The Occupational and Personal Pension Schemes (Contracting-out) (Miscellaneous Amendments) Regulations 2002

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend various instruments which govern the arrangements whereby occupational and personal pension schemes are contracted-out of the state additional retirement pensions, and associated matters including those relating to transfer payments, benefits for widows and widowers, contributions equivalent premiums and the provision of information relating to pension schemes and state scheme rights and duties.

Regulation 2 amends the Occupational Pension Schemes (Contracting-out) Regulations 1996 in relation to contracting-out certificates and elections and the trivial commutation of benefits. Regulation 2 also substitutes regulation 19 (lump sum benefits) and regulation 51 (contributions equivalent premiums) (paragraphs (7) and (12) respectively). Regulation 2(9) inserts new regulation 20A into those Regulations to provide for the suspension of benefits derived from section 9(2B) protected rights.

Regulation 3 amends the Protected Rights (Transfer Payment) Regulations 1996 by inserting a new regulation 4A which provides for transfer payments to section 53 Schemes (former contracted-out schemes) (regulation 3(2)) and to provide for transfer payments to overseas arrangements as well as overseas schemes (regulation 3(3)).

Regulation 4 amends the Personal and Occupational Pension Schemes (Protected Rights) Regulations 1996 in respect of pensions and annuities for widows and widowers (regulations 4, 5 and 7), the suspension and the forfeiture of protected rights payments and their treatment where a member dies before effect is given to such rights (regulation 9).

Regulation 5 amends the Occupational Pension Schemes (Modification of Schemes) Regulations 1996 to disapply restrictions on modifying Schemes to be amended to offer single life pensions and annuities in accordance with the Personal and Occupational Pension Schemes (Protected Rights) Regulations 1996 as amended by regulation 4 of these Regulations.

Regulation 6 amends the Occupational Pension Schemes (Investment) Regulations 1996 to apply the restriction on employer related investments in regulation 5 of those Regulations to schemes referred to in Chapter IV of Part XIV of the Income and Corporation Taxes Act 1988.

Regulation 7 amends regulations 51 and 52 of the Occupational Pension Schemes (Contracting-out) Regulations (Northern Ireland) 1996 which relate to contributions equivalent premiums.

Regulation 8 amends the Personal Pension Schemes (Appropriate Schemes) Regulations 1997 by inserting a new regulation 6A to extend the categories of person to whom information may be given to enable them to comply with Part III (certification of pension schemes and effect on members state scheme rights and duties) of the Pension Schemes Act 1993 to widows and widowers of an earner and anyone responsible for making payments derived from protected rights.

Regulation 9 amends the Occupational and Personal Pension Schemes (Assignment, Forfeiture, Bankruptcy etc.) Regulations 1997 by inserting paragraph (1A) into regulation 2 (commutation of pension under an occupational pension scheme). New paragraph (1A) disapplies, in relation to the commutation of benefits referred to in section 91(5) of the Pensions Act 1995, the principle of inalienability of pensions provided for in section 91(1) of that Act.

Regulation 10 amends regulation 3 of the Occupational Pension Schemes (Contracting-out) (Payment and Recovery of Remaining Balances) Regulations 2000 which deals with the recovery of amounts by the Inland Revenue by substituting the reference to section 42A(2D) of the Pension Schemes (Northern Ireland) Act 1993 with a reference to section 38A(2D) of that Act.

An assessment of the cost to business of complying with these Regulations has been made, copies of which have been placed in the libraries of both Houses of Parliament. Copies may be obtained from the Department for Work and Pensions, Regulatory Impact Unit, 3rd floor, The Adelphi, 1–11 John Adam Street, London, WC2N 6HT.