Part IV Protection for early leavers

C2C16C7C3C15C5C10C8C13C12C18C14C22Chapter I preservation of benefit under occupational schemes

Annotations:
Modifications etc. (not altering text)

I1C1C6C11C17C9C4C19C20C2175 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—

    1. 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

    2. b

      by reference to previous service of his (whether or not pensionable service); or

    3. c

      in such other circumstances as may be prescribed,

    including under paragraph (b) any transfer credits;

  • “purchased credits” means supplementary credits for which, under the rules of the scheme, a member may or must make a payment in whole or in part (whether by means of additional contributions, or of deduction from benefit, or otherwise, and whether separately for each credit or by one or more payments for one or more credits);

  • “bonus credits” means supplementary credits other than purchased credits or transfer credits.

2

Subject to subsections (3) to (7), if a scheme provides for long service benefit to include supplementary credits, it must—

a

provide for such credits to be included in short service benefit, and

b

provide for all credits to be so included.

3

Where purchased credits have not been paid for in full at or before termination of pensionable service, the short service benefit must include the appropriate proportion of the credits.

4

In subsection (3) “the appropriate proportion of the credits” means—

a

if they were to be paid for by a fixed amount, the same proportion as the amount paid bears to the full amount payable; and

b

otherwise, the same proportion as the period between the time when the first payment became due and the termination of the member’s pensionable service bears to the whole period over which payment was to be made.

5

If the benefit includes bonus credits, or credits for which payment is to be made by deduction from that or another benefit, the credits to be included in the benefit and (where applicable) the amount of the deduction must be computed on the assumption—

a

that the credits accrue in full only to a member remaining in pensionable service until normal pension age; and

b

that the amount of any such credit, and also of any relevant deduction, accrues at a uniform rate from the time when the credit was awarded up to the time of his attaining that age.

6

Where any such deduction is a percentage of benefit, the percentage must be the same for short service as for long service benefit.

7

A scheme must comply with any regulations made with respect to the manner in which supplementary credits are to be included in short service benefit, including regulations providing for the avoidance of fractional amounts and otherwise to facilitate computation.