The Registered Pension Schemes (Modification of the Rules of Existing Schemes) Regulations 2006

Limits on amounts of remuneration to be taken into account

5.—(1) This paragraph applies in the case of the rules of an existing scheme which becomes a registered pension scheme by virtue of paragraph 1(1)(a), (c) or (d) of Schedule 36—

(a) where the existing scheme came into existence before 14th March 1989, as regards an employee who became a member of that scheme on or after 1st June 1989;

(b) where the existing scheme came into existence on or after 14th March 1989, as regards any employee who is a member of that scheme (whenever he became a member).

This paragraph is subject to the following qualifications.

(2) Paragraph (1) does not apply to the rules of an existing scheme in their application to an employee to whom paragraph 20 of Schedule 6 to the Finance Act 1989 did not apply, immediately before its repeal, by virtue of regulation 3(2), (3), (4), (6) or (8) or 3A(2) of the Continuation of Rights Regulations.

(3) If, and to the extent that, paragraph (1) applies, paragraphs (4) to (7) have effect—

(a) in respect of the transitional period and

(b) regardless of anything contained in the rules of the existing scheme to the contrary.

(4) In arriving at the employee’s relevant annual remuneration for the purposes of calculating benefits, any excess of what would be the employee’s relevant annual remuneration (apart from this paragraph) over the permitted maximum for the year of assessment in which his participation in the scheme ceases shall be disregarded.

(5) In arriving at the employee’s remuneration for the year 2006-07 or any subsequent year of assessment for the purposes of any restriction on the aggregate amount of contributions payable under the scheme by the employee and the employer, there shall be disregarded any excess of what would be his remuneration for the year (apart from this paragraph) over the permitted maximum for the year.

(6) If—

(a) a transfer payment having been accepted by the existing scheme under its rules, the payment has been treated as entitling the employee to be regarded as having additional years of service (“inserted years”), and

(b) by virtue of the modification of paragraph 20 of Schedule 6 to the Finance Act 1989 contained in regulation 5 of the Continuation of Rights Regulations that paragraph did not apply to the inserted years, but did apply to the member’s actual years of service,

paragraph (5) applies only to the computation of pension benefits so far as they are referable to the member’s actual years of service.

(7) The amount of contributions payable under the scheme by an employee in the year 2006-07 or any subsequent year of assessment shall be limited to 15 per cent of the employee’s remuneration for the year in respect of the employment.

(8) In this regulation “the Continuation of Rights Regulations” means the Retirement Benefits Schemes (Continuation of Rights of Members of Approved Schemes) Regulations 1990(1).

(1)

()S.I. 1990/2101. Regulation 3 was amended by regulation 3 of S.I. 1993/3220 and regulations 4 and 5 of S.I. 1996/3114. Regulation 3A was inserted by regulation 6 of S.I. 1996/3114 and amended by regulation 2 of S.I. 1996/3233.