The Personal and Occupational Pension Schemes (Tax Approval and Miscellaneous Provisions) Regulations 1988

Explanatory Note

(This note is not part of the Regulations)

These Regulations are all made under provisions of the Social Security Act 1986 (“the 1986 Act”) or provisions inserted into the Social Security Pensions Act 1975 (“the 1975 Act”) by the 1986 Act; and are made before the end of a period of 12 months from the commencement of those provisions. Consequently, by virtue of section 61(5) of the 1986 Act, the provisions of section 61(2) and (3) of the 1975 Act (as amended by paragraph 94 of Schedule 10 to the 1986 Act) which require reference to the Occupational Pensions Board of, and a report by the Board on, proposals to make regulations for certain purposes of both Acts do not apply to them.

The Regulations amend various other regulations about personal and occupational pension schemes to take account of the provisions of the Finance (No. 2) Act 1987 (c. 51) (now consolidated in the Income and Corporation Taxes Act 1988) relating to the tax approval and tax exemption of such schemes and make other miscellaneous provisions.

Regulation 1 is formal.

Regulation 2 revokes the amendment made to regulation 5(a) of the Occupational Pension Schemes (Discharge of Liability) Regulations 1985 by regulation 7(5) of the Personal and Occupational Pension Schemes (Consequential Provisions) Regulations 1987 so that before the guaranteed minimum pension of the widower of a pension scheme member can be bought out under section 52C of the 1975 Act he must make a written request or give written consent.

Regulation 3 adds a further category of tax approved pension scheme to those listed in regulation 2(3) of the Occupational Pension Schemes (Transfer Values) Regulations 1985 as being of a kind to which pension rights may be transferred, namely a scheme approved under Chapter IV of Part XIV of the Income and Corporation Taxes Act 1988.

Regulation 4 replaces references in the Schedule to the Money Purchase Contracted-out Schemes Regulations 1987 to the Banking Act 1979 (c. 37) with reference to the Banking Act 1987 and also adds shares in and deposits with a building society and investments with a pension company which is an associated body of a building society as permitted investments.

Regulation 5 amends the Pension Schemes (Voluntary Contributions Requirements and Voluntary and Compulsory Membership) Regulations 1987 so as to specify the provisions of the Income and Corporation Taxes Act 1988 under which tax exemption or tax approval may be given for the purposes of section 12 of the 1986 Act permitting voluntary contributions to a pension scheme.

Regulation 6 amends the Personal Pension Schemes (Disclosure of Information) Regulations 1987 so as to add to the categories of information listed in Schedule 1 (basic information to be disclosed to members and other specified persons) information about whether the scheme is tax approved or an application for approval is pending and how tax relief on members' contributions is effected. It also amends paragraph 1(a) of Schedule 2 (information to be made available to individuals) so as to require information to be given about what part of the contributions credited to a member of a scheme is attributable to tax relief on his share of minimum contributions.

Regulation 7 adds to the categories of tax approved schemes permitted to receive transfers under regulation 2 of the Personal Pension Schemes (Transfer Values) Regulations 1987 those schemes approved under Chapter IV of Part XIV of the Income and Corporation Taxes Act 1988.

Regulation 8 amends the Personal and Occupational Pension Schemes (Modification of Enactments) Regulations 1987 so as to apply the provisions of Schedule 16 of the Social Security Act 1973 (preservation of benefit) relating to alternatives to and surrender of short-service benefit to personal pension schemes.

Regulation 9 amends the Personal and Occupational Pension Schemes (Protected Rights) Regulations 1987 by adding a further category of protected rights to those listed in regulation 3, namely rights to money purchase benefits derived from a payment attributable to tax relief on the employee’s share of minimum contributions.