1.—(1) In these Regulations–
“Class A member” is a member who–
became a member on or after 1st June 1989 and is not to be treated as a Class B member or Class C member by virtue of a Revenue agreement; or
was a Class B member or a Class C member immediately before that date and is deemed to have become a Class A member by virtue of making a Class A election;
“Class A election” means an election duly made by a Class B member or a Class C member by notice in writing to the administering authority, before the date on which he ceases to be an active member for any reason (including death), that he wishes to be treated as a Class A member for the Scheme, as from 1st June 1989;
“Class B member” is a member who–
became a member on or after 17th March 1987 and before 1st June 1989 or is to be treated as a Class B member by virtue of a Revenue agreement;
has continued to be a member since before 1st June 1989 or satisfies one of the continuity conditions in relation to any period when he was not a member;
is not to be treated as a Class C member by virtue of a Revenue agreement, and
is not deemed to have become a Class A member by virtue of making a Class A election;
“Class C member” is a member who–
became a member before 17th March 1987 or is to be treated as a Class C member by virtue of a Revenue agreement;
has continued to be a member since before that date or satisfies one of the continuity conditions in relation to any period when he was not a member; and
is not deemed to have become a Class A member by virtue of a Class A election;
“continuity conditions”, in relation to a Class B member or a Class C member, are–
that his active membership ceased on his secondment or posting to another employer, at the time of the secondment or posting he had a definite expectation that he would become an active member again when it ended, and he again became an active member at the end of his secondment or posting;
that his active membership ceased by reason of his unpaid absence and he began paying contributions again under regulation 11 within one month of returning to work;
that the member’s active membership ceased wholly or partly because of her pregnancy or confinement and she began paying contributions again under that regulation within one month of returning to work as a maternity rights returner;
that the member’s active membership ceased otherwise than as mentioned in paragraph (a), (b) or (c) and within one month he rejoined the Scheme as an active member and began paying contributions again under that regulation; or
that his membership ceased by reason of the member leaving the Scheme as a result of a contravention which is actionable under section 62 of the Financial Services Act 1986.
“existing rights member” means a member to whom regulation 5(2) of the Retirement Schemes (Continuation of Rights of Members of Approved Schemes) Regulations 1990(1) applies;
“relevant benefits” has the meaning given in section 612(1) of the Taxes Act.
(2) Where a member who was eligible to become a member at a time when he would have become a Class B member or a Class C member, as the case may be, applies for membership after that date by virtue of being a person in respect of whom regulation 124 applies, he must be treated as a Class B or a Class C member, as the case may be, at any time if–
(a)he continues to be a member throughout the period beginning with the date on which he becomes a member of the Scheme and ending with that time; or
(b)the continuity conditions are satisfied in relation to the part of that period when he was not a member.
(3) A person has retained benefits if he is entitled to or has received relevant benefits accrued under–
(a)an approved scheme or a scheme seeking approval;
(b)a relevant statutory scheme (as defined in section 611A) of the Taxes Act);
(c)a fund to which section 608 of that Act applies (funds approved before 6th April 1980);
(d)a retirement benefits scheme (as defined in section 611 of that Act) accepted by the Commissioners of Inland Revenue as a scheme which corresponds as mentioned in section 596(2)(b) of that Act;
(e)a contract or trust scheme approved under section 620 or a personal pension scheme approved under section 631 of that Act; or
(f)transfer payments from overseas schemes held in a type of arrangement defined in sub-paragraph (a), (b) or (e).
(4) However, retained benefits which are death benefits must be disregarded if–
(a)the member’s pay in the first year of his employment during which he is a member does not exceed one quarter of the Revenue permitted maximum for the year of assessment in which that first year begins; or
(b)they do not exceed £2,500.
(5) Retained relevant benefits may be disregarded if the member started to purchase benefits under Part III, or was given extra benefits under Part III after August 1991, and–
(a)where the member became a member on or after 14 March 1989, his remuneration in the first year of his employment during which he is a member does not exceed one quarter of the Revenue permitted maximum for the year of assessment in which the first year begins; or
(b)where the member became a member before 14 March 1989, his remuneration in the first year in which he starts to accrue benefits under Part III does not exceed one quarter of the Revenue permitted maximum for the year of assessment in which that first year begins.
(6) For sub-paragraph (3) benefits accrued under the Scheme must be disregarded unless they accrued in respect of a period of membership as respects which the person is treated as a deferred member or a pensioner member by virtue of regulation 31(5).
(7) In this Schedule–
(a)“final remuneration” means, subject as provided in sub-paragraphs (b) to (e), the greater of–
(i)the highest total remuneration (as defined in sub-paragraph (h)) for any period of twelve complete and consecutive months (ending on the last day of the month) falling wholly within the five years preceding the relevant date; and
(ii)the yearly average of the total emoluments from the employer which are assessable to income tax under Case I or II of Schedule E and upon which income tax liability has been determined in any three or more consecutive years ending at the end of any month not earlier than 10 years before the relevant date;
(b)where final remuneration is calculated by reference to any period other than the last complete year ending on the relevant date, the member’s total remuneration or total emoluments may be increased for any year in proportion to any increase in the retail prices index from the last day of that period up to the relevant date, but for a Class C member this shall not apply to the calculation of the maximum retirement grant benefit unless the member’s aggregate retirement benefit is similarly increased beyond the maximum amount which could have been paid but for this provision and the similar provision in the definition of total remuneration and then only to the same extent;
(c)in respect of a Class B member, final remuneration for the purpose of the calculation of the retirement grant shall not exceed £100,000 or such other sum as may be prescribed by the Treasury;
(d)in respect of a any member whose remuneration in any tax year after 5 April 1987 used for the purpose of calculating retirement benefits has exceeded £100,000 (or such other sum as may be prescribed by the Treasury), final remuneration shall not exceed the amount ascertained in accordance with sub-paragraph (a) (ii) and sub-paragraph (a) (i) shall not apply unless the member chooses to adopt £100,000 (or such other figure as may be prescribed by the Treasury);
(e)remuneration and total emoluments shall not include any amounts which arise from the acquisition or disposal of shares or any interest in shares or from a right to acquire shares or anything in respect of which tax is chargeable by virtue of section 148 of the Taxes Act;
(f)“relevant date” means the last day on which the member is an active member;
(g)“service” means service in local government employment;
(h)“total remuneration” in relation to any member means the aggregate of–
(i)actual amounts received for the twelve complete and consecutive months ending on or immediately prior to the date for which total remuneration is to be calculated (in this definition called “the calculation date”) which correspond to the fixed annual rates of salary for the time being in respect of that member’s service; and
(ii)that member’s average annual remuneration from the employer or otherwise in respect of service by way of commissions, fluctuating emoluments or other benefits assessed to income tax under Schedule E (but not within paragraph (i)) for the 36 complete and consecutive months ending on or immediately prior to the calculation date, provided that remuneration within the scope of this paragraph for a year prior to that ending with the calculation date may be increased in proportion to any increase in the retail price index from the last day of that year up to the calculation date.