|
|
|
|
|
|
|
Navigation
News
|
 |
Pensions Act 2004 (c. 35)(The document as of February, 2008) Page 30 Pages: P.1 | P.2 | P.3 | P.4 | P.5 | P.6 | P.7 | P.8 | P.9 | P.10 | P.11 | P.12 | P.13 | P.14 | P.15 | P.16 | P.17 | P.18 | P.19 | P.20 | P.21 | P.22 | P.23 | P.24 | P.25 | P.26 | P.27 | P.28 | P.29 | P.30 | P.31 | P.32 | P.33 | P.34 (3) Where, by virtue of this paragraph, periodic compensation is payable to a person under paragraph 11 or 15 before that person attains normal pension age-- (a) paragraph 12(2) applies as if the reference to the date on which the active member attains normal pension age were a reference to the date on which the compensation is payable by virtue of this paragraph, and (b) paragraph 17(2)(b) applies as if the reference to the date on which the deferred member attains normal pension age were a reference to the date on which the compensation is payable by virtue of this paragraph. Compensation cap26 (1) Where-- (a) a person becomes entitled to relevant compensation in respect of a benefit ("benefit A") under the scheme, and (b) sub-paragraph (2)(a) or (b) applies, the amount of the compensation must be restricted in accordance with sub-paragraph (3). (2) For the purposes of sub-paragraph (1)-- (a) this paragraph applies if-- (i) the annual value of benefit A exceeds the compensation cap, and (ii) paragraph (b)(i) does not apply, and (b) this paragraph applies if-- (i) at the same time as the person becomes entitled to relevant compensation in respect of benefit A he also becomes entitled to relevant compensation in respect of one or more other benefits under the scheme or a connected occupational pension scheme ("benefit or benefits B"), and (ii) the aggregate of the annual values of benefit A and benefit or benefits B exceeds the compensation cap. (3) Where the relevant compensation in respect of benefit A is required to be restricted in accordance with this sub-paragraph-- (a) if that compensation is within sub-paragraph (4)(a), the protected pension rate for the purposes of paragraph 3(3)(a) is the cap fraction of the rate determined in accordance with paragraph 3(5); (b) if that compensation is within sub-paragraph (4)(b), the protected notional pension for the purposes of paragraph 11(3)(a) is the cap fraction of the rate determined in accordance with paragraph 11(4); (c) if that compensation is within sub-paragraph (4)(c), the protected amount for the purposes of paragraph 14(3) is the cap fraction of the amount determined in accordance with paragraph 14(4); (d) if that compensation is within sub-paragraph (4)(d), the protected pension rate for the purposes of paragraph 15(3)(a) is the cap fraction of the rate determined in accordance with paragraph 15(4); (e) if that compensation is within sub-paragraph (4)(e), the protected amount for the purposes of paragraph 19(3) is the cap fraction of the amount determined in accordance with paragraph 19(4). (4) For the purposes of this paragraph "relevant compensation" means-- (a) periodic compensation under paragraph 3 (in a case to which sub-paragraph (7) of that paragraph applies), (b) periodic compensation under paragraph 11, (c) compensation under paragraph 14, (d) periodic compensation under paragraph 15, or (e) compensation under paragraph 19. (5) For the purposes of this paragraph, "the cap fraction" means-- ---Where--
(6) For the purposes of this paragraph the "annual value" of a benefit in respect of which a person has become entitled to relevant compensation means-- (a) if the relevant compensation is within sub-paragraph (4)(a) and neither paragraph (b) nor (c) below applies, the amount of the protected pension rate for the purposes of paragraph 3(3)(a); (b) if the relevant compensation is within sub-paragraph (4)(a) and is in respect of a pension of which a portion has been commuted for a lump sum, the amount which would have been the protected pension rate for those purposes had that portion not been commuted; (c) if the relevant compensation is within sub-paragraph (4)(a) and the person became entitled to a relevant lump sum under the scheme at the same time as he became entitled to the pension to which that compensation relates, an amount equal to the aggregate of-- (i) the protected pension rate for the purposes of paragraph 3(3)(a), and (ii) the annualised value of the relevant lump sum; (d) if the relevant compensation is within sub-paragraph (4)(b), the amount of the protected notional pension for the purposes of paragraph 11(3)(a); (e) if the relevant compensation is within sub-paragraph (4)(c), the annualised value of the protected amount for the purposes of paragraph 14(3); (f) if the relevant compensation is within sub-paragraph (4)(d), the amount of the protected pension rate for the purposes of paragraph 15(3)(a); (g) if the relevant compensation is within sub-paragraph (4)(e), the annualised value of the protected amount for the purposes of paragraph 19(3); and for the purposes of determining the annual value of a benefit any reduction required to be made by this paragraph is to be disregarded. (7) In this paragraph--
and for the purposes of this paragraph, except in prescribed circumstances, the scheme is connected with another occupational pension scheme if the same person is or was an employer in relation to both schemes. (8) For the purposes of sub-paragraph (6)(c) a lump sum under the scheme is a relevant lump sum if the person's entitlement to the lump sum-- (a) is attributable to his pensionable service, and (b) did not arise by virtue of any provision of the admissible rules of the scheme making special provision as to early payment of pension on grounds of ill health. (9) Regulations may provide for this paragraph to apply with prescribed modifications where a person becomes entitled to relevant compensation in respect of a benefit and he has previously-- (a) become entitled to relevant compensation in respect of a benefit or benefits under the scheme or a connected occupational pension scheme, or (b) become entitled to one or more lump sums under the scheme or a connected occupational pension scheme. (10) Regulations may prescribe sums which are to disregarded for the purposes of this paragraph. Increasing the compensation cap in line with earnings27 (1) This paragraph applies where, on a review under subsection (2) of section 148 of the Social Security Administration Act 1992 (c. 5) (review of general level of earnings obtaining in Great Britain) in a tax year, the Secretary of State concludes that the general level of earnings obtaining in Great Britain ("the new level") exceeds the general level at the end of the period mentioned in paragraph (a) or, as the case may be, the date determined under paragraph (b) of that subsection ("the old level"). (2) The Secretary of State must make an order under sub-paragraph (7) of paragraph 26 which has the effect of increasing the amount specified for the purposes of that sub-paragraph by the percentage by which the new level is greater than the old level. (3) The order must provide for the increase to have effect on and after the 1st April next following the end of the tax year to which the review relates. Annual increase in periodic compensation28 (1) This paragraph provides for the increases mentioned in sub-paragraph (3)(b) of paragraphs 3, 5, 8, 11, 15 and 22. (2) Where a person is entitled to periodic compensation under any of those paragraphs, he is entitled, on the indexation date, to an increase under this paragraph of-- (a) the appropriate percentage of the amount of the underlying rate immediately before that date, or (b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which he was so entitled. (3) In sub-paragraph (2)--
(4) Where paragraph 26(3) (compensation cap) applies to restrict the amount of periodic compensation under one of the paragraphs mentioned in sub-paragraph (1), the amount mentioned in sub-paragraph (3)(a) of the paragraph in question is attributable to post-1997 service and pre-1997 service in the same proportions as the amount so mentioned would have been so attributable had paragraph 26(3) not applied. (5) Where a portion of periodic compensation under one of the paragraphs mentioned in sub-paragraph (1) has been commuted under paragraph 24-- (a) for the purposes of sub-paragraph (2), the definition of "underlying rate" in sub-paragraph (3) applies as if the reference in paragraph (a) of the definition to the amount mentioned in sub-paragraph (3)(a) of the paragraph in question was a reference to that amount reduced by the commutation percentage, and (b) that amount (as so reduced) is attributable to post-1997 service and pre-1997 service in the same proportions as that amount would have been so attributable had no part of the periodic compensation been commuted. (6) In this paragraph--
(7) But in this paragraph, in relation to any relevant pension credit amount, "post-1997 service" and "pre-1997 service" have such meanings as may be prescribed. (8) In sub-paragraph (7), "relevant pension credit amount" means an amount mentioned in sub-paragraph (3)(a) of-- (a) paragraph 3, (b) paragraph 5, or (c) paragraph 15 as it applies by virtue of paragraph 21, which is attributable (directly or indirectly) to a pension credit. (9) This paragraph is subject to paragraph 29 (Board's power to alter rates of revaluation and indexation). Board's powers to alter rates of revaluation and indexation29 (1) The Board may determine the percentage that is to be the maximum revaluation rate for the purposes of paragraphs 12(4) and 17(4), and where it does so paragraphs 12(5) and 17(5) do not apply. (2) The Board may also determine the percentage that is to be the appropriate percentage for the purposes of paragraph 28 (and where it does so the definition of "appropriate percentage" in paragraph 28(3) does not apply). (3) Before making a determination under this paragraph the Board must-- (a) consult such persons as it considers appropriate, and (b) publish details of the proposed determination in such manner as it considers appropriate and consider any representations made in respect of it. (4) The rate determined under this paragraph may be nil. (5) A determination under this paragraph may be expressed so as to have effect for a limited period. (6) A determination under sub-paragraph (2)-- (a) has effect in relation to future increases under paragraph 28 only, and (b) may be expressed to have effect-- (i) in all cases (whether the entitlement to the periodic compensation first arose before or after the date the determination is made), or (ii) only in cases where entitlement to the periodic compensation first arose on or after a date determined by the Board. (7) Notice of any determination under this paragraph must be published in such manner as the Board considers appropriate. Secretary of State's powers to vary percentage paid as compensation30 (1) The Secretary of State may, on the recommendation of the Board, by order provide that any of the provisions mentioned in sub-paragraph (2) is to have effect as if a different percentage were substituted for the percentage specified in the provision on the passing of this Act ("the original percentage"). (2) The provisions are paragraphs 3(4)(a) and (b), 5(3), 7(2), 8(3), 10(2), 11(3), 14(3), 15(3), 19(3), 20(3) and 22(3) of this Schedule (percentage used to calculate periodic or lump sum compensation entitlement). (3) Subject to sub-paragraph (4), an order under sub-paragraph (1) has effect only in respect of any period for which the Board has, under paragraph 29-- (a) reduced the maximum revaluation rate for the purposes of paragraphs 12(4) and 17(4) to nil, and (b) reduced the appropriate percentage for the purposes of paragraph 28 to nil in all cases. (4) Sub-paragraph (3) does not prevent an order under sub-paragraph (1) having effect to the extent that it provides for paragraph 3(4)(a), 11(3), 14(3), 15(3), 19(3) or 20(3) (provisions where the original percentage is 90%) to have effect as if for the original percentage there were substituted a higher percentage. (5) Before making a recommendation for the purposes of sub-paragraph (1) the Board must-- (a) consult such persons as it considers appropriate, and (b) publish details of the proposed recommendation in such manner as it considers appropriate and consider any representations made in respect of it. (6) Subject to sub-paragraph (3), an order under this paragraph may have effect-- (a) for a limited period specified in the order; (b) in relation-- (i) to all payments of compensation which fall to be made after such date as may be specified in the order (whether the entitlement to the periodic compensation first arose before or after that date), or (ii) only to payments of compensation to which a person first becomes entitled after such a date. (7) The date specified under sub-paragraph (6)(b)(i) or (ii) must not be earlier than the date of the order. Special provision in relation to certain pensions in payment before the assessment date31 (1) The powers conferred by this paragraph are exercisable in relation to cases where-- (a) immediately before the assessment date, a person ("the pensioner") is entitled to present payment of a pension under the scheme rules ("the pre-assessment date pension"), but (b) the effect of disregarding rules within paragraphs (a) and (b) of paragraph 35(2) is that the pensioner is not entitled to compensation under paragraph 3(2) by reason of the pension or a part of the pension. (2) Regulations may provide-- (a) for the pensioner to be treated, for the purposes of the pension compensation provisions, as entitled, immediately before the assessment date, to present payment of a pension under the admissible rules, and (b) for the compensation payable under paragraph 3 in respect of that pension to be determined in the prescribed manner and, for this purpose, for any provision of this Schedule to be applied with such modifications as may be prescribed. (3) Regulations may also provide, in cases where-- (a) the pensioner is not treated as entitled to present payment of a pension by virtue of regulations under sub-paragraph (2), but (b) he is or may become entitled to compensation in respect of the pre-assessment date pension otherwise than under paragraph 3, for any provision of this Schedule to apply with such modifications as may be prescribed. Short periods of service which terminate on commencement of assessment period32 (1) This paragraph applies to a member of the scheme if-- (a) his pensionable service terminates on the commencement of the assessment period, and (b) as a result, he has rights, in relation to the scheme, under Chapter 5 of Part 4 of the Pension Schemes Act 1993 (c. 48) (early leavers: cash transfer sums and contribution refunds). (2) Where this paragraph applies, for the purposes of this Schedule the member is to be treated as if, immediately before the assessment date, he-- (a) had relevant accrued rights to benefits under the scheme (within the meaning of section 101AA(4) of that Act), and (b) did not have any other rights to benefits (other than benefits attributable (directly or indirectly) to a pension credit) under the scheme. Power to modify Schedule in its application to certain schemes33 Where the scheme is a prescribed scheme or a scheme of a prescribed description, this Schedule applies with such modifications as may be prescribed. Normal pension age34 (1) In this Schedule "normal pension age", in relation to the scheme and any pension or lump sum under it, means the age specified in the admissible rules as the earliest age at which the pension or lump sum becomes payable without actuarial adjustment (disregarding any admissible rule making special provision as to early payment on the grounds of ill health). (2) Where different ages are specified in relation to different parts of a pension or lump sum-- (a) this Schedule has effect as if those parts were separate pensions or, as the case may be, lump sums, and (b) references in relation to a part of the pension or lump sum to the normal pension age are to be read as references to the age specified in the admissible rules as the earliest age at which that part becomes payable under the scheme without actuarial adjustment (disregarding any special provision as to early payment on grounds of ill health or otherwise). (3) In any case where the Board is satisfied that it is not possible to identify the normal pension age from the admissible rules of the scheme, it may, having regard to those rules, determine how the normal pension age is to be determined. Scheme rules, admissible rules etc35 (1) In this Schedule, in relation to the scheme, the following expressions have the meaning given by this paragraph--
(2) The "admissible rules" means the scheme rules disregarding-- (a) in a case where sub-paragraph (3) applies, the recent rule changes, and (b) in any case, any scheme rule which comes into operation on, or operates by reference, to the winding up of the scheme or any associated event. (3) This sub-paragraph applies if the combined effect of the recent rule changes and recent discretionary increases is such that, if account were taken of those changes and increases in calculating the protected liabilities in relation to the scheme at the relevant time, those protected liabilities would be greater than they would be if all those changes and increases were disregarded. (4) In sub-paragraph (3) "the relevant time" means the time immediately before the assessment period which begins on the assessment date. (5) Subject to sub-paragraph (6), "recent rule changes" means-- (a) changes to the scheme rules which took effect in the period of three years ending with the assessment date, or were made in that period and took effect by reference to an earlier time, and (b) any scheme rules which come into operation on, or operate by reference to-- (i) an insolvency event in relation to the employer or any associated event, or (ii) any prescribed event relating to the future of the employer as a going concern. (6) "Recent rule changes" does not include-- (a) any scheme rules or changes attributable to paragraph 3 of Schedule 5 to the Social Security Act 1989 (c. 24), section 129 of the Pension Schemes Act 1993 (c. 48), section 117 of the Pensions Act 1995 (c. 26), section 31(4) of the Welfare Reform and Pensions Act 1999 (c. 30) or section 306 of this Act (overriding requirements), (b) any enactment, or any scheme rules or changes which are required or reasonably necessary to comply with an enactment, (c) any scheme rules or changes that come into operation on, or operate by reference to, the winding up of the scheme or any associated event, and (d) any scheme rules or changes of a prescribed description. (7) "Recent discretionary increase" means an increase in the rate of any pension in payment or postponed pension under the scheme rules which took effect in the period mentioned in sub-paragraph (5)(a). (8) For the purposes of sub-paragraph (7) an increase ("the relevant increase") in the rate of a pension in payment or postponed pension is to be disregarded to the extent that it does not exceed-- (a) the amount by which the pension in question is required to be increased by virtue of-- (i) the admissible rules, or (ii) sections 13(1) and 109 of the Pension Schemes Act 1993 (requirement to index and pay guaranteed minimum pensions), or (b) if greater, the appropriate percentage of the rate of that pension. (9) For the purposes of sub-paragraph (8)(a), no increase in the rate of a pension which is made at the discretion of the trustees or managers of the scheme, the employer or any other person is to be regarded as an increase required by virtue of the admissible rules. (10) For the purposes of sub-paragraph (8)(b), "the appropriate percentage" is the percentage increase in the general level of prices in Great Britain during the period-- (a) beginning when the rate of the pension was last increased or, if there has been no previous increase, the date the pension first became payable (or would have been payable but for its being postponed), and (b) ending with the time the relevant increase was made. Accrual rate, pensionable service and pensionable earnings36 (1) In this Schedule, in relation to a member's entitlement to benefits under the scheme, each of the following expressions has the meaning given by this paragraph--
(2) "Accrual rate" means the rate at which under the admissible rules rights to the benefits accrue over time by reference to periods of pensionable service. (3) "Pensionable earnings" means the earnings by reference to which the benefits are calculated under the admissible rules. (4) Subject to sub-paragraph (5), "pensionable service" means-- (a) actual service in any description of employment to which the scheme applies which qualifies the member for benefits under the scheme, and (b) any notional service allowed in respect of the member under the admissible rules which qualifies the member for such benefits. (5) The service within sub-paragraph (4)(b) does not include-- (a) service attributable (directly or indirectly) to a pension credit, or (b) service of a prescribed description. Other definitions37 (1) In this Schedule--
(2) For the purposes of this Schedule the accrued rights of a member of the scheme at any time are the rights (other than rights attributable (directly or indirectly) to a pension credit) which, in accordance with the admissible rules, have accrued to or in respect of him at that time to future benefits. (3) In this Schedule references to a pension or lump sum under the admissible rules of the scheme, or a right to such a pension or lump sum, do not include a pension or lump sum, or right to a pension or lump sum, which is a money purchase benefit. (4) In this Schedule references to "ill health" are to be construed in accordance with regulations under this sub-paragraph. Section 200 SCHEDULE 8 Restricted information held by the Board: certain permitted disclosures to facilitate exercise of functions
|