The Retirement Benefits Schemes (Continuation of Rights of Members of Approved Schemes) (Amendment) Regulations 1996

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Retirement Benefits Schemes (Continuation of Rights of Members of Approved Schemes) Regulations 1990 (S.I. 1990/2101) (“the principal Regulations”).

Part II of Schedule 6 to the Finance Act 1989 (“the Schedule”) modifies the rules of retirement benefits schemes approved by the Commissioners of Inland Revenue before 27th July 1989. The principal Regulations prescribe circumstances in which certain provisions of the Schedule are disapplied or modified in particular cases.

These Regulations, in addition to making an amendment of a drafting nature, insert in the principal Regulations further circumstances in which provisions contained in the Schedule are disapplied.

Regulation 1 provides for citation and commencement, and regulation 2 for interpretation.

Regulation 3 inserts additional definitions in regulation 2(1) of the principal Regulations.

Regulation 4, by way of a drafting amendment, ensures that the expression “the Taxes Act”, defined by regulation 3, is used throughout the principal Regulations to describe the Income and Corporation Taxes Act 1988.

Regulation 5 amends regulation 3(2) and (3) of the principal Regulations (disapplication of paragraphs 20 and 22 to 26 of the Schedule) so as to cater for circumstances where, as a result of bad investment advice, an employee fails to become a member of a retirement benefits scheme but becomes a member of a personal pension scheme within a specified time period.

Regulation 6 inserts new regulations 3A and 3B in the principal Regulations.

Regulation 3A disapplies paragraphs 20 and 22 to 26 of the Schedule in circumstances where, as a result of bad investment advice, an employee fails to become, or ceases to be, a member of a retirement benefits scheme and instead becomes a member of a personal pension scheme or enters into a retirement annuity contract, and subsequently as part of compensation for loss suffered becomes, or is reinstated as, a member of a retirement benefits scheme.

Regulation 3B disapplies paragraph 21 of the Schedule (limit on total contributions payable under the scheme by an employee) in circumstances where the employee becomes a member of the scheme and is entitled to receive benefits under the scheme for years of service ending prior to the tax year in which he becomes a member.