The Railways Pension Scheme Order 1994

Buying Annuities

18C  The Trustee shall buy annuity contracts to secure benefits in respect of pensioners from the UK office or branch of an Insurance Company. The contracts shall be consistent with Revenue Approval and the Contracting–out Laws and shall provide benefits as nearly as practicable the same as each person’s entitlement under the Section. Any annuity contract bought in the name of the Trustee before the winding–up started may be assigned to the pensioner concerned.

In the case of Members who have not started to receive pensions under the Section the Trustee shall use each Member’s Accumulated Fund to buy annuity contracts or insurance policies from the UK office or branch of an Insurance Company. The Trustee shall buy contracts and policies in the name of the Members. The contracts and policies shall be consistent with the Preservation, Revaluation and Contracting–out Laws and with Revenue Approval.

If the whole of a Member’s Accumulated Fund cannot be used because of Inland Revenue limits the balance shall be used as described in Rule 18E (Surplus).

If the assets of the Section are insufficient to provide all benefits in full the following benefits shall be provided first and in the following order of priority: (1) benefits in respect of pensioners and of Members who reached Minimum Pension Age before the winding–up started and (2) GMPs not yet payable, state scheme premiums and equivalent pension benefits for periods of non– participating employment under the National Insurance Act 1965(1).

(1)

1965 c. 51.