PART IIIF5 ... STATEMENTS OF ENTITLEMENT AND CALCULATION OF TRANSFER VALUES

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F9Manner of calculation of initial cash equivalents for money purchase benefits F1(other than collective money purchase benefits)F4and cash balance benefits not calculated by reference to final salaryC1C2C37C

1

For F2cash balance benefits in respect of which the available sum is not calculated by reference to final salary and money purchase benefits F8other than collective money purchase benefits, the initial cash equivalent is to be calculated in accordance with this regulation.

2

The initial cash equivalent is the realisable value F6at the date of calculation of any benefits to which the member is entitled.

3

The trustees must calculate that realisable value—

a

in accordance with the scheme rules; and

b

in a manner which is—

i

approved by the trustees; and

ii

consistent with F7Chapter 1 of Part 4ZA of the 1993 Act.

4

F3The realisable value must include—

a

for money purchase benefits, any increases to the benefits resulting from a payment of interest made in accordance with the scheme rules; or

b

for cash balance benefits—

i

any interest (including notional interest) which, in accordance with the scheme rules, applies to the available sum in respect of which the benefits are calculated;

ii

any guarantee which, in accordance with the scheme rules, applies to the available sum in respect of the benefits or to the contributions made by the member or by another person in respect of the member;

iii

any options the member has which would increase the value of the member’s benefits under the scheme (adjusted to reflect the proportion of members the trustees determine are likely to exercise those options); and

iv

any discretionary benefits which the trustees determine should be taken into account, having regard to any established custom for awarding the benefits and any requirement for consent before they are awarded.