The Postal Services Act 2011 (Transfer of Accrued Pension Rights) Order 2012

Article 4

SCHEDULE 2 Restrictions on amendments to the RMSPS

1.—(1) In this Schedule—

“Actuarial Equivalence Requirements” has the meaning given in paragraph 9;

“Actuarial Equivalence Statement” has the meaning given in paragraph 13;

“Actuarial Equivalence Statement Requirement” has the meaning given in paragraph 12;

“Actuarial Value Requirement” has the meaning given in paragraph 11;

“Actuary” has the meaning given in the RMSPS Rules;

“Affected Member” is a person who is, at the time a Regulated Modification or RMPP Restricted Modification takes effect, a member of the RMSPS, a survivor of a member of the RMSPS or a survivor of a member of the RMPP who died on or before the Cut-Off Date with benefits under the RMSPS, and—

(a)

the Regulated Modification is a Protected Modification and, on taking effect, the Protected Modification would or might affect any of that person’s RMSPS Subsisting Rights as mentioned in paragraph (a) or (b) of the definition of “Protected Modification”;

(b)

the Regulated Modification is a Detrimental Modification that is not a Protected Modification and, on taking effect, the Detrimental Modification would or might adversely affect any of that person’s RMSPS Subsisting Rights; or

(c)

the RMPP Restricted Modification would, on taking effect, affect the person or the person’s benefits as mentioned in paragraph (b), (c) or (d) of the definition of “RMPP Restricted Modification”;

“Consent Requirements” means the requirements consisting of—

(a)

the Informed Consent Requirement; and

(b)

the Timing Requirement;

“Cut-Off Date” means 31 March 2012;

“Cut-Off Date Active” has the meaning given in the RMSPS Rules;

“Cut-Off Date Non-Active” has the meaning given in the RMSPS Rules;

“Detrimental Modification” means an amendment or modification to the RMSPS which on taking effect would or might adversely affect any RMSPS Subsisting Rights;

“Equivalent Correction” has the meaning given in sub-paragraph (3) below;

“Equivalent Scheme” means an occupational pension scheme, where the power to modify that scheme is subject to the “subsisting rights provisions” within the meaning of section 67 of the Pensions Act 1995(1);

“Information Requirement” has the meaning given in paragraph 10;

“Informed Consent Requirement” has the meaning given in paragraph 6;

“Protected Modification” means an amendment or modification to the RMSPS which—

(a)

on taking effect would or might result in any RMSPS Subsisting Right of a member of the RMSPS or a survivor of a member of the RMSPS or the RMPP which is not a right or entitlement to money purchase benefits becoming, or being replaced with, a right or entitlement to money purchase benefits under the Relevant RMSPS Rules (and for these purposes, the reference in the definition of “money purchase benefits” in section 181(1) of the Pension Schemes Act 1993(2) to the widow or widower of a member of an occupational pension scheme is to be read as including any other survivor of the member);

(b)

would or might result in a reduction in the prevailing rate of any pension in payment under the Relevant RMSPS Rules; or

(c)

if the RMSPS were an Equivalent Scheme would be a “protected modification” for the purposes of the “subsisting rights provisions” referred to in section 67 of the Pensions Act 1995 by reason of an order made under section 67A(3)(c) of that Act;

“Regulated Modification” means an amendment or modification to the RMSPS which is—

(a)

a Protected Modification; or

(b)

a Detrimental Modification;

or is both;

“relevant legislative provision” means any of the provisions referred to in section 67A(9) of the Pensions Act 1995, if and to the extent that the provision applies to the RMSPS under Schedule 4;

“Relevant RMSPS Rules” means—

(a)

the RMSPS Rules, except so far as overridden by a relevant legislative provision;

(b)

the relevant legislative provisions, to the extent that they have effect in relation to the RMSPS and are not reflected in the RMSPS Rules; and

(c)

any provision which the RMSPS Rules do not contain but which the RMSPS must contain if it is to conform with the requirements of Chapter 1 of Part 4 of the Pension Schemes Act 1993 (preservation of benefit under occupational pension schemes);

“Reporting Requirement” has the meaning given in paragraph 19;

“RMPP Cut-Off Date Rules” has the meaning given in the RMSPS Rules;

“RMPP Restricted Modification” means an amendment or modification which—

(a)

would alter the primary purpose of the RMSPS;

(b)

would reduce the benefits of any person who is at the date of the amendment or modification already entitled to the receipt of a pension or annuity under the RMSPS;

(c)

would, in respect of a person in what was immediately prior to 28 August 1987 category (a) in rule 1 of the non-contributory part of the RMPP (as set out in the third supplemental deed to the RMPP dated 19 November 1971), depart from the Civil Service Scheme for the time being in force as prescribed by rule 2 of the non-contributory section rules of the RMPP Cut-Off Date Rules;

(d)

would, in respect of a person in what was immediately prior to 28 August 1987 category (a) in general rule 1 of the RMPP as set out in the third supplemental deed to the RMPP dated 19 November 1971 who was subject to the section A rules of the RMPP Cut-Off Date Rules, deprive that person of the following—

(i)

if the person is a Cut-Off Date Non-Active, any of the benefits referred to in rule 1 of the section A rules of the RMPP Cut-Off Date Rules; or

(ii)

if the person is a Cut-Off Date Active, any of the benefits provided for in the Section A Rules of the RMSPS Rules;

“RMSPS Subsisting Rights” means—

(a)

in relation to a member of the RMSPS, at any time—

(i)

any right (including any pension credit right) which at that time has accrued or been provided to or in respect of the member to future benefits under the Relevant RMSPS Rules; or

(ii)

any entitlement to the present payment of a pension or other benefit which the member has at that time, under the Relevant RMSPS Rules; and

(b)

in relation to the survivor of a member of the RMSPS or of the RMPP, at any time, any entitlement to benefits, or right to future benefits, which that survivor has at that time under the Relevant RMSPS Rules in respect of such member;

“survivor”, in relation to a member of the RMSPS or the RMPP, means a person who—

(a)

is the widow or widower of the member; or

(b)

has survived the member and has any entitlement to benefit, or right to future benefits, under the Relevant RMSPS Rules in respect of the member;

“Timing Requirement” has the meaning given in paragraph 8.

(2) A modification would or might adversely affect a person’s RMSPS Subsisting Rights if it would alter the nature or extent of the entitlement or right so that the benefits, or future benefits, to which the entitlement or right relates would or might be less generous.

(3) An amendment or modification to a rule or provision of the RMSPS will be an “Equivalent Correction” where—

(i) any rule or provision of the RMPP Rules has been subject to rectification or correction which would not be subject to or restricted by the restrictions on the power to amend the RMPP Rules or the “subsisting rights provisions” within the meaning of section 67 of the Pensions Act 1995 at that time (or such rectification or correction would be available in relation to that rule or provision);

(ii) the rule or provision of the RMSPS corresponds to or is derived from that rule or provision of the RMPP Rules; and

(iii) the amendment or modification to the rule or provision of the RMSPS is consistent with such rectification or correction of that rule or provision of the RMPP, and does no more than implement a corresponding correction to the terms of the rule or provision of the RMSPS.

2.—(1) A Regulated Modification may be made to the RMSPS by the Secretary of State if—

(a) it is an amendment or modification which, if the RMSPS were an Equivalent Scheme would not, at the time the amendment or modification is being made, have been subject to or restricted by the “subsisting rights provisions” within the meaning of section 67 of the Pensions Act 1995 at that time, including without limitation an amendment or modification which—

(i) comes within section 67(3) of the Pensions Act 1995;

(ii) could have been made by resolution under section 68 of the Pensions Act 1995 or section 24G of the Pension Schemes Act 1993;

(iii) reflects legislative requirements that have overriding effect in relation to the scheme and are not reflected in the scheme rules;

(iv) includes in the scheme rules any provision which those rules do not contain but which the scheme must contain if it is to conform with legislative requirements, if those legislative requirements do not have overriding effect in relation to the scheme;

(b) it is an Equivalent Correction; or

(c) the following requirements are satisfied in respect of the modification in the case of each Affected Member—

(i) if the modification is a Protected Modification, the Consent Requirements;

(ii) if the modification is not a Protected Modification, either the Actuarial Equivalence Requirements (if the Secretary of State determines that they are to apply in the case of that Affected Member) or the Consent Requirements; and

(iii) the Reporting Requirement.

(2) If the Regulated Modification is also an RMPP Restricted Modification, the requirements of paragraph 3 must be satisfied if the modification is to be made.

3.—(1) An RMPP Restricted Modification (other than a modification within paragraph (a) of the definition of “RMPP Restricted Modification”) may be made to the RMSPS by the Secretary of State if the modification satisfies either (a) or (b) below—

(a) The modification—

(i) is required to reflect legislative requirements that have overriding effect in relation to the RMSPS (and are not otherwise reflected in the RMSPS Rules);

(ii) is required to include in the RMSPS Rules any provision which those rules do not contain but which they must contain if that scheme is to conform with legislative requirements (where those legislative requirements apply but do not have overriding effect in relation to the RMSPS);

(iii) were it being made under the RMPP, could have been made by trustee resolution under either section 68 of the Pensions Act 1995 or section 24G of the Pension Schemes Act 1993 provided that, in each case, the Secretary of State complies with any procedural requirements relevant to the resolution which would have had to be complied with by the trustee of the RMPP were the modification being made under that scheme; or

(iv) is an Equivalent Correction.

(b) The following requirements are satisfied in respect of the modification in the case of each Affected Member —

(i) the Consent Requirements; and

(ii) the Reporting Requirement.

(2) If the RMPP Restricted Modification is also a Regulated Modification, the requirements of paragraph 2 must be satisfied if the modification is to be made.

4.  If a Regulated Modification or an RMPP Restricted Modification is made to the RMSPS by the Secretary of State and a member of the RMSPS dies before the requirements mentioned in paragraph 2(1)(c) or 3(1)(b), so far as they apply in that member’s case, have been complied with in respect of the modification, paragraph 5 will apply to that modification if the member—

(a) before the member died, had given his or her consent to the modification in accordance with the Consent Requirements, or

(b) before the member died, or before the Secretary of State had become aware that the member had died, the Secretary of State had complied with the Information Requirement (other than paragraph 10(c)) in respect of the modification in that member’s case.

5.  Any of the requirements mentioned in paragraphs 2(1)(c) and 3(1)(b) as it applies in respect of the modification—

(a) which is satisfied in the case of the member; or

(b) which would have been satisfied in the member’s case had the member not died before it was satisfied,

is to be taken to be satisfied in the case of any survivor of the member in respect of the modification.

6.  Subject to paragraph 7, the “Informed Consent Requirement” is satisfied in the case of an Affected Member if before the modification is made—

(a) the Secretary of State has—

(i) given that person information in writing adequate to explain the nature of the modification and its effect on the member;

(ii) notified that person in writing that he or she may make representations to the Secretary of State about the modification;

(iii) afforded that person a reasonable opportunity to make such representations; and

(iv) notified that person in writing that the Consent Requirements apply in that person’s case in respect of the modification; and

(b) after the Secretary of State has complied with paragraph (a)(i), (ii) and (iv), the Affected Member has given consent in writing to the modification.

7.  If—

(a) the modification is not a Protected Modification; and

(b) before the modification is made the Secretary of State notifies an Affected Member in writing that—

(i) if that person gives consent to the modification for the purposes of the Consent Requirements, those requirements apply in that person’s case in respect of the modification, but

(ii) otherwise, the Actuarial Equivalence Requirements apply in that person’s case in respect of the modification,

the Secretary of State is to be taken to have complied with paragraph 6(a)(iv) in respect of that member.

8.  The Timing Requirement is satisfied in the case of an Affected Member if the modification takes effect within a reasonable period after that person has given consent to the modification in accordance with paragraph 6(b).

9.  The Actuarial Equivalence Requirements consist of—

(a) the Information Requirement;

(b) the Actuarial Value Requirement; and

(c) the Actuarial Equivalence Statement Requirement.

10.  The Information Requirement is satisfied in the case of an Affected Member if before the modification is made the Secretary of State has taken all reasonable steps to—

(a) give that person information in writing adequate to explain the nature of the modification and its effect on that person;

(b) notify that person in writing that he or she may make representations to the Secretary of State about the modification;

(c) afford that person a reasonable opportunity to make such representations; and

(d) notify that person in writing that the Actuarial Equivalence Requirements apply in that person’s case in respect of the modification.

11.  The Actuarial Value Requirement is satisfied in the case of an Affected Member if before the modification is made the Secretary of State has made such arrangements, or taken such steps, as are adequate to secure that actuarial value will be maintained, in accordance with paragraph 14.

12.  The Actuarial Equivalence Statement Requirement is satisfied in the case of an Affected Member if the Secretary of State has, within a reasonable period beginning with the date on which the modification takes effect, obtained an Actuarial Equivalence Statement relating to the Affected Member in respect of the modification.

13.  An Actuarial Equivalence Statement means a statement in writing which—

(a) is given by the Actuary or another person who is approved by the Secretary of State and is a Fellow of the Faculty of Actuaries or a Fellow of the Institute of Actuaries; and

(b) certifies that actuarial value has been maintained, in accordance with paragraph 14.

14.  For the purposes of paragraphs 11 and 13 as they apply in relation to an Affected Member, actuarial value is maintained if the actuarial value, immediately after the time at which the modification takes effect, of the Affected Member’s RMSPS Subsisting Rights is equal to or greater than the actuarial value of that person’s RMSPS Subsisting Rights immediately before that time.

15.  The Information Requirement is to be taken to have been satisfied in relation to the revised modification where—

(a) the Information Requirement has been satisfied in the case of an Affected Member in respect of a proposed modification (“the original modification”);

(b) before the Secretary of State has made a modification to the RMSPS in relation to the original modification, the original modification has been revised; and

(c) the modification as so revised (“the revised modification”) does not differ from the original modification in any material respect.

16.  The Secretary of State is to be regarded as having taken all reasonable steps to notify an Affected Member as mentioned in paragraph 10(d) if he has taken all reasonable steps to notify that person in writing that—

(a) if that person gives consent to the modification for the purposes of the Consent Requirements, those requirements apply in that person’s case in respect of the modification, but

(b) otherwise, the Actuarial Equivalence Requirements apply in that person’s case in respect of the modification.

17.  When making any calculation for the purposes of paragraphs 11, 13 and 14 of the actuarial value of an Affected Member’s RMSPS Subsisting Rights at any time, the Actuary must—

(a) calculate the value of the RMSPS Subsisting Rights of an Affected Member by adopting methods and making assumptions which are consistent with methods and assumptions used by the Secretary of State as at the date of the modification to calculate a cash equivalent transfer value from the RMSPS in accordance with regulations 7 to 7C and 7E(1) to (3) as appropriate of the Occupational Pension Schemes (Transfer Values) Regulations 1996 (manner of calculation and verification of cash equivalents), as those regulations apply to the RMSPS under Schedule 4;

(b) ensure that the calculation of the actuarial value of an Affected Member’s RMSPS Subsisting Rights is made in accordance with any guidance that is adopted or prepared, and from time to time revised, by the Board for Actuarial Standards (being the operating body of that name of the Financial Reporting Council) which is current on the date that the Actuarial Equivalence Statement is obtained by the Secretary of State;

(c) exclude from the RMSPS Subsisting Rights calculation—

(i) the value of any RMSPS Subsisting Rights that have been surrendered, commuted or forfeited before the date on which the modification of the RMSPS takes effect;

(ii) the value of any amounts paid, or due to be paid, in respect of any pension or other benefit in payment to an Affected Member in respect of a period prior to the date on which the modification takes effect;

(iii) the value of discretionary benefits that have not been awarded to an Affected Member or are not in payment on the date on which the modification takes effect; and

(d) exclude any RMSPS Subsisting Rights which consist wholly or partly of rights to money purchase benefits where—

(i) those benefits are not valued in a manner which involves making estimates of the value of the rights, and

(ii) the modification has no effect on the value of those rights.

18.  Nothing in paragraphs 12 and 13 precludes Actuarial Equivalence Statements relating to—

(a) two or more Affected Members, or

(b) Affected Members of any particular description, in respect of a modification being given in a single document.

19.  The Reporting Requirement is satisfied in relation to the exercise of a power to which paragraph 2 or 3 applies if the Secretary of State has, in accordance with paragraph 20—

(a) notified each Affected Member in whose case the Consent Requirements apply in respect of the modification, and

(b) taken all reasonable steps to notify each Affected Member in whose case the Actuarial Equivalence Requirements apply in respect of the modification,

that he has made an order to modify the RMSPS.

20.  The Secretary of State must give (or, where the Actuarial Equivalence Requirements apply, take all reasonable steps to give) the notification mentioned in paragraph 19—

(a) within a reasonable period beginning with the date of the order modifying the RMSPS mentioned in paragraph 19; and

(b) before the date on which the modification made by that order takes effect.

(1)

1995 c.26.

(2)

1993 c.48.