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Pension Schemes Act 1993

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Legislation Crest

Pension Schemes Act 1993

1993 CHAPTER 48

An Act to consolidate certain enactments relating to pension schemes with amendments to give effect to recommendations of the Law Commission and the Scottish Law Commission.

[5th November 1993]

X1Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Editorial Information

X1[A Table showing the derivation of the provisions of this consolidation Act will be found at the end of the Act. The Table has no official status]

Extent Information

E1Act's amending/repealing provisions are co-extensive with the enactments they affect see s. 192(1)

Extent attributes have been set without reference to the co-extensive extent provision except in the repeal and amendment schedules

Modifications etc. (not altering text)

C1Act modified (19.7.1995) by Pensions Act 1995 (c. 26), Sch. 4 para. 1

C2Act applied (4.12.1995 for specified purposes, 1.1.1996 for specified purposes, 6.4.1996 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 124(5) (with s. 121(5)); S.I. 1995/3104, art. 2; S.I. 1996/778, art. 2(4), Sch. Pt. 4

C3Act: power to modify conferred (6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 149(2); S.I. 1996/778, art. 2(6); S.I. 1997/664, art. 2(3), Sch. Pt. 2

C4Act: power to modify conferred (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 15(1)(2)(b); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

C5Act: power to modify conferred (11.11.1999) by Welfare Reform and Pensions Act 1999 (c. 30), s. 85(1)(b)(i)

C6Act: power to amend conferred (2.12.1999) by Northern Ireland Act 1998 (c. 47), s. 87 (with s. 95); S.I. 1999/3209, art. 2, Sch.

C7Act: transfer of functions (6.4.2005) by Pensions Act 2004 (c. 35), ss. 7(1)(a), 322(1) (with s. 313); S.I. 2005/275, art. 2(7), Sch. Pt. 7 (with transitional provisions and savings in S.I. 2005/695, arts. 5(8), 6, Schs. 2, 3 (as amended by S.I. 2005/1108, art. 3(b))

C9Act: power to modify conferred (6.4.2006) by Pensions Act 2004 (c. 35), ss. 321(1)(b), 322(1); S.I. 2006/560, art. 2(3), Sch. Pt. 3

C11Act: power to modify conferred (26.11.2008) by Pensions Act 2008 (c. 30), ss. 146(2)(a), 149(2)

Commencement Information

I1Act not in force at Royal Assent see s. 193(2), (3) and Schedule 9

Part IU.K. Preliminary

1 Categories of pension schemes.U.K.

[F1(1)]In this Act, unless the context otherwise requires—

  • [F2occupational pension scheme” means a pension scheme—

    (a)

    that—

    (i)

    for the purpose of providing benefits to, or in respect of, people with service in employments of a description, or

    (ii)

    for that purpose and also for the purpose of providing benefits to, or in respect of, other people,

    is established by, or by persons who include, a person to whom subsection (2) applies when the scheme is established or (as the case may be) to whom that subsection would have applied when the scheme was established had that subsection then been in force, and

    (b)

    that has its main administration in the United Kingdom or outside the [F3EEA states],

    or a pension scheme that is prescribed or is of a prescribed description;]

  • [F2personal pension scheme” means a pension scheme that—

    (a)

    is not an occupational pension scheme, and

    (b)

    is established by a person within F4... section 154(1) of the Finance Act 2004;]

  • public service pension scheme” means an occupational pension scheme established by or under an enactment or the Royal prerogative or a Royal charter, being a scheme—

    (a)

    all the particulars of which are set out in, or in a legislative instrument made under, an enactment, Royal warrant or charter, or

    (b)

    which cannot come into force, or be amended, without the scheme or amendment being approved by a Minister of the Crown or government department [F5or by the Scottish Ministers],

    and includes any occupational pension scheme established, with the concurrence of the Treasury, by or with the approval of any Minister of the Crown [F6or established by or with the approval of the Scottish Ministers] and any occupational pension scheme prescribed by regulations made by the Secretary of State and the Treasury jointly as being a scheme which ought in their opinion to be treated as a public service pension scheme for the purposes of this Act.

[F7(2)This subsection applies—

(a)where people in employments of the description concerned are employed by someone, to a person who employs such people,

(b)to a person in an employment of that description, and

(c)to a person representing interests of a description framed so as to include—

(i)interests of persons who employ people in employments of the description mentioned in paragraph (a), or

(ii)interests of people in employments of that description.

(3)For the purposes of subsection (2), if a person is in an employment of the description concerned by reason of holding an office (including an elective office) and is entitled to remuneration for holding it, the person responsible for paying the remuneration shall be taken to employ the office-holder.

(4)In the definition in subsection (1) of “occupational pension scheme”, the reference to a description includes a description framed by reference to an employment being of any of two or more kinds.

(5)In subsection (1) “pension scheme” (except in the phrases “occupational pension scheme”, “personal pension scheme” and “public service pension scheme”) means a scheme or other arrangements, comprised in one or more instruments or agreements, having or capable of having effect so as to provide benefits to or in respect of people—

(a)on retirement,

(b)on having reached a particular age, or

(c)on termination of service in an employment.

(6)The power of the Treasury under section 154(4) of the Finance Act 2004 (power to amend sections 154 and 155) includes power consequentially to amend—

(a)paragraph (a) of the definition in subsection (1) of “personal pension scheme”, and

(b)any provision in force in Northern Ireland corresponding to that paragraph.]

Textual Amendments

F1S. 1(1): s. 1 renumbered as s. 1(1) (1.7.2005 for specified purposes, 22.9.2005 for specified purposes, 6.4.2006 in so far as not already in force) by Pensions Act 2004 (c. 35), ss. 239(2), 322(1) (with s. 313); S.I. 2005/1720, art. 2(7)(a)(b)(i)(ii)

F2Words in s. 1(1) substituted (1.7.2005 for specified purposes, 22.9.2005 for specified purposes, 6.4.2006 in so far as not already in force) by Pensions Act 2004 (c. 35), ss. 239(3), 322(1) (with s. 313); S.I. 2005/1720, art. 2(7)(a)(b)(i)(ii)

F4Words in s. 1(1) repealed (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), Sch. 20 paras. 23(1), 24(1), Sch. 27 Pt. 3(2)

F7S. 1(2)-(6) inserted (1.7.2005 for specified purposes, 22.9.2005 for specified purposes, 6.4.2006 in so far as not already in force) by Pensions Act 2004 (c. 35), ss. 239(4), 322(1) (with s. 313); S.I. 2005/1720, art. 2(7)(a)(b)(i)(ii)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Part IIU.K. Administration

The Occupational Pensions BoardU.K.

F82 Constitution and functions of the Board.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F83 Membership of the Board.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F84 Reports of the Board.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F85 Further provisions as to constitution and procedure of the Board.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Registration of schemesU.K.

F96 Registration of occupational and personal pension schemes.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Extent Information

E2S. 6 extends to U.K. except s. 6(2)(ii)(5)(6)(7) which extend only to G.B. see s. 192(2)

Textual Amendments

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Part IIIE+W+S Certification of Pension Schemes and Effects on Members’ State Scheme Rights and Duties

Chapter IE+W+S Certification

PreliminaryE+W+S

7 Issue of contracting-out F10... certificates.E+W+S

[F11(1)Regulations shall provide for HMRC to issue certificates stating that the employment of an earner in employed earner's employment is contracted-out employment by reference to an occupational pension scheme.]

[F11(1A)In this Act such a certificate is referred to as “a contracting-out certificate”.]

(2)The regulations shall provide for contracting-out certificates to be issued to employers and to specify—

(a)the employments which are to be treated, either generally or in relation to any specified description of earners, as contracted-out employments; and

(b)the occupational pension schemes by reference to which those employments are to be so treated.

[F12(2A)The regulations may provide, in the case of contracting-out certificates issued before the principal appointed day, for their cancellation by virtue of the regulations—

(a)at the end of a prescribed period beginning with that day, or

(b)if prescribed conditions are not satisfied at any time in that period,

but for them to continue to have effect until so cancelled; and the regulations may provide that a certificate having effect on and after that day by virtue of this subsection is to have effect, in relation to any earner’s service on or after that day, as if issued on or after that day.

(2B)In this Part, “the principal appointed day” means the day designated by an order under section 180 of the Pensions Act 1995 as the principal appointed day for the purposes of Part III of that Act]

(3)An occupational pension scheme is a contracted-out scheme in relation to an earner’s employment if it is for the time being specified in a contracting-out certificate in relation to that employment; and references in this Act to the contracting-out of a scheme are references to its inclusion in such a certificate.

F13(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)Except in prescribed circumstances, no contracting-out certificate F14... shall have effect from a date earlier than that on which the certificate is issued.

[F15(8)References in this Act to a contracting-out certificate, a contracted-out scheme and to contracting-out in a context relating to a money purchase contracted-out scheme are to be construed in accordance with section 181A.]

Textual Amendments

F10Words in s. 7 sidenote repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 2(6), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F11S. 7(1)(1A) substituted for s. 7(1) (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 2(2) (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F12S. 7(2A)(2B) inserted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 136(1), 180(1); S.I. 1996/778, art. 2(5)(a)(7), Sch. Pt. 5

F13S. 7(4)-(6) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 2(3), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F14Words in s. 7(7) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 2(4), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F15S. 7(8) inserted (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 2(5) (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

8 Meaning of “contracted-out employment”, “guaranteed minimum pension” and “minimum payment”.E+W+S

(1)The employment of an earner in employed earner’s employment is “contracted-out employment” in relation to him during any period in which[F16

(a)he is under pensionable age;

(aa)his service in the employment is for the time being service which qualifies him for a pension provided by an occupational pension scheme contracted out by virtue of satisfying section 9(2) (in this Act referred to as “a salary related contracted-out scheme”);]

(b)there is in force a contracting-out certificate issued by the [F17Inland Revenue] in accordance with this Chapter stating that the employment is contracted-out employment by reference to the scheme.

[F18(1A)In addition, in relation to any period before the abolition date, the employment of an earner in employed earner's employment was “contracted-out employment” in relation to him during that period if—

(a)he was under pensionable age;

(b)his employer made minimum payments in respect of his employment to a money purchase contracted-out scheme, and

(c)there was in force a contracting-out certificate issued in accordance with this Chapter (as it then had effect) stating that the employment was contracted-out employment by reference to the scheme.]

(2)In this Act—

  • guaranteed minimum pension” means any pension which is provided by an occupational pension scheme in accordance with the requirements of sections 13 and 17 to the extent to which its weekly rate is equal to the earner’s or, as the case may be, the earner’s [F19widow's, widower’s [F20, surviving same sex spouse's] or surviving civil partner's] guaranteed minimum as determined for the purposes of those sections respectively; and

  • minimum payment”, in relation to an earner’s employment in any tax week, means the rebate percentage of so much of the earnings paid to or for the benefit of the earner in that week as exceeds the current lower earnings limit but not [F21the applicable limit] (or the prescribed equivalents if he is paid otherwise than weekly);

[F22and for the purposes of this subsection “rebate percentage” means the appropriate flat rate percentage [F23for the tax year in which the week falls as specified in an order made under section 42B (as it had effect before the abolition date)]].

[F24(2A)In subsection (2) “the applicable limit” means—

(a)in relation to a tax year before 2009-10, the upper earnings limit;

(b)in relation to 2009-10 or any subsequent tax year, the upper accrual point.]

F25(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Any contracting-out certificate for the time being in force in respect of an employed earner’s employment shall be conclusive that the employment is contracted-out employment.

F26(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F16Words in s. 8(1) substituted (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 3(2) (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F17Words in s. 8(1)(b) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 34(a); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F18S. 8(1A) inserted (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 3(3) (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F22Words in s. 8(2) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 23(a); S.I. 1997/664, art. 2(3), Sch. Pt. 2

F23Words in s. 8(2) substituted (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 3(4) (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F26S. 8(5) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 23(b), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

General requirements for certificationE+W+S

9 Requirements for certification of schemes: general.E+W+S

(1)Subject to subsection (4), an occupational pension scheme can be contracted-out in relation to an earner’s employment only if it satisfies subsection (2) F27... .

[F28(2)An occupational pension scheme satisfies this subsection only if—

(a)in relation to any earner’s service before the principal appointed day, it satisfies the conditions of subsection (2A), and

(b)in relation to any earner’s service on or after that day, it satisfies the conditions of subsection (2B).

(2A)The conditions of this subsection are that—

(a)the scheme complies in all respects with [F29sections 13 to 24E] or, in such cases or classes of case as may be prescribed, with those sections as modified by regulations, and

(b)the rules of the scheme applying to guaranteed minimum pensions are framed so as to comply with the relevant requirements.

(2B)The conditions of this subsection are that the [F30Inland Revenue] [F31are satisfied] that—

(a)the scheme complies with section 12A,

(b)restrictions imposed under section 40 of the Pensions Act 1995 (restriction on employer-related investments) apply to the scheme and the scheme complies with those restrictions,

(c)the scheme satisfies such other requirements as may be prescribed (which—

(i)must include requirements as to the amount of the resources of the scheme and,

(ii)may include a requirement that, if the only members of the scheme were those falling within any prescribed class or description, the scheme would comply with section 12A); and

(d)the scheme does not fall within a prescribed class or description,

and [F31are satisfied] that the rules of the scheme are framed so as to comply with the relevant requirements.

(2C)Regulations may modify subsection (2B)(a) and (b) in their application to occupational pension schemes falling within a prescribed class or description.]

F32(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Where there are two or more occupational pension schemes in force in relation to an earner’s employment, none of which can by itself be a contracted-out scheme, the [F33Inland Revenue may, if they think] fit, treat them for contracting-out purposes as a single scheme.

F34(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F35(5A)Regulations about pension schemes made under this Chapter may contain provisions framed by reference to whether or not a scheme [F36is a registered pension scheme under section 153 of the Finance Act 2004].]

(6)In this section “relevant requirements” means—

(a)the requirements of any regulations prescribing the form and content of rules of contracted-out F37... schemes; and

(b)such other requirements as to form and content (not inconsistent with regulations) as may be imposed by the [F38Secretary of State] as a condition of contracting-out F39... either generally or in relation to a particular scheme.

Textual Amendments

F27Words in s. 9(1) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 4(2), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F28S. 9(2)-(2C) substituted for s. 9(2) (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 136(3), 180(1); S.I. 1996/778, art. 2(5)(a)(7), Sch. Pt. V

F29Words in s. 9(2A) substituted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(4), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

F30Words in s. 9(2B) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 35(2)(a); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F31Words in s. 9(2B) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 35(2)(b); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F32S. 9(3) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 4(3), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F33Words in s. 9(4) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 35(4); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F34S. 9(5) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 4(3), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F37Words in s. 9(6)(a) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 4(4)(a), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F39Words in s. 9(6)(b) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 4(4)(b), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

Modifications etc. (not altering text)

C21S. 9 excluded (1.6.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 149(1), 180(1); S.I. 1996/778, art. 2(6); S.I. 1997/664, art. 2(3), Sch. Pt. 2

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F4010 Protected rights and money purchase benefits.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11 Elections as to employments covered by contracting-out certificates.E+W+S

(1)Subject to the provisions of this Part, an employment otherwise satisfying the conditions for inclusion in a contracting-out certificate shall be so included if and so long as the employer so elects and not otherwise.

(2)Subject to subsections (3) and (4), an election may be so made, and an employment so included, either generally or in relation only to a particular description of earners.

(3)Except in such cases as may be prescribed, an employer shall not, in making or abstaining from making any election under this section, discriminate between different earners on any grounds other than the nature of their employment.

(4)If the [F41Inland Revenue consider] that an employer is contravening subsection (3) in relation to any scheme, [F42they] may—

(a)refuse to give effect to any election made by him in relation to that scheme; or

(b)cancel any contracting-out certificate held by him in respect of it.

(5)Regulations may make provision—

(a)for regulating the manner in which an employer is to make an election with a view to the issue, variation or surrender of a contracting-out certificate;

(b)for requiring an employer to give a notice of his intentions in respect of making or abstaining from making any such election in relation to any existing or proposed scheme—

(i)to employees in any employment to which the scheme applies or to which it is proposed that it should apply;

(ii)to any independent trade union recognised to any extent for the purpose of collective bargaining in relation to those employees;

(iii)to the trustees and managers of the scheme; and

(iv)to such other persons as may be prescribed;

(c)for requiring an employer, in connection with any such notice, to furnish such information as may be prescribed and to undertake such consultations as may be prescribed with any such trade union as is mentioned in paragraph (b)(ii);

(d)for empowering the [F43Inland Revenue] to refuse to give effect to an election made by an employer unless [F43they are] satisfied that he has complied with the requirements of the regulations;

(e)for referring to an industrial tribunal any question—

(i)whether an organisation is such a trade union as is mentioned in paragraph (b)(ii), or

(ii)whether the requirements of the regulations as to consultation have been complied with.

Textual Amendments

F41Words in s. 11(4) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 37(2)(a); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F42Word in s. 11(4) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 37(2)(b); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F43Words in s. 11(5)(d) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 37(3); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F4412 Determination of basis on which scheme is contracted-out.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F44S. 12 repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 6, Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

[F45Requirements for certification of occupational pension schemes applying from the principal appointed day of the Pensions Act 1995E+W+S

Textual Amendments

F45Ss. 12A-12D and cross-heading inserted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 136(5), 180(1); S.I. 1996/778, art. 2(5)(a)(7), Sch. Pt. 5

12AThe statutory standardE+W+S

(1)Subject to the provisions of this Part, the scheme must, in relation to the provision of pensions for earners in employed earner’s employment, and for their [F46widows, widowers or surviving civil partners], satisfy the statutory standard.

(2)Subject to regulations made by virtue of section 9(2B)(c)(ii), in applying this section regard must only be had to—

(a)earners in employed earner’s employment, or

(b)their [F47widows, widowers or surviving civil partners],

collectively, and the pensions to be provided for persons falling within paragraph (a) or (b) must be considered as a whole.

(3)For the purposes of this section, a scheme satisfies the statutory standard if the pensions to be provided for such persons are broadly equivalent to, or better than, the pensions which would be provided for such persons under a reference scheme.

(4)Regulations may provide for the manner of, and criteria for, determining whether the pensions to be provided for such persons under a scheme are broadly equivalent to, or better than, the pensions which would be provided for such persons under a reference scheme.

(5)Regulations made by virtue of subsection (4) may provide for the determination to be made in accordance with guidance prepared from time to time by a prescribed body F48... .

(6)The pensions to be provided for such persons under a scheme are to be treated as broadly equivalent to or better than the pensions which would be provided for such persons under a reference scheme if and only if an actuary (who, except in prescribed circumstances, must be the actuary appointed for the scheme in pursuance of section 47 of the Pensions Act 1995) so certifies.

12BReference schemeE+W+S

(1)This section applies for the purposes of section 12A.

(2)A reference scheme is an occupational pension scheme which—

(a)complies with each of subsections (3) and (4), and

(b)complies with any prescribed requirements.

(3)In relation to earners employed in employed earner’s employment, a reference scheme is one which provides—

(a)for them to be entitled to a pension under the scheme commencing at a normal pension age of 65 and continuing for life, and

(b)for the annual rate of the pension at that age to be—

(i)1/80th of average qualifying earnings in the last three tax years preceding the end of service,

multiplied by

(ii)the number of years service, not exceeding such number as would produce an annual rate equal to half the earnings on which it is calculated.

(4)In relation to [F49widows, widowers or surviving civil partners], a reference scheme is one which provides—

(a)for the [F49widows, widowers or surviving civil partners] of earners employed in employed earner’s employment (whether the earners die before or after attaining the age of 65) to be entitled, except in prescribed circumstances, to pensions under the scheme, and

[F50(b)for entitlements to those pensions to commence on the day following the death of the earners, and

(c)except in prescribed circumstances, for the annual rate of those pensions to be—

(i)if the earners die on or after their normal pension age, 50 per cent. of the annual rate which a reference scheme was required to provide to the deceased earners immediately before their death, or

(ii)if the earners die before their normal pension age, 50 per cent. of the annual rate which a reference scheme would have been required to provide to the deceased earners if the date of their death had been their normal pension age, and

(d)if those pensions are payable in respect of earners who die—

(i)otherwise than in pensionable service under the scheme, and

(ii)before their own entitlements to pensions under the scheme have commenced,

for those pensions to be revalued in accordance with section 84 as though they were such benefits as are mentioned in section 83(1)(a).]

(5)For the purposes of this section, an earner’s qualifying earnings in any tax year are 90 per cent. of the amount by which the earner’s earnings—

(a)exceed the qualifying earnings factor for that year, and

(b)do not exceed [F51the applicable limit].

(6)Regulations may modify subsections (2) to (5).

(7)In this section—

  • [F52the applicable limit” means—

    (a)

    in relation to a tax year before [F532009-10], the upper earnings limit for the year multiplied by 53;

    (b)

    in relation to [F532009-10] or any subsequent tax year, the upper accrual point [F54multiplied by 53];]

  • “normal pension age”, in relation to a scheme, means the age specified in the scheme as the earliest age at which pension becomes payable under the scheme (apart from any special provision as to early retirement on grounds of ill-health or otherwise),

  • “qualifying earnings factor”, in relation to a tax year, has the meaning given by section 122(1) of the Social Security Contributions and Benefits Act 1992, and

  • “upper earnings limit”, in relation to a tax year, means the amount specified for that year by regulations made by virtue of section 5(3) of that Act as the upper earnings limit for Class 1 contributions.

12CTransfer, commutation, etcE+W+S

(1)Regulations may prohibit or restrict—

(a)the transfer of any liability—

(i)for the payment of pensions under a relevant scheme, or

(ii)in respect of accrued rights to such pensions,

(b)the discharge of any liability to provide pensions under a relevant scheme, or

(c)the payment of a lump sum instead of a pension payable under a relevant scheme,

except in prescribed circumstances or on prescribed conditions.

(2)In this section “relevant scheme” means a scheme contracted out by virtue of section 9(2B) of this Act and references to pensions and accrued rights under the scheme are to such pensions and rights so far as attributable to an earner’s service on or after the principal appointed day.

(3)Regulations under subsection (1) may provide that any provision of this Part shall have effect subject to such modifications as may be specified in the regulations.

12DEntitlement to benefitE+W+S

In the case of a scheme contracted out by virtue of section 9(2B) of this Act, regulations may make provision as to the ages by reference to which benefits under the scheme are to be paid]

Requirements for certification of occupational pension schemes providing guaranteed minimum pensionsE+W+S

13 Minimum pensions for earners.E+W+S

(1)Subject to the provisions of this Part, the scheme must—

(a)provide for the earner to be entitled to a pension under the scheme if he attains pensionable age; and

(b)contain a rule to the effect that the weekly rate of the pension will be not less than his guaranteed minimum (if any) under sections 14 to 16.

[F55(1A)But a scheme may be amended so as to omit provision of the kind specified in subsection (1)(a) and (b) if the conditions specified in section 24B are satisfied.]

(2)In the case of an earner who is a married woman or widow who is liable to pay primary Class 1 contributions at a reduced rate by virtue of section 19(4) of the M1Social Security Contributions and Benefits Act 1992, subject to the provisions of this Part, the scheme must—

(a)provide for her to be entitled to a pension under the scheme if she attains pensionable ageF56...; and

(b)satisfy such other conditions as may be prescribed.

(3)Subject to subsection (4), the scheme must provide for the pension to commence on the date on which the earner attains pensionable age and to continue for his life.

(4)Subject to subsection (5), the scheme may provide for the commencement of the earner’s guaranteed minimum pension to be postponed for any period for which he continues in employment after attaining pensionable age.

(5)The scheme must provide for the earner’s consent to be required—

(a)for any such postponement by virtue of employment to which the scheme does not relate; and

(b)for any such postponement after the expiration of five years from the date on which he attains pensionable age.

(6)Equivalent pension benefits for the purposes of the former legislation are not to be regarded as constituting any part of the earner’s guaranteed minimum pension.

(7)The benefits referred to in subsection (6) are any to which the earner may be immediately or prospectively entitled in respect of a period of employment which—

(a)was for him non-participating employment under that legislation; and

(b)was not on its termination the subject of any payment in lieu of contributions;

but subsection (6) excludes only so much of those benefits as had to be provided in order that the employment should for that period be treated as non-participating.

(8)In this section “the former legislation” means Part III of the M2National Insurance Act 1965 and the previous corresponding enactments.

Textual Amendments

F55S. 13(1A) inserted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(1), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

F56Words in s. 13(2)(a) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 26, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Marginal Citations

14 Earner’s guaranteed minimum.E+W+S

(1)An earner has a guaranteed minimum in relation to the pension provided by a scheme if in any tax week in a relevant year, earnings in excess of the current lower earnings limit (or the prescribed equivalent if he is paid otherwise than weekly) have been paid to or for his benefit in respect of employment which is contracted-out by reference to the scheme.

(2)Subject to section 15(1), the guaranteed minimum shall be the weekly equivalent of an amount equal to the appropriate percentage of the total of the earner’s earnings factors for the relevant years, so far as derived from earnings such as are mentioned in subsection (1) upon which primary Class 1 contributions have been paid or treated as paid.

[F57(2A)Where any liability of a scheme in respect of an earner’s guaranteed minimum pension ceases by virtue of a civil recovery order, his guaranteed minimum in relation to the scheme is extinguished or reduced accordingly.]

F58(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Where the amount of a person’s earnings for any period is relevant for any purpose of subsection (1) or (2) and the [F59Inland Revenue are] satisfied that records of those earnings have not been maintained or retained or are otherwise unobtainable, [F60they] may for that purpose—

(a)compute, in such manner as [F60they] [F61think] fit, an amount which shall be regarded as the amount of those earnings; or

(b)take their amount to be such sum as [F60he] [F60they] may specify in the particular case.

(5)In subsection (2) the “appropriate percentage” means—

(a)in respect of the earner’s earnings factors for any tax year not later than the tax year 1987-88—

(i)if the earner was not more than 20 years under pensionable age on 6th April 1978, 1.25 per cent.;

(ii)in any other case 25/N per cent.;

(b)in respect of the earner’s earnings factors for the tax year 1988-89 and for subsequent tax years—

(i)if the earner was not more than 20 years under pensionable age on 6th April 1978, 1 per cent.;

(ii)in any other case 20/N per cent.;

where N is the number of years in the earner’s working life (assuming he will attain pensionable age) which fall after 5th April 1978.

(6)Regulations may prescribe rules as to the circumstances in which earnings factors are derived from earnings for the purposes of subsection (2).

(7)For the purposes of subsection (2) the weekly equivalent of the amount there mentioned shall be calculated by dividing that amount by 52.

(8)In this section “relevant year” means any tax year in the earner’s working life (not being earlier than the tax year 1978-79 [F62or later than the tax year ending immediately before the principal appointed day]).

Textual Amendments

F58S. 14(3) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 27(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F59Words in s. 14(4) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 38(a); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F60Word in s. 14(4) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 38(b); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F61Word in s. 14(4)(a) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 38(c); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F62Words in s. 14(8) inserted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 27(b); S.I. 1997/664, art. 2(3), Sch. Pt. 2

Modifications etc. (not altering text)

C28S. 14(1) applied (with modifications) (6.4.1997) by The Protected Rights (Transfer Payment) Regulations 1996 (S.I. 1996/1461), regs. 1(1), 6(4)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

15 Increase of guaranteed minimum where commencement of guaranteed minimum pension postponed.E+W+S

(1)Where in accordance with section 13(4) the commencement of an earner’s guaranteed minimum pension is postponed for any period and there are at least seven complete weeks in that period, his guaranteed minimum in relation to the scheme shall, for each complete week in that period, be increased by one-seventh per cent.—

(a)of the amount of that minimum apart from this subsection; or

(b)if for that week (or a period which includes that week) a pension is paid to him under the scheme at a weekly rate less than that minimum, of the difference between that pension and that minimum.

(2)In subsection (1) “week” means any period of seven consecutive days.

(3)Where an earner’s guaranteed minimum is increased under subsection (1), the increase of that part of it which is attributable to earnings factors for the tax year 1987-88 and earlier tax years shall be calculated separately from the increase of the rest.

(4)Where one or more orders have come into force under section 109 during the period for which the commencement of a guaranteed minimum pension is postponed, the amount of the guaranteed minimum for any week in that period shall be determined as if the order or orders had come into force before the beginning of the period.

Modifications etc. (not altering text)

C31S. 15(1): sums payable amended (with effect in accordance with arts. 1(4), 6 of the amending S.I.) by The Social Security Benefits Up-rating Order 2015 (S.I. 2015/457), arts. 1(2)(c)(3), 5(2)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

[F6315A Reduction of guaranteed minimum in consequence of pension debit.E+W+S

(1)Where—

(a)an earner has a guaranteed minimum in relation to the pension provided by a scheme, and

(b)his right to the pension becomes subject to a pension debit,

his guaranteed minimum in relation to the scheme is, subject to subsection (2), reduced by the appropriate percentage.

(2)Where the earner is in pensionable service under the scheme on the day on which the order or provision on which the pension debit depends takes effect, his guaranteed minimum in relation to the scheme is reduced by an amount equal to the appropriate percentage of the corresponding qualifying benefit.

(3)For the purposes of subsection (2), the corresponding qualifying benefit is the guaranteed minimum taken for the purpose of calculating the cash equivalent by reference to which the amount of the pension debit is determined.

(4)For the purposes of this section the appropriate percentage is—

(a)if the order or provision on which the pension debit depends specifies the percentage value to be transferred, that percentage;

(b)if the order or provision on which the pension debit depends specifies an amount to be transferred, the percentage which the appropriate amount for the purposes of subsection (1) of section 29 of the Welfare Reform and Pensions Act 1999 (lesser of specified amount and cash equivalent of transferor’s benefits) represents of the amount mentioned in subsection (3)(b) of that section (cash equivalent of transferor’s benefits).]

Textual Amendments

F63S. 15A inserted (11.11.1999 for specified purposes, 1.12.2000 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), ss. 32(3), 89(5)(a); S.I. 2000/1047, art. 2(2)(d), Sch. Pt. 4

Modifications etc. (not altering text)

C32S. 15A applied (with effect in accordance with art. 1(2) of the amending S.S.I.) by SI 1992/129 Sch. 2 rule N6 (as inserted by The Firemens Pension Scheme (Pension Sharing on Divorce) (Scotland) Order 2001 (S.S.I. 2001/310), arts. 1(2), 3)

C33S. 15A applied (with effect in accordance with reg. 1(2) of the amending S.S.I.) by the National Health Service Superannuation Scheme (Scotland) Regulations 1995 (S.I. 1995/365), reg. W6 (as inserted by S.S.I. 2001/465, reg. 1(2), sch. 1 para. 3)

16 Revaluation of earnings factors for purposes of s. 14: early leavers etc.E+W+S

(1)Subject to subsection (2), for the purpose of section 14(2) the earner’s earnings factor for any relevant year (so far as derived as mentioned in that section) shall be taken to be that factor as increased by the same percentage as that prescribed for the increase of that factor by the last order under section 21 of the M3Social Security Pensions Act 1975 or section 148 of the M4Social Security Administration Act 1992 to come into force before the end of the final relevant year.

(2)The scheme may provide that the earnings factors of an earner whose service in contracted-out employment by reference to the scheme is terminated before the final relevant year shall be determined for the purposes of section 14(2) by reference to the last such order to come into force before the end of the tax year in which that service ends (“the last service tax year”).

(3)Where a scheme provides as mentioned in subsection (2) the scheme shall provide for the weekly equivalent mentioned in section 14(2) to be increased by at least [F64the prescribed percentage for each relevant year after the last service tax year; and the provisions included by virtue of this subsection may also conform with such additional requirements as may be prescribed].

(4)Except in such cases or classes of case as may be prescribed, the provision made by virtue of subsections (2) and (3) must be the same for all members of the scheme.

(5)In this section—

  • [F65relevant year” means any tax year in the earner’s working life,]

  • [F66“final relevant year” means the last tax year in the earner’s working life].

Textual Amendments

F64Words in s. 16(3) substituted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 28(a); S.I. 1996/778, art. 2(5)(a), Sch. Pt. 5; S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 3)

F65Words in s. 16(5) substituted (11.11.1999 for specified purposes, 25.4.2000 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 4; S.I. 2000/1047, art. 2(2)(b), Sch. Pt. 2

F66Words in s. 16(5) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 28(b); S.I. 1997/664, art. 2(3), Sch. Pt. 2

Modifications etc. (not altering text)

C47S. 16(1) applied (with modifications) (6.4.1997) by The Protected Rights (Transfer Payment) Regulations 1996 (S.I. 1996/1461), regs. 1(1), 6(5)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Marginal Citations

17 Minimum pensions for widows and widowers.E+W

(1)Subject to the provisions of this Part, the scheme must provide that if the earner dies leaving a [F67widow, widower or surviving civil partner] (whether before or after attaining pensionable age), the [F67widow, widower or surviving civil partner] will be entitled to a guaranteed minimum pension under the scheme.

[F68(1A)But a scheme may be amended so as to omit provision of the kind specified in subsection (1) if the conditions specified in section 24B are satisfied.]

(2)The scheme must contain a rule to the effect that—

(a)if the earner is a man [F69, or a woman in a relevant gender change case,] who has a guaranteed minimum under section 14, the weekly rate of the widow’s pension will be not less than the widow’s guaranteed minimum;

(b)if the earner is a woman who has a guaranteed minimum under that section, the weekly rate of the widower’s pension will be not less than the widower’s guaranteed minimum;

[F70(c)if the earner is a person who has a guaranteed minimum under that section, the weekly rate of the surviving civil partner’s pension will not be less than the surviving civil partner’s guaranteed minimum;]

[F71(d)if the earner is a man who has a guaranteed minimum under that section, the weekly rate of the widower's pension will not be less than the surviving same sex spouse's guaranteed minimum;

(e)if the earner is a woman (other than in a relevant gender change case) who has a guaranteed minimum under that section, the weekly rate of the widow's pension will not be less than the surviving same sex spouse's guaranteed minimum.]

(3)The widow’s guaranteed minimum shall be half that of the earner.

(4)The widower’s [F72or surviving civil partner's] [F73or surviving same sex spouse's] guaranteed minimum shall be one-half of that part of the earner’s guaranteed minimum which is attributable to earnings factors for the tax year 1988-89 and subsequent tax years.

[F74(4A)[F75Subject to subsection (4B)] the scheme must provide for the [F76widow's, widower’s or surviving civil partner's] pension to be payable to the [F77widow, widower or surviving civil partner]

(a)for any period for which a Category B retirement pension is payable to the [F77widow, widower or surviving civil partner] by virtue of the earner’s contributions or would be so payable but for section 43(1) of the Social Security Contributions and Benefits Act 1992 (persons entitled to more than one retirement pension);

(b)for any period for which widowed parent’s allowance or bereavement allowance is payable to the [F77widow, widower or surviving civil partner] by virtue of the earner’s contributions; and

(c)in the case of a [F77widow, widower or surviving civil partner] whose entitlement by virtue of the earner’s contributions to a widowed parent’s allowance or bereavement allowance has come to an end at a time after the [F77widow, widower or surviving civil partner] attained the age of 45, for so much of the period beginning with the time when the entitlement came to an end as neither—

[F78(i)comprises a period during which the widow, widower or surviving civil partner and [F79another person are living together as a married couple;] nor

(ii)falls after the time of any—

(a)marriage; or

(b)formation of a civil partnership,

by the widow or widower or surviving civil partner which takes place after the earner’s death.]]

[F80(4B)Sub-paragraphs (i)(b) and (ii)(b) of subsection (4A)(c) do not apply where the earner dies before 5th December 2005.]

(5)[F81In the case of a woman who is the widow of a man,] the scheme [F82must also make provision] for the widow’s pension to be payable to her for any period for which a F83... widowed mother’s allowance or widow’s pension is payable to her by virtue of the earner’s contributionsF83....

(6)[F84In any other case,] the scheme [F85must also make provision] for the [F86widower’s [F87, widow's] or surviving civil partner’s pension to be payable] in the prescribed circumstances and for the prescribed period.

(7)The trustees or managers of the scheme shall supply to the [F88Inland Revenue] any such information as [F88the Inland Revenue] may require relating to the payment of pensions under the scheme to [F89widows, widowers or surviving civil partners].

[F90(8)Where—

(a)a lump sum is paid to an earner under provisions included in a scheme by virtue of section 21(1), and

(b)those provisions are of a prescribed description,

the earner shall be treated for the purposes of this section as having any guaranteed minimum under section 14 that he would have had but for that payment.]

F91(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F92(10)In relation to an earner who is a woman, a reference in this section to a relevant gender change case is a reference to a case where—

(a)the earner is a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004, and

(b)the marriage of the earner and her widow (that ends with the earner's death) subsisted before the time when the certificate was issued.

(11)This section is subject to regulations under section 38A.]

Extent Information

E3This version of this provision extends to England and Wales only; a separate version has been created for Scotland only

Textual Amendments

F68S. 17(1A) inserted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(2), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

F69Words in s. 17(2)(a) inserted (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 20(2)(a); S.I. 2014/93, art. 3(j)(vi)

F71S. 17(2)(d)(e) inserted (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 20(2)(b); S.I. 2014/93, art. 3(j)(vi)

F73Words in s. 17(4) inserted (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 20(3); S.I. 2014/93, art. 3(j)(vi)

F81Words in s. 17(5) inserted (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 20(4); S.I. 2014/93, art. 3(j)(vi)

F84Words in s. 17(6) inserted (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 20(5)(a); S.I. 2014/93, art. 3(j)(vi)

F87Word in s. 17(6) inserted (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 20(5)(b); S.I. 2014/93, art. 3(j)(vi)

F88Words in s. 17(7) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 39; S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F90S. 17(8) inserted (1.7.2005 for specified purposes, 6.4.2006 in so far as not already in force) by Pensions Act 2004 (c. 35), ss. 284(2), 322(1) (with s. 313); S.I. 2005/1720, art. 2(15)(a)(b), Sch. Pt. 2

F92S. 17(10)(11) inserted (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 20(6); S.I. 2014/93, art. 3(j)(vi)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

17 Minimum pensions for widows and widowers.S

(1)Subject to the provisions of this Part, the scheme must provide that if the earner dies leaving a [F890widow, widower or surviving civil partner] (whether before or after attaining pensionable age), the [F890widow, widower or surviving civil partner] will be entitled to a guaranteed minimum pension under the scheme.

[F891(1A)But a scheme may be amended so as to omit provision of the kind specified in subsection (1) if the conditions specified in section 24B are satisfied.]

(2)The scheme must contain a rule to the effect that—

(a)if the earner is a man [F892, or a woman in a relevant gender change case,] who has a guaranteed minimum under section 14, the weekly rate of the widow’s pension will be not less than the widow’s guaranteed minimum;

(b)if the earner is a woman who has a guaranteed minimum under that section, the weekly rate of the widower’s pension will be not less than the widower’s guaranteed minimum;

[F893(c)if the earner is a person who has a guaranteed minimum under that section, the weekly rate of the surviving civil partner’s pension will not be less than the surviving civil partner’s guaranteed minimum;]

[F894(d)if the earner is a man who has a guaranteed minimum under that section, the weekly rate of the widower’s pension will not be less than the surviving same sex spouse’s guaranteed minimum;

(e)if the earner is a woman (other than in a relevant gender change case) who has a guaranteed minimum under that section, the weekly rate of the widow’s pension will not be less than the surviving same sex spouse’s guaranteed minimum.]

(3)The widow’s guaranteed minimum shall be half that of the earner.

(4)The widower’s [F895or surviving civil partner's] [F896or surviving same sex spouse’s] guaranteed minimum shall be one-half of that part of the earner’s guaranteed minimum which is attributable to earnings factors for the tax year 1988-89 and subsequent tax years.

[F897(4A)[F898Subject to subsection (4B)] the scheme must provide for the [F899widow's, widower’s or surviving civil partner's] pension to be payable to the [F900widow, widower or surviving civil partner]

(a)for any period for which a Category B retirement pension is payable to the [F900widow, widower or surviving civil partner] by virtue of the earner’s contributions or would be so payable but for section 43(1) of the Social Security Contributions and Benefits Act 1992 (persons entitled to more than one retirement pension);

(b)for any period for which widowed parent’s allowance or bereavement allowance is payable to the [F900widow, widower or surviving civil partner] by virtue of the earner’s contributions; and

(c)in the case of a [F900widow, widower or surviving civil partner] whose entitlement by virtue of the earner’s contributions to a widowed parent’s allowance or bereavement allowance has come to an end at a time after the [F900widow, widower or surviving civil partner] attained the age of 45, for so much of the period beginning with the time when the entitlement came to an end as neither—

[F901(i)comprises a period during which the widow, widower or surviving civil partner and [F902another person are living together as a married couple;] nor

(ii)falls after the time of any—

(a)marriage; or

(b)formation of a civil partnership,

by the widow or widower or surviving civil partner which takes place after the earner’s death.]]

[F903(4B)Sub-paragraphs (i)(b) and (ii)(b) of subsection (4A)(c) do not apply where the earner dies before 5th December 2005.]

(5)[F904In the case of a woman who is the widow of a man,] the scheme [F905must also make provision] for the widow’s pension to be payable to her for any period for which a F906... widowed mother’s allowance or widow’s pension is payable to her by virtue of the earner’s contributionsF906....

(6)[F907In any other case,] the scheme [F908must also make provision] for the [F909widower’s [F910, widow’s] or surviving civil partner’s pension to be payable] in the prescribed circumstances and for the prescribed period.

(7)The trustees or managers of the scheme shall supply to the [F911Inland Revenue] any such information as [F911the Inland Revenue] may require relating to the payment of pensions under the scheme to [F912widows, widowers or surviving civil partners].

[F913(8)Where—

(a)a lump sum is paid to an earner under provisions included in a scheme by virtue of section 21(1), and

(b)those provisions are of a prescribed description,

the earner shall be treated for the purposes of this section as having any guaranteed minimum under section 14 that he would have had but for that payment.]

[F914(9)In relation to an earner who is a woman, a reference in this section to a relevant gender change case is a reference to a case where—

(a)the earner is a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004; and

(b)the marriage of the earner and her widow (that ends with the earner’s death) subsisted before the time when the certificate was issued.]

Extent Information

E10This version of this provision extends to Scotland only; a separate version has been created for England and Wales only

Textual Amendments

F891S. 17(1A) inserted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(2), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

F911Words in s. 17(7) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 39; S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F913S. 17(8) inserted (1.7.2005 for specified purposes, 6.4.2006 in so far as not already in force) by Pensions Act 2004 (c. 35), ss. 284(2), 322(1) (with s. 313); S.I. 2005/1720, art. 2(15)(a)(b), Sch. Pt. 2

Commencement Information

I12Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

18 Treatment of insignificant amounts.E+W+S

(1)Where an amount is required to be calculated in accordance with the provisions of sections 14(7), 15(1) or 17(2), (3) or (4) and, apart from this subsection, the amount so calculated is less than 0.5p, then, notwithstanding any other provision of this Act, that amount shall be taken to be zero, and other amounts so calculated shall be rounded to the nearest whole penny, taking 0.5p as nearest to the next whole penny above.

(2)Where a guaranteed minimum pension is attributable in part to earnings factors for the period before the tax year 1988-89 and in part to earnings factors for that tax year or for that tax year and subsequent tax years, the pension shall be calculated by—

(a)applying subsection (1) separately to the amount attributable to the period before the tax year 1988-89 and to the amount attributable to that and subsequent tax years, and

(b)aggregating the two amounts so calculated.

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

19 Discharge of liability where guaranteed minimum pensions secured by insurance policies or annuity contracts.E+W+S

(1)A transaction to which this section applies discharges the trustees or managers of an occupational pension scheme from their liability to provide for or in respect of any person guaranteed minimum pensions—

(a)if it is carried out not earlier than the time when that person’s pensionable service terminates; and

(b)if and to the extent that it results in guaranteed minimum pensions for or in respect of that person being appropriately secured; and

(c)if and to the extent that the requirements set out in paragraph (a), (b) or (c) of subsection (5) are satisfied.

(2)This section applies to the following transactions—

(a)the taking out of a policy of insurance or a number of such policies;

(b)the entry into an annuity contract or a number of such contracts;

(c)the transfer of the benefit of such a policy or policies or such a contract or contracts.

(3)In this section “appropriately secured” means secured by an appropriate policy of insurance or an appropriate annuity contract, or by more than one such policy or contract.

(4)A policy of insurance or annuity contract is appropriate for the purposes of this section if—

(a)the [F93insurer] with which it is or was taken out or entered into—

(i)is, or was at the relevant time, carrying on F94... long-term insurance business in the United Kingdom or any other [F95EEA state]; and

(ii)satisfies, or at the relevant time satisfied, prescribed requirements; and

(b)it may not be assigned or surrendered except on conditions which satisfy such requirements as may be prescribed; and

(c)it contains or is endorsed with terms whose effect is that the amount secured by it may not be commuted except on conditions which satisfy such requirements as may be prescribed; and

(d)it satisfies such other requirements as may be prescribed.

(5)The requirements referred to in subsection (1) are—

(a)that the arrangement for securing the amount by means of the policy or contract was made—

(i)at the written request of the earner or, if the earner has died, of the earner’s [F96widow, widower or surviving civil partner]; or

(ii)with the consent of the earner or the [F97widow, widower or surviving civil partner] given in writing in a prescribed form;

(b)that—

(i)the case is one such as is mentioned in section 96(2); and

(ii)the policy or contract only secures guaranteed minimum pensions;

(c)that—

(i)the case is not one such as is mentioned in section 96(2); and

(ii)such conditions as may be prescribed are satisfied.

(6)In subsection (4)(a), “the relevant time” means the time when the policy of insurance was taken out or the annuity contract was entered into or, as the case may be, when the benefit of the policy or contract was transferred.

F98(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20 Transfer of accrued rights.E+W+S

(1)Regulations may prescribe circumstances in which and conditions subject to which—

(a)a transfer of or a transfer payment in respect of—

(i)an earner’s accrued rights to guaranteed minimum pensions under a contracted-out scheme;

(ii)an earner’s accrued rights to pensions under an occupational pension scheme which is not contracted-out, to the extent that those rights derive from his accrued rights to guaranteed minimum pensions under a contracted-out scheme; or

(iii)the liability for the payment of guaranteed minimum pensions to or in respect of any person who has become entitled to them,

may be made by an occupational pension scheme to another such scheme [F99, to a personal pension scheme or to an overseas arrangement];

(b)a transfer of or a transfer payment in respect of an earner’s accrued rights to guaranteed minimum pensions which are appropriately secured for the purposes of section 19 may be made to an occupational pension scheme [F100, a personal pension scheme or an overseas arrangement].

(2)Any such regulations may be made so as to apply to earners who are not in employment at the time of the transfer.

(3)Regulations under subsection (1) may provide that any provision of this Part (other than sections 18, 19 and 43 to 45, F101... so far as they apply to personal pension schemes) or of Chapter III of Part IV or Chapter II of Part V shall have effect, where there has been a transfer to which they apply, subject to such modifications as may be specified in the regulations.

(4)Regulations under subsection (1) shall have effect in relation to transfers whenever made unless they provide that they are only to have effect in relation to transfers which take place after they come into force.

(5)The power conferred by subsection (1) is without prejudice to the generality of section 182(2).

(6)In the provisions mentioned in subsection (3) “accrued rights”, in relation to an earner, means the rights conferring prospective entitlement under the scheme in question to the pensions to be provided for the earner and the earner’s [F102widow, widower or surviving civil partner] in accordance with sections 13 and 17, and references to an earner’s accrued rights to guaranteed minimum pensions shall be construed accordingly.

21 Commutation, surrender and forfeiture.E+W+S

[F103(1)A scheme may, in such circumstances and subject to such restrictions and conditions as may be prescribed, provide for the payment of a lump sum instead of a pension required to be provided by the scheme in accordance with section 13 or 17.]

(2)Neither section 13 nor section 17 shall preclude a scheme from providing for the earner’s or the earner’s [F104widow's, widower’s or surviving civil partner's] guaranteed minimum pension to be suspended or forfeited in such circumstances as may be prescribed.

Textual Amendments

F103S. 21(1) substituted (1.7.2005 for specified purposes, 6.4.2006 in so far as not already in force) by Pensions Act 2004 (c. 35), ss. 284(1), 322(1) (with s. 313); S.I. 2005/1720, art. 2(15)(a)(b), Sch. Pt. 2

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F10522 Financing of benefits.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F105S. 22 repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 30, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

23 Securing of benefits.E+W+S

F106(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)Subject to subsection (3), the scheme must contain a rule by which any liabilities of the scheme in respect of—

(a)guaranteed minimum pensions and accrued rights to guaranteed minimum pensions;

(b)any such benefits as are excluded by section 13(6) from earners’ guaranteed minimum pensions;

(c)pensions and other benefits (whether or not within paragraph (a) or (b)) in respect of which entitlement to payment has already arisen; and

(d)state scheme premiums,

are accorded priority on a winding up over other liabilities under the scheme in respect of benefits attributable to any period of service after the rule has taken effect.

(3)The rule may also accord priority, on a winding up occurring after an earner has attained normal pension age, to liabilities of the scheme in respect of pensions and other benefits to which—

(a)he will be entitled on ceasing to be in employment, or

(b)the earner’s [F107widow, widower or surviving civil partner] or any dependant of the earner’s will be entitled on the earner’s death.

(4)Subsections [F108(2) and (3)] do not apply to public service pension schemes.

F109(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)Subsections (2) and (3) do not apply to schemes falling within any category or description prescribed as being exempt from the requirements of those subsections.

(7)If the scheme provides for the payment out of any sum representing the surrender value of a policy of insurance taken out for the purposes of the scheme, it must make provision so that there may be no payment out in relation to guaranteed minimum pensions except in such circumstances as may be prescribed.

Textual Amendments

F106S. 23(1) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 31(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F108Words in s. 23(4) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 31(b); S.I. 1997/664, art. 2(3), Sch. Pt. 2

F109S. 23(5) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 31(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

Modifications etc. (not altering text)

C51S. 23(2)(3) excluded (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 31; S.I. 1997/664, art. 2(3), Sch. Pt. 2

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F11024 Sufficiency of resources.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F110S. 24 repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 32, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

[F11124AConversion of guaranteed minimum pension into other benefits: introductionE+W+S

In this section and sections 24B to 24H—

(a)the rules specified in sections 13(1)(a) and (b) and 17(1) are referred to as the “guaranteed minimum pension rules”,

(b)GMP conversion” means amendment of the scheme in relation to an earner so that it no longer contains the guaranteed minimum pension rules,

(c)a “GMP-converted scheme” is a scheme which has been subject to GMP conversion,

(d)the conversion date” means the date on which that amendment takes effect,

(e)the pre-conversion benefits” means the benefits provided under the scheme immediately before the conversion date (disregarding money purchase benefits),

(f)the post-conversion benefits” means the benefits which are provided under the converted scheme (disregarding money purchase benefits),

(g)the converted scheme” means the scheme as it has effect immediately after conversion, and

(h)the trustees” in relation to a scheme means the trustees, managers or other persons responsible under the scheme for effecting amendments of it.

Textual Amendments

F111Ss. 24A-24H inserted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(3), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

24BThe conversion conditionsE+W+S

(1)This section specifies the conditions referred to in sections 13(1A) and 17(1A) (for exemption from the requirement to guarantee a minimum pension).

(2)Condition 1 is that the post-conversion benefits must be actuarially at least equivalent to the pre-conversion benefits.

(3)Condition 2 is that if the earner was entitled immediately before the conversion date to the payment of a pension under the scheme, the converted scheme does not provide for a reduction of, or have the effect of reducing, the amount of that pension immediately after conversion.

(4)Condition 3 is that the post-conversion benefits must not include money purchase benefits, apart from any money purchase benefits provided under the scheme immediately before the conversion date.

(5)Condition 4 is that the converted scheme provides survivors' benefits in accordance with section 24D in such circumstances, and during such periods, as are prescribed by regulations.

(6)Condition 5 is that the procedural requirements of section 24E have been complied with.

(7)In applying these conditions to a scheme in respect of an earner—

(a)it is immaterial whether or not on the conversion date the scheme was also converted in respect of other earners, and

(b)it is immaterial (except for Condition 2) whether or not on the conversion date the earner was entitled to the payment of a pension under the scheme.

Textual Amendments

F111Ss. 24A-24H inserted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(3), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

24CActuarial equivalenceE+W+S

Regulations may make provision for determining actuarial equivalence for the purpose of Condition 1 of section 24B.

Textual Amendments

F111Ss. 24A-24H inserted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(3), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

24DSurvivors' benefitsE+W

(1)This section specifies the benefits mentioned in Condition 4 of section 24B.

(2)The first benefit is that if the earner [F112is a man married to a woman or a woman married to a woman in a relevant gender change case, and the earner] dies (whether before or after attaining normal pension age) leaving a widow, she is entitled to a pension of at least half the value of the pension to which the earner would have been entitled by reference to employment during the period—

(a)beginning with 6th April 1978, and

(b)ending with 5th April 1997.

(3)The second benefit is that if the earner [F113is a married woman (other than in a relevant gender change case), a man married to a man, or a civil partner, and the earner] dies (whether before or after attaining normal pension age) leaving a widower [F114, widow] or surviving civil partner, he or she is entitled to a pension of at least half the value of the pension to which the earner would have been entitled by reference to employment during the period—

(a)beginning with 6th April 1988, and

(b)ending with 5th April 1997.

[F115(4)In relation to an earner who is a woman, a reference in this section to a relevant gender change case is a reference to a case where—

(a)the earner is a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004, and

(b)the marriage of the earner and her widow (that ends with the earner's death) subsisted before the time when the certificate was issued.

(5)This section is subject to regulations under section 38A.]

Extent Information

E4This version of this provision extends to England and Wales only; a separate version has been created for Scotland only

Textual Amendments

F111Ss. 24A-24H inserted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(3), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

F112Words in s. 24D(2) inserted (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 21(2); S.I. 2014/93, art. 3(j)(vi); S.I. 2014/3169, art. 2

F113Words in s. 24D(3) inserted (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 21(3)(a); S.I. 2014/93, art. 3(j)(vi); S.I. 2014/3169, art. 2

F114Word in s. 24D(3) inserted (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 21(3)(b); S.I. 2014/93, art. 3(j)(vi); S.I. 2014/3169, art. 2

F115S. 24D(4)(5) inserted (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 21(4); S.I. 2014/93, art. 3(j)(vi); S.I. 2014/3169, art. 2

[F91524DSurvivors' benefitsS

(1)This section specifies the benefits mentioned in Condition 4 of section 24B.

(2)The first benefit is that if the earner [F916is a man married to a woman or a woman married to a woman in a relevant gender change case, and the earner] dies (whether before or after attaining normal pension age) leaving a widow, she is entitled to a pension of at least half the value of the pension to which the earner would have been entitled by reference to employment during the period—

(a)beginning with 6th April 1978, and

(b)ending with 5th April 1997.

(3)The second benefit is that if the earner [F917is a married woman (other than in a relevant gender change case), a man married to a man, or a civil partner, and the earner] dies (whether before or after attaining normal pension age) leaving a widower [F918, widow] or surviving civil partner, he or she is entitled to a pension of at least half the value of the pension to which the earner would have been entitled by reference to employment during the period—

(a)beginning with 6th April 1988, and

(b)ending with 5th April 1997.

[F919(4)In relation to an earner who is a woman, a reference in this section to a relevant gender change case is a reference to a case where—

(a)the earner is a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004; and

(b)the marriage of the earner and her widow (that ends with the earner’s death) subsisted before the time when the certificate was issued.]]

24EProcedural requirementsE+W+S

(1)This section specifies the procedural requirements that must be complied with in order to satisfy Condition 5 of section 24B.

(2)The employer in relation to the scheme must consent to the GMP conversion in advance.

(3)The trustees must take all reasonable steps to—

(a)consult the earner in advance, and

(b)notify all members, and survivors, affected by the GMP conversion before, or as soon as is reasonably practicable after, the conversion date.

(4)The Commissioners for Her Majesty's Revenue and Customs must be notified on or before the conversion date—

(a)that the GMP conversion will occur or has occurred, and

(b)that it affects the earner.

Textual Amendments

F111Ss. 24A-24H inserted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(3), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

24FTransfer outE+W+S

(1)Regulations may prescribe—

(a)restrictions on the transfer of the earner's accrued rights under a GMP-converted scheme;

(b)conditions which must be complied with on the transfer of the earner's accrued rights under a GMP-converted scheme.

(2)Section 20(2) and (5) shall apply to regulations under this section.

(3)Where a member of a non-GMP-converted scheme makes an application under section 95(1), the trustees may with his consent adjust any F116... cash equivalent so as to reflect rights that would have accrued if the scheme had been subject to GMP conversion in accordance with Conditions 1 to 4 of section 24B.

Textual Amendments

F111Ss. 24A-24H inserted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(3), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

F116Word in s. 24F(3) omitted (6.4.2015) by virtue of Pension Schemes Act 2015 (c. 8), s. 89(3)(b), Sch. 4 para. 5 (with s. 87)

24GPowers to amend schemesE+W+S

(1)The trustees of an occupational pension scheme may by resolution modify it so as to effect GMP conversion (whether in relation to present earners, pensioners or survivors) in accordance with the conditions in section 24B.

(2)The subsisting rights provisions within the meaning of section 67 of the Pensions Act 1995 (c. 26) shall not apply to a power conferred by an occupational pension scheme to modify the scheme in so far as the power enables GMP conversion in accordance with the conditions in section 24B.

(3)Where a scheme is amended to effect GMP conversion the trustees may include other amendments which they think are necessary or desirable as a consequence of, or to facilitate, the GMP conversion.

(4)Where an occupational pension scheme is being wound up, the trustees may, before the winding up is completed, adjust rights under the scheme so as to reflect what would have happened if the scheme had been subject to GMP conversion in accordance with Conditions 1 to 4 of section 24B.

(5)In the application of section 24E by virtue of subsection (1) above, a reference to the earner includes a reference to a pensioner or survivor whose pension is subjected to GMP conversion.

Textual Amendments

F111Ss. 24A-24H inserted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(3), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

24HEnforcement of GMP conversion conditionsE+W+S

(1)If the Regulatory Authority thinks that the conditions of section 24B have not been satisfied in relation to an amendment, modification or adjustment effected in accordance with any of sections 13(1A), 17(1A), 24F and 24G, the Regulatory Authority may make an order declaring the amendment, modification or adjustment void—

(a)in respect of a specified person or class of person,

(b)to a specified extent, and

(c)as from a specified time.

(2)Where the Regulatory Authority makes an order under subsection (1) it may—

(a)require the trustees of the scheme concerned to take specified steps;

(b)declare that specified action of the trustees shall not be treated as a contravention of the scheme if it would not have been a contravention if the order under subsection (1) had not been made.

(3)An order may be made under subsection (1) before or after the amendment, modification or adjustment takes effect.

(4)If the Regulatory Authority thinks that the process of effecting a GMP conversion of a scheme has been commenced and that a relevant condition of section 24B is not being complied with, or may not be complied with, the Regulatory Authority may by order—

(a)prohibit the taking of further steps in the GMP conversion (whether generally or in relation to specified steps), and

(b)require the trustees of the scheme to take specified steps before resuming the process of GMP conversion.

(5)Section 10 of the Pensions Act 1995 (civil penalties) shall apply to a trustee who has failed to take all reasonable steps to secure compliance with the conditions of section 24B in relation to an amendment, modification or adjustment effected in accordance with any of sections 13(1A), 17(1A), 24F and 24G.]

Textual Amendments

F111Ss. 24A-24H inserted (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(3), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

Discretionary requirementsE+W+S

25 Power for Board to impose conditions as to investments and resources.E+W+S

F117(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F118(2)A salary related contracted-out scheme must, in relation to any earner’s service before the principal appointed day, comply with any requirements prescribed for the purpose of securing that—

(a)the [F119Inland Revenue are] kept informed about any matters affecting the security of the minimum pensions guaranteed under the scheme, and

(b)the resources of the scheme are brought to and are maintained at a level satisfactory to the [F120Inland Revenue]]

F121(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F117S. 25(1) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 33(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F118S. 25(2) substituted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 33(b); S.I. 1996/778, art. 2(5)(a), Sch. Pt. 5; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F119Words in s. 25(2)(a) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 40(a); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F120Words in s. 25(2)(b) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 40(b); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F121S. 25(3) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 33(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Requirements for certification of occupational and personal money purchase schemesE+W+S

F12225ARequirements for schemes with members with protected rightsE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12326 Persons who may establish scheme.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12427 Identification and valuation of protected rights.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12527ARequirements in relation to giving effect to protected rightsE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12628 Ways of giving effect to protected rights.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F126Ss. 28-29 repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 11, Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F12628ARequirements for interim arrangementsE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F126Ss. 28-29 repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 11, Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F12628BInformation about interim arrangementsE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F126Ss. 28-29 repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 11, Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F12629 The pension and annuity requirements.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F126Ss. 28-29 repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 11, Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F12730 Securing of liability for protected rights.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12831 Investment and resources of schemes.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12932 Suspension or forfeiture.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13032ADischarge of protected rights on winding up: insurance policiesE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13133 Tax requirements to prevail over requirements of section 31.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13233AAppropriate schemes: “Blowing the whistle”E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cancellation, variation, surrender and refusal of certificatesE+W+S

34 Cancellation, variation, surrender and refusal of certificates.E+W+S

[F133(1)Regulations shall provide for the cancellation, variation or surrender of a contracting-out certificate, or the issue of a new certificate—

(a)on any change of circumstances affecting the treatment of an employment as contracted-out employment; or

(b)where the certificate was issued on or after the principal appointed day, if any employer of persons in the description of employment to which the scheme in question relates, or the actuary of the scheme, fails to provide HMRC, at prescribed intervals, with such documents as may be prescribed for the purpose of verifying that the conditions of section 9(2B) are satisfied.]

(2)Regulations may enable the [F134Inland Revenue] to cancel or vary a contracting-out certificate where—

(a)[F135they have] reason to suppose that any employment to which it relates ought not to be treated as contracted-out employment in accordance with the certificate; and

(b)the employer does not show that it ought to be so treated.

(3)Where [F136by or by virtue of any provision of this Part the contracting-out of a scheme in relation to an employment depends on the satisfaction of a particular condition] the continued contracting-out of the scheme F137... shall be dependent on continued satisfaction of the condition; and if the condition ceases to be satisfied, that shall be a ground (without prejudice to any other) for the cancellation or variation of the contracting-out F138... certificate.

(4)A contracting-out certificate in respect of any employment may be withheld or cancelled by the [F134Inland Revenue] if [F139they consider] that there are circumstances which make it inexpedient that the employment should be or, as the case may be, continue to be, contracted-out employment by reference to the scheme, notwithstanding that the relevant scheme is one that [F139they] would otherwise treat as proper to be contracted-out in relation to all earners in that employment.

F140(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F141(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F142(7)Without prejudice to the previous provisions of this section, failure of a scheme to comply with any requirements prescribed by virtue of section 25(2) shall be a ground on which the [F134Inland Revenue] may, in respect of any employment to which the scheme relates, cancel a contracting-out certificate].

(8)Except in prescribed circumstances, no cancellation, variation or surrender of a contracting-out certificate F143... shall have effect from a date earlier than that on which the cancellation, variation or surrender is made.

[F144(9)A reference in this section to a contracting-out certificate does not include a reference to a contracting-out certificate issued in respect of a money purchase contracted-out scheme.]

Textual Amendments

F133S. 34(1) substituted (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 15(2) (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F134Words in s. 34 substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 45(2); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F135Words in s. 34(2)(a) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 45(3); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F136Words in s. 34(3) substituted for s. 34(3)(a)(b) (26.9.2007 for specified purposes) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 15(3)(a) (with Sch. 4 Pt. 3)

F137Words in s. 34(3) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 15(3)(b), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F138Words in s. 34(3) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 15(3)(c), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F139Words in s. 34(4) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 45(4); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F140S. 34(5) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 15(4), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F141S. 34(6) repealed (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 37(b), Sch. 7 Pt. III; S.I. 1996/778, art. 2(5)(a), Sch. Pt. 5; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F142S. 34(7) substituted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 37(c); S.I. 1996/778, art. 2(5)(a), Sch. Pt. 5; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F143Words in s. 34(8) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 15(5), Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F144S. 34(9) inserted (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 15(6) (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

35 Surrender and cancellation of contracting-out certificates: issue of further certificates.E+W+S

(1)This section applies in any case where—

(a)a contracting-out certificate (“the first certificate”) has been surrendered by an employer or cancelled by the Board; and

(b)at any time before the end of the period of 12 months beginning with the date of the surrender or cancellation, that or any connected employer makes an election under section 11 in respect of any employment which was specified by virtue of section 7(2)(a) in the first certificate, with a view to the issue of a further contracting-out certificate.

(2)This section applies whether or not the scheme specified in the first certificate in relation to the employment concerned is the same as the scheme which would be specified in the further certificate if it were issued.

(3)The Board shall not give effect to the election referred to in subsection (1) by issuing a further certificate unless they consider that, in all the circumstances of the case, it would be reasonable to do so.

(4)Regulations may make such supplemental provision in relation to cases falling within this section as the Secretary of State considers necessary or expedient.

(5)For the purposes of subsection (1)—

(a)an employment (“the second employment”) in respect of which an election of the kind referred to in subsection (1)(b) has been made; and

(b)an employment (“the first employment”) which was specified by virtue of section 7(2)(a) in the first certificate,

shall be treated as one employment if, in the opinion of the Board—

(i)they are substantially the same, however described; or

(ii)the first employment falls wholly or partly within the description of the second employment or the second employment falls wholly or partly within the description of the first employment.

(6)Regulations shall prescribe the cases in which employers are to be treated as connected for the purposes of this section.

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

36 Surrender and cancellation of contracting-out certificates: cancellation of further certificates.E+W+S

(1)This section applies in any case where—

(a)a contracting-out certificate (“the first certificate”) has been surrendered by an employer or cancelled by the Board;

(b)a further contracting-out certificate (“the further certificate”) has been issued, after the surrender or cancellation of the first certificate but before the end of the period of 12 months beginning with the date of the surrender or cancellation, in respect of any employment which was specified by virtue of section 7(2)(a) in the first certificate; and

(c)the Board have formed the opinion that had they been aware of all the circumstances of the case at the time when the further certificate was issued they would have been prevented by section 35(3) from issuing it.

(2)This section applies whether or not the scheme specified in the first certificate in relation to the employment concerned is the same as the scheme specified in the further certificate.

(3)The Board may, before the end of the period of 12 months beginning with the date on which the further certificate was issued, cancel that certificate.

(4)Where a contracting-out certificate is cancelled under subsection (3) the provisions of this Act and of any regulations and orders made under it shall have effect as if the certificate had never been issued.

(5)Regulations may make such supplemental provision in relation to cases falling within this section as the Secretary of State considers necessary or expedient.

(6)Without prejudice to subsection (5), regulations may make provision, in relation to any case in which the Board have cancelled a contracting-out certificate under subsection (3), preventing the recovery by the employer concerned (whether by deduction from emoluments or otherwise) of such arrears which he is required to pay to the Secretary of State in respect of an earner’s liability under section 6(3) of the M5Social Security Contributions and Benefits Act 1992 as may be prescribed.

(7)For the purposes of subsection (1)—

(a)an employment (“the second employment”) in respect of which a further contracting-out certificate of the kind referred to in subsection (1)(b) has been issued; and

(b)an employment (“the first employment”) which was specified by virtue of section 7(2)(a) in the first certificate,

shall be treated as one employment if, in the opinion of the Board—

(i)they are substantially the same, however described; or

(ii)the first employment falls wholly or partly within the description of the second employment or the second employment falls wholly or partly within the description of the first employment.

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Marginal Citations

Alteration of scheme rules after certificationE+W+S

[F14537 Alteration of rules of contracted-out schemes.E+W

(1)Except in prescribed circumstances, the rules of a [F146salary related] contracted-out scheme cannot be altered unless the alteration is of a prescribed description.

(2)Regulations made by virtue of subsection (1) may operate so as to validate with retrospective effect any alteration of the rules which would otherwise be void under this section.

(3)References in this section to a [F147salary related] contracted-out scheme include a scheme which has ceased to be contracted-out so long as any person is entitled to receive, or has accrued rights to, any benefits under the scheme attributable to a period when the scheme was contracted-out.

[F148(4)The reference in subsection (3) to a person entitled to receive benefits under a scheme includes a person who is so entitled by virtue of a qualifying relationship only in such cases as may be prescribed.]

[F148(5)For that purpose a person is entitled to receive benefits by virtue of a qualifying relationship if the person is so entitled by virtue of being—

(a)the widower of a female earner;

(b)the widower of a male earner;

(c)the widow of a female earner, except where it is a relevant gender change case; or

(d)the survivor of a civil partnership with an earner.

(6)In relation to a widow of a female earner, the reference in subsection (5)(c) to a relevant gender change case is a reference to a case where—

(a)the earner is a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004, and

(b)the marriage of the earner and her widow (that ends with the earner's death) subsisted before the time when the certificate was issued.

(7)This section is subject to regulations under section 38A.]]

Extent Information

E5This version of this provision extends to England and Wales only; a separate version has been created for Scotland only

Textual Amendments

F145S. 37 substituted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 39; S.I. 1996/778, art. 2(5)(a), Sch. Pt. V; S.I. 1997/664, art. 2(3), Sch. Pt. II

F148S. 37(4)-(7) substituted for s. 37(4) (E.W.) (13.3.2014 for specified purposes, 10.12.2014 in so far as not already in force) by Marriage (Same Sex Couples) Act 2013 (c. 30), s. 21(3), Sch. 4 para. 22(2); S.I. 2014/93, art. 3(j)(vi); S.I. 2014/3169, art. 2

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

[F92037 Alteration of rules of contracted-out schemes.S

(1)Except in prescribed circumstances, the rules of a [F921salary related] contracted-out scheme cannot be altered unless the alteration is of a prescribed description.

(2)Regulations made by virtue of subsection (1) may operate so as to validate with retrospective effect any alteration of the rules which would otherwise be void under this section.

(3)References in this section to a [F922salary related] contracted-out scheme include a scheme which has ceased to be contracted-out so long as any person is entitled to receive, or has accrued rights to, any benefits under the scheme attributable to a period when the scheme was contracted-out.

[F923(4)The reference in subsection (3) to a person entitled to receive benefits under a scheme includes a person who is so entitled by virtue of a qualifying relationship only in such cases as may be prescribed.

(5)For that purpose a person is entitled to receive benefits by virtue of a qualifying relationship if the person is so entitled by virtue of being—

(a)the widower of a female earner;

(b)the widower of a male earner;

(c)the widow of a female earner, except where it is a relevant gender change case; or

(d)the survivor of a civil partnership with an earner.

(6)In relation to a widow of a female earner, the reference in subsection (5)(c) to a relevant gender change case is a reference to a case where—

(a)the earner is a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004; and

(b)the marriage of the earner and her widow (that ends with the earner’s death) subsisted before the time when the certificate was issued.]]

Extent Information

E12This version of this provision extends to Scotland only; a separate version has been created for England and Wales only

Textual Amendments

F920S. 37 substituted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 39; S.I. 1996/778, art. 2(5)(a), Sch. Pt. V; S.I. 1997/664, art. 2(3), Sch. Pt. II

Commencement Information

I13Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F14938 Alteration of rules of appropriate schemes.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General regulations as to administration of Part IIIE+W+S

[F15038ARegulations about relevant gender change casesE+W

(1)The Secretary of State may, by regulations, make provision for—

(a)section 17,

(b)section 24D, or

(c)section 37,

to have its special effect in relevant gender change cases only if conditions prescribed in the regulations are met.

(2)Regulations under subsection (1) may, in particular, prescribe conditions that relate to the provision of information by—

(a)one or both of the members of married same sex couples, or

(b)the survivors of such couples.

(3)The Secretary of State may, by regulations, make further provision about cases where (because of regulations under subsection (1))—

(a)section 17,

(b)section 24D, or

(c)section 37,

does not have its special effect in relevant gender change cases.

(4)Regulations under subsection (3) may, in particular, provide for the section in question to have its ordinary effect in relevant gender change cases.

(5)Regulations under subsection (1) or (3) may, in particular, modify or disapply any enactment that concerns information relating to—

(a)the gender or sex of a person, or

(b)the change of gender or sex of a person,

including any enactment that concerns requests for, or disclosure of, such information.

(6)In this section, in relation to section 17, 24D or 37—

(a)relevant gender change case” has the same meaning as in that section;

(b)special effect” means the effect which the section has (if regulations under subsection (1) of this section are ignored) in relation to relevant gender change cases, insofar as that effect is different from the section's ordinary effect;

(c)ordinary effect” means the effect which the section has in relation to same sex married couples in cases that are not relevant gender change cases.]

39 General power to make regulations.E+W+S

Schedule 2 shall have effect for enabling regulations to be made in relation to the operation and administration of this Part, and Part I of that Schedule has effect as respects occupational pension schemes F151...

Textual Amendments

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Chapter IIE+W+S Reduction in state scheme contributions and Social Security benefits for members of certified schemes

PreliminaryE+W+S

40 Scope of Chapter II.E+W+S

This Chapter has effect for the purpose—

(a)of reducing the rates at which certain national insurance contributions are payable by or in respect of earners whose employment is contracted-out by reference to contracted-out occupational pension schemes;

(b)of providing for contributions to be paid by the [F152Inland Revenue] in respect of earners who are members of [F153money purchase contracted-out schemes and members of ]appropriate personal pension schemes; and

(c)of making provision concerning the payment of certain social security benefits payable in respect of members and former members of such schemes.

Textual Amendments

F153Words in s. 40(b) inserted (13.3.1996 for specified purposes, 6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 137(1), 180(1); S.I. 1996/778, art. 2(1)(5)(a), Sch. Pts. 1, 5; S.I. 1997/664, art. 2(3), Sch. Pt. 2

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

[F154Reduced rates of contributions for members of salary related contracted-out schemes]E+W+S

Textual Amendments

F154S. 41 cross-heading substituted (13.3.1996 for specified purposes, 6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 137(2), 180(1); S.I. 1996/778, art. 2(1)(5)(a), Sch. Pts. I, V; S.I. 1997/664, art. 2(3), Sch. Pt. II

41[F155Reduced rates of Class 1 contributions]E+W+S

[F156(1)Subsections (1A) to [F157(1E)] apply where—

(a)the earnings paid to or for the benefit of an earner in any tax week are in respect of an employment which is contracted-out employment at the time of the payment, and

(b)the earner’s service in the employment is service which qualifies him for a pension provided by a salary related contracted-out scheme;

and in subsections (1A) and (1B) “the relevant part”, in relation to those earnings, means so much of those earnings as exceeds the current lower earnings limit but not [F158the upper accrual point] (or the prescribed equivalents if the earner is paid otherwise than weekly).]

F159(1ZA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F160(1A)The amount of any primary Class 1 contribution [F161attributable to section 8(1)(a) of the Social Security Contributions and Benefits Act 1992 (c. 4)] in respect of the earnings shall be reduced by an amount equal to [F1621.4 per cent] of the relevant part of the earnings (“Amount R1”).

(1B)The amount of any secondary Class 1 contribution in respect of the earnings shall be reduced by an amount equal to [F1633.4 per cent] of the relevant part of the earnings (“Amount R2”).

(1C)The aggregate of Amounts R1 and R2 shall be set off—

(a)first against the aggregate amount which the secondary contributor is liable to pay in respect of the contributions mentioned in subsections (1A) and (1B); and

(b)then (as to any balance) against any amount which the secondary contributor is liable to pay in respect of any primary or secondary Class 1 contribution in respect of earnings—

(i)paid to or for the benefit of any other employed earner (whether in contracted-out employment or not), and

(ii)in relation to which the secondary contributor is such a contributor;

and in this subsection any reference to a liability to pay an amount in respect of a primary Class 1 contribution is a reference to such a liability under paragraph 3 of Schedule 1 to the Social Security Contributions and Benefits Act 1992.

(1D)If—

(a)any balance remains, and

(b)the secondary contributor makes an application for the purpose to the Inland Revenue,

the Inland Revenue shall, in such manner and at such time (or within such period) as may be prescribed, pay to the secondary contributor an amount equal to the remaining balance.

But regulations may make provision for the adjustment of an amount that would otherwise be payable under this subsection so as to avoid the payment of trivial or fractional amounts.

(1E)If the Inland Revenue pay any amount under subsection (1D) which they are not required to pay, they may recover that amount from the secondary contributor in such manner and at such time (or within such period) as may be prescribed.]

(2)Where—

(a)an earner has ceased to be employed in an employment; and

(b)earnings are paid to him or for his benefit within the period of 6 weeks, or such other period as may be prescribed, from the day on which he so ceased,

that employment shall be treated for the purposes of subsection (1) as contracted-out employment at the time when the earnings are paid if it was contracted-out employment in relation to the earner when he was last employed in it.

(3)This section shall not affect the amount of any primary Class 1 contribution which is payable at a reduced rate by virtue of regulations under section 19(4) of the M6Social Security Contributions and Benefits Act 1992 (reduced rates for married women and widows).

Textual Amendments

F155S. 41 heading substituted (13.3.1996 for specified purposes, 6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 137(2), 180(1); S.I. 1996/778, art. 2(1)(5)(a), Sch. Pts. I, V; S.I. 1997/664, art. 2(3), Sch. Pt. II

F156S. 41(1)-(1C) substituted for s. 41(1)(1A) (6.4.1999) by Social Security Act 1998 (c. 14), s. 87(2), Sch. 7 para. 127; S.I. 1999/418, art. 2(3)(a)

F157Word in s. 41(1) substituted (22.12.1999 for specified purposes, 6.4.2000 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(3)(a), Sch. 9 para. 6(2); S.I. 1999/3420, art. 2

F158Words in s. 41(1) substituted (21.9.2008 with effect in relation to 2009-10 and subsequent tax years) by National Insurance Contributions Act 2008 (c. 16), s. 6(1), Sch. 1 para. 10(2) (with Sch. 1 para. 10(4))

F159S. 41(1ZA) repealed (21.9.2008 with effect in relation to 2009-10 and subsequent tax years) by National Insurance Contributions Act 2008 (c. 16), s. 6(1), Sch. 1 para. 10(3), Sch. 2 (with Sch. 1 para. 10(4))

F160S. 41(1A)-(1E) substituted for s. 41(1A)-(1C) (22.12.1999 for specified purposes, 6.4.2000 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(3)(a), Sch. 9 para. 6(3); S.I. 1999/3420, art. 2

F161Words in s. 41(1A) inserted (with effect in accordance with s. 8(2) of the amending Act) by National Insurance Contributions Act 2002 (c. 19), Sch. 1 para. 36

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Marginal Citations

42 Review and alteration of rates of contributions applicable under s. 41.E+W+S

(1)The Secretary of State may from time to time, and shall when required by subsection (2), lay before each House of Parliament—

(a)[F164a report by the Government Actuary or the Deputy Government Actuary on—

(i)the percentages for the time being applying under section [F16541(1A) and (1B)], and

(ii)any changes since the preparation of the last report under this paragraph in the factors in his opinion affecting the cost of providing benefits of an actuarial value equivalent to that of the benefits [F166(or parts of benefits) which, in accordance with section 48A below and [F167Schedules 4A and 4B] to the Social Security Contributions and Benefits Act 1992,] are foregone by or in respect of members of salary related contracted-out schemes]

(b)a report by the Secretary of State stating whether he considers that, in view of the report of the Government Actuary or the Deputy Government Actuary, there should be an alteration in either or both of those percentages and, if so, what alteration is in his opinion required.

(2)The Secretary of State shall lay such reports at intervals of not more than five years.

(3)If in a report under subsection (1)(b) the Secretary of State states that he considers that there should be an alteration in either or both of the percentages mentioned in section [F16841(1A) and (1B)], he shall prepare and lay before each House of Parliament with the report the draft of an order making that alteration; and if the draft is approved by resolution of each House the Secretary of State shall make the order in the form of the draft.

(4)An order under subsection (3) shall have effect from the beginning of such tax year as may be specified in the order, but not a tax year earlier than the second after that in which the order is made.

(5)No alteration of those percentages shall introduce any distinction on grounds of age or sex.

(6)A draft of an order making alterations in either or both of those percentages may contain consequential provisions altering any percentage for the time being specified in [F169the definition of “the percentage for contributing earners” or “the percentage for non-contributing earners” in paragraph 2(5)] of Schedule 4 as that percentage applies in relation to earnings paid or payable on or after the day as from which the order is to have effect.

[F170(7)Until paragraph 60(4) of Schedule 4 to the Pensions Act 2007 comes into force, subsection (6) has effect as if the reference to the definition of “the percentage for contributing earners” or “the percentage for non-contributing earners” were a reference to paragraph (a) of either of those definitions.]

Textual Amendments

F164S. 42(1)(a) substituted (13.3.1996 for specified purposes, 6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 137(3), 180(1); S.I. 1996/778, art. 2(1)(5)(a), Sch. Pts. 1, 5; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F166Words in s. 42(1)(a)(ii) substituted (25.1.2001 for specified purposes, 6.4.2002 in so far as not already in force) by Child Support, Pensions and Social Security Act 2000 (c. 19), ss. 34, 86(1)(b)(2) (with s. 83(6)); S.I. 2001/153, art. 2(a)

F169Words in s. 42(6) substituted (3.1.2012) by Pensions Act 2011 (c. 19), ss. 28(1), 38(3)(d)

Modifications etc. (not altering text)

C55S. 42(1)(a) modified (13.3.1996 for specified purposes, 6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 137(4), 180(1); S.I. 1996/778, art. 2(1)(5)(a), Sch. Pts. 1, 5; S.I. 1997/664, art. 2(3), Sch. Pt. 2

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

[F171Reduced rates of contributions, and rebates, for members of money purchase contracted-out schemesE+W+S

Textual Amendments

F171Ss. 42A, 42B and cross-heading inserted (13.3.1996 for specified purposes, 6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 137(5), 180(1); S.I. 1996/778, art. 2(1)(5)(a), Sch. Pts. I, V; S.I. 1997/664, art. 2(3), Sch. Pt. II

42AReduced rates of Class 1 contributions, and rebatesE+W+S

[F172(1)Subsections (2) to [F173(2D) and (3)] apply where—

(a)the earnings paid to or for the benefit of an earner in any tax week are in respect of an employment which is contracted-out employment at the time of the payment, and

(b)the earner’s service in the employment is service which qualifies him for a pension provided by a money purchase contracted-out scheme;

and in subsections (2) and (2A) “the relevant part”, in relation to those earnings, means so much of those earnings as exceeds the current lower earnings limit but not [F174the upper accrual point] (or the prescribed equivalents if the earner is paid otherwise than weekly).]

[F175(2)The amount of any primary Class 1 contribution [F176attributable to section 8(1)(a) of the Social Security Contributions and Benefits Act 1992] in respect of the earnings shall be reduced by an amount equal to the appropriate flat-rate percentage of the relevant part of the earnings (“Amount R1”).

(2A)The amount of any secondary Class 1 contribution in respect of the earnings shall be reduced by an amount equal to the appropriate flat-rate percentage of the relevant part of the earnings (“Amount R2”).

(2B)The aggregate of Amounts R1 and R2 shall be set off—

(a)first against the aggregate amount which the secondary contributor is liable to pay in respect of the contributions mentioned in subsections (2) and (2A); and

(b)then (as to any balance) against any amount which the secondary contributor is liable to pay in respect of a primary or secondary Class 1 contribution in respect of earnings—

(i)paid to or for the benefit of any other employed earner (whether in contracted-out employment or not), and

(ii)in relation to which the secondary contributor is such a contributor;

and in this subsection any reference to a liability to pay an amount in respect of a primary Class 1 contribution is a reference to such a liability under paragraph 3 of Schedule 1 to the Social Security Contributions and Benefits Act 1992.

(2C)If—

(a)any balance remains, and

(b)the secondary contributor makes an application for the purpose to the Inland Revenue,

the Inland Revenue shall, in such manner and at such time (or within such period) as may be prescribed, pay to the secondary contributor an amount equal to the remaining balance.

But regulations may make provision for the adjustment of an amount that would otherwise be payable under this subsection so as to avoid the payment of trivial or fractional amounts.

(2D)If the Inland Revenue pay any amount under subsection (2C) which they are not required to pay, they may recover that amount from the secondary contributor in such manner and at such time (or within such period) as may be prescribed.]

(3)[F177Subject to subsection (5A),] the [F178Inland Revenue] shall except in prescribed circumstances or in respect of prescribed periods pay in respect of that earner and that tax week to the [F179earner] or, in prescribed circumstances, to a prescribed person the amount by which—

(a)the appropriate age-related percentage of that part of those earnings,

exceeds

(b)the appropriate flat-rate percentage of that part of those earnings.

(4)Regulations may make provision—

(a)as to the manner in which and time at which or period within which payments under subsection (3) are to be made,

(b)for the adjustment of the amount which would otherwise be payable under that subsection so as to avoid the payment of trivial or fractional amounts,

(c)for earnings to be calculated or estimated in such manner and on such basis as may be prescribed for the purpose of determining whether any, and if so what, payments under subsection (3) are to be made.

(5)If the [F180Inland Revenue] [F181pay] an amount under subsection (3) which [F181they] [F181are] not required to pay or is not required to pay to the person to whom, or in respect of whom, he pays it, he may recover it from any person to whom, or in respect of whom, he paid it.

[F182(5A)Where a payment under subsection (3) is due in respect of an earner, HMRC are not required to make the payment if they determine that the cost to them of administering the payment would exceed the amount of the payment.]

(6)Where—

(a)an earner has ceased to be employed in an employment, and

(b)earnings are paid to him or for his benefit within the period of six weeks, or such other period as may be prescribed, from the day on which he so ceased,

that employment shall be treated for the purposes of this section as contracted-out employment at the time when the earnings are paid if it was contracted-out employment in relation to the earner when he was last employed in it.

(7)Subsection (3) of section 41 applies for the purposes of this section as it applies for the purposes of that.

[F183(8)For the purposes of this section “the appropriate age-related percentage” and “the appropriate flat-rate percentage”, in relation to a tax year beginning before the abolition date, are the percentages specified as such for that tax year in an order made under section 42B (as it had effect prior to that date).]]

Textual Amendments

F172S. 42A(1)-(2B) substituted for s. 42A(1)(2) (6.4.1999) by Social Security Act 1998 (c. 14), s. 87(2), Sch. 7 para. 128; S.I. 1999/418, art. 2(3)(a)

F173Words in s. 42A(1) substituted (22.12.1999 for specified purposes, 6.4.2000 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(3)(a), Sch. 9 para. 7(2); S.I. 1999/3420, art. 2

F174Words in s. 42A(1) substituted (21.9.2008 with effect in relation to 2009-10 and subsequent tax years) by National Insurance Contributions Act 2008 (c. 16), s. 6(1), Sch. 1 para. 11

F175S. 42A(2)-(2D) substituted for s. 42A(2)-(2B) (22.12.1999 for specified purposes, 6.4.2000 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(3)(a), Sch. 9 para. 7(3); S.I. 1999/3420, art. 2

F176Words in s. 42A(2) inserted (with effect in accordance with s. 8(2) of the amending Act) by National Insurance Contributions Act 2002 (c. 19), Sch. 1 para. 37

F178Words in s. 42A(3) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 46(2); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F180Words in s. 42A(5) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 46(3)(a); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F181Words in s. 42A(5) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 46(3)(b); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F183S. 42A(8) inserted (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 17 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F18442BDetermination and alteration of rates of contributions, and rebates, applicable under section 42AE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F184S. 42B repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 18, Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

Minimum contributions: members of appropriate personal pension schemesE+W+S

43 Payment of minimum contributions to personal pension schemes.E+W+S

(1)Subject to the following provisions of this Part, the [F185Inland Revenue] shall, except in such circumstances [F186or in respect of such periods] as may be prescribed, pay minimum contributions in respect of an employed earner for any period during which the earner—

(a)is over the age of 16 but has not attained pensionable age;

(b)is not a married woman or widow who has made an election which is still operative that [F187so much of her liability in respect of primary Class 1 contributions as is attributable to section 8(1)(a) of the Social Security Contributions and Benefits Act 1992 (c. 4)] shall be a liability to contribute at a reduced rate; and

(c)is a member of an appropriate personal pension scheme which is for the time being the earner’s chosen scheme.

(2)Subject to subsection (3), minimum contributions in respect of an earner shall be paid to the [F188earner].

(3)In such circumstances as may be prescribed minimum contributions shall be paid to a prescribed person.

(4)Where the condition mentioned in subsection (1)(a) or (c) ceases to be satisfied in the case of an earner in respect of whom the [F185Inland Revenue] [F189are] required to pay minimum contributions, the duty of the [F185Inland Revenue] to pay them shall cease as from a date determined in accordance with regulations.

(5)If the [F185Inland Revenue] [F190pay] an amount by way of minimum contributions which [F191they] [F190are] not required to pay, [F191they] may recover it—

(a)from the person to whom [F191they] paid it, or

(b)from any person in respect of whom [F191they] paid it.

(6)If the [F185Inland Revenue] [F192pay] in respect of an earner an amount by way of minimum contributions which [F193they] [F192are] required to pay, but [F192do] not pay it to the trustees or managers of the earner’s chosen scheme, [F193they] may recover it from the person to whom [F193they] paid it or from the earner.

[F194(6A)Where a payment under subsection (1) is due in respect of an earner, HMRC are not required to make the payment if they determine that the cost to them of administering the payment would exceed the amount of the payment.]

[F195(7)In this section “the earner's chosen scheme” means the scheme which was immediately before the abolition date the earner's chosen scheme in accordance with section 44 (as it had effect prior to that date).]

Textual Amendments

F185Words in s. 43 substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 47(2); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F186Words in s. 43(1) inserted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 42; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F187Words in s. 43(1)(b) substituted (with effect in accordance with s. 8(2) of the amending Act) by National Insurance Contributions Act 2002 (c. 19), Sch. 1 para. 38

F189Word in s. 43(4) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 47(3); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F190Words in s. 43(5) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 47(4)(a); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F191Word in s. 43(5) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 47(4)(b); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F192Words in s. 43(6) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 47(5)(a); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F193Word in s. 43(6) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 47(5)(b); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F195S. 43(7) inserted (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 19 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F19644 Earner’s chosen scheme.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F196S. 44 repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 20, Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

45 Amount of minimum contributions.E+W+S

[F197(1)In relation to any tax week falling within a period for which the [F198Inland Revenue are] required to pay minimum contributions in respect of an earner, the amount of those contributions shall be an amount equal to the appropriate age-related percentage of so much of the earnings paid in that week (other than earnings in respect of contracted-out employment) as exceeds the current lower earnings limit but not [F199the upper accrual point] (or the prescribed equivalents if he is paid otherwise than weekly)].

F200(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Regulations may make provision—

(a)for earnings to be calculated or estimated in such manner and on such basis as may be prescribed for the purpose of determining whether any, and if so what, minimum contributions are payable in respect of them;

(b)for the adjustment of the amount which would otherwise be payable by way of minimum contributions so as to avoid the payment of trivial or fractional amounts;

(c)for the intervals at which, for the purposes of minimum contributions, payments of earnings are to be treated as made;

F201(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e)for this section to have effect in prescribed cases as if for any reference to a tax week there were substituted a reference to a prescribed period F202... ;

(f)as to the manner in which and time at which or period within which minimum contributions are to be made.

[F203(4)For the purposes of this section “the appropriate age-related percentage”, in relation to a tax year beginning before the abolition date, is the percentage (or percentages) specified as such for that tax year in an order made under section 45A (as it had effect prior to that date).]

Textual Amendments

F197S. 45(1) substituted (6.4.1997) by Pensions Act 1995 (c. 26), ss. 138(2), 180(1); S.I. 1997/664, art. 2(3), Sch. Pt. 2

F198Words in s. 45(1) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 49; S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F199Words in s. 45(1) substituted (21.9.2008 with effect in relation to 2009-10 and subsequent tax years) by National Insurance Contributions Act 2008 (c. 16), s. 6(1), Sch. 1 para. 12

F200S. 45(2) omitted (6.4.1997) by virtue of Pensions Act 1995 (c. 26), ss. 138(3), 180(1), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F201S. 45(3)(d) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 43, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F202Words in s. 45(3)(e) omitted (6.4.1997) by virtue of Pensions Act 1995 (c. 26), ss. 138(4), 180(1), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F203S. 45(4) inserted (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 21 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F20445ADetermination and alteration of rates of minimum contributions under section 45E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F204S. 45A repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 22, Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F20545BMoney purchase and personal pension schemes: verification of agesE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of entitlement to guaranteed minimum pensions on payment of social security benefitsE+W+S

46 Effect of entitlement to guaranteed minimum pensions on payment of social security benefits.E+W+S

(1)Where for any period a person is entitled both—

(a)to a Category A or Category B retirement pension, a widowed mother’s allowance [F206, a widowed parent’s allowance] [F207or a widow’s pension] under the M7Social Security Contributions and Benefits Act 1992; and

(b)to one or more guaranteed minimum pensions,

the weekly rate of the benefit mentioned in paragraph (a) shall for that period be reduced by an amount equal—

(i)[F208to that part of its additional pension which is attributable to earnings factors for any tax years ending before the principal appointed day], or

(ii)to the weekly rate of the pension mentioned in paragraph (b) (or, if there is more than one such pension, their aggregate weekly rates),

whichever is the less.

F209(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F210(3)Where for any period—

(a)a person is entitled to one or more guaranteed minimum pensions; and

(b)he is also entitled to long-term incapacity benefit under section 30A of the Social Security Contributions and Benefits Act 1992,

for that period an amount equal to the weekly rate or aggregate weekly rates of the guaranteed minimum pension or pensions shall be deducted from any increase payable under regulations under section 30B(7) of that Act and he shall be entitled to such an increase only if there is a balance after the deduction and, if there is such a balance, at a weekly rate equal to it.]

(4)Where for any period—

(a)a person is entitled to one or more guaranteed minimum pensions;

(b)he is also entitled to a Category A retirement pension under section 44 of the M7 Social Security Contributions and Benefits Act 1992; and

(c)the weekly rate of his pension includes an additional pension such as is mentioned in section 44(3)(b) of that Act,

for that period section 47 of that Act shall have effect as if the following subsection were substituted for subsection (3)—

(3)In subsection (2) above “the relevant amount” means an amount equal to the aggregate of—

(a)the additional pension; and

(b)the weekly rate or aggregate weekly rates of the guaranteed minimum pension or pensions,

reduced by the amount of any reduction in the weekly rate of the Category A retirement pension made by virtue of section 46(1) of the Pension Schemes Act 1993..

(5)Where for any period—

(a)a person is entitled to one or more guaranteed minimum pensions;

(b)he is also entitled to a Category A retirement pension under section 44 of the M7Social Security Contributions and Benefits Act 1992; and

(c)the weekly rate of his Category A retirement pension does not include an additional pension such as is mentioned in subsection (3)(b) of that section,

for that period the relevant amount shall be deducted from the amount that would otherwise be the increase under section 47(1) of that Act and the pensioner shall be entitled to an increase under that section only if there is a balance remaining after that deduction and, if there is such a balance, of an amount equal to it.

(6)Where for any period—

(a)a person is entitled to one or more guaranteed minimum pensions;

(b)he is also entitled—

F211(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii)to a Category A retirement pension under section 44 of that Act; or

(iii)to a Category B retirement pension under [F212section 48A [F213, 48B or 48BB]] of that Act; and

(c)the weekly rate of the pension includes an additional pension such as is mentioned in section 44(3)(b) of that Act,

for that period paragraph 3 of Schedule 7 to that Act shall have effect as if the following sub-paragraph were substituted for sub-paragraph (3)—

(3)In this paragraph “the relevant amount” means an amount equal to the aggregate of—

(a)the additional pension; and

(b)the weekly rate or aggregate weekly rates of the guaranteed minimum pension or pensions,

reduced by the amount of any reduction in the weekly rate of the pension made by virtue of section 46(1) of the Pension Schemes Act 1993..

(7)Where for any period—

(a)a person is entitled to one or more guaranteed minimum pensions;

(b)he is also entitled to any of the pensions under the M7 Social Security Contributions and Benefits Act 1992 mentioned in subsection (6)(b); and

(c)the weekly rate of the pension does not include an additional pension such as is mentioned in section 44(3)(b) of that Act,

for that period the relevant amount shall be deducted from the amount that would otherwise be the increase under paragraph 3 of Schedule 7 to that Act and the beneficiary shall be entitled to an increase only if there is a balance after that deduction and, if there is such a balance, only to an amount equal to it.

(8)In this section “the relevant amount” means an amount equal to the weekly rate or aggregate weekly rates of the guaranteed minimum pension or pensions—

F214(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)in the case of subsection (5), reduced by the amount of any reduction in the weekly rate of the Category A retirement pension made by virtue of subsection (1);

and references in this section to the weekly rate of a guaranteed minimum pension are references to that rate without any increase under section 15(1).

F215(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F206Words in s. 46(1) inserted (24.4.2000 for specified purposes, 9.4.2001 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(1), Sch. 8 para. 18(2); S.I. 2000/1047, art. 2(2)(a), Sch. Pt. 1

F207Words in s. 46(1) substituted (13.4.1995) by Social Security (Incapacity for Work) Act 1994 (c. 18), s. 16(3), Sch. 1 para. 56(2); S.I. 1994/2926, art. 2(4), Sch. Pt. 4

F208S. 46(1)(i) substituted (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 44; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F211S. 46(6)(b)(i) repealed (13.4.1995) by Social Security (Incapacity for Work) Act 1994 (c. 18), s. 16(3), Sch. 1 para. 56(5), Sch. 2; S.I. 1994/2926, art. 2(4), Sch. Pt. 4

F212Words in s. 46(6)(b)(iii) substituted (19.7.1995) by Pensions Act 1995 (c. 26), s. 180(2)(a), Sch. 4 para. 22

F213Words in s. 46(6)(b)(iii) substituted (24.4.2000 for specified purposes, 9.4.2001 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(1), Sch. 8 para. 18(3); S.I. 2000/1047, art. 2(2)(a), Sch. Pt. 1

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Marginal Citations

[F21646ARetirement in tax year after 5th April 2020E+W+S

(1)Subsection (2) applies where—

(a)for any period a person is entitled to a Category A or Category B retirement pension, or a widowed parent's allowance, under the 1992 Act (“the benefit”),

(b)the person is entitled to one or more guaranteed minimum pensions for that period, and

(c)the weekly rate of the additional pension in the benefit is determined under section 45(2A) of the 1992 Act (retirement in tax year after 5th April 2020).

(2)The weekly rate of the benefit shall, for the period mentioned in subsection (1)(a), be reduced by an amount calculated in accordance with regulations.

(3)Regulations under subsection (2) must provide for the amount of the reduction to be calculated in such a way that it does not exceed such part of the weekly rate of the additional pension in the benefit as is attributable to earnings factors for tax years ending before the principal appointed day.

(4)The effect of the reductions made under subsection (2) in relation to any person must be actuarially equivalent to the effect of the reductions that, but for section 46(1A), would be made under section 46(1) in relation to that person.

(5)The Secretary of State must require the Government Actuary or Deputy Government Actuary (“the Actuary”) to prepare a report on how actuarial equivalence should be determined for the purposes of this section.

(6)In preparing the report the Actuary must consult such persons as appear to the Actuary to be appropriate.

(7)The Secretary of State must lay the report before Parliament.

(8)Having considered the report, the Secretary of State must by regulations make provision for determining actuarial equivalence for the purposes of this section.

(9)If any recommendation in the report is not followed in the regulations, the Secretary of State must prepare and lay before Parliament a report explaining why.

(10)In this section “the 1992 Act” means the Social Security Contributions and Benefits Act 1992.]

Textual Amendments

F216S. 46A inserted (8.4.2010 for specified purposes) by Pensions Act 2008 (c. 30), ss. 103(3), 149(1); S.I. 2010/1221, art. 2(b)

47 Further provisions concerning entitlement to guaranteed minimum pensions for the purposes of s. 46.E+W+S

(1)The reference in section 46(1) to a person entitled to a guaranteed minimum pension shall be construed as including a reference to a person so entitled by virtue of being the widower [F217, surviving same sex spouse] [F218or surviving civil partner] of an earner [F219in any case where he is entitled to a benefit other than a widowed parent’s allowance] F220... only if—

[F221(a)he is also entitled to a Category B retirement pension by virtue of the earner’s contributions (or would be so entitled but for section 43(1) of the Social Security Contributions and Benefits Act 1992); or]

(b)he is also entitled to a Category A retirement pension by virtue of [F222section 41(5)] of [F222that Act].

(2)For the purposes of section 46 a person shall be treated as entitled to any guaranteed minimum pension to which he would have been entitled—

(a)if its commencement had not been postponed, as mentioned in section 13(4); or

(b)if there had not been made a transfer payment or transfer under regulations made by virtue of section 20 as a result of which—

(i)he is no longer entitled to guaranteed minimum pensions under the scheme by which the transfer payment or transfer was made, and

(ii)he has not become entitled to guaranteed minimum pensions under the scheme to which the transfer payment or transfer was made.

(3)Where—

(a)guaranteed minimum pensions provided for a member or the member’s [F223widow, widower or surviving civil partner] under a contracted-out scheme have been wholly or partly secured as mentioned in subsection (3) of section 19; and

(b)either—

(i)the transaction wholly or partly securing them was carried out before 1st January 1986 and discharged the trustees or managers of the scheme as mentioned in subsection (1) of that section; or

(ii)it was carried out on or after that date without any of the requirements specified in subsection (5)(a) to (c) of that section being satisfied in relation to it and the scheme has been wound up; and

(c)any company with which any relevant policy of insurance or annuity contract was taken out or entered into is unable to meet the liabilities under policies issued or securities given by it; and

(d)the combined proceeds of—

(i)any relevant policies and annuity contracts, and

(ii)any cash sums paid or alternative arrangements made under the [F224Financial Services Compensation Scheme],

are inadequate to provide the whole of the amount secured,

the member and the member’s [F223widow, widower or surviving civil partner] shall be treated for the purposes of section 46 as only entitled to such part (if any) of the member’s or, as the case may be, the member’s [F225widow's, widower’s or surviving civil partner's] guaranteed minimum pension as is provided by the proceeds mentioned in paragraph (d).

(4)A policy or annuity is relevant for the purposes of subsection (3) if taking it out or entering into it constituted the transaction to which section 19 applies.

(5)For the purposes of section 46 a person shall be treated as entitled to any guaranteed minimum pension to which he would have been entitled—

(a)if a lump sum had not been paid instead of that pension under provisions included in a scheme by virtue of section 21(1); or

(b)if that pension had not been forfeited under provisions included in a scheme by virtue of section 21(2).

[F226(6)For the purposes of section 46, a person shall be treated as entitled to any guaranteed minimum pension to which he would have been entitled but for [F227section 14(2A) and] any reduction under section 15A.]

[F228(7)For the purposes of section 46, a person shall be treated as entitled to any guaranteed minimum pension to which he would have been entitled but for any order under section 342A of the Insolvency Act 1986 (recovery of excessive pension contributions) or under section 36A of the Bankruptcy (Scotland) Act 1985.]

[F229(8)For the purposes of section 46, a person shall be treated as entitled to a guaranteed minimum pension to which he would have been entitled but for the fact that the trustees or managers were discharged from their liability to provide that pension on the Board of the Pension Protection Fund assuming responsibility for the scheme.]

[F230(9)For the purposes of section 46, a person shall be treated as entitled to a guaranteed minimum pension to which, in the opinion of the Commissioners for Her Majesty's Revenue and Customs, he would have been entitled but for the amendment of a scheme so that it no longer contains the guaranteed minimum pension rules.

(10)Where the earner's accrued rights have been transferred after the amendment of the scheme, in making the calculation under subsection (9) the Commissioners shall assume the application of section 16(1) after the transfer.

(11)In making the calculation under subsection (9) the Commissioners shall ignore any effect of the scheme being wound up.]

Textual Amendments

F226S. 47(6) added (11.11.1999 for specified purposes, 1.12.2000 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), ss. 32(4), 89(5)(a); S.I. 2000/1047, art. 2(2)(d), Sch. Pt. 4

F227Words in s. 47(6) inserted (24.2.2003) by Proceeds of Crime Act 2002 (c. 29), s. 458(1), Sch. 11 para. 22(4); S.I. 2003/120, art. 2, Sch. (with arts. 3, 4) (as amended (20.2.2003) by S.I. 2003/333, art. 14)

F228S. 47(7) added (11.11.1999 for specified purposes, 6.4.2002 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 6; S.I. 2002/153, art. 2(g)

F230S. 47(9)-(11) added (1.3.2009 for specified purposes, 6.4.2009 in so far as not already in force) by Pensions Act 2007 (c. 22), ss. 14(5), 30(2)(a); S.I. 2009/406, art. 2(a)(b)

Modifications etc. (not altering text)

C57S. 47(2)(b) applied (with modifications) (6.4.1997) by The Protected Rights (Transfer Payment) Regulations 1996 (S.I. 1996/1461), regs. 1(1), 6(3)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

48 Reduced benefits where minimum payments or minimum contributions paid.E+W+S

(1)Subject to subsection (3), this subsection applies where for any period—

(a)minimum payments have been made in respect of an earner to an occupational pension scheme which is a money purchase contracted-out scheme in relation to the earner’s employment, or

(b)minimum contributions have been paid in respect of an earner under section 43.

(2)Where subsection (1) applies then, for the purposes of section 46—

(a)the earner shall be treated, as from the date on which he reaches pensionable age, as entitled to a guaranteed minimum pension at a prescribed weekly rate arising from that period in that employment;

F231(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)in prescribed circumstances F232... any [F233widow, widower or surviving civil partner] of the earner shall be treated as entitled to a guaranteed minimum pension at a prescribed weekly rate arising from that period;

and where subsection (1)(b) applies paragraphs (a) to (c) of this subsection apply also for the purposes of [F234section] 47(2) of the Social Security Contributions and Benefits Act 1992M8 and paragraph 3(2) of Schedule 7 to that Act, but with the omission from paragraph (a) of the words “in that employment”.

(3)Where the earner is a married woman or widow, subsection (1) shall not have effect by virtue of paragraph (a) of that subsection in relation to any period during which there is operative an election that her liability in respect of primary Class 1 contributions shall be a liability to contribute at a reduced rate.

(4)The power to prescribe a rate conferred by subsection (2)(a) includes power to prescribe a nil rate.

Textual Amendments

F231S. 48(2)(b) omitted (13.3.1996 for specified purposes, 1.4.1996 in so far as not already in force) by virtue of Pensions Act 1995 (c. 26), ss. 140(2), 180(1), Sch. 7 Pt. III; S.I. 1996/778, art. 2(2), Sch. Pt. 2

F232Words in s. 48(2)(c) omitted (13.3.1996 for specified purposes, 1.4.1996 in so far as not already in force) by virtue of Pensions Act 1995 (c. 26), ss. 140(2), 180(1), Sch. 7 Pt. III; S.I. 1996/778, art. 2(2), Sch. Pt. 2

F234Word in s. 48(2) substituted (13.4.1995) by Social Security (Incapacity for Work) Act 1994 (c. 18), s. 16(3), Sch. 1 para. 58; S.I. 1994/2926, art. 2(4), Sch. Pt. 4

Modifications etc. (not altering text)

C58S. 48 excluded (6.4.1997) by Pensions Act 1995 (c. 26), ss. 140(3), 180(1); S.I. 1997/664, art. 2(3), Sch. Pt. 2 (with art. 10)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Marginal Citations

[F235Effect of reduced contributions and rebates on social security benefitsE+W+S

Textual Amendments

F235S. 48A inserted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), ss. 140(1), 180(1); S.I. 1996/778, art. 2(5)(a), Sch. Pt. 5; S.I. 1997/664, art. 2(3), Sch. Pt. 2

48AAdditional pension and other benefitsE+W+S

(1)In relation to any tax week where—

(a)the amount of a Class 1 contribution [F236attributable to section 8(1)(a) of the Social Security Contributions and Benefits Act 1992] in respect of the earnings paid to or for the benefit of an earner in that week is reduced under section 41 [F237or, in the case of a week falling before the abolition date, under section 42A (as it then had effect)], or

(b)[F238in the case of a week falling before the abolition date, an amount is paid under section 45(1) (as it then had effect)] in respect of the earnings paid to or for the benefit of an earner,

section 44(6) of the Social Security Contributions and Benefits Act 1992 (earnings factors for additional pension) shall have effect, except in prescribed circumstances, as if no [F239such] primary Class 1 contributions had been paid or treated as paid upon those earnings for that week and section 45A of that Act did not apply (where it would, apart from this subsection, apply).

(2)Where the whole or part of a contributions equivalent premium has been paid or treated as paid in respect of the earner, the Secretary of State may make a determination reducing or eliminating the application of subsection (1).

(3)Subsection (1) is subject to regulations under paragraph 5(3A) to (3E) of Schedule 2.

(4)Regulations may, so far as is required for the purpose of providing entitlement to additional pension (such as is mentioned in section 44(3)(b) of the Social Security Contributions and Benefits Act 1992) but to the extent only that the amount of additional pension is attributable to provision made by regulations under section 45(5) of that Act, disapply subsection (1).

(5)In relation to earners where, by virtue of subsection (1), section 44(6) of the Social Security Contributions and Benefits Act 1992 has effect, in any tax year, as mentioned in that subsection in relation to some but not all of their earnings, regulations may modify the application of section 44(5) [F240or (5A)] of that Act.]

Textual Amendments

F236Words in s. 48A(1) inserted (with effect in accordance with s. 8(2) of the amending Act) by National Insurance Contributions Act 2002 (c. 19), Sch. 1 para. 39(a)

F237Words in s. 48A(1)(a) substituted (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 23(2) (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F238Words in s. 48A(1)(b) substituted (26.9.2007 for specified purposes, 6.4.2012 in so far as not already in force, that being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 30(2)(b)(3), Sch. 4 para. 23(3) (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F239Word in s. 48A(1) inserted (with effect in accordance with s. 8(2) of the amending Act) by National Insurance Contributions Act 2002 (c. 19), Sch. 1 para. 39(b)

Modifications etc. (not altering text)

[F241Women, married women and widows]E+W+S

Textual Amendments

F241S. 49 and cross heading substituted (19.7.1995) by Pensions Act 1995 (c. 26), s. 180(2)(a), Sch. 4 para. 16

[F24149Women, married women and widows. E+W+S

The Secretary of State may make regulations modifying, in such manner as he thinks proper—

(a)this Chapter in its application to women born on or after 6th April 1950, and

(b)sections 41, 42, 46(1), 47(2) and (5) and 48, in their application to women who are or have been married]

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Chapter IIIE+W+S Termination of contracted-out or appropriate scheme status: state scheme premiums

Approval of arrangements for schemes ceasing to be certifiedE+W+S

50 Powers of [F242Inland Revenue] to approve arrangements for scheme ceasing to be certified.E+W+S

(1)In the case of an occupational pension scheme F243... which is or has been certified as a [F244salary related contracted-out] scheme, the [F242Inland Revenue] may, for the event of, or in connection with, its ceasing to be such a scheme, approve any arrangements made or to be made in relation to the scheme, or for its purposes, for the preservation or transfer—

[F245(a)of earners’ accrued rights to guaranteed minimum pensions under the scheme or accrued rights to pensions under the scheme attributable to their service on or after the principal appointed day; and

(b)of the liability for the payment of such pensions in respect of persons who have then become entitled to receive them.]

[F246(1A)The power of the [F242Inland Revenue] to approve arrangements under this section—

(a)includes power to approve arrangements subject to conditions, and

(b)may be exercised either generally or in relation to a particular scheme.

(1B)Arrangements may not be approved under this section unless any prescribed conditions are met]

(2)If the scheme ceases to be a [F247salary related contracted-out] scheme (whether by being wound up or otherwise) and the [F242Inland Revenue] either—

(a)[F248have] withdrawn [F248their] approval of previously approved arrangements relating to it; or

(b)[F248have] declined to approve arrangements relating to it,

the [F242Inland Revenue] may issue a certificate to that effect.

(3)A certificate issued under subsection (2)(a) or (b) shall be cancelled by the [F242Inland Revenue] if [F249they subsequently approve] the arrangements.

(4)Regulations may provide that where the [F242Inland Revenue] [F250have] approved arrangements under subsection (1) in respect of an occupational pension scheme F251... any provision of this Part (other than sections 18, 19, [F25231 and 33] and [F25343 and 45]) or Chapter III of Part IV or Chapter II of Part V shall have effect subject to such modifications as may be specified in the regulations.

(5)Any such regulations shall have effect in relation to arrangements whenever approved, unless they provide that they are only to have effect in relation to arrangements approved after they come into force.

(6)It is hereby declared that an approval of arrangements relating to an occupational pension scheme [F254to which subsection (1) applies] may be withdrawn at any time, notwithstanding that the scheme has been wound up.

F255(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F242Words in s. 50 substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 51(2); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F246S. 50(1A)(1B) inserted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 45(b); S.I. 1996/778, art. 2(5)(a), Sch. Pt. V; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(1))

F248Words in s. 50(2) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 51(3); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F249Words in s. 50(3) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 51(4); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F250Word in s. 50(4) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 51(5); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

51 Calculation of guaranteed minimum pensions preserved under approved arrangements.E+W+S

(1)This section applies where—

(a)an earner’s guaranteed minimum pension rights or accrued rights to guaranteed minimum pensions under a scheme [F256satisfy prescribed conditions], and

(b)one or more of the five tax years ending with the tax year in which the scheme ceases to be contracted-out is a relevant year in relation to the earner.

(2)Where this section applies then, except in such circumstances as may be prescribed, section 16(1) shall have effect, subject to the following provisions, that is to say—

(a)any earnings factor shall be taken to be that factor as increased by the last order under section 21 of the M9Social Security Pensions Act 1975 or section 148 of the M10Social Security Administration Act 1992 to come into force before those five tax years; and

(b)any relevant earnings factors derived from contributions or earnings in respect of any year (“the relevant contributions year”) shall be treated as increased by 12 per cent. compound for each of those five tax years, other than any of those years which—

(i)constitutes or begins before the relevant contributions year, or

(ii)begins after the final relevant year in relation to the earner.

(3)Subsection (2) shall not apply in any case where its application would result in the amount of the guaranteed minimum being greater than it would have been apart from that subsection.

(4)Regulations may provide that subsections (1) to (3) shall have effect with prescribed modifications in relation to a scheme which, immediately before it ceased to be contracted-out, contained provisions authorised by section 16(2).

(5)In this section “relevant year” and “final relevant year” have the same meanings as in section 16.

Textual Amendments

F256Words in s. 51(1)(a) substituted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 46; S.I. 1996/778, art. 2(5)(a), Sch. Pt. V; S.I. 1997/664, art. 2(3), Sch. Pt. II

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Marginal Citations

Supervision of formerly certified schemesE+W+S

52 Supervision of schemes which have ceased to be certified.E+W+S

(1)Section 53 shall apply for the purpose of making provision for securing the continued supervision of [F257salary related] occupational pension schemes as respects which subsection (2) applies F258...

(2)This subsection applies as respects any [F259salary related] occupational pension scheme, other than a public service pension scheme, where—

[F260(a)the scheme has ceased to be a contracted-out scheme, and

(b)any persons remain who fall within any of the following categories.]

[F261(2A)Those categories are—

(a)any persons entitled to receive, or having accrued rights to—

(i)guaranteed minimum pensions, or

(ii)pensions under the scheme attributable to service on or after the principal appointed day but before the scheme ceased to be contracted-out,

F262(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F263(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ]

F264(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F265(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F265(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F265(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

53 Supervision: former contracted-out schemes.E+W+S

[F266(1)The [F267Inland Revenue] may direct the trustees or managers of the scheme, or the employer, to take or refrain from taking such steps as the [F267Inland Revenue] may specify in writing; and such a direction shall be final and binding on the person directed and any person claiming under him.

(1A)An appeal on a point of law shall lie to the High Court or, in Scotland, the Court of Session from a direction under subsection (1) at the instance of the trustees or managers or the employer, or any person claiming under them.

(1B)A direction under subsection (1) shall be enforceable—

(a)in England and Wales, in [F268the county court] as if it were an order of that court, and

(b)in Scotland, by the sheriff, as if it were an order of the sheriff and whether or not the sheriff could himself have given such an order]

[F269(1C)But where a direction under subsection (1) conflicts with a freezing order made by the Regulatory Authority under section 23 of the Pensions Act 2004 in relation to the scheme then, during the period for which the freezing order has effect, the direction to the extent that it conflicts with the freezing order—

(a)is not binding as described in subsection (1), and

(b)is not enforceable as described in subsection (1B).]

F270(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F271(3)If a certificate has been issued under subsection (2) of section 50 and has not been cancelled under subsection (3) of that section, any liabilities in respect of such entitlement or rights as are referred to in section 52(2A)(a) F272... must, except in prescribed circumstances, be discharged (subject to any directions under subsection (1)) in a prescribed manner and within a prescribed period or such longer period as the [F267Inland Revenue] may allow].

F273(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F273(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F266S. 53(1)-(1B) substituted for s. 53(1) (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 48(a); S.I. 1997/664, art. 2(3), Sch. Pt. II

F267Words in s. 53 substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 52; S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F268Words in s. 53(1B)(a) substituted (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 52; S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F271S. 53(3) substituted (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 48(c); S.I. 1996/778, art. 2(5)(a), Sch. Pt. V; S.I. 1997/664, art. 2(3), Sch. Pt. II

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F27454 Supervision: former appropriate personal pension schemes.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State scheme premiumsE+W+S

55 Payment of state scheme premiums on termination of certified status.E+W+S

F275(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F276(2)Where—

(a)an earner is serving in employment which is contracted-out employment by reference to an occupational pension scheme F277... ,

(b)paragraph (a) ceases to apply, by reason of any of the following circumstances, before the earner attains the scheme’s normal pension age or (if earlier) the end of the tax year preceding that in which the earner attains pensionable age, and

(c)the earner has served for less than two years in the employment,

the prescribed person [F278shall, if subsection (2B) applies, pay and otherwise] may elect to pay a premium under this subsection (referred to in this Act as a “contributions equivalent premium”).

(2A)The circumstances referred to in subsection (2) are that—

(a)the earner’s service in the employment ceases otherwise than on the earner’s death,

(b)the earner ceases to be a member of the scheme otherwise than on the earner’s death,

(c)the earner’s service in the employment ceases on the earner’s death and the earner dies leaving a [F279widow, widower or surviving civil partner],

(d)the scheme is wound up,

(e)the scheme ceases to be a contracted-out occupational pension scheme;

F280... ]

[F281(2B)Except in prescribed circumstances, this subsection applies in any case where the earner has no accrued right to any benefit under the scheme.

(2C)Where a contributions equivalent premium is required to be paid in respect of an earner by virtue of subsection (2), the prescribed person must notify the Inland Revenue of that fact within the prescribed period and in the prescribed manner.]

F282(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F282(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F282(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F282(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F275S. 55(1) repealed (6.4.1997) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 50, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

F276S. 55(2)(2A) substituted for s. 52(2) (6.4.1996 for specified purposes, 6.4.1997 in so far as not already in force) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), ss. 141(1), 180(1); S.I. 1996/778, art. 2(5)(a), Sch. Pt. V; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

F277Words in s. 55(2)(a) repealed (6.4.2012 being "the abolition date" for the purposes of s. 15(1) of the amending Act) by Pensions Act 2007 (c. 22), ss. 15(4), 27(7), 30(2)(b), Sch. 4 para. 26, Sch. 7 Pt. 6 (with Sch. 4 Pt. 3); S.I. 2011/1267, art. 2(a)

F278Words in s. 55(2) inserted (11.11.1999 for specified purposes, 6.4.2002 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 7(1)(a); S.I. 2001/4049, art. 2(3)(a)

F280Words in s. 55(2A) repealed (11.11.1999 for specified purposes, 6.4.2002 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 7(1)(b), Sch. 13 Pt. I; S.I. 2001/4049, art. 2(3)(a)

F281S. 55(2B)(2C) inserted (11.11.1999 for specified purposes, 6.4.2002 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(5)(a), Sch. 2 para. 7(1)(c); S.I. 2001/4049, art. 2(3)(a)

F282S. 55(3)-(6) repealed (6.4.1997) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 50, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

Modifications etc. (not altering text)

Commencement Information

I2Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

F28356 Provisions supplementary to s. 55.E+W+S

F284(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)A premium under section 55 shall be paid by the prescribed person to the [F285Inland Revenue] within the prescribed period F286...

F287(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F288(4) Where under the rules of the scheme, transfer credits have been allowed—

(a)in respect of the earner’s rights under another scheme, or

(b)in respect of the earner by reference to the payment of a cash transfer sum (within the meaning of [F283Chapter 2 of Part 4ZA]) to the trustees or managers of the scheme by the trustees or managers of another occupational pension scheme,]

the reference in section 55(2) to employment which is contracted-out by reference to the scheme shall include references to employment in any period of linked qualifying service which was contracted-out employment by reference to the other scheme.

F289(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F290(6)Subject to regulations under paragraph 1 of Schedule 2, service in any employment which ceases with the death of the employer shall be treated for the purposes of section 55(2A) as ceasing immediately before the death]

[F291(7)Where a premium under section 55 is payable by the Board of the Pension Protection Fund by virtue of a transfer under section 161 of the Pensions Act 2004 (effect of the Board assuming responsibility for an occupational pension scheme), then, subject to subsection (8), sections 55 to 68 apply with such modifications as may be prescribed in relation to that premium.

(8)A premium under section 55 in respect of an earner ceases to be payable if—

(a)the liability to pay the premium is transferred to the Board of the Pension Protection Fund by virtue of section 161 of the Pensions Act 2004, and

(b)prescribed requirements are met.]

Textual Amendments

F283Words in s. 56(4)(b) substituted (6.4.2015 until the coming into force of the repeal of this section by 2014 c. 19, Sch. 13) by Pension Schemes Act 2015 (c. 8), s. 89(3)(b), Sch. 4 para. 6 (with s. 87)

F284S. 56(1) repealed (6.4.1997) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 51(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

F285Words in s. 56(2) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 54; S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F286Words in s. 56(2) repealed (6.4.1997) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 51(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

F287S. 56(3) repealed (6.4.1997) (with savings for existing state scheme premiums) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 51(a), Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. II (with art. 4(2)(3))

F288Words in s. 56(4) subst