The National Health Service (Pension Scheme and Additional Voluntary Contributions) (Pension Sharing) Amendment Regulations 2001

Explanatory Note

(This note is not part of the Regulations)

These Regulations further amend the National Health Service Pension Scheme Regulations 1995 (“the Pension Scheme Regulations”) which provide for the superannuation of persons engaged in the National Health Service, and amend the National Health Service Pension Scheme (Additional Voluntary Contributions) Regulations 2000 (“the AVC Regulations”) which make provision for the payment of additional voluntary contributions by persons who are members of the NHS Pension Scheme, or by their employers, in order to secure additional pension benefits.

The amendments make provision in relation to rights resulting in the payment of pension credit benefit to or in respect of those entitled to pension credits as a result of the sharing of pensions following divorce or nullity of marriage.

Regulations 1 and 2 provide for citation, commencement and interpretation.

Regulation 3 and Schedule 1 amend the Pension Scheme Regulations. Paragraph 1 of Schedule 1 inserts new definitions into regulation A2 of the Pension Scheme Regulations.

Paragraph 2 of Schedule 1 inserts a new regulation R12 into the Pension Scheme Regulations which gives effect to a new Schedule 2A (inserted by paragraph 3 of Schedule 1).

The new Schedule 2A makes provision for the discharge of liability if the person entitled to the pension credit dies before liability has been discharged, the identification of safeguarded rights, the commutation of pension credit benefit before or at normal benefit age (age 60), the payment of pension credit benefit at normal benefit age, after the death of the pension credit member before the pension credit benefit becomes payable and after it becomes payable.

Paragraph 10 of Schedule 2A provides that transfers in or out of the NHS Pension Scheme in respect of pension credit rights or pension credit benefit shall not be allowed.

Schedule 2A also provides that any period of time which may be taken into account in relation to the pension credit benefit shall not count for any other purpose under the Pension Scheme Regulations.

Regulations F5 (payment of lump sum), T5 (offset for crime, negligence and fraud), T6 (loss of rights to benefits) and T8 (interest on late payment of benefits) are modified in their application to pension credit members.

Regulation 4 and Schedule 2 amend the AVC Regulations. Regulations 2, 13 and 15 of the AVC Regulations are amended (paragraphs 2 to 4 of Schedule 2). A new regulation 17A is inserted into the AVC Regulations which gives effect to a new Schedule 2 (paragraphs 5 and 6 of Schedule 2 to these Regulations).

The new Schedule 2 to the AVC Regulations makes provision for the discharge of liability in respect of a pension credit by the Secretary of State, the discharge of liability if the person entitled to the pension credit dies before liability has been discharged, the commutation of pension credit benefit before or at normal benefit age (age 60), the payment of pension credit benefit at normal benefit age, and after the death of the pension credit member before the pension credit benefit becomes payable and after it becomes payable.

Provision is also made for the investment of pension credit rights in a way which is similar to the investment of additional voluntary contributions under regulation 7 of the AVC Regulations. The transfer of pension credit rights out of the AVC scheme is also provided for.

Paragraph 11 of the new Schedule 2 enables a person entitled to a pension credit or a pension credit member to nominate someone other than a surviving spouse to receive the lump sum payable upon his death.

Paragraphs 13 and 14 of the new Schedule 2 to the AVC Regulations contain provisions regarding the reduction and forfeiture of rights to pension credit benefit to the extent that those rights are originally derived from contributions made by the employer of the pension credit member’s former spouse and against whom the pension sharing order or provision was made. The provisions are similar to regulations 19 and 20 of the AVC Regulations.

These Regulations do not impose any costs on business.