SCHEDULE 2

Scheme flexibilities
PART 1

General

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—
  1. additional pension contributions;
  2. faster accrual contributions; or
  3. buy-out contributions;
- “contributions payment period”, for contributions paid monthly, means the period which—
  1. begins on the start date; and
  2. ends on the date on which the final monthly payment is due;
- “election” means—
  1. an additional pension election
  2. a faster accrual election; or
  3. 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”—
  1. for contributions paid by lump sum, means the date on which the Department receives the lump sum; and
  2. 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.