C1C2C3C4C5Part III Certification of Pension Schemes and Effects on Members’ State Scheme Rights and Duties

Annotations:
Modifications etc. (not altering text)
C2

Pt. III: power to modify conferred (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

Chapter I Certification

Preliminary

I18 Meaning of “contracted-out employment”, “guaranteed minimum pension” and “minimum payment”.

1

The employment of an earner in employed earner’s employment is “contracted-out employment” in relation to him during any period in whichF8—

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 F3Inland Revenue in accordance with this Chapter stating that the employment is contracted-out employment by reference to the scheme.

F91A

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 F5widow's, widower’s F11, 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 F6the applicable limit (or the prescribed equivalents if he is paid otherwise than weekly);

F2and for the purposes of this subsection “rebate percentage” means the appropriate flat rate percentage F10for 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).

F72A

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.

3

Regulations may make provision—

a

for the manner in which, and time at which or period within which, minimum payments are to be made;

b

for the recovery by employers of amounts in respect of the whole or part of minimum payments by deduction from earnings;

c

for calculating the amounts payable according to a scale prepared from time to time by the Secretary of State or otherwise adjusting them so as to avoid fractional amounts or otherwise facilitate computation;

d

for requiring that the liability in respect of a payment made in a tax week, in so far as the liability depends on any conditions as to a person’s age on retirement, shall be determined as at the beginning of the week or as at the end of it;

e

for securing that liability is not avoided or reduced by the payment of earnings being made in accordance with any practice which is abnormal for the employment in respect of which the earnings are paid;

f

without prejudice to paragraph (e), for enabling the F4Inland Revenue, where F4they are satisfied as to the existence of any practice in respect of the payment of earnings whereby the incidence of minimum payments is avoided or reduced by means of irregular or unequal payments of earnings, to give directions for securing that minimum payments are payable as if that practice were not followed;

g

for the intervals at which, for the purposes of minimum payments, payments of earnings are to be treated as made; and

h

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.

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.

F15

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