment under paragraph (7) unless he—

(a) became a pensionable employee before 6th April 1980, and

(b) by notice given in accordance with paragraph (6) elects not to receive such a payment.

(5) A person to whom this regulation applies who is entitled to reckon an aggregate of 5 or more than 5 years' reckonable service and qualifying service may, subject to paragraphs (8) and (11), by notice given in accordance with paragraph (6) elect to receive a payment under paragraph (7).

(6) Notice for the purposes of paragraph (4) or (5) must be given in writing to the appropriate administering authority—

(a) not earlier than one month and two days after the date on which the person ceased to be employed as mentioned in paragraph (1)(a), but

(b) within the period of 12 months beginning on that date.

(7) A payment under this paragraph is a payment out of the appropriate superannuation fund of a sum equal to—

(a) the aggregate amount of the person's contributions to the fund, and

(b) if he ceased to be employed for any reason other than—

(i) his voluntary resignation, or

(ii) his resignation or dismissal in consequence of inefficiency or an offence of a fraudulent character or misconduct,

compound interest on the amount mentioned in paragraph (a) calculated, to the date on which he ceased to be employed, for any period before 1st April 1972 at the rate of 3% per annum with half yearly rests on 31st March and 30th September, for any other period before 1st April 1980 at the rate of 4% per annum with yearly rests on 31st March, and for any period after 31st March 1980 at the rate of 9% per annum with yearly rests on 31st March.

(8) Paragraphs (3) to (5) do not apply to a person who ceases to be employed in consequence of—

(a) an offence of a fraudulent character, or

(b) grave misconduct,

in connection with his employment.

(9) Where paragraph (8) applies to a person, the employing authority may, subject to paragraphs (10) and (11), direct the payment out of the appropriate superannuation fund—

(a) to him, or

(b) where paragraph (8)(a) applies, to him or to his spouse or any dependant of his,

of a sum equal to the whole or a part of the aggregate amount of his contributions to the fund.

(10) If the person ceased to be employed in the circumstances mentioned in regulation E2(1)(c), a direction under paragraph (9) may only be given in respect of contributions relating to a period of service in respect of which the employing authority have given a direction as to forfeiture under regulation M1.

(11) No payment shall be made under this regulation—

(a) to a person who, having ceased to be employed in the circumstances mentioned in regulation E2(1)(c) and not having given a notice under paragraph (5), again becomes a pensionable employee and gives notice under regulation E2(10), or

(b) in the case of a person whose period of reckonable service and qualifying service is 5 years or more, in respect of any period of reckonable service and qualifying service after 5th April 1975, or

(c) in the case of a person who ceases to be employed in the circumstances mentioned in regulation E2(1)(c) or falls within regulation E2(1)(d), in respect of any period of service in contracted-out employment by reference to the scheme, or

(d) to a person who is for the time being entitled to be paid, or has been paid, an ill-health retirement grant under regulation E4.

(12) A payment under paragraph (2) to a person falling within paragraph (3), or a person falling within paragraph (4) who has not made an election under paragraph (4)(b), shall be made at the end of the 12 months following the termination of his employment or in accordance with any written request received by the administering authority for earlier payment (but in no case earlier than one month and two days after the termination of the employment) or for later payment.

(13) The administering authority shall deduct from any payment (with or without interest) under this regulation any tax to which they may become chargeable under paragraph 2 of Part II of Schedule 5 to the Finance Act 1970(8) (which relates to charge to tax on repayment of employee's contributions).

(14) In this regulation “relevant remuneration” means, in relation to a person to whom this regulation applies, the remuneration on which contributions were paid—

(a) under regulation C2 or C3, or

(b) under regulation C1 or C2 of the 1974 regulations, or

(c) under Part I of the Act of 1937, or

(d) under a local Act scheme, or

(e) under some other superannuation scheme in respect of service or employment—

(i) which became, by virtue of interchange rules, reckonable for the purposes of the former regulations, or

(ii) to which a transfer value accepted under regulation J8 relates.

(15) In this regulation references to the aggregate amount of a person's contributions to a superannuation fund include references to the contributions and amounts specified in paragraph (16) in so far as they—

(a) have not been returned to the person or, if returned, have subsequently been repaid by him,

(b) are attributable to service which might have reckoned under Part Din relation to the employment he has ceased to hold, and

(c) are not attributable to any earlier period of service in respect of which a benefit has been paid under Part E or under the 1974 regulations.

(16) The contributions and amounts mentioned in paragraph (15) are—

(a) any contributions paid by him to any superannuation fund—

(i) under regulation C2 or C3, or

(ii) under regulation C1 or C2 of the 1974 regulations, or

(iii) under Part I of the Act of 1937, or

(iv) under a local Act scheme;

(b) any contributions which, if—

(i) the former regulations had not been revoked by the 1974 regulations, and

(ii) he had immediately before ceasing to be employed been a contributory employee,

he would, by virtue of interchange rules, have been deemed to have made to the appropriate superannuation fund within the meaning of the Act of 1937;

(c) any amount which in those circumstances would, by virtue of interchange rules, have been included in any amount which would, on his ceasing to be employed, have become payable to him by way of a return of contributions under section 10 of the Act of 1937;

(d) any amount by which in those circumstances the amount mentioned in sub-paragraph (c) would, by virtue of interchange rules, have been deemed to have been increased;

(e) any amount paid by him into a superannuation fund under an old modification scheme; and

(f) any amount paid by him—

(i) by way of additional contributory payments or added period payments, or

(ii) under regulation C4 or C8, or

(iii) under regulation CIA or C2A of the 1974 regulations.

(17) Where the service in respect of which a payment under this regulation may be made is restricted by paragraph (11)(b) or (c), paragraph (16) has effect as if—

(a) in sub-paragraph (f)(i), the words “or added period payments”, and

(b) in sub-paragraph (f)(ii), the words “C4 or”, and

(c) in sub-paragraph (!)(iii), the words “CIA or”,

were omitted.

Effect of return to local government on right to a return of contributions

C13.  A person's right to a payment under regulation C12 is extinguished if—

(a) he returns to local government employment after leaving previous local government employment with a right to such a payment,

(b) on the date on which he returns to local government employment he has not received the payment, and

(c) he has not given, within 3 months after that date or such longer period as his previous fund authority and, if different, his new fund authority may allow, written notice to his previous fund authority that he wishes to receive an immediate payment.

Restoration of right to reckon service in transitional cases where there has been a return of contributions

C14.—(1) Notwithstanding regulation D3, service for which a return of contributions has been received shall be reckonable as reckonable service if the conditions in paragraph (2) are satisfied and the person makes the payment required by paragraph (3).

(2) The conditions are that—

(a) the person ceased to be employed in local government employment on or after 1st April 1974 and before 1st January 1980; and

(b) on the cessation of that employment the aggregate of his reckonable and qualifying service (or, if he was subject to a local Act scheme, the service which would have been taken into account in determining whether or not he was entitled to benefits) amounted to less than 5 years; and

(c) the return of contributions was made in relation to that employment; and

(d) he subsequently returns to local government employment.

(3) The person must pay by not later than the relevant date to his previous fund authority for the credit of their superannuation fund—

(a) a sum equal to the contributions returned to him (together with any increase under regulation J10 and any interest he was paid); and

(b) compound interest on that sum calculated in accordance with regulation J7 for the period beginning with the date on which he received the return of contributions and ending on the date of the payment of that sum.

(4) The relevant date is the expiry of 6 months after his return to local government employment.

(5) The previous fund authority may in any particular case extend the period mentioned in paragraph (4).

Reduction of returned contributions following payment in lieu of contributions

C15.—(1) Subject to the provisions of this regulation, where a pensionable employee leaves employment in circumstances—

(a) to which regulation 6 of the Transitional Provisions Regulations does not apply; and

(b) in which returned contributions are due and a payment in lieu of contributions has previously been made in respect of him in circumstances in which returned contributions were not due,

those returned contributions shall be reduced by a sum equal to the amount, or the aggregate of the amounts, by which under section 60(5) of the Insurance Act (which defines an employer's rights against an insured person in respect of payments in lieu of contributions) they could have been reduced if returned at the time when the previous payment in lieu of contributions was made.

(2) Paragraph (1) shall also apply for the reduction of returned contributions where a payment in lieu of contributions has been made under any insurance code in respect of any period of former employment which is reckonable as service as a pensionable employee if—

(a) that payment in lieu was made in circumstances not involving the return of any superannuation contributions made by him in that employment; and

(b) the transfer value payable in respect of that employment has been adjusted to take account of that payment in lieu;

and where no superannuation contributions were payable in that employment, any amount returnable in respect of contributions deemed to have been made therein shall be reduced by a sum equal to one half of that payment in lieu.

(3) No payment in lieu of contributions shall be taken into account for the purposes of paragraphs (1) and (2)—

(a) on more than one occasion; or

(b) if the payment is one which has been reduced under regulation 13 of the National Insurance (Non-participation-Assurance of Equivalent Pension Benefits) Regulations 1960(9) or any corresponding enactment in force in Northern Ireland or the Isle of Man.

(4) Where the employment of a pensionable employee comes to an end in circumstances to which regulation 6 of the Transitional Provisions Regulations applies, the amount of returned contributions to which he is entitled shall be reduced by any amount which, under section 60 of the Insurance Act as modified by the said regulation 6, the person who has made or is liable to make a payment in lieu of contributions in respect of such employee or would be so liable had the employee not been assured of equivalent pension benefits is entitled either to recover from the person liable for the returned contributions or to retain out of the returned contributions.

(5) Where returned contributions are due in the circumstances mentioned in paragraph (1) or paragraph (4) on the cessation of two or more concurrently held employments, the reduction required by that paragraph shall be made by such one of the authorities paying the returned contributions as they may agree or, in default of agreement, as is determined by the Secretary of State, and where those employments were held under the same employing authority, the reduction shall be made in relation to such one only of the employments as is determined by the authority.

(6) Where returned contributions are reduced under paragraph (1) or under section 60(5) of the Insurance Act or the said section 60(5) as modified by regulation 6 of the Transitional Provisions Regulations or under any corresponding provision of the Northern Ireland Act or the Isle of Man Act, any sum so deducted shall not form part of any amount payable to or in respect of him, either as returned contributions or as a benefit ascertained by reference to the amount of the contributions paid by him, on the occasion of any later cessation of his employment.

(7) In this regulation “returned contributions” means an amount payable under regulation C12 to or in respect of a pensionable employee by way of a return of contributions.

Limitation of payments

C16.  Schedule 7 has effect for the limitation, in certain circumstances, of payments under this Part.

(1)

S.I. 1965/621.

(2)

S.I. 1979/1737.

(3)

S.I. 1983/1271.

(4)

1974 c.23.

(5)

1887 c.71.

(6)

1978 c.44.

(7)

1974 c.52; part of section 29(3) was repealed by the Trade Union and Labour Relations (Amendment) Act 1976 (c.7), section 1(d), and section 29(7)was repealed by the Criminal Law Act 1977 (c.45), section 65 and Schedule 13; further amendments were made to section 29 by the Employment Act 1982 (c.46), section 18.

(8)

1970 c.24.

(9)

S.I. 1960/1103.