The Occupational Pension Schemes (Discharge of Liability) Regulations 1997

Other requirements applying to policies of insurance and annuity contracts

5.  The requirements referred to in section 19(4)(d) of the 1993 Act (policy of insurance or annuity contract appropriate if it satisfies such other requirements as may be prescribed) are—

(a) that the insurance company with which the policy is taken out or the contract entered into assumes an obligation to the earner in question or to trustees of a trust for the benefit of the earner and, if appropriate, dependants of his, to pay the benefits secured by the policy or contract to him or, as the case may be, to dependants of his, or to the trustees of such a trust;

(b) that, the policy or contract contains, or is endorsed with, terms so as to provide for any increase, which would have been applicable as a consequence of section 51 (annual increase in rate of pension) and section 52 (restriction on increase where member is under 55) of the 1995 Act had the discharge of liability not taken place, to apply to the benefits which have become secured or been replaced by that policy or contract;

(c) that, if any guaranteed minimum pension is due or prospectively due to the earner in question, the policy or contract contains, or is endorsed with, terms so as to provide—

(i) that the annuity to be paid thereunder to or for his benefit will be at least equal to the guaranteed minimum pension due to him, or, as the case may be, prospectively due to him, at pensionable age, subject to section 15 (increase of guaranteed minimum pension) or section 16 (revaluation of earnings factors) of the 1993 Act, and

(ii) in the case where the earner dies leaving a widow or widower, that the annuity payable for the widow’s or widower’s benefit will be at least equal to the guaranteed minimum pension due or prospectively due to the widow or widower, and

(iii) in each case mentioned in sub-paragraphs (i) and (ii), that any increase of guaranteed minimum pension under Chapter II of Part V of the 1993 Act(1) results in a similar increase in the annuity.

(1)

Chapter II Part V was amended by sections 53(4) and 55 of the Pensions Act 1995.