The Pension Protection Fund (Compensation) Regulations 2005

[F1 Schemes where part of pension entitlement is determined on a career average revalued earnings basis: modification of paragraphs 8, 10, 11 and 14 of Schedule 7 to the Act E+W+S

27.— (1) This regulation applies to an occupational pension scheme where part of the pension entitlement is determined on a career average revalued earnings basis, that is to say by reference to the member’s earnings in each year of pensionable service applicable to that part, and where those earnings, or a proportion of those earnings accrued as a pension, may be revalued each year until the member attains normal pension age or the pension is put into payment.

(2) In their application to a scheme where part of the pension entitlement is determined on a career average revalued earnings basis, paragraphs 8 and 11 of Schedule 7 to the Act shall have effect with the following modifications—

(a) for sub-paragraph (5) substitute—

“(5) Subject to sub-paragraphs (6) and (7), the accrued amount is—

• X + Y,

where—

X is an amount equal to such initial annual rate of that part of the pension which is determined on a career average revalued earnings basis to which the member would have been entitled under the admissible rules had the member attained normal pension age when the pensionable service relating to that part of the pension ended, or in any case where the Board is satisfied that it is not possible to identify the initial annual rate of pension, such amount as the Board may determine, having regard to the admissible rules, and

Y is AR x PE x PS.

(5A) In sub-paragraph (5)—

“AR” is the active member’s annual accrual rate, under the admissible rules, in respect of that part of the pension which is not determined on a career average revalued earnings basis,

“PE” is the active member’s annual pensionable earnings, under the admissible rules, in respect of that part of the pension which is not determined on a career average revalued earnings basis, and

“PS” is the active member’s pensionable service, under the admissible rules, in years (including any fraction of a year) in respect of that part of the pension which is not determined on a career average revalued earnings basis.”,

(b) in sub-paragraph (6)—

(i) for “the pension” substitute “that part of the pension which is not determined on a career average revalued earnings basis”,

(ii) after “formula” insert “Y is AR x PE x PS”, and

(iii) for “the accrued amount” substitute “Y”, and

(c) in sub-paragraph (7)—

(i) after “formula” insert “Y is AR x PE x PS”, and

(ii) for “the accrued amount” substitute “Y”.

(3) In their application to a scheme where part of the pension entitlement is determined on a career average revalued earnings basis, paragraph 10 of Schedule 7 to the Act shall have effect with the following modifications—

(a) for sub-paragraph (4) substitute—

“(4) Subject to sub-paragraphs (5) and (6), the accrued amount is—

• X + Y,

where—

X is an amount equal to such amount of the scheme lump sum that relates to that part of the pension which is determined on a career average revalued earnings basis, to which the member would have been entitled under the admissible rules had the member attained normal pension age when the pensionable service relating to that scheme lump sum ended, or in any case where the Board is satisfied that it is not possible to identify the amount of scheme lump sum, such amount as the Board may determine, having regard to the admissible rules, and

Y is AR x PE x PS.

(4A) In sub-paragraph (4)—

“AR” is the active member’s annual accrual rate, under the admissible rules, in respect of the scheme lump sum that relates to that part of the pension which is not determined on a career average revalued earnings basis,

“PE” is the active member’s annual pensionable earnings, under the admissible rules, in respect of the scheme lump sum that relates to that part of the pension which is not determined on a career average revalued earnings basis, and

“PS” is the active member’s pensionable service, under the admissible rules, in years (including any fraction of a year) in respect of the scheme lump sum that relates to that part of the pension which is not determined on a career average revalued earnings basis.”,

(b) in sub-paragraph (5)—

(i) after “the scheme lump sum” insert “that relates to that part of the pension which is not determined on a career average revalued earnings basis”,

(ii) after “formula” insert “Y is AR x PE x PS”, and

(iii) for “the accrued amount” substitute “Y”, and

(c) in sub-paragraph (6)—

(i) after “formula” insert “Y is AR x PE x PS”, and

(ii) for “the accrued amount” substitute “Y”.

(4) In their application to a scheme where part of the pension entitlement is determined on a career average revalued earnings basis, paragraph 14 of Schedule 7 to the Act shall have effect with the following modifications—

(a) for sub-paragraph (5) substitute—

“(5) Subject to sub-paragraphs (6) and (7), the accrued amount is—

• X + Y,

where—

X is an amount equal to such amount of scheme lump sum that relates to that part of the pension which is determined on a career average revalued earnings basis, to which the member would have been entitled under the admissible rules had the member attained normal pension age when the pensionable service relating to that scheme lump sum ended, or in any case where the Board is satisfied that it is not possible to identify the amount of scheme lump sum, such amount as the Board may determine, having regard to the admissible rules, and

Y is AR x PE x PS.

(5A) In sub-paragraph (5)—

“AR” is the active member’s annual accrual rate, under the admissible rules, in respect of the scheme lump sum that relates to that part of the pension which is not determined on a career average revalued earnings basis,

“PE” is the active member’s annual pensionable earnings, under the admissible rules, in respect of the scheme lump sum that relates to that part of the pension which is not determined on a career average revalued earnings basis, and

“PS” is the active member’s pensionable service under the admissible rules, in years (including any fraction of a year) in respect of the scheme lump sum that relates to that part of the pension which is not determined on a career average revalued earnings basis.”,

(b) in sub-paragraph (6)—

(i) after “the scheme lump sum” insert “that relates to that part of the pension which is not determined on a career average revalued earnings basis”,

(ii) after “formula” insert “Y is AR x PE x PS”, and

(iii) for “the accrued amount” substitute “Y”, and

(c) in sub-paragraph (7)—

(i) after “formula” insert “Y is AR x PE x PS”, and

(ii) for “the accrued amount” substitute “Y”.]

Textual Amendments

F1 Pt. 11 inserted (6.4.2010) by Pension Protection Fund (Miscellaneous Amendments) Regulations 2010 (S.I. 2010/560), regs. 1(2)(b), 4(4)