The Financial Assistance Scheme Regulations 2005

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Actual pensionU.K.

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2.—[F1(1) In this Schedule, “actual pension” means, subject to [F2sub-paragraphs (3) to (4)] and paragraph 2A, the annual rate of annuity which has been, can be or could have been, paid to the beneficiary as at the later of—

(a)the day from which the beneficiary is entitled to an annual payment; or

(b)the day on which the qualifying pension scheme began to be wound up,

as a result of the purchase of an annuity with the assets available to discharge the liability of the scheme to, or in respect of, the qualifying member after that liability has, or had, been determined.]

[F3(1A) For the purposes of sub-paragraph (1), where a transfer notice has been given in respect of a qualifying pension scheme, no assets which are transferred to the Secretary of State shall be treated as being available to discharge the liability in respect of any qualifying member of that scheme from the day on which the transfer notice is given.]

(2) The liability of the scheme to the beneficiary shall be determined for the purposes of sub-paragraph (1)—

(a)in accordance with section 73 of the 1995 Act; or

(b)where that section does not apply, in accordance with the scheme rules.

(3) The annual rate of annuity which [F4has been, can be or could have been] purchased for the beneficiary for the purposes of sub-paragraph (1) [F5or, as the case may be, paragraph 2A, as a result of the purchase of an annuity] with the assets referred to in that sub-paragraph, shall be determined [F6(or, as the case may be, redetermined)]—

[F7(a)where the beneficiary was an active or a deferred member of the qualifying pension scheme [F8on the day before the day on which the qualifying pension scheme began to be wound up], on the basis that the sum which will be, or has been, used to discharge the liability of the scheme to him will only be, or has only been, used to purchase an annuity when the qualifying member attains, or attained, his normal retirement age;]

(b)where the beneficiary is a survivor [F9or surviving dependant] of a member of that scheme, having regard to the annual rate of annuity which will come into payment [F10to that beneficiary on the later of—

(i)the day on which an annuity has been purchased from the assets of the scheme; or

(ii)the day after the day on which that qualifying member died;]

[F11(ba)where the beneficiary is a survivor or surviving dependant, on the basis that any amount (including any lump sum) payable to that beneficiary as a result of the death of the qualifying member being within a period specified in the scheme rules beginning on the day on which the member became entitled to a pension from the scheme or, if later, the day on which the pension was first paid, shall not be taken into account;]

F12(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)on the basis that there has been no commutation of benefits deriving from the scheme [F13after the day on which the scheme began to be wound up].

[F14(3A) Where the scheme manager is satisfied that the amount of interim pension paid to the beneficiary in respect of any previous year or years in which an annual payment was payable to the beneficiary is higher or lower than the annual rate of annuity determined in accordance with this paragraph, the scheme manager may determine how the actual pension is to be calculated for the purposes of determining the annual payment in respect of each year in which an annual payment is payable to the beneficiary, having regard to—

(a)the annual rate of annuity determined in accordance with this paragraph;

(b)the amount of any interim pension which was, or is due to be, paid to the beneficiary; and

(c)such other matters as the scheme manager considers relevant.]

[F15(3B) Sub-paragraph (3D) applies where the scheme manager is satisfied that the sum of interim pension paid to a beneficiary and any payment made under these Regulations in respect of any year in the period determined in accordance with sub-paragraph (3C) is higher or lower than the sum of—

(a)the revalued notional pension or survivor notional pension; and

(b)any annual increases or proportion of annual increases, which the scheme manager considers could have been paid in respect of that year, taking into account—

(i)the determination under regulation 27(1)(d);

(ii)the revaluation amount determined in accordance with regulation 17(11); and

(iii)the proportion of that year which falls after the 1st January.

(3C) For the purposes of sub-paragraph (3B), the period is the period from—

(a)the earlier of—

(i)the day on which the beneficiary became entitled to a payment under these Regulations; and

(ii)the day on which the beneficiary became entitled under the scheme rules to a pension or other benefit; or

(b)the day on which the qualifying pension scheme began to be wound up if that is later than the day determined in accordance with paragraph (a),

until the day on which the scheme manager gave a transfer notice to the scheme trustees or managers.

(3D) Where this sub-paragraph applies, the scheme manager may—

(a)determine how the actual pension is to be calculated, having regard to—

(i)the amount of interim pension which was paid to the beneficiary;

(ii)the amount of the sum of—

(aa)the revalued notional pension or survivor notional pension; and

(bb)any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii)the amount of any payments made under these Regulations prior to the day on which the transfer notice is given; and

(iv)such other matters as the scheme manager considers relevant; and

(b)where the sum of the interim pension paid and any payments made under these Regulations in respect of any year is lower than the sum of the amounts referred to in sub-paragraph (3B)(a) and (b), make a payment to the beneficiary or, where the beneficiary has died prior to the scheme manager making this determination, to the beneficiary’s estate, having regard to—

(i)the amount of interim pension which was paid to the beneficiary;

(ii)the amount of the sum of—

(aa)the revalued notional pension or survivor notional pension; and

(bb)any annual increases, or proportion of annual increases, which the scheme manager considers could have been paid;

(iii)the amount of any payments made under these Regulations prior to the scheme manager giving the transfer notice; and

(iv)such other matters as the scheme manager considers relevant.

(3E) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before the day on which a transfer notice is given, an amount to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the actual pension is to be calculated, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(3F) Where the beneficiary is a qualifying member who has received a payment in accordance with regulation 17H (payments to qualifying members receiving a pension from the qualifying pension scheme before entitlement to an annual payment or ill health payment), or the survivor or surviving dependant of such a qualifying member, the scheme manager may determine how the actual pension is to be calculated, having regard to—

(a)the amount paid under regulation 17H;

(b)any interim pension paid by the scheme from the day on which the scheme began to be wound up until the day on which a transfer notice was given; and

(c)such other matters as the scheme manager considers relevant.

(3G) Where the beneficiary is a qualifying member to whom regulation 17D applies or a survivor or surviving dependant of such a qualifying member, the scheme manager may determine how the actual pension is to be calculated, having regard to any lump sum paid and determined in accordance with that regulation.

(3H) Where the beneficiary is—

(a)a qualifying member to whom regulation 17H applied whose payment under Schedule 7 had been reduced under paragraph 1(2) or (5) of that Schedule; or

(b)a beneficiary who was entitled to an annual payment determined in accordance with Schedule 4 whose payment under that Schedule has been reduced under paragraph 1(2) or (5),

the scheme manager shall include the amount by which the payment has been reduced when determining the actual pension.

(3I) Sub-paragraph (3J) applies where—

(a)a qualifying member to whom Part 7 applies has received a payment from the scheme before becoming entitled to an annual payment;

(b)a transfer notice has been given in respect of the qualifying pension scheme; and

(c)the qualifying member became entitled to an annual payment prior to the day on which the transfer notice was given.

(3J) Where this sub-paragraph applies, the scheme manager may determine how the actual pension is to be calculated, having regard to—

(a)any interim pension paid by the scheme from the day on which the scheme began to be wound up until the day on which the transfer notice was given; and

(b)such other matters as the scheme manager considers relevant.

(3K) Where—

(a)the beneficiary is a qualifying member or the survivor or surviving dependant of a qualifying member to whom part 7 applies;

(b)the qualifying member has commuted for a lump sum a portion of the benefits deriving from the scheme after the day on which the scheme began to be wound up; and

(c)a transfer notice has been given in respect of the scheme,

the scheme manager may determine how the actual pension is to be calculated having regard to any lump sum paid as a result of the commutation.]

(4) Where the scheme manager is satisfied that it is not possible for him to determine the annual rate of annuity for the purposes of sub-paragraph (1) having regard to the information [F16available to it and to such other matters as the scheme manager considers appropriate], [F17it] shall determine the annual rate of annuity on the basis of the sum which would discharge the liability of the scheme to the beneficiary [F18and of such other matters] as [F17it] considers relevant.

[F19(5) Where the scheme manager is satisfied that increases have been, are being, or will be made to the annual rate of annuity, and [F17it] considers that those increases are not reasonable, [F17it] may determine the annual rate of annuity on the basis of the sum which would discharge the liability of the scheme to the beneficiary and of such other matters as [F17it] considers relevant.]