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14. After rule E.28 insert—
(1) No annual pension payable under this Part may exceed two thirds of the Revenue maximum.
(2) Where two or more pensions are payable under this Part in respect of a deceased member, the aggregate annual amount of them may not exceed the Revenue maximum.
(3) In paragraph (1) “the Revenue maximum” means—
(a)in the case of a deceased active or deferred member, the amount of the annual pension that would have been payable to the member if on the date of death he had become entitled to a pension under rule D.5 (early payment of benefits: active members with permanent serious ill-health) and had exercised the option under rule D.10 (option to exchange lump sum for pension) in respect of the whole of the lump sum to which he would otherwise have been entitled,
(b)in the case of a deceased pensioner member who exercised that option in respect of the whole of the lump sum to which he would otherwise have been entitled, the amount of the annual pension to which he was entitled at the date of death, and
(c)in the case of a deceased pensioner member who did not exercise that option in respect of the whole of the lump sum to which he would otherwise have been entitled, the amount of the annual pension to which he would have been entitled at the date of death if he had done so.
This is subject to paragraphs (4) and (6).
(4) In the case of a pension debit member, the amount of the annual pension is determined without taking the pension debit into account if in the relevant tax year the member met the modest earnings test.
(5) For the purposes of paragraph (4)—
(a)a member meets the modest earnings test in a tax year if in that year—
(i)in the case of a tax year before 2003–04, the member’s pensionable earnings to which section 203 of the Income and Corporation Taxes Act 1988 (PAYE) applied, and
(ii)in the case of a tax year after 2002–03, the member’s pensionable earnings that are PAYE income for the year (within the meaning of section 683 of the Income Tax (Earnings and Pensions) Act 2003),
do not exceed one quarter of the permitted maximum, as defined in section 590C(2) of the Income and Corporation Taxes Act 1988, for that year, and
“the relevant tax year” means the tax year immediately before that in which the marriage in relation to which the pension sharing order in question was made ended.
(6) If the member was a retained rights member, the value of his retained benefits is disregarded in calculating the Revenue maximum.
(7) If, apart from this paragraph, the aggregate annual amount of two or more pensions payable under this Part in respect of a deceased member would exceed the Revenue maximum, the annual amount of each of them is to be reduced by—
where—
E is the amount of the excess,
P is the annual amount of the pension in question, and
AP is the aggregate annual amount of the pensions.
(1) Notwithstanding any other provision of the Scheme, no benefits may be paid under this Part to any person in respect of a member if or to the extent that their payment would prejudice the registration of the Scheme as a relevant statutory scheme under section 611A(1)(b) of the Income and Corporation Taxes Act 1988.
(2) If the payment of benefits is restricted by virtue of paragraph (1) but the manner in which the restriction affects any particular benefit or benefits is not apparent from the rules relating to the restriction, the Secretary of State may determine the manner in which the restriction is to be given effect.”.
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