|
| |
|
(c) | the survivor first satisfies those conditions on or after that date. |
| |
(2) | The survivor is entitled to periodic compensation in respect of that pension |
| |
| |
(a) | commencing if, and when, the pension would have become payable |
| |
under the admissible rules, and |
| 5 |
(b) | continuing until such time as entitlement to the pension would have |
| |
ceased under the admissible rules. |
| |
(3) | The annual rate of the periodic compensation is 100% of the aggregate of— |
| |
(a) | the initial rate of the pension which would have been payable in |
| |
accordance with the admissible rules had the conditions mentioned |
| 10 |
in sub-paragraph (1)(c) been satisfied, immediately before the |
| |
| |
(b) | any increases under paragraph 27 (annual increases in periodic |
| |
| |
(4) | This paragraph is subject to paragraph 29 (power of Secretary of State to |
| 15 |
change percentage rates by order). |
| |
Compensation in form of dependants’ benefits |
| |
22 (1) | Regulations may provide for compensation to be payable, in such |
| |
circumstances as may be prescribed, to or in respect of prescribed |
| |
dependants of prescribed descriptions of— |
| 20 |
(a) | members of the scheme, or |
| |
(b) | persons with rights to benefits payable under the scheme in respect |
| |
of members of the scheme. |
| |
(2) | Regulations may in particular— |
| |
(a) | provide for compensation in the form of periodic or lump sum |
| 25 |
| |
(b) | for periodic compensation to be payable for a prescribed period, |
| |
(c) | apply paragraphs 27 and 28(2) (annual increases in respect of |
| |
periodic compensation) in respect of compensation in the form of |
| |
periodic payments (with or without modifications). |
| 30 |
Commutation of periodic compensation |
| |
23 (1) | In prescribed circumstances, a person entitled to periodic compensation |
| |
under paragraph 5, 8, 11 or 15 may opt to commute for a lump sum a portion |
| |
of the periodic compensation with effect from the time it becomes payable. |
| |
(2) | Except in such circumstances as may be prescribed, the portion commuted |
| 35 |
under sub-paragraph (1) must not exceed 25%. |
| |
(3) | Any reduction required to be made under paragraph 25 (compensation cap) |
| |
must be made before determining the amount of a person’s periodic |
| |
compensation which may be commuted under this paragraph. |
| |
(4) | Where a person opts to commute any part of his periodic compensation |
| 40 |
under this paragraph, the lump sum payable under sub-paragraph (1) is the |
| |
actuarial equivalent of the commuted portion of the periodic compensation |
| |
calculated from tables designated for this purpose by the Board. |
| |
(5) | The Board must publish in such manner as it considers appropriate the |
| |
tables designated by it for the purposes of sub-paragraph (4). |
| 45 |
|
| |
|
| |
|
(6) | Regulations may prescribe the manner in which an option to commute |
| |
periodic compensation under this paragraph may be exercised. |
| |
(7) | This paragraph does not apply where— |
| |
(a) | before the assessment date, the person concerned has received |
| |
benefits under the scheme which were in the form of a lump sum |
| 5 |
(otherwise than as a result of the commutation of any part of a |
| |
pension) and were attributable to his own service under the scheme, |
| |
| |
(b) | immediately before the assessment date, the person concerned has |
| |
rights to a lump sum under the admissible rules (otherwise than by |
| 10 |
commutation of any part of a pension) and those rights are |
| |
attributable to such service. |
| |
(8) | The Secretary of State may, by order, amend sub-paragraph (2) to substitute |
| |
a different percentage for the percentage for the time being specified in that |
| |
| 15 |
Early payment of compensation |
| |
24 (1) | Regulations may prescribe circumstances in which, and conditions subject |
| |
to which, a person may become entitled to— |
| |
(a) | periodic compensation under paragraph 11 or 15, or |
| |
(b) | lump sum compensation under paragraph 14 or 19, |
| 20 |
| before he attains normal pension age (or, in a case to which paragraph 20 |
| |
applies, normal benefit age). |
| |
(2) | The Board must determine the amount of the actuarial reduction to be |
| |
applied to compensation where a person becomes so entitled by virtue of |
| |
regulations under this paragraph. |
| 25 |
(3) | Where, by virtue of this paragraph, periodic compensation is payable to a |
| |
person under paragraph 11 or 15 before that person attains normal pension |
| |
| |
(a) | paragraph 12(2) applies as if the reference to the date on which the |
| |
active member attains normal pension age were a reference to the |
| 30 |
date on which the compensation is payable by virtue of this |
| |
| |
(b) | paragraph 17(2)(b) applies as if the reference to the date on which the |
| |
deferred member attains normal pension age were a reference to the |
| |
date on which the compensation is payable by virtue of this |
| 35 |
| |
| |
| |
(a) | a person becomes entitled to relevant compensation in respect of a |
| |
benefit (“benefit A”) under the scheme, and |
| 40 |
(b) | sub-paragraph (2)(a) or (b) applies, |
| |
| the amount of the compensation must be restricted in accordance with sub- |
| |
| |
(2) | For the purposes of sub-paragraph (1)— |
| |
(a) | this paragraph applies if— |
| 45 |
(i) | the annual value of benefit A exceeds the compensation cap, |
| |
| |
|
| |
|
| |
|
(ii) | paragraph (b)(i) does not apply, and |
| |
(b) | this paragraph applies if— |
| |
(i) | at the same time as the person becomes entitled to relevant |
| |
compensation in respect of benefit A he also becomes entitled |
| |
to relevant compensation in respect of one or more other |
| 5 |
benefits under the scheme or a connected occupational |
| |
pension scheme (“benefit or benefits B”), and |
| |
(ii) | the aggregate of the annual values of benefit A and benefit or |
| |
benefits B exceeds the compensation cap. |
| |
(3) | Where the relevant compensation in respect of benefit A is required to be |
| 10 |
restricted in accordance with this sub-paragraph— |
| |
(a) | if that compensation is within sub-paragraph (4)(a), the protected |
| |
pension rate for the purposes of paragraph 3(3)(a) is the cap fraction |
| |
of the rate determined in accordance with paragraph 3(5), |
| |
(b) | if that compensation is within sub-paragraph (4)(b), the protected |
| 15 |
notional pension for the purposes of paragraph 11(3)(a) is the cap |
| |
fraction of the rate determined in accordance with paragraph 11(4); |
| |
(c) | if that compensation is within sub-paragraph (4)(c), the protected |
| |
amount for the purposes of paragraph 14(3) is the cap fraction of the |
| |
amount determined in accordance with paragraph 14(4); |
| 20 |
(d) | if that compensation is within sub-paragraph (4)(d), the protected |
| |
pension rate for the purposes of paragraph 15(3)(a) is the cap fraction |
| |
of the rate determined in accordance with paragraph 15(4); |
| |
(e) | if that compensation is within sub-paragraph (4)(e), the protected |
| |
amount for the purposes of paragraph 19(3) is the cap fraction of the |
| 25 |
amount determined in accordance with paragraph 19(4). |
| |
(4) | For the purposes of this paragraph “relevant compensation” means— |
| |
(a) | periodic compensation under paragraph 3 (in a case to which sub- |
| |
paragraph (7) of that paragraph applies), |
| |
(b) | periodic compensation under paragraph 11, |
| 30 |
(c) | compensation under paragraph 14, |
| |
(d) | periodic compensation under paragraph 15, or |
| |
(e) | compensation under paragraph 19. |
| |
(5) | For the purposes of this paragraph, “the cap fraction” means—![equation: over[char[C],char[V]]](missing.gif) |
| |
| 35 |
| C is the compensation cap, and |
| |
| V is the annual value of benefit A or, in a case to which sub-paragraph (2)(b) |
| |
applies, the aggregate of the annual values of benefit A and benefit or |
| |
| |
(6) | For the purposes of this paragraph the “annual value” of a benefit in respect |
| 40 |
of which a person has become entitled to relevant compensation means— |
| |
(a) | if the relevant compensation is within sub-paragraph (4)(a) and |
| |
neither paragraph (b) nor (c) below applies, the amount of the |
| |
protected pension rate for the purposes of paragraph 3(3)(a); |
| |
|
| |
|
| |
|
(b) | if the relevant compensation is within sub-paragraph (4)(a) and is in |
| |
respect of a pension of which a portion has been commuted for a |
| |
lump sum, the amount which would have been the protected |
| |
pension rate for those purposes had that portion not been |
| |
| 5 |
(c) | if the relevant compensation is within sub-paragraph (4)(a) and the |
| |
person became entitled to a relevant lump sum under the scheme at |
| |
the same time as he became entitled to the pension to which that |
| |
compensation relates, an amount equal to the aggregate of— |
| |
(i) | the protected pension rate for the purposes of paragraph |
| 10 |
| |
(ii) | the annualised value of the relevant lump sum; |
| |
(d) | if the relevant compensation is within sub-paragraph (4)(b), the |
| |
amount of the protected notional pension for the purposes of |
| |
| 15 |
(e) | if the relevant compensation is within sub-paragraph (4)(c), the |
| |
annualised value of the protected amount for the purposes of |
| |
| |
(f) | if the relevant compensation is within sub-paragraph (4)(d), the |
| |
amount of the protected pension rate for the purposes of paragraph |
| 20 |
| |
(g) | if the relevant compensation is within sub-paragraph (4)(e), the |
| |
annualised value of the protected amount for the purposes of |
| |
| |
| and for the purposes of determining the annual value of a benefit any |
| 25 |
reduction required to be made by this paragraph is to be disregarded. |
| |
| |
| “annualised value” of a lump sum or amount means the annualised |
| |
actuarially equivalent amount of that sum or amount determined in |
| |
accordance with actuarial factors published by the Board; |
| 30 |
| “the compensation cap”, in relation to the person who becomes |
| |
entitled to relevant compensation in respect of benefit A, means— |
| |
(a) | the amount specified by the Secretary of State by order, or |
| |
| |
(i) | has not attained the age of 65, or |
| 35 |
(ii) | has attained the age of 66, |
| |
| at the time he first becomes entitled to that compensation, |
| |
that amount as adjusted by the Board in accordance with |
| |
actuarial adjustment factors published by it; |
| |
| and for the purposes of this paragraph, except in prescribed circumstances, |
| 40 |
the scheme is connected with another occupational pension scheme if the |
| |
same person is or was an employer in relation to both schemes. |
| |
(8) | For the purposes of sub-paragraph (6)(c) a lump sum under the scheme is a |
| |
relevant lump sum if the person’s entitlement to the lump sum— |
| |
(a) | is attributable to his pensionable service under the scheme or another |
| 45 |
| |
(b) | did not arise by virtue of any provision of the admissible rules of the |
| |
scheme making special provision as to early payment of pension on |
| |
| |
|
| |
|
| |
|
(9) | Regulations may provide for this paragraph to apply with prescribed |
| |
modifications where a person becomes entitled to relevant compensation in |
| |
respect of a benefit and he has previously— |
| |
(a) | become entitled to relevant compensation in respect of a benefit or |
| |
benefits under the scheme or a connected occupational pension |
| 5 |
| |
(b) | become entitled to one or more lump sums under the scheme or a |
| |
connected occupational pension scheme. |
| |
(10) | Regulations may prescribe sums which are to disregarded for the purposes |
| |
| 10 |
Increasing the compensation cap in line with earnings |
| |
26 (1) | This paragraph applies where, on a review under subsection (2) of section |
| |
148 of the Social Security Administration Act 1992 (c. 5) (review of general |
| |
level of earnings obtaining in Great Britain) in a tax year, the Secretary of |
| |
State concludes that the general level of earnings obtaining in Great Britain |
| 15 |
(“the new level”) exceeds the general level at the end of the period |
| |
mentioned in paragraph (a) or, as the case may be, the date determined |
| |
under paragraph (b) of that subsection (“the old level”). |
| |
(2) | The Secretary of State must make an order under sub-paragraph (7) of |
| |
paragraph 25 which has the effect of increasing the amount specified for the |
| 20 |
purposes of that sub-paragraph by the percentage by which the new level is |
| |
greater than the old level. |
| |
(3) | The order must provide for the increase to have effect on and after the 1st |
| |
April next following the end of the tax year to which the review relates. |
| |
Annual increase in periodic compensation |
| 25 |
27 (1) | This paragraph provides for the increases mentioned in sub-paragraph |
| |
(3)(b) of paragraphs 3, 5, 8, 11, 15 and 21. |
| |
(2) | Where a person is entitled to periodic compensation under any of those |
| |
paragraphs, he is entitled, on the indexation date, to an increase under this |
| |
| 30 |
(a) | the appropriate percentage of the amount of the underlying rate |
| |
immediately before that date, or |
| |
(b) | where the person first became entitled to the periodic compensation |
| |
during the period of 12 months ending immediately before that date, |
| |
1/12th of that amount for each full month for which he was so |
| 35 |
| |
(3) | In sub-paragraph (2)— |
| |
| “appropriate percentage” means the lesser of— |
| |
(a) | the percentage increase in the retail prices index for the |
| |
period of 12 months ending with the 31st May last falling |
| 40 |
before the indexation date, and |
| |
| |
| |
(a) | the 1st January next falling after a person first becomes |
| |
entitled to the periodic compensation, and |
| 45 |
(b) | each subsequent 1st January during his lifetime; |
| |
|
| |
|
| |
|
| “underlying rate” means, in the case of periodic compensation under |
| |
any of the paragraphs mentioned in sub-paragraph (1), the |
| |
| |
(a) | so much of the amount mentioned in sub-paragraph (3)(a) |
| |
of the paragraph in question as is attributable to post-1997 |
| 5 |
| |
(b) | the amount within sub-paragraph (3)(b) of that paragraph |
| |
immediately before the indexation date. |
| |
(4) | Where paragraph 25(3) (compensation cap) applies to restrict the amount of |
| |
periodic compensation under one of the paragraphs mentioned in sub- |
| 10 |
paragraph (1), the amount mentioned in sub-paragraph (3)(a) of the |
| |
paragraph in question is attributable to post-1997 service and pre-1997 |
| |
service in the same proportions as the amount so mentioned would have |
| |
been so attributable had paragraph 25(3) not applied. |
| |
(5) | Where a portion of periodic compensation under one of the paragraphs |
| 15 |
mentioned in sub-paragraph (1) has been commuted under paragraph 23— |
| |
(a) | for the purposes of sub-paragraph (2), the definition of “underlying |
| |
rate” in sub-paragraph (3) applies as if the reference in paragraph (a) |
| |
of the definition to the amount mentioned in sub-paragraph (3)(a) of |
| |
the paragraph in question was a reference to that amount reduced by |
| 20 |
the commutation percentage, and |
| |
(b) | that amount (as so reduced) is attributable to post-1997 service and |
| |
pre-1997 service in the same proportions as that amount would have |
| |
been so attributable had no part of the periodic compensation been |
| |
| 25 |
| |
| “post-1997 service” means— |
| |
(a) | pensionable service under the scheme on or after 6th April |
| |
| |
(b) | rights which are derived (directly or indirectly) from rights |
| 30 |
attributable to pensionable service on or after that date; |
| |
| “pre-1997 service” means— |
| |
(a) | pensionable service under the scheme before that date, or |
| |
(b) | rights which are derived (directly or indirectly) from rights |
| |
attributable to pensionable service before that date; |
| 35 |
| “the commutation percentage”, in relation to periodic compensation, |
| |
means the percentage of that compensation commuted under |
| |
| |
(7) | This paragraph is subject to paragraph 28 (Board’s power to alter rates of |
| |
revaluation and indexation). |
| 40 |
Board’s powers to alter rates of revaluation and indexation |
| |
28 (1) | The Board may determine the percentage that is to be the maximum |
| |
revaluation rate for the purposes of paragraphs 12(4) and 17(4), and where |
| |
it does so paragraphs 12(5) and 17(5) do not apply. |
| |
(2) | The Board may also determine the percentage that is to be the appropriate |
| 45 |
percentage for the purposes of paragraph 27 (and where it does so the |
| |
definition of “appropriate percentage” in paragraph 27(3) does not apply). |
| |
(3) | Before making a determination under this paragraph the Board must— |
| |
(a) | consult such persons as it considers appropriate, and |
| |
|
| |
|
| |
|
(b) | publish details of the proposed determination in such manner as it |
| |
considers appropriate and consider any representations made in |
| |
| |
(4) | The rate determined under this paragraph may be nil. |
| |
(5) | A determination under this paragraph may be expressed so as to have effect |
| 5 |
| |
(6) | A determination under sub-paragraph (2)— |
| |
(a) | has effect in relation to future increases under paragraph 27 only, |
| |
| |
(b) | may be expressed to have effect— |
| 10 |
(i) | in all cases (whether the entitlement to the periodic |
| |
compensation first arose before or after the date the |
| |
determination is made), or |
| |
(ii) | only in cases where entitlement to the periodic compensation |
| |
first arose on or after a date determined by the Board. |
| 15 |
(7) | Notice of any determination under this paragraph must be published in |
| |
such manner as the Board considers appropriate. |
| |
Secretary of State’s powers to vary percentage paid as compensation |
| |
29 (1) | The Secretary of State may, on the recommendation of the Board, by order |
| |
provide that any of the provisions mentioned in sub-paragraph (2) is to have |
| 20 |
effect as if a different percentage were substituted for the percentage |
| |
specified in the provision on the passing of this Act (“the original |
| |
| |
(2) | The provisions are paragraphs 3(4)(a) and (b), 5(3), 7(2), 8(3), 10(2), 11(3), |
| |
14(3), 15(3), 19(3) and 21(3) of this Schedule (percentage used to calculate |
| 25 |
periodic or lump sum compensation entitlement). |
| |
(3) | Subject to sub-paragraph (4), an order under sub-paragraph (1) has effect |
| |
only in respect of any period for which the Board has, under paragraph 28— |
| |
(a) | reduced the maximum revaluation rate for the purposes of |
| |
paragraphs 12(4) and 17(4) to nil, and |
| 30 |
(b) | reduced the appropriate percentage for the purposes of paragraph 27 |
| |
| |
(4) | Sub-paragraph (3) does not prevent an order under sub-paragraph (1) |
| |
having effect to the extent that it provides for paragraph 3(4)(a), 11(3), 14(3), |
| |
15(3) or 19(3) (provisions where the original percentage is 90%) to have effect |
| 35 |
as if for the original percentage there were substitute a higher percentage. |
| |
(5) | Before making a recommendation for the purposes of sub-paragraph (1) the |
| |
| |
(a) | consult such persons as it considers appropriate, and |
| |
(b) | publish details of the proposed recommendation in such manner as |
| 40 |
it considers appropriate and consider any representations made in |
| |
| |
(6) | Subject to sub-paragraph (3), an order under this paragraph may have |
| |
| |
(a) | for a limited period specified in the order; |
| 45 |
| |
|
| |
|