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

Amendments to the principal Regulations

6.  After regulation 3 there shall be inserted the following regulations—

“Disapplication of paragraphs 20 and 22 to 26 of the Schedule - further provision

3A.— (1) Paragraphs 20 and 22 to 26(1) of the Schedule shall not apply as regards an employee in the circumstances prescribed in paragraph (2) below.

(2) The circumstances prescribed in this paragraph are circumstances where—

(a) the employee either—

(i) was eligible, or reasonably likely to become eligible, to be a member of a scheme before 1st June 1989 but, in the circumstances specified in paragraph (3) below, did not become a member, or

(ii) became a member of a scheme before that date but, in the circumstances specified in paragraph (4) below, ceased to be a member; and

(b) by way of compensation for loss suffered, or reasonably likely to be suffered, by the employee as a result of the circumstances specified in paragraph (3) or (4) below—

(i) the employee becomes or, as the case may be, is reinstated as, a member of that scheme, or becomes a member of another scheme established by the employer or by an employer who was a relevant employer in relation to that employer, and

(ii) a capital sum is paid on or after 1996 (whether or not to the trustees of the scheme) in respect of the employee.

(3) The circumstances specified in this paragraph are circumstances where, acting in reliance on bad investment advice at least some of which was given during the period beginning with 29th April 1988 and ending with 31st May 1989, the employee became a member of a personal pension scheme or entered into a retirement annuity contract.

(4) The circumstances specified in this paragraph are circumstances where, acting in reliance on bad investment advice at least some of which was given during the period beginning with 29th April 1988 and ending with 30th June 1994, the employee—

(a) ceased to be a member of, or to pay contributions to, the scheme and instead became a member of a personal pension scheme or entered into a retirement annuity contract;

(b) ceased to be a member of the scheme as a result of the transfer of accrued rights of his under the scheme to a personal pension scheme; or

(c) ceased to be a member of the scheme and instead (by virtue of such a provision as is mentioned in section 591 (2) (g) of the Taxes Act(2)) entered into arrangements for securing relevant benefits by means of an annuity contract.

(5) In this regulation—

“relevant benefits” has the meaning given by section 612(1) of the Taxes Act;

“retirement annuity contract” means a contract made before 1st July 1988 and approved by the Board under or by virtue of any provision of Chapter III of Part XIV of the Taxes Act.

Disapplication of paragraph 21 of the Schedule

3B— (1) Paragraph 21 of the Schedule shall not apply as regards an employee in the circumstances prescribed in paragraph (2) below and as respects the year or years of assessment specified in paragraph (3) below.

(2) The circumstances prescribed in this paragraph are circumstances where—

(a) an employee is admitted to membership of the scheme,

(b) benefits are to be provided under the scheme in respect of years of service of the employee ending prior to the year of assessment in which he is admitted to membership of the scheme,

(c) under the rules of the scheme the employee is required to contribute towards the cost of those benefits, and

(d) the annual rate, expressed as a monetary sum or as a percentage of his remuneration, that the employee is required to contribute under the rules of the scheme towards the cost of those benefits either—

(i) is the same as the annual rate that he would have been required to contribute under those rules towards the cost of those benefits if he had been a member of the scheme in the years of service in respect of which those benefits are to be provided, or

(ii) is the same as the annual rate that he is required to contribute under those rules towards the cost of benefits accruing in respect of his current year of service.

(3) The year or years of assessment specified is the year or years of assessment in which the employee makes the contributions referred to in paragraph (2)(c) above.”

(1)

Paragraphs 20 and 22 of Schedule 6 to the Finance Act 1989 were amended by section 107(7) of the Finance Act 1993 (c. 34) with effect for the year 1994-95 and subsequent years of assessment.

(2)

Section 591(2)(g) was amended by section 107(2) of, and Part V (12) of Schedule 26 to, the Finance Act 1994 (c. 9).