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Regulation 17A

[F1SCHEDULE 2E+WPENSION SHARING ON DIVORCE OR NULLITY OF MARRIAGE [F2OR, DISSOLUTION OR NULLITY OF CIVIL PARTNERSHIP]

Textual Amendments

Discharge of liability in respect of a pension creditE+W

1.—(1) Where the Secretary of State discharges his liability in respect of a pension credit in accordance with sub-paragraph (2) of paragraph 1 of Schedule 5 to the 1999 Act (pension credits: mode of discharge: funded pension schemes—internal transfers) the appropriate rights shall be invested under paragraph 2 below to provide for the purchase from an [F3insurer] of an annuity which complies with the requirements of sub-paragraph (5) below.

(2) Where sub-paragraph (1) applies, the person entitled to the pension credit may elect, by giving written notice to the Secretary of State, the authorised fund or funds in which the appropriate rights are to be invested.

(3) The Secretary of State shall notify in writing the person who has made an election under sub-paragraph (2) of the Secretary of State’s acceptance of that election.

(4) Where an election has been made under sub-paragraph (2) it shall not be varied or cancelled after liability in respect of the pension credit has been discharged by the Secretary of State.

(5) An annuity complies with the requirements of this sub-paragraph if—

(a)it provides a pension which commences not earlier than normal benefit age and is payable to the pension credit member for life;

[F4(b)any dependant’s pension which is payable under it is payable only on the death of the pension credit member after that member has reached normal benefit age and is payable to the dependant for life: this is subject to paragraph (6);]

(c)it is not capable in whole or in part of surrender, assignment or commutation.

[F5(6) In the case of a person who is a child to whom—

(a)Part H of the 1995 Regulations (child allowance) applies;

(b)regulation 2.E.9 or 3.E.9 of the 2008 Regulations applies (meaning of dependant child); or

(c)regulation 122 of the 2015 Regulations (eligible child) applies,

a pension referred to in paragraph (5)(b) ceases to be payable when that person ceases to be a dependant child within the meaning of whichever of those Regulations applies.

(7) Sub-paragraph (5) does not apply where, in accordance with sub-paragraph (5C) of paragraph 4, a pension credit member elects to be provided with alternative benefits referred to in sub-paragraph (5B) of that paragraph.]

Textual Amendments

Investment of appropriate rightsE+W

2.  Any appropriate rights invested under this paragraph shall be invested by the Secretary of State as soon as is reasonably practicable in accordance with any notice given under sub-paragraph (2) of paragraph 1.

Discharge of liability in respect of a pension credit following the death of the person entitled to the pension creditE+W

3.—(1) The Secretary of State shall, following the death of the person entitled to a pension credit before liability in respect of that credit has been discharged, discharge his liability in respect of that credit by making a payment of a lump sum in accordance with paragraph (2)(a)(i) of regulation 6 of the Pension Sharing (Implementation and Discharge of Liability) Regulations 2000.

(2) The lump sum payable under this paragraph shall be paid in accordance with regulation 15(3) (payments by the Secretary of State) of these Regulations.

Pension credit benefitE+W

4.—(1) The pension credit benefit to which a pension credit member shall be entitled under the AVC scheme shall consist of a pension [F6(including, where appropriate, a pension commencement lump sum)].

(2) A pension credit member shall be entitled to the payment of the pension credit benefit when he reaches normal benefit age.

(3) A pension payable in accordance with this paragraph shall be payable to the pension credit member for life.

(4) The value of the pension referred to in [F7sub-paragraph (1) and any alternative benefit referred to in sub-paragraph (5A)] shall be equal to the value of the pension credit rights which have accrued to or in respect of the pension credit member.

(5) Not earlier than 3 months before the date he reaches normal benefit age, a pension credit member, by giving notice to the Secretary of State, shall make a benefits election which shall specify—

(a)whether only a pension payable for life is to be provided;

[F8(aa)whether a pension commencement lump sum and a pension payable for life is to be provided;]

(b)for whom, if anyone, a dependant’s pension is to be provided;

(c)if more than one such pension is to be provided, either—

(i)the proportion of the amount secured by the total investments made under paragraph 2 that is to be applied to the purchase of each of them; or

(ii)the dependants' pensions to be provided expressed as a percentage of the pension for life;

(d)in respect of each pension to be provided, whether the annual rate of the pension—

(i)is to be fixed; or

(ii)is to vary in accordance with the Index; or

(iii)is to increase yearly by a specified percentage or, if lower than that percentage, by the increase in the Index for the year in question; and

(e)the authorised provider who is to provide each pension.

[F9(5A) An authorised provider selected by the Secretary of State—

(a)must provide a pension credit member with an option to receive the benefits referred to in sub-paragraph (5)(a), (aa) and (b); and

(b)may, as from 6th April 2015, provide such a member with an option to receive the alternative benefits referred to in sub-paragraph (5B).

(5B) Those alternative benefits are benefits that are equivalent in value to the benefits referred to in sub-paragraph (5)(a), (aa) and (b) and which comply with the requirements of the 2014 Act.

(5C) A member who wishes to be provided with such alternative benefits must elect to do so by giving the Secretary of State notice in writing not earlier than 3 months before attaining normal benefit age.]

(6) For the purposes of this Schedule the authorised provider must meet the requirements referred to in regulations 12 to 14 of the Pension Sharing (Pension Credit Benefit) Regulations 2000.

[F10(7) Upon receipt of a notice of election under sub-paragraph (5) [F11, or as the case may be, sub-paragraph (5C)] the Secretary of State shall, as soon as reasonably practicable, realise the investments made under paragraph 2 and—

(a)where sub-paragraph (5)(aa) does not apply, apply the proceeds to the purchase of an annuity from the authorised provider specified in the notice of election;

(b)where that sub-paragraph does apply—

(i)pay the percentage of the proceeds specified in the notice of election as a pension commencement lump sum, and

(ii)apply the balance of those proceeds to the purchase of an annuity from the authorised provider specified in that notice,

[F12(c)where sub-paragraph (5C) applies, pay the alternative benefits the pension credit member has elected to be provided with,]

and not otherwise.]

[F13(8) Where the conditions in sub-paragraph (9) are satisfied, the Secretary of State may realise the investments made under paragraph 2 and apply the proceeds to the purchase of benefits under these Regulations from an insurer that the Secretary of State considers—

(a)suitable,

(b)will satisfy the requirements of regulations 12 to 14 of the Pension Sharing (Pension Credit Benefit) Regulations 2000,

(c)will comply with the requirements of the 2014 Act, and

(d)will fully discharge its liability for payment of benefits under these Regulations.

(9) Those conditions are that the pension credit member has—

(a)attained normal benefit age on, or after, 1st May 2001, and

(b)attained the age of 75 and not given notice of an election under sub-paragraph (5) before doing so.

(10) Paragraph (8) applies notwithstanding that the benefits are payable to a pension credit member by virtue of that member being a member of the NHS Pension Scheme under—

(a)Part E or regulation L1 of the 1995 Regulations (benefits for members and preserved pension);

(b)regulation 2.D.1, 2.D.4, 2.D.5, 2.D.8, 2.D.10, 2.D.11, 3.D.1, 3.D.4, 3.D.5, 3.D.7, or 3.D.9 of the 2008 Regulations (normal retirement pensions, actuarially reduced pensions, ill health pensions and early retirement pensions); or

(c)regulation 73, 79, 81, 82, 84, 90 or 94 of the 2015 Regulations (age retirement, early retirement, partial retirement and ill-health pensions).]

Textual Amendments

Outward transfersE+W

5.—(1) The Secretary of State shall, upon receipt of a notice in writing under section 101F(1) of the 1993 Act (power to give transfer notice) from an eligible member, pay a transfer value in accordance with the provisions of Chapter II of Part IVA of the 1993 Act (requirements relating to pension credit benefit: transfer values) and Part III of the Pension Sharing (Pension Credit Benefit) Regulations 2000 (provision of benefits).

(2) The transfer value referred to in sub-paragraph (1) shall represent the value of the appropriate rights invested under paragraph 2 calculated in accordance with regulation 24 of the Pension Sharing (Pension Credit Benefit) Regulations 2000 (manner of calculation and verification of cash equivalents).

Commutation of the whole of pension credit benefit before normal benefit ageE+W

6.—(1) A pension credit member shall be entitled to the commutation of the whole of his pension credit benefit before having reached normal benefit age in the circumstances [F14referred to in paragraphs (b), (e) and (f) of the lump sum rule in section 166(1) of the 2004 Act].

(2) In the case of a pension credit member to whom this paragraph applies, the Secretary of State may realise the investments made under paragraph 2 without purchasing an annuity and the proceeds shall be payable to the pension credit member as a lump sum.

Textual Amendments

Commutation of the whole of pension credit benefit at normal benefit ageE+W

7.—(1) A pension credit member shall be entitled to the commutation of the whole of his pension credit benefit at normal benefit age in the circumstances described in sub-paragraph (2).

(2) The circumstances described in this sub-paragraph are—

(a)the pension credit member is suffering from serious ill health at normal benefit age; or

[F15(b)the total benefits payable meet the requirements of regulation 12 of the 2009 Regulations.]

(3) In the case of a pension credit member to whom this paragraph applies, the Secretary of State may realise the investments made under paragraph 2 without purchasing an annuity and the proceeds shall be payable to the pension credit member as a lump sum.

(4) In this paragraph “serious ill health” means ill health which is such as to give rise to a life expectancy of less than one year from the date on which the payment of the pension credit benefit of the pension credit member is applied for.

Textual Amendments

Pension credit member dies before pension credit benefit becomes payableE+W

8.  If a pension credit member dies before his pension under the AVC scheme becomes payable under paragraph 4 of this Schedule, the Secretary of State may realise the investments made under paragraph 2 without purchasing an annuity and the proceeds shall be payable as a lump sum in accordance with regulation 15(3) of these Regulations.

Pension credit member dies after pension credit benefit becomes payableE+W

9.  If a pension credit member dies within the period of 5 years beginning with the date upon which payments of pension credit benefit under paragraph 4 of this Schedule commence, the balance that would have been payable during the remainder of that period, if the payments of pension credit benefit had continued at the rate in force at the time of the pension credit member’s death, shall be payable as a lump sum in accordance with regulation 15(3) of these Regulations.

Excluded membershipE+W

10.  Where a pension credit member is also a participator in the AVC scheme, any period which may count for any purpose in connection with his pension credit benefit shall not be taken into account for the purpose of ascertaining his entitlement to, or as the case may be, the calculation of, benefits other than pension credit benefits under the AVC scheme.

Payment of lump sum on deathE+W

11.—(1) Where a lump sum is payable under any of paragraphs 3, 8 or 9 of this Schedule, unless sub-paragraph (2) or (3) below applies, the lump sum shall be paid to the personal representative of the person entitled to a pension credit or, as the case may be, the pension credit member.

(2) Where the person entitled to a pension credit or, as the case may be, the pension credit member dies and leaves a [F16widow, widower, [F17surviving scheme partner] or surviving civil partner], the lump sum may be paid to the [F16widow, widower, [F17surviving scheme partner] or surviving civil partner], unless—

(a)the person entitled to a pension credit or, as the case may be, the pension credit member has given notice to the Secretary of State in accordance with sub-paragraph (4) below that the [F16widow, widower, [F17surviving scheme partner] or surviving civil partner] is not to receive the payment, and has not revoked that notice; or

(b)sub-paragraph (3) below applies.

(3) Where the person entitled to a pension credit or, as the case may be, the pension credit member has given notice to the Secretary of State in accordance with sub-paragraphs (4) and (5) below that the lump sum is to be paid to a person specified in the notice, and has not revoked that notice, the lump sum may be paid to that person unless—

(a)that person has died before the payment can be made; or

(b)payment to that person is not, in the opinion of the Secretary of State, reasonably practicable.

(4) Notice to the Secretary of State for the purpose of sub-paragraph (2) or (3) above—

(a)shall be given only by a person entitled to a pension credit or, as the case may be, a pension credit member under the AVC scheme;

(b)shall be given in writing; and

(c)may at any time be revoked in writing,

[F18(d)shall nominate the whole of the lump sum to a nominee and, in the case of a notice that specifies more than one person, shall also specify the percentage of the lump sum to be paid to each such person,]

and a person entitled to a pension credit or, as the case may be, a pension credit member who revokes such a notice may give further notice for the purpose of one of those sub-paragraphs.

[F19(5) A notice given under subparagraph (3) must specify one or more persons who may be—

(a)an individual;

(b)a body corporate;

(c)an unincorporated body;

(d)the member’s personal representatives,

but must not specify one or more persons referred to in paragraph (a) together with a body referred to in either of paragraphs (b) or (c).]

Textual Amendments

Miscellaneous provisionsE+W

12.  Regulations 17 (payments in respect of deceased persons), 18 (benefits not assignable on bankruptcy) and 21 (determination of questions) of these Regulations shall apply in respect of a person entitled to a pension credit or, as the case may be, a pension credit member.

[F20Offset for crime, negligence or fraudE+W

13.—(1) This paragraph applies in relation to pension credit benefit which arises by virtue of pension credit rights which are derived from an employer’s contributions paid on or after the date on which the AVC Regulations came into force in respect of the relevant participator.

(2) Where paragraph (3) applies, the Secretary of State may reduce the amount of any pension credit benefit payable to or in respect of a pension credit member under this Schedule to the extent set out, and subject to the conditions specified, in whichever of the regulations referred to in that paragraph applies.

(3) This paragraph applies where on or after the date these Regulations come into force—

(a)in respect of a relevant pension credit member the circumstances set out in whichever of the following regulations applies have occurred—

(i)regulation T5 of the 1995 Regulations (offset for crime, negligence or fraud);

(ii)regulation 2.J.6 or 3.J.6 of the 2008 Regulations (reduction in benefits in cases where loss caused by member’s crime, negligence or fraud);

(iii)paragraph 11 of Schedule 3 to the 2015 Regulations (offset of benefits), and

(b)there has been a loss to public funds.

(4) In this paragraph—

“relevant pension credit member” means a pension credit member who is also a member of the NHS Pension Scheme;

“relevant participator” means the participator in relation to whose rights under the AVC scheme the pension sharing order or provision, which gave the pension credit member in question entitlement to a pension credit, was made.]

Textual Amendments

[F21Loss of rights to benefitsE+W

14.—(1) Where paragraph (2) applies, the Secretary of State may direct that all or any part of any rights to pension credit benefit a pension credit member has under this Schedule and which arise by virtue of an employer’s contributions paid on or after the date on which the AVC Regulations come into force in respect of a relevant participator, are to be forfeited.

(2) This paragraph applies where on or after the date these Regulations come into force—

(a)that pension credit member commits and is convicted of an offence referred to in—

(i)regulation T6 of the 1995 Regulations (loss of rights to benefits);

(ii)regulation 2.J.7 or 3.J.7 of the 2008 Regulations (forfeiture of rights to benefits), or

(iii)paragraph 12 of Schedule 3 to the 2015 Regulations (forfeiture of rights to benefits), and

(b)the circumstances are such that a direction may be made by the Secretary of State under whichever of those regulations applies.

(3) In this paragraph “relevant participator” means the participator in relation to whose rights under the AVC scheme the pension sharing order or provision, which gave the pension credit member in question entitlement to a pension credit, was made.]]

Textual Amendments