Pension Schemes (Northern Ireland) Act 1993 (c. 49)

(The document as of February, 2008)

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(b) he has served for less than two years in employment which is contracted-out by reference to the scheme,

then if--

(i) the earner's service is terminated otherwise than by his death or by the scheme's ceasing to be contracted-out and his period of service is not one in respect of which the scheme conforms to the appropriate extent with the preservation requirements; or

(ii) the earner's service is terminated by his death and he dies leaving a widow,

the prescribed person may elect to pay a premium under this subsection.

(3) The Department may by regulations provide that, in such cases and subject to such conditions as may be prescribed, if--

(a) an earner in employment to which an occupational pension scheme which is not a money purchase contracted-out scheme applies has ceased (whether before or after the commencement of this subsection) to be in that employment before attaining normal pension age;

(b) there has been a transfer from that scheme to another scheme of his accrued rights other than his accrued rights to guaranteed minimum pensions;

(c) the scheme to which his accrued rights are transferred is neither a contracted-out scheme nor one which was formerly contracted-out and in respect of which the Board have duties under section 49 at the time of the transfer;

(d) no premium under subsection (1)(a) is payable in respect of the earner; and

(e) the circumstances in which by virtue of paragraphs (a) and (b) of subsection (2) a premium is payable under that subsection do not exist,

a state scheme premium may be paid under this subsection.

(4) Subject to subsection (5), where--

(a) an earner's service in contracted-out employment by reference to an occupational pension scheme which is not a money purchase contracted-out scheme is terminated before he attains pensionable age (otherwise than by his death);

(b) no premium is payable in respect of the earner under subsection (1) or (2); and

(c) the weekly rate of the guaranteed minimum pensions to which he has accrued rights under the scheme will fall to be determined in accordance with provisions included in the scheme by virtue of section 12(2) and (3),

a state scheme premium shall be payable in respect of the earner under this subsection.

(5) Subsection (4) does not apply if the provisions mentioned in paragraph (c) of that subsection conform with such additional requirements as may be prescribed.

(6) In this Act--

(a) a premium payable under paragraph (a) of subsection (1) in the case of an occupational pension scheme other than a money purchase contracted-out scheme is referred to as an "accrued rights premium";

(b) a premium payable under paragraph (b) of that subsection in such a case is referred to as a "pensioner's rights premium";

(c) a premium payable under paragraph (a) or (c) of that subsection in the case of a money purchase contracted-out scheme is referred to as a "contracted-out protected rights premium";

(d) a premium payable under paragraph (a) or (c) of that subsection in the case of a personal pension scheme is referred to as a "personal pension protected rights premium";

(e) a premium under subsection (2) is referred to as a "contributions equivalent premium";

(f) a premium under subsection (3) is referred to as a "transfer premium"; and

(g) a premium under subsection (4) is referred to as a "limited revaluation premium".

52 Provisions supplementary to s. 51

(1) Regulations may prescribe circumstances in which a contracted-out protected rights premium or a personal pension protected rights premium shall not be payable under section 51(1).

(2) A premium under section 51 shall be paid by the prescribed person to the Department within the prescribed period or, in the case of a transfer premium, within a prescribed period after the prescribed event.

(3) It is hereby declared that on the withdrawal of an approval of arrangements under section 46 of an occupational pension scheme other than a money purchase contracted-out scheme after the winding up of the scheme a premium becomes payable in pursuance of section 51(1).

(4) Where under the rules of the scheme transfer credits have been allowed in respect of the earner's accrued rights under another scheme, the reference in section 51(2) to employment which is contracted-out by reference to the scheme shall include references to employment in any period of linked qualifying service which was contracted-out employment by reference to the other scheme.

(5) For the purposes of section 51(2), a scheme conforms to the appropriate extent with the preservation requirements if--

(a) it entitles the earner to short service benefit; or

(b) it makes any provision which under those requirements is permitted as an alternative to short service benefit (other than provision for return of contributions or for benefit in the form of a lump sum).

(6) Subject to regulations made under paragraph 1 of Schedule 1, an employment which is terminated by the death of the employer shall be treated for the purposes of section 51(2) and (4) as terminated immediately before the death.

53 Elections to pay contributions equivalent premiums

(1) An election under section 51(2) must be made within the prescribed period and in the prescribed manner.

(2) Except in such cases as may be prescribed, the prescribed person shall not, in making or abstaining from making elections under that section, discriminate between different earners on any grounds other than their respective lengths of relevant service.

(3) In subsection (2) "relevant service" means service in contracted-out employment by reference to the scheme, together with any service in contracted-out employment which in relation to service in that employment is linked qualifying service.

(4) If the Board consider that the prescribed person is contravening subsection (2), they may cancel any contracting-out certificate held by the earner's employer in respect of the scheme in question.

54 Amount of premiums payable under s. 51

(1) Subject to section 59(3), the amount of an accrued rights premium shall be the cost of providing guaranteed minimum pensions for the earner and his widow in accordance with his accrued rights under the scheme.

(2) Subject to section 59(3), the amount of a pensioner's rights premium shall be the cost of providing or continuing to provide any guaranteed minimum pension under the scheme, whether for the earner (or former earner) or for his widow.

(3) Subject to section 59(3), the amount of a contracted-out protected rights premium or a personal pension protected rights premium payable in respect of any person shall be the cash equivalent of the protected rights in question.

(4) The amount of a contributions equivalent premium shall be the difference between--

(a) the amount of the Class 1 contributions payable in respect of the earner's employment in employment which was contracted-out by reference to the scheme, and

(b) the amount of those contributions which would have been payable if the employment had not been contracted-out.

(5) The amount of a transfer premium shall be determined in the manner in which the amount of an accrued rights premium under subsection (1) falls to be determined under subsection (1) (but subject to the provisions of sections 55(2) and 60(1)).

(6) The amount of a limited revaluation premium shall be the difference between--

(a) the cost of providing the guaranteed minimum pensions in accordance with the provisions included in the scheme by virtue of section 12(2) and (3); and

(b) what would have been the cost of providing them if no such provisions had been included.

(7) Section 52(4) applies for the purposes of subsection (4) as it applies for the purposes of section 51(2).

55 Alternative basis for revaluation of earnings factors for calculation of certain premiums

(1) In determining the amount of any accrued rights premium or pensioner's rights premium payable where one or more of the five tax years ending with the tax year in which the relevant scheme ceases to be contracted-out is a relevant year in relation to the earner, the costs referred to in subsections (1) and (2) of section 54 shall be calculated as follows--

(a) any relevant earnings factor shall be taken to be that factor as increased by the last order under Article 23 of the [S.I. 1975/1503 (N.I. 15).] Social Security Pensions (Northern Ireland) Order 1975 or section 130 of the [1992 c. 8.] Social Security Administration (Northern Ireland) Act 1992 to come into operation before those five tax years; and

(b) any relevant earnings factor derived from contributions in respect of any year ("the relevant contributions year") shall be treated as increased by 12 per cent. compound for each of those five tax years, other than any of those years which--

(i) constitutes or begins before the relevant contributions year, or

(ii) begins after the final relevant year in relation to the earner.

(2) Subsection (1) shall not apply if the person liable for the premium elects in the prescribed manner that it should not and, notwithstanding section 54(5), it shall not apply in the determination of the amount of a transfer premium.

(3) Regulations may provide that subsections (1) and (2) shall have effect with prescribed modifications in relation to a scheme which has ceased to be contracted-out and, immediately before it so ceased, contained provisions authorised by section 12(2) and (3).

(4) Subject to subsection (5), where a limited revaluation premium is payable in respect of an earner, and the case is one in which his service in contracted-out employment is terminated in consequence of the relevant scheme ceasing to be contracted-out, the costs referred to in subsection (6) of section 54 shall be calculated as follows--

(b) any relevant earnings factor derived from earnings upon which primary Class 1 contributions have been paid or treated as paid in respect of any year ("the relevant contributions year") shall be treated as increased by 12 per cent. compound for each of those five tax years, other than any of those years which constitutes or begins before the relevant contributions year.

(5) Subsection (4) shall not apply in any case where its application would result in the amount of the premium being greater than it would have been apart from that subsection.

(6) In subsection (1) "relevant year" and "final relevant year" have the same meanings as in section 12, and references to the earner shall be construed as references to the earner in respect of whom the premium in question has become payable.

56 Effect of payment of premiums on rights

(1) Payment of an accrued rights premium shall extinguish the earner's rights to guaranteed minimum pensions under the scheme.

(2) Payment of a pensioner's rights premium shall extinguish any right to receive guaranteed minimum pensions under the scheme, whether for the earner (or former earner) or for the earner's (or former earner's) widow or widower.

(3) Where a contracted-out protected rights premium or a personal pension protected rights premium is paid in respect of a person--

(a) the rights whose cash equivalent is included in the premium shall be extinguished; and

(b) sections 43(2) and (5) and 44(2) shall have effect in relation to that person and a widow or widower of that person as if any guaranteed minimum pension to which that person or any such widow or widower is treated as entitled under those provisions, and which derives from the minimum payments, minimum contributions or transfer payment or payments from which those rights derive were reduced by the appropriate percentage.

(4) Payment of a contributions equivalent premium in the circumstances mentioned in section 51(2)(i) shall extinguish the earner's accrued rights to guaranteed minimum pensions under the relevant scheme.

(5) Payment of a contributions equivalent premium in the circumstances mentioned in section 51(2)(ii) shall extinguish any such accrued rights in respect of the earner's widow.

(6) Payment of a transfer premium shall extinguish the earner's accrued rights to guaranteed minimum pensions under the scheme from which his other accrued rights have been transferred.

(7) In subsection (3) "the appropriate percentage" means, subject to the following provisions of this section--

---

where--

X is the amount of the contracted-out protected rights premium or, as the case may be, the personal pension protected rights premium together, if the person in respect of whom it falls to be paid gives notice to the prescribed person within the prescribed period--
(a) with the cash equivalent, paid to the Department within the prescribed period, of any other rights which he has under the scheme and specifies in the notice; and
(b) with the amount of any voluntary contribution paid to the Department within the prescribed period by, or in respect of, the person concerned; and
Y is the cost of providing any guaranteed minimum pension such as is mentioned in subsection (3).

(8) If the appropriate percentage, as calculated under subsection (7), would fall between two whole numbers, it is to be taken to be the lower number.

(9) If it would be over 100, it is to be taken to be 100.

(10) The remainder after the reduction for which subsection (3) provides--

(a) if it would contain a fraction of 1p, is to be treated as the nearest lower whole number of pence; and

(b) if it would be less than a prescribed amount, is to be treated as nil.

57 Deduction of contributions equivalent premium from refund of scheme contributions

(1) This section applies where--

(a) an earner's service in contracted-out employment is terminated; and

(b) he (or, by virtue of a connection with him, any other person) is entitled to a refund of any payments made by or in respect of him towards the provision of benefits under the scheme by reference to which that employment was contracted-out; and

(2) Where this section applies, then, subject to the following provisions of this section, the person by whom the premium falls to be paid shall be entitled on paying it to recover an amount equal to so much of the premium as is attributable to primary Class 1 contributions (and on paying any part of it to recover a proportionate part of that amount) from the person liable for the refund.

(3) The amount recoverable under this section shall not exceed the amount of the refund or so much of it as has not been made.

(4) Where the period taken into account in arriving at the amount mentioned in subsection (2) does not coincide with that in respect of which the refund is to be made, the sum recoverable under this section shall be determined by reference to so much of that amount and of the refund as are referable to the same period.

(5) Where the refund--

(a) is made in respect of more than one period of service, and one or more of those periods is a period of previous linked qualifying service; and

(b) includes any amount paid under a contracted-out scheme in relation to that service on or in connection with a transfer of accrued rights to another scheme,

the amount which may be recovered under this section shall be increased by such amount as may be prescribed.

(6) Where the person liable for the premium is himself liable for the refund, he shall be entitled to retain out of the refund the amount which he could recover under this section from another person liable for the refund.

(7) The amount of the refund shall be reduced by the amount recovered or retained under this section; and provision shall be made by regulations for requiring the making of refunds to be delayed for the purpose of enabling any right of recovery or retainer conferred by this section to be exercised, notwithstanding anything in any enactment relating to the making of the refund.

(8) Where--

(a) an earner's service in contracted-out employment is terminated;

(b) he (or, by virtue of a connection with him, any other person) is entitled to a refund of any payments made by or in respect of him under the scheme by reference to which that employment was contracted-out in relation to any previous contracted-out employment of his, being payments towards the provision of benefits under that scheme;

(d) the period taken into account in arriving at the amount mentioned in subsection (2) includes the period of the previous contracted-out employment,

then the person liable for that premium shall have the like right of recovery from that refund (so far as the premium is not recoverable or retainable out of a refund in respect of a later employment) as a person has under this section where the refund relates to service in the employment on the termination of which the premium falls to be paid (and subsection (7) shall apply accordingly).

(9) This section shall apply in relation to such a refund as is referred to in subsection (1)(b) which becomes payable after the termination of an earner's service in contracted-out employment as it applies to such a refund becoming payable on the termination of an earner's service in such employment.

(10) Where the earner (or, by virtue of a connection with him, any other person) becomes entitled to any payment in lieu of benefit, this section shall apply in relation to the payment as if it were such a refund as is referred to in subsection (1)(b).

(11) For the purposes of subsection (10), a payment in lieu of benefit is any payment falling to be made to or for the benefit of, or in respect of, a person by virtue of his being or having been a member of an occupational pension scheme, being a payment which either--

(a) is made or to be made otherwise than out of the resources of the scheme; or

(b) is made or to be made out of those resources but by way of distribution on a winding up; or

58 No recovery of state scheme premiums from earners, etc

(1) Notwithstanding any contract to the contrary, a person shall not be entitled--

(a) to recover any part of a state scheme premium from any earner in respect of whom it is payable; or

(b) except in accordance with section 57, to recover or retain any part of such a premium out of any money payable to or for the benefit of the earner or any other person.

(2) Nothing in subsection (1) affects the right of the trustees or managers of a scheme--

(a) in a case where an accrued rights premium or a pensioner's rights premium has been paid, to reduce the pension of the person in respect of whom the premium has been paid by the amount of his guaranteed minimum pension;

(b) in a case where a limited revaluation premium has been paid, to recoup it--

(i) out of the resources of the scheme, in so far as they derive from contributions; or

(ii) in prescribed cases, out of payments made to them in respect of an earner's transfer to their scheme from some other scheme;

(c) in a case where a state scheme premium has been paid, to make the deduction for which section 92(3) provides when they calculate the cash equivalent to which the earner in respect of whom the premium has been paid has a right under Chapter IV of Part IV.

59 Further provisions concerning calculations relating to premiums

(1) The following amounts shall be certified by the Department--

(a) the costs mentioned in subsections (1), (2) and (6) of section 54,

(b) the amount of the difference mentioned in subsection (4) of that section,

(c) the cost of providing the appropriate percentage of the guaranteed minimum pension for the purposes of section 56, and

(d) the amount mentioned in section 57(2).

(2) The cash equivalents mentioned in section 54(3) and section 56(7)(a) shall be calculated and verified in the prescribed manner.

(3) If the Department--

(a) cannot readily ascertain the amount of any earnings in any tax week relevant for determining the costs referred to in subsection (1) or (2) of section 54, or

(b) is satisfied that records of earnings relevant for determining the amount mentioned in subsection (4) of that section have not been maintained or retained or are otherwise unobtainable,

then the Department may for that purpose--

(i) compute, in such manner as it thinks fit, an amount which shall be regarded as the amount of those earnings; or

(ii) take their amount to be such sum as it may specify in the particular case,

and it may certify the costs referred to in section 54(1) and (2) accordingly.

(4) Where the Department subsequently ascertains the amount of such earnings as are mentioned in paragraph (a) of subsection (3)--

(a) if it appears to the Department that the amount of the accrued rights premium or, as the case may be, the pensioner's rights premium would have been less if the Department had not made the calculation on the basis described in subsection (3), it shall refund the difference to the prescribed person, and

(b) if it appears to the Department that that premium would have been greater if the Department had not made the calculation on that basis, the prescribed person shall pay the difference to the Department.

(5) For the purposes of subsection (1) the Department may make such adjustments as it thinks necessary for avoiding fractional amounts.

60 Actuarial tables for purposes of calculations relating to premiums

(1) In calculating and certifying the costs mentioned in subsections (1), (2) and (6) of section 54 and the cost of providing the appropriate percentage of the guaranteed minimum pension for the purposes of section 56 the Department shall apply whichever of the prescribed actuarial tables (as in force at the appropriate time) is applicable in accordance with the regulations prescribing the tables, but for the purpose of calculating the amount of a transfer premium the Department shall apply the actuarial table prescribed for the purpose of calculating the amount of an accrued rights premium in such manner as may be prescribed.

(2) In subsection (1) "the appropriate time" means the time when the scheme ceases to be contracted-out or, as the case may be, to be appropriate or, in the case of costs mentioned in section 54(6), the time when the earner's service in contracted-out employment is terminated.

(3) The tables to be used in calculating the costs referred to in section 54(6) shall be so framed as to embody the assumption that the increase of weekly equivalent required by section 12(3) is 5 per cent. compound for each relevant year after that in which the earner's service is terminated; and that assumption shall prevail over any different provision made by the scheme.

61 Inclusion of former and future earners for some purposes of this Chapter

Any reference to earners in sections 46(1)(a) and (7), 54(1) and (2), 55(1) and (6) and 56(1) and (2) and in section 51(1)(a), as it applies in relation to an occupational pension scheme which is not a money purchase contracted-out scheme, includes, in relation to any particular time, not only a reference to earners who are in employment at that time but also a reference to earners who are not in employment at that time but who have been in employment before it or will be in employment after it.

62 Power to apply certain provisions to widowers

The following provisions shall be construed as if the references to a person entitled to receive a guaranteed minimum pension included references to a person so entitled by virtue of being the widower of an earner only in such cases as may be prescribed--

(a) section 46(1)(a)(ii);

(b) section 48(2); and

and the references to a widow in section 54(1) and (2) shall be construed as including references to a widower and the reference in section 138(5) to guaranteed minimum pensions as including a reference to the guaranteed minimum pension of a widower only in those cases.

63 Non-payment of state scheme premiums

(1) If a person fails to pay any state scheme premium which is payable by him at or within the time prescribed for the purpose, he shall be liable on summary conviction to a fine of not more than level 3 on the standard scale.

(2) Where--

(a) a person is convicted of the offence under subsection (1) of failing to pay a premium, and

(b) the premium remains unpaid at the date of the conviction,

he shall be liable to pay to the Department a sum equal to the amount which he failed to pay.

(3) Subject to subsection (4), where a person is convicted of an offence mentioned in subsection (2), evidence may be given of any previous failure by him to pay state scheme premiums within the time prescribed for the purpose; and in that subsection "the conviction" and "the offence" mean respectively the conviction referred to in this subsection and the offence of which the person is convicted.

(4) Such evidence may be given only if notice of intention to give it is served with the summons or warrant on which the person appeared before the court which convicted him.

64 Unpaid premiums: supplementary

(1) Where a person charged with an offence to which section 63(2) applies is convicted of that offence in his absence under Article 24(2) of the [S.I. 1981/1675 (N.I. 26).] Magistrates' Courts (Northern Ireland) Order 1981, then if--

(a) it is proved to the satisfaction of the court, on oath or by affidavit or in the manner prescribed by magistrates' courts rules, that notice under section 63(4) has been duly served specifying the other premiums in respect of which the complainant intends to give evidence; and

(b) the clerk of petty sessions has received a statement in writing purporting to be made by the accused or by a solicitor acting on his behalf to the effect that if the accused is convicted in his absence of the offence charged he desires to admit failing to pay the other premiums so specified or any of them,

section 63(3) and (4) shall have effect as if the evidence had been given and the failure so admitted had been proved, and the court shall proceed accordingly.

(2) Where--

(a) a person is convicted of an offence to which section 63(2) applies; and

(b) an order is made under the [1950 c. 7 (N.I.).] Probation Act (Northern Ireland) 1950 placing the offender on probation or discharging him absolutely or conditionally,

subsection (1) and section 63(2) to (4) shall apply as if it were a conviction for all purposes.

(3) Any sum which a person is liable to pay under subsection (1) or section 63(2) to (4) shall be recoverable from him as a penalty.

(4) State scheme premiums recovered by the Department under those provisions shall be treated for all purposes as premiums paid to the Department in respect of the person in respect of whom they were originally payable.

Part IV Protection for Early Leavers

I Preservation of Benefit Under Occupational Schemes

65 Scope of Chapter I: the preservation requirements

(1) This Chapter has effect in relation to the preservation of benefit under occupational pension schemes to which it applies.

(2) In this Act "the preservation requirements" means the requirements specified in or under sections 67 to 78.

(3) This Chapter applies to any occupational pension scheme whose resources are derived in whole or in part from--

(a) payments made or to be made by one or more employers of earners to whom the scheme applies, being payments either--

(i) under an actual or contingent legal obligation; or

(ii) in the exercise of a power conferred, or the discharge of a duty imposed, on a Minister of the Crown, government department or any other person, being a power or duty which extends to the disbursement or allocation of public money; or

(b) such other payments by the earner or his employer, or both, as may be prescribed for different categories of scheme.

66 Interpretation (Part IV)

(1) In this Chapter--

"scheme" means an occupational pension scheme to which this Chapter applies;
"relevant employment", in relation to a scheme, means any employment to which the scheme applies;
"long service benefit", in relation to a scheme, means the benefits which will be payable under the scheme, in accordance with legal obligation, to or in respect of a member of the scheme on the assumption--
(a)
that he remains in relevant employment, and
(b)
that he continues to render service which qualifies him for benefits,

until he attains normal pension age; and in this definition "benefits" means--
(i)
retirement benefit for the member himself at normal pension age, or
(ii)
benefit for the member's wife or husband, widow or widower, or dependants, or others, on his attaining that age or his later death, or
(iii)
both such descriptions of benefit.

(2) In this Act "pensionable service", in relation to a scheme and a member of it, means, subject to subsection (3), service in relevant employment which qualifies the member (on the assumption that it continues for the appropriate period) for long service benefit under the scheme.

(3) There shall be taken into account as pensionable service only actual service, that is to say--

(a) service notionally attributable for any purposes of the scheme is not to be regarded as pensionable service; and

(b) no account is to be taken of scheme rules by which a period of service can be treated for any purpose as being longer or shorter than it actually is.

67 Basic principle as to short service benefit

(1) A scheme must make such provision that where a member's pensionable service is terminated before normal pension age and--

(a) he has at least 2 years' qualifying service, or

(b) a transfer payment in respect of his rights under a personal pension scheme has been made to the scheme,

he is entitled to benefit consisting of or comprising benefit of any description which would have been payable under the scheme as long service benefit, whether for himself or others, and calculated in accordance with this Chapter.

(2) The benefit to which a member is entitled under subsection (1) is referred to in this Act as "short service benefit".

(3) Subject to subsection (4), short service benefit must be made payable as from normal pension age or, if in the member's case that age is earlier than 60, then from the age of 60.

(4) Short service benefit payable on or in respect of the member's death after normal pension age must be made payable as from his death or within such time after it as long service benefit payable on or in respect of his death would be payable.

(5) In applying subsections (3) and (4), no regard is to be had to the operation of any scheme rule, taking effect at any time after termination of the member's pensionable service, as to what is normal pension age under the scheme.

(6) A scheme must not provide for payment of short service benefit in the form of a lump sum at any time before normal pension age, except in such circumstances as may be prescribed.

(7) In subsection (1) "2 years' qualifying service" means 2 years (whether a single period of that duration or two or more periods, continuous or discontinuous, totalling 2 years) in which the member was at all times employed either--

(a) in pensionable service under the scheme; or

(b) in service in employment which was contracted-out by reference to the scheme; or

(8) For the purposes of subsection (7), no regard shall be had to whether or not the service was of the same description in the whole of the 2 years.

(9) A period of service previously terminated is not to count towards the 2 years' qualifying service unless it counts towards qualification for long service benefit, and need then count only to the same extent and in the same way.

68 No discrimination between short service and long service beneficiaries

(1) A scheme must not contain any rule which results, or can result, in a member being treated less favourably for any purpose relating to short service benefit than he is, or is entitled to be, treated for the corresponding purpose relating to long service benefit.

(2) Subsection (1) does not apply to any rule in its application to members whose pensionable service terminated before the rule came into force, unless the rule--

(a) was made after the termination of a member's pensionable service; and

(b) results, or is capable of resulting, in any treatment less favourable for him than that to which he would have been entitled but for the rule.

(3) Subsection (1) does not apply to a rule which merely confers discretion on the scheme's trustees or managers, or others, so long as it is not a rule requiring the discretion to be exercised in any discriminatory manner against members in respect of their short service benefit.

69 Form of short service benefit and its alternatives

(1) Subject to subsection (2) and section 77, a member's short service benefit must be--

(a) payable directly out of the resources of the scheme; or

(b) assured to him by such means as may be prescribed.

(2) Subject to subsections (3) to (5), a scheme may, instead of providing short service benefit, provide--

(a) for the member's accrued rights (including any transfer credits allowed under the scheme)--

(i) to be transferred to another occupational pension scheme with a view to acquiring transfer credits for the member under the other scheme, or

(ii) to be transferred to a personal pension scheme or a self-employed pension arrangement with a view to acquiring rights for the member under the rules of the scheme or arrangement; or

(b) for such alternatives to short service benefit as may be prescribed.

(3) The option conferred by subsection (2)(a) is additional to any obligation imposed by Chapter IV of this Part.

(4) The alternatives specified in subsection (2)(a) and (b) may only be by way of complete or partial substitute for short service benefit--

(a) if the member consents; or

(b) in such other cases as may be prescribed.

(5) An alternative prescribed under subsection (2)(b) may only include payment by way of return of contributions--

(a) if they relate to a period of service before 6th April 1975; or

(b) if there has been such a payment relating to a period of service before that date and the contributions relate to a period of service of less than 5 years after that date.

70 Computation of short service benefit

(1) Subject to the provisions of this section, a scheme must provide for short service benefit to be computed on the same basis as long service benefit.

(2) For that purpose, no account is to be taken of any rule making it (directly or indirectly) a condition of entitlement to benefit that pensionable service shall have been of any minimum duration.

(3) Subsection (1) does not apply to so much of any benefit as accrues at a higher rate, or otherwise more favourably, in the case--

(a) of members with a period of pensionable service of some specified minimum length, or

(b) of members remaining in pensionable service up to some specified minimum age.

(4) Subsection (1) does not apply to so much of any benefit as is of an amount or at a rate unrelated to length of pensionable service or to the number or amount of contributions paid by or for the member.

(5) Regulations may provide that subsection (1) shall not apply to any category of schemes or members, or description of benefit.

(6) So far as any short service benefit is not required to be computed in accordance with subsection (1), it must be computed on the basis of uniform accrual, so that at the time when pensionable service is terminated, it bears the same proportion to long service benefit as the period of that service bears to the period from the beginning of that service to the time when the member would attain normal pension age or such lower age as may be prescribed.

(7) Where long service benefit is related to a member's earnings at, or in a specified period before, the time when he attains normal pension age, short service benefit must be related, in a corresponding manner, to his earnings at, or in the same period before, the time when his pensionable service is terminated.

(8) A scheme must comply with any regulations relating to the basis of computation of short service benefit, including regulations providing for the avoidance of fractional amounts and otherwise to facilitate computation.

71 Credits

(1) In this section--

"supplementary credits", in relation to a scheme and a member's entitlement to its benefits, means any increase of benefit or additional benefit to which the member may become entitled--
(a)
in consequence of any provision made by or under the scheme after he becomes a member of it (to the extent that it applies to any previous pensionable service of his); or

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