The Financial Assistance Scheme (Modifications and Miscellaneous Amendments) Regulations 2005

Amendment of the FAS Regulations

4.—(1) The FAS Regulations shall be amended in accordance with this regulation.

(2) In regulation 2 (interpretation)—

(a) in paragraph (1), in the definition of “survivor”, after “member” insert “or former member”;

(b) in paragraph (7)—

(i) for “In these Regulations,” substitute “Subject to paragraph (8), in these Regulations,”, and

(ii) for “potential”, in each place that it occurs, substitute “possible”; and

(c) after paragraph (7), add—

“(8) If a beneficiary or a possible beneficiary appoints a person under sub-paragraph (a) of paragraph (7), and then—

(a) dies, or

(b) becomes otherwise incapable of acting for himself,

the person appointed under sub-paragraph (a) of that paragraph is deemed to have been appointed under sub-paragraph (b) of that paragraph.

(9) For the purposes of these Regulations, a person is “terminally ill” at any time if at that time he suffers from a progressive disease and his death, in consequence of that disease, can reasonably be expected within six months.”.

(3) In regulation 17 (annual payments)—

(a) in paragraph (3), omit “within the meaning given in section 66(2)(a) of the Social Security Contributions and Benefits Act 1992”;

(b) after paragraph (5), insert—

“(5A) In determining the amount of annual payment that is payable to, or in respect of, a beneficiary for any previous year or years (“arrears payable”), the total of all monthly instalments of an initial payment that have been made to, or in respect of, the beneficiary for any previous year or years is to be deducted from the amount of arrears payable to that beneficiary.

(5B) From the day after the day on which a beneficiary dies, any further monthly instalments of an annual payment that would have been payable to that beneficiary, in respect of that year, cease to be payable.”;

(c) in paragraph (6), for “Annual” substitute “Subject to paragraph (5B), annual”; and

(d) after paragraph (6), add—

“(7) Paragraphs 7 and 8 of Schedule 2 provide for the circumstances in which an annual payment is not payable under this Part.”.

(4) For regulation 18 (initial payments), substitute—

“Initial payments

18.— (1) This regulation applies where a qualifying pension scheme is winding up and—

(a) a qualifying member of that scheme—

(i) has attained the age of 64; or

(ii) has not attained that age, but the scheme manager—

(aa) has been notified that a qualifying member is terminally ill; and

(bb) is satisfied as to that fact; or

(b) a qualifying member of that scheme has died and leaves a survivor.

(2) The trustees or managers of the scheme may make a written request to the scheme manager for a payment (“an initial payment”) to be made to, or in respect of, a qualifying member or his survivor—

(a) in anticipation of an annual payment being payable under this Part to the qualifying member or his survivor; and

(b) before any monthly instalment of that annual payment is made.

(3) If a request for an initial payment is made in respect of a qualifying member who dies before any monthly instalment of an annual payment has been made to that qualifying member, the trustees or managers may make a further request that an initial payment be made in respect of any survivor of that qualifying member.

(4) On receipt of a request for an initial payment, the scheme manager may, in his discretion, make an initial payment—

(a) to the qualifying member in respect of whom the request was made, with effect from whichever is the later of—

(i) 14th May 2004; or

(ii) the day on which—

(aa) the qualifying member attains the age of 65, or

(bb) the scheme manager is first notified that the qualifying member is terminally ill,

whichever is the earlier; or

(b) if the qualifying member has died, to a survivor of that qualifying member with effect from whichever is the later of—

(i) 14th May 2004; or

(ii) the day after the day on which that qualifying member died.

(5) In exercising his discretion under paragraph (4), the scheme manager may only have regard to—

(a) the amount, if any, of any interim pension that was in payment, is in payment, or is proposed to be paid, from the qualifying pension scheme—

(i) to a qualifying member up until his death; or

(ii) after his death, to his survivor; and

(b) any circumstances relating to the scheme which, in the opinion of the scheme manager, are relevant to determining whether an initial payment should be made.

(6) Schedule 2 makes provision for the determination of the amount of initial payments.

(7) If the scheme manager determines that an initial payment may be made under paragraph (4), the initial payment is payable—

(a) to a qualifying member from the relevant day mentioned in that paragraph until the day on which that qualifying member—

(i) would have been paid, or is paid, the first monthly instalment of an annual payment in accordance with regulation 19, if an annual payment were payable, or is payable, to him under this Part; or

(ii) dies,

whichever is the earlier; and

(b) in respect of a qualifying member who has died, to a survivor of that qualifying member from the day after the day on which that qualifying member died until the day on which his survivor—

(i) would have been paid, or is paid, the first monthly instalment of an annual payment in accordance with regulation 19, if an annual payment were payable, or is payable, to him under this Part; or

(ii) dies,

whichever is the earlier.

(8) From the day after the day on which a beneficiary dies, any further monthly instalments of an initial payment that would have been payable to that beneficiary in respect of that year cease to be payable.

(9) The scheme manager may, at any time before the amount of the annual payment is determined, redetermine the amount of any initial payment paid under paragraph (4) if he is satisfied that the amount being paid by way of initial payment, as determined in accordance with Schedule 2, may be incorrect.

(10) In this regulation, “interim pension” has the meaning given by paragraph 2 of Schedule 2(1).”.

(5) In regulation 19(3)(b), for “18(3)” substitute “18(4)”.

(6) In Schedule 2 (determination of annual and initial payments)—

(a) in paragraph 1(2) (introductory)—

(i) for the definition of “the certification date” substitute—

““the certification date” means the date for which the relevant information provided in relation to a qualifying member, or a survivor of a qualifying member, is correct;”, and

(ii) in the appropriate alphabetical places, insert—

““the FAS Information and Payments Regulations” means the Financial Assistance Scheme (Provision of Information and Administration of Payments) Regulations 2005(2);

“appropriate person” has the meaning given by regulation 2(1) of the FAS Information and Payments Regulations (interpretation);

“relevant information” means any information—

(a)

that is described in any of paragraphs (j) to (l) of the fourth item of the table in paragraph 1(2) of Schedule 1 to the FAS Information and Payments Regulations (information to be provided by appropriate persons);

(b)

that is to be provided by an appropriate person to the scheme manager in accordance with regulation 3(3)(a) of those Regulations; and

(c)

from which the amount of the actual pension or interim pension of a qualifying member, or of a survivor of a qualifying member, may be derived;”;

(b) in paragraph 2 (actual pension)—

(i) in sub-paragraph (1), for “which has,” substitute “which has been,”, and

(ii) for sub-paragraph (3)(a) substitute—

“(a) where the beneficiary was an active or a deferred member of the qualifying pension scheme immediately before that scheme began to wind up, on the basis that the sum which will be, or has been, used to discharge the liability of the scheme to him will only be, or has only been, used to purchase an annuity when the qualifying member attains, or attained, his normal retirement age;”;

(c) in paragraph 5(6)(b) (survivors of qualifying members), for “paragraph 3 or 4 had he attained the age of 65 immediately before his death.” substitute—

“paragraph 3 or 4 if—

(i) he had attained the age of 65 before his death; or

(ii) he had not attained that age, but the scheme manager, after being notified that the qualifying member was terminally ill, was satisfied as to that fact.”;

(d) in paragraph 9(4) (revaluation), in the explanation of term “A” in the formula, after “before” insert “the month”; and

(e) in paragraph 10 (initial payments)—

(i) for paragraph (a) substitute—

“(a) for paragraph 2, substitute—

“Interim pension

2.   In this Schedule, “interim pension” means the annual rate of pension that was in payment, is in payment, or is proposed to be paid, to a qualifying member, or to a survivor of that qualifying member, from the assets of the qualifying pension scheme of which that qualifying member is, or was, a member—

(a) on or after the time when the scheme began to wind up; but

(b) before the day on which the scheme’s liabilities in respect of the qualifying member are, or were, discharged.”;”, and

(ii) after paragraph (c), add—

“(d) for “annual payment”, in each place that it occurs (except in paragraph 1(1)), substitute “initial payment”; and

(e) in paragraph 5—

(i) for sub-paragraph (3) substitute—

“(3) The initial payment payable to a survivor of a qualifying member shall be—

”; and

(ii) omit sub-paragraphs (2) and (6).”.

(1)

Paragraph 2 of Schedule 2 is modified by paragraph 10(a) of that Schedule as substituted by regulation 4(5)(e) of these Regulations.

(2)

S.I. 2005/2189 as amended by regulation 6 of these Regulations.