The Protected Rights (Transfer Payment) (Amendment) Regulations 2005

Insertion of regulations 3B and 3C into the principal Regulations

5.  After regulation 3A of the principal Regulations(1) (transfer payments from stakeholder pension schemes without the member’s consent) there shall be inserted the following regulations—

“Transfer payment to a money purchase contracted-out scheme or the money purchase part of a mixed benefit contracted-out scheme with the member’s consent

3B.— (1) A transfer payment may be made to either—

(a) a money purchase contracted-out scheme; or

(b) the money purchase part of a mixed benefit contracted-out scheme,

if the conditions specified in paragraph (2) are satisfied.

(2) The conditions specified in this paragraph are—

(a) the member consents in writing;

(b) the transfer payment (or, if it forms part of a larger payment giving effect to both protected rights and other rights, that part of it which gives effect to protected rights) is of an amount at least equal to the cash equivalent of the protected rights to which effect is being given, as calculated and verified in a manner consistent with regulations made under section 97 of the 1993 Act;

(c) the transfer payment in respect of the member’s protected rights is applied so as to provide money purchase benefits under the receiving scheme for or in respect of the member; and

(d) either the member—

(i) is employed by an employer who is a contributor to the receiving scheme; or

(ii) has previously been a member of the receiving scheme.

Transfer payment to a money purchase contracted-out scheme or the money purchase part of a mixed benefit contracted-out scheme without the member’s consent

3C.— (1) A transfer payment may be made to either—

(a) a money purchase contracted-out scheme; or

(b) the money purchase part of a mixed benefit contracted-out scheme,

without the member’s consent if the requirements of paragraph (2) are satisfied.

(2) The requirements of this paragraph are that the conditions specified in either—

(a) paragraphs (3) and (4); or

(b) paragraph (8),

are satisfied.

(3) The conditions specified in this paragraph are—

(a) the transfer payment (or, if it forms part of a larger payment giving effect to both protected rights and other rights, that part of it which gives effect to protected rights) is of an amount at least equal to the cash equivalent of the protected rights to which effect is being given, as calculated and verified in a manner consistent with regulations made under section 97 of the 1993 Act;

(b) the transfer payment in respect of the member’s protected rights is applied so as to provide money purchase benefits under the receiving scheme for or in respect of the member; and

(c) the transferring scheme is either—

(i) a money purchase contracted-out scheme;

(ii) the money purchase part of a mixed benefit contracted-out scheme; or

(iii) a scheme mentioned in head (i) or (ii) of this sub-paragraph which has ceased to be a contracted-out scheme.

(4) The conditions specified in this paragraph are—

(a) subject to paragraph (7), the trustees have sent a notice to the member at his last known postal address or electronic mail address in relation to the proposed transfer;

(b) a period of at least three months has elapsed from the date of the notice;

(c) the trustees have not received written notification within that period that the member objects to the transfer; and

(d) the transferring scheme and the receiving scheme bear a relationship to each other such as is described in regulation 12(2) of the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991(2) (transfer of member’s accrued rights without consent).

(5) In paragraph (4)(a), “notice” means a notice in writing stating—

(a) the names and addresses of the—

(i) transferring scheme; and

(ii) receiving scheme;

(b) the name of the person in the—

(i) transferring scheme; and

(ii) receiving scheme,

that a member may contact for further information;

(c) the value of the rights which are to be transferred;

(d) the nature of the rights which are to be transferred; and

(e) that—

(i) the member has the right to object to the proposed transfer of his protected rights by sending a written notice to that effect to the trustees of the transferring scheme; and

(ii) the trustees of the transferring scheme may transfer that member’s protected rights unless they receive that written notification of his objection to the proposed transfer within three months from the date of the notice.

(6) For the purposes of paragraph (4)—

(a) where the trustees of the transferring scheme are notified of a delivery failure of a notice sent by electronic mail to a member for the purposes of paragraph (4)(a), the trustees shall send a further notice to the member’s last known postal address unless he is an excluded person; and

(b) the date of the notice for the purposes of paragraph (4)(b) shall be the date of the second notice.

(7) The trustees of a transferring scheme may transfer the protected rights of an excluded person without sending a notice to him.

(8) The conditions specified in this paragraph are—

(a) the requirements of paragraphs (3)(a) to (c) and (4)(d) of this regulation are complied with;

(b) the relevant actuary certifies to the trustees of the transferring scheme that the transfer credits to be acquired for each member under the receiving scheme in respect of his protected rights are, broadly, no less favourable than the rights to be transferred;

(c) where it is proposed that a member’s protected rights are to be transferred in accordance with this paragraph, information about the proposed transfer and details of the value of the rights to be transferred shall be furnished to the member at least one month before the proposed transfer is due to take place, unless the member is an excluded person.

(9) Where in response to either a notice issued under paragraph (4) or information furnished under paragraph (8)(c) a member consents in writing to the transfer of his protected rights under the scheme, the trustees of the scheme may give effect to the protected rights of that member by making a transfer payment in accordance with this regulation. However, the trustees shall not give effect to the protected rights of that member by making a transfer payment in accordance with regulation 3B.

(10) In this regulation—

“the relevant actuary” has the meaning given by regulation 12(5) of the Occupational Pension Schemes (Preservation of Benefits) Regulations 1991;

“excluded person” means a member whose present address is not known to the trustees and in respect of whom correspondence sent by the trustees to his last address known to the trustees has been returned;

“transfer credits” means rights allowed to a member under the rules of a receiving scheme by reference to a transfer payment to that scheme of his protected rights from a transferring scheme.”.

(1)

Regulation 3A was inserted by S.I. 2000/1403.

(2)

S.I.1991/167; relevant amending instruments are S.I. 1992/1531 and 1996/2131.