SCHEDULE 2Scheme flexibilities

PART 1General

Interpretation of Schedule

1.

In this Schedule—

“amount of accrued extra earned pension” means the amount of accrued earned pension attributable to a faster accrual election;

“amount of extra pension” has the meaning given in paragraph 2;

“buy-out election” means an election under Chapter 1 of Part 4 of this Schedule;

“buy-out value” means an amount determined or re-determined by the Department in accordance with Part 4 of this Schedule;

“contributions” means—

(a)

additional pension contributions;

(b)

faster accrual contributions; or

(c)

buy-out contributions;

“contributions payment period”, for contributions paid monthly, means the period which—

(a)

begins on the start date; and

(b)

ends on the date on which the final monthly payment is due;

“election” means—

(a)

an additional pension election

(b)

a faster accrual election; or

(c)

a buy-out election;

“faster accrual contributions” means contributions for a faster accrual rate;

“faster accrual rate”, in relation to P's pensionable earnings, means 1/45th, 1/50th or 1/55th;

“monthly payments”, in respect of an election, means contributions paid monthly;

“overall amount” means the overall amount of extra pension as defined in paragraph 3;

“refund period”, in relation to additional pension contributions, means the period ending one year after the start date;

“start date”—

(a)

for contributions paid by lump sum, means the date on which the Department receives the lump sum; and

(b)

for monthly payments, means the first day of the second month after the month in which the election is accepted.

Meaning of “amount of extra pension”

2.

The amount of extra pension for a person (P) at any given time is the sum of the following—

(a)

the amount of accrued extra earned pension (if any) at that time;

(b)

the amount of accrued additional pension (if any) at that time;

(c)

the buy-out value at that time, if P has elected to buy out the standard reduction.

Meaning of “overall amount of extra pension”

3.

(1)

The overall amount of extra pension is—

(a)

£6,500 for any financial year ending before 1st April 2016; and

(b)

for any financial year beginning on or after that date—

(i)

an amount determined by the Department of Finance and Personnel for that financial year; or

(ii)

if the Department of Finance and Personnel has not determined an amount for that financial year, the amount calculated under sub-paragraph (2).

(2)

If the Department of Finance and Personnel has not determined an amount under sub-paragraph (1)(b)(i) for any financial year, the overall amount is the amount to which the annual rate of a pension of an amount equal to the overall amount for the previous financial year would have been increased under the Pensions Increases Act (Northern Ireland) 1971 if—

(a)

that pension were eligible to be so increased; and

(b)

the beginning date for that pension were the first day of the previous financial year.

Limit on elections

4.

(1)

The Department must not accept an additional pension election or a faster accrual election in relation to a member (P) at any time if—

(a)

the Department has accepted a buy-out election from P; and

(b)

the buy-out value at that time exceeds the overall amount of extra pension at that time.

(2)

The Department must not accept an additional pension election or a faster accrual election that would result in the amount of extra pension exceeding the overall amount of extra pension.

Actuarial advice

5.

The Department must take advice from the scheme actuary before determining any amount under this Part.