The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations (Northern Ireland) 2008

Amendment of the Pension Sharing (Valuation) Regulations

5.—(1) The Pension Sharing (Valuation) Regulations (Northern Ireland) 2000(1) shall be amended in accordance with sub-paragraphs (2) to (4).

(2) In regulation 1(2) (interpretation)—

(a) omit the definition of “the 2005 Order”(2);

(b) after the definition of “the Minimum Funding Requirement Regulations” insert—

““the Transfer Values Regulations” means the Occupational Pension Schemes (Transfer Values) Regulations (Northern Ireland) 1996;”;

(c) omit the definition of “the Board for Actuarial Standards”(3);

(d) omit the definition of “effective date”(4);

(e) after the definition of “employer” insert—

““initial cash equivalent” means the amount calculated in accordance with regulation 7(1)(a) of the Transfer Values Regulations;”;

(f) omit the definition of “scheme actuary”.

(3) For regulations 4 to 6(5) substitute—

“Manner of calculation and verification of cash equivalents: occupational pension schemes

4.— (1) Subject to this regulation, cash equivalents for members of occupational pension schemes are to be calculated and verified in accordance with regulations 7 to 7E of the Transfer Values Regulations.

(2) Reductions to initial cash equivalents can only be made in accordance with regulation 7D of, and paragraphs 1 to 6 and 12 to 14 of Schedule 1A to, the Transfer Values Regulations.

(3) The reduction referred to in paragraph 2 of Schedule 1A to the Transfer Values Regulations must not be applied to a case where liability in respect of a pension credit is to be discharged in accordance with—

(a) paragraph 1(2) of Schedule 5 to the 1999 Order (pension credits: mode of discharge — funded pension schemes), or

(b) paragraph 1(3) of that Schedule, in a case where regulation 7(2) of the Pension Sharing (Implementation and Discharge of Liability) Regulations (Northern Ireland) 2000(6) (funded pension schemes) applies.

(4) When calculating and verifying the cash equivalent, the Transfer Values Regulations are to be read as if—

(a) in regulation 1(2) (interpretation)—

(i) after the definition of “member” there were inserted—

““normal pension age” has the meaning given by section 175;”;

(ii) after the definition of “the Taxes Act” there were inserted—

““transfer day” has the meaning given by Article 26(8) of the Welfare Reform and Pensions (Northern Ireland) Order 1999;”, and

(iii) after the definition of “trustees” there were added—

““valuation day” has the meaning given by Article 26(7) of the Welfare Reform and Pensions (Northern Ireland) Order 1999,”;

(b) in regulation 7(1) (manner of calculation and verification of cash equivalents – general provisions) for “paragraph (5)” there were substituted “paragraphs (5) to (9)”;

(c) after regulation 7(5) there were added—

“(6) Where the person with pension rights is a deferred member of an occupational pension scheme on the transfer day, the value of the benefits which he has accrued under that scheme must be taken to be—

(a) in the case of an occupational pension scheme other than a salary related scheme, the cash equivalent to which he acquired a right under section 90(1)(a) (right to cash equivalent) on the termination of his pensionable service, calculated and verified on the assumption that he has made an application under section 91(1)(7) (ways of taking right to cash equivalent); or

(b) in the case of a salary related occupational pension scheme, the guaranteed cash equivalent to which he would have acquired a right under section 90(1)(aa) if he had made an application under section 91(1).

(7) Where the person with pension rights is an active member of an occupational pension scheme on the transfer day, the value of the benefits which he has accrued under that scheme must be calculated and verified on the assumption that the member had made a request for an estimate of the cash equivalent that would be available to him were his pensionable service to terminate on the transfer day.

(8) Where the person with pension rights is a pensioner member of an occupational pension scheme on the transfer day, the value of his pension must be calculated and verified in accordance with this regulation and regulations 7A to 7C and 7E(1) to (3) as appropriate.

(9) Where the person with pension rights attains, or is over, normal pension age and is not in receipt of a pension—

(a) the pension must be calculated and verified in accordance with this regulation and regulations 7A to 7C and 7E(1) to (3) as appropriate; and

(b) the trustees must assume that the member’s pension comes into payment on the transfer day.”;

(d) in regulation 7A(2) (manner of calculation and verification of cash equivalents for salary related benefits) the reference to “guarantee date” were a reference to “valuation day”, and

(e) in paragraph 12 of Schedule 1A (reductions in initial cash equivalents) the reference to “guarantee date” were a reference to “valuation day”.

Manner of calculation and verification of cash equivalents: other relevant arrangements

5.— (1) Subject to this regulation, cash equivalents for members of a relevant arrangement other than an occupational pension scheme are to be calculated and verified in accordance with regulations 7 to 7E of the Transfer Values Regulations.

(2) When calculating and verifying the cash equivalent, the Transfer Values Regulations are to be read as if—

(a) in regulation 1(2)—

(i) after the definition of “the Taxes Act” there were inserted—

““transfer day” has the meaning given by Article 26(8) of the Welfare Reform and Pensions (Northern Ireland) Order 1999;”, and

(ii) for the definition of “trustees” there were substituted—

““trustees” means the person responsible for the relevant arrangement;”;

(b) in regulation 7(1) for “paragraph (5)” there were substituted “paragraphs (5) and (6)”, and

(c) after regulation 7(5) there were added—

“(6) Where the person with pension rights is a member of a personal pension scheme, or those rights are contained in a retirement annuity contract, the value of the benefits which he has accrued under that scheme or contract on the transfer day must be taken to be the cash equivalent to which he would have acquired a right under section 90(1)(b) (right to cash equivalent), if he had made an application under section 91(1) (ways of taking right to cash equivalent) on the date on which the request for the valuation was received.”.

(3) In relation to a personal pension scheme which is comprised in a retirement annuity contract made before 4th January 1988, this regulation applies as if such a scheme were not excluded from the scope of Chapter IV of Part IV of the Pension Schemes Act by section 89(1)(b)(8) (scope of Chapter IV).”.

(4) In regulation 7 (other relevant arrangements: reduction of cash equivalents)—

(a) the existing provision shall be numbered as paragraph (1) of that regulation;

(b) after that paragraph add—

“(2) This regulation does not apply to occupational pension schemes.”.

(1)

S.R. 2000 No. 144; relevant amending Regulations are S.R. 2000 No. 335, S.R. 2003 No. 337, S.R. 2005 Nos. 171 and 568 and S.R. 2007 No. 64

(2)

The definition of “the 2005 Order” was inserted by paragraph 8(2) of Schedule 3 to S.R. 2005 No. 568

(3)

The definition of “the Board for Actuarial Standards” was inserted by paragraph 10(a) of the Schedule to S.R. 2007 No. 64

(4)

The definition of “effective date” was inserted by regulation 4(2) of S.R. 2003 No. 337

(5)

Regulation 4 was amended by regulation 10(3) of S.R. 2000 No. 335, regulation 16(2) of S.R. 2005 No. 171, paragraph 8(3) of Schedule 3 to S.R. 2005 No. 568 and paragraph 10(b) of S.R. 2007 No. 64; regulation 5 was amended by regulation 10(4) of S.R. 2000 No. 335, regulation 4(3) of S.R. 2003 No. 337, regulation 16(3) to (7) of S.R. 2005 No. 171, paragraph 8(4) of Schedule 3 to S.R. 2005 No. 568 and paragraph 10(c) of the Schedule to S.R. 2007 No. 64; regulation 6 was amended by regulation 10(5) of S.R. 2000 No. 335 and paragraph 10(d) of the Schedule to S.R. 2007 No. 64

(6)

S.R. 2000 No. 145; regulation 7(2) was amended by regulation 11(4) of S.R. 2000 No. 335

(7)

Section 91 was amended by paragraph 5 of Schedule 4 to the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213 (N.I. 22)), Part III(6) of Schedule 9 to the Child Support, Pensions and Social Security Act (Northern Ireland) 2000 and Article 133 of S.I. 2001/3649

(8)

Section 89 was amended by Article 148 of the Pensions (Northern Ireland) Order 1995 and paragraph 22 of Schedule 9 to the Welfare Reform and Pensions (Northern Ireland) Order 1999 (S.I. 1999/3147 (N.I. 11))