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(This note is not part of the Regulations)
These Regulations make provision in relation to the payment of a contributions equivalent premium (“CEP”) under section 55(2) of the Pension Schemes Act 1993 (c.48) or section 51(2) of the Pension Schemes (Northern Ireland) Act 1993 (c.49), when an assessment period has begun in relation to an occupational pension scheme or when the Board of the Pension Protection Fund (“the Board”) has assumed responsibility for the scheme.
A CEP is payable where a member of a scheme which has contracted-out of the state additional pension scheme leaves the scheme. Where the Board pays a CEP in respect of a member, compensation paid from the Pension Protection Fund in respect of a scheme right to a transfer payment or contribution refund shall be reduced to reflect this.
Regulation 2 applies where, before an assessment period (within the meaning of section 132 of the Pensions Act 2004 (c.35)) begins in relation to a scheme, the trustees or managers had already become liable to pay a CEP, but had not discharged their liability to do so. They may pay a CEP during the assessment period.
Regulation 3 applies where a member’s service ceases during the assessment period. The trustees or managers may elect to pay a CEP in respect of him.
Regulation 4 amends the Occupational Pension Schemes (Contracting-out) Regulations 1996 (S.I. 1996/1172) to prescribe that the Board is required to discharge its liability to pay a CEP where it has such a liability, the period in which the Board is to discharge such a liability and that the CEP will be paid out of the Pension Protection Fund rather than the resources of a scheme.
Regulation 5 makes provision for Northern Ireland similar to regulation 4 in respect of the Occupational Pension Schemes (Contracting-out) Regulations (Northern Ireland) 1996 (S.R. 1996 No. 493).
Regulation 6 prescribes the circumstances where a CEP ceases to be payable by the Board.
Regulation 7 makes provision for Northern Ireland similar to regulation 6.
Regulation 8 modifies the application of section 61 of the Pension Schemes Act 1993 (deduction of contributions equivalent premium from refund of scheme contributions) to deal with where the Board pays a CEP and the member is also entitled to compensation under paragraph 20 of Schedule 7 to the Pensions Act 2004 (compensation in respect of scheme right to transfer payment or contribution refund).
Regulation 9 makes provision for Northern Ireland similar to regulation 8 in respect of section 57 of the Pension Schemes (Northern Ireland) Act 1993.
These Regulations have only a negligible impact on business, charities and the voluntary sector. Publication of a full Regulatory Impact assessment is not necessary for such legislation.
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