36U.K.Schedule 28 to FA 2004 (registered pension schemes) is amended as follows.
37U.K.In paragraph 3 (definition of member's lifetime annuity) after sub-paragraph (1) insert—
“(1A)For the purposes of this Part, but subject to any provision made under sub-paragraph (2C)(za), an annuity payable to the member is also a lifetime annuity if—
(a)it is payable by an insurance company,
(b)the member becomes entitled to it on or after 6 April 2015, and
(c)it is payable until the member's death or until the later of the member's death and the end of a term certain.”
38U.K.In paragraph 6 (definition of member's short-term annuity) after sub-paragraph (1) insert—
“(1ZA)For the purposes of this Part, but subject to any provision made under sub-paragraph (1C)(za), an annuity payable to the member is also a short-term annuity if—
(a)it is purchased by the application of sums or assets representing the whole or any part of the member's drawdown pension fund, or of the member's flexi-access drawdown fund, in respect of an arrangement,
(b)it is payable by an insurance company,
(c)the member becomes entitled to it on or after 6 April 2015, and
(d)it is payable for a term which does not exceed five years.”
39U.K.In paragraph 17 (definition of dependants' annuity) after sub-paragraph (1) insert—
“(1ZA)For the purposes of this Part, but subject to any provision made under sub-paragraph (4)(za), an annuity payable to a dependant is also a dependants' annuity if—
(a)either—
(i)it is purchased together with a lifetime annuity payable to the member and the member becomes entitled to that lifetime annuity on or after 6 April 2015, or
(ii)it is purchased after the member's death and the dependant becomes entitled to it on or after 6 April 2015,
(b)it is payable by an insurance company,
(c)where the dependant is not the member's child, it is payable until the dependant's death or until the earliest of the dependant's marrying, entering into a civil partnership or dying, and
(d)where the dependant is the member's child, it is payable until the earlier of the dependant's ceasing to be a dependant or dying, or until the earliest of the dependant's marrying, entering into a civil partnership, ceasing to be a dependant or dying.”
40U.K.In paragraph 20 (definition of dependants' short-term annuity) after sub-paragraph (1) insert—
“(1ZA)For the purposes of this Part, but subject to any provision made under sub-paragraph (1C)(za), an annuity payable to a dependant is also a dependants' short-term annuity if—
(a)it is purchased by the application of sums or assets representing the whole or any part of the dependant's drawdown pension fund, or of the dependant's flexi-access drawdown fund, in respect of an arrangement,
(b)it is payable by an insurance company,
(c)the dependant becomes entitled to it on or after 6 April 2015, and
(d)it is payable for a term which does not exceed five years and ends before the dependant dies.”
41U.K.In section 165(1) of FA 2004 (the pension rules) in pension rule 2 (death of a member)—
(a)in the first sentence after “an annuity,” insert “ and if in the case of an annuity that day was before 6 April 2015, ”,
(b)after that sentence insert—
“If the member becomes entitled to an annuity on or after 6 April 2015 and the annuity is payable until the later of the member's death and the end of a term certain, payment of the annuity may continue to be made (to any person) until the end of that term.”, and
(c)in the final sentence for “But no other” substitute “ Except as provided by the preceding provisions of this rule, no ”.
42U.K.Schedule 28 to FA 2004 (registered pension schemes) is further amended as follows.
43U.K.In paragraph 3(1) (definition of member's lifetime annuity) after paragraph (b) insert—
“(ba)the member becomes entitled to it before 6 April 2015,”.
44(1)In paragraph 3(2C) (regulations for cases where lifetime annuity ceases and funds are transferred)—U.K.
(a)before paragraph (a) insert—
“(za)in a case where—
(i)a new annuity becomes payable,
(ii)the member becomes entitled to it on or after 6 April 2015,
(iii)it would be a lifetime annuity if any provision made under this paragraph were ignored,
(iv)the terms of the contract for it are such that there will or could be decreases in its amount other than allowed decreases (see sub-paragraph (2E)), and
(v)any other conditions prescribed by the regulations are met,
the new annuity is not a lifetime annuity for the purposes of this Part,”, and
(b)in paragraph (b) for “any other case” substitute “ a case other than one where a new lifetime annuity becomes payable ”.
(2)In paragraph 3 after sub-paragraph (2D) insert—
“(2E)In sub-paragraph (2C)(za)(iv) “allowed decreases” means decreases from time to time allowed by regulations under sub-paragraph (1)(d); and any such regulations are to be treated as having effect for this purpose.”
45U.K.In paragraph 6(1) (definition of member's short-term annuity) after paragraph (c) insert—
“(ca)the member becomes entitled to it before 6 April 2015,”.
46(1)In paragraph 6(1C) (regulations for cases where short-term annuity ceases and funds are transferred)—U.K.
(a)before paragraph (a) insert—
“(za)in a case where—
(i)a new annuity becomes payable,
(ii)the member becomes entitled to it on or after 6 April 2015,
(iii)it would be a short-term annuity if any provision made under this paragraph were ignored,
(iv)the terms of the contract for it are such that there will or could be decreases in its amount other than allowed decreases (see sub-paragraph (1E)), and
(v)any other conditions prescribed by the regulations are met,
the new annuity is not a short-term annuity for the purposes of this Part,”, and
(b)in paragraph (b) for “any other case” substitute “ a case other than one where a new short-term annuity becomes payable ”.
(2)In paragraph 6 after sub-paragraph (1D) insert—
“(1E)In sub-paragraph (1C)(za)(iv) “allowed decreases” means decreases from time to time allowed by regulations under sub-paragraph (1)(e); and any such regulations are to be treated as having effect for this purpose.”
47U.K.In paragraph 17(1) (definition of dependants' annuity) for paragraph (za) substitute—
“(za)either—
(i)it is purchased together with a lifetime annuity payable to the member and the member becomes entitled to that lifetime annuity before 6 April 2015, or
(ii)it is purchased after the member's death and the dependant becomes entitled to it before 6 April 2015,”.
48U.K.In paragraph 17(1A) for “sub-paragraph (1)(za)” substitute “ sub-paragraphs (1)(za) and (1ZA)(a) ”.
49(1)In paragraph 17(4) (regulations for cases where dependants' annuity ceases and funds are transferred)—U.K.
(a)before paragraph (a) insert—
“(za)in a case where—
(i)a new annuity becomes payable,
(ii)the dependant becomes entitled to it on or after 6 April 2015,
(iii)it would be a dependants' annuity if any provision made under this paragraph were ignored,
(iv)the terms of the contract for it are such that there will or could be decreases in its amount other than allowed decreases (see sub-paragraph (6)), and
(v)any other conditions prescribed by the regulations are met,
the new annuity is not a dependants' annuity for the purposes of this Part,”, and
(b)in paragraph (b) for “any other case” substitute “a case other than one where a new dependants' annuity becomes payable”.
(2)In paragraph 17 after sub-paragraph (5) insert—
“(6)In sub-paragraph (4)(za)(iv) “allowed decreases” means decreases from time to time allowed by regulations under sub-paragraph (1)(c); and any such regulations are to be treated as having effect for this purpose.”
50U.K.In paragraph 20(1) (definition of dependants' short-term annuity) after paragraph (c) insert—
“(ca)the dependant becomes entitled to it before 6 April 2015,”.
51(1)In paragraph 20(1C) (regulations for cases where dependants' short-term annuity ceases and funds are transferred)—U.K.
(a)before paragraph (a) insert—
“(za)in a case where—
(i)a new annuity becomes payable,
(ii)the dependant becomes entitled to it on or after 6 April 2015,
(iii)it would be a dependants' short-term annuity if any provision made under this paragraph were ignored,
(iv)the terms of the contract for it are such that there will or could be decreases in its amount other than allowed decreases (see sub-paragraph (1E)), and
(v)any other conditions prescribed by the regulations are met,
the new annuity is not a dependants' short-term annuity for the purposes of this Part,”, and
(b)in paragraph (b) for “any other case” substitute “a case other than one where a new dependants' short-term annuity becomes payable”.
(2)In paragraph 20 after sub-paragraph (1D) insert—
“(1E)In sub-paragraph (1C)(za)(iv) “allowed decreases” means decreases from time to time allowed by regulations under sub-paragraph (1)(e); and any such regulations are to be treated as having effect for this purpose.”
52U.K.In Schedule 16 to FA 2011 (benefits under pension schemes) in each of paragraphs 87 and 95 (entitlement to unsecured or alternatively secured pension on 5 April 2011) for “the reference” substitute “ a reference ”.