type: legislation

jurisdiction: UK

text:
1
This Order may be cited as the Al Trunk Road (A57, A638 and B1164 Junction Improvement Markham Moor) Order 2006 and shall Come into force on 3 November 2006
2
In this Order —
1
all measurements of distance are measured along the route of the relevant highway;
2
a
“the new trunk roads” means the new slip roads;
b
“the plan” means the plan folio consisting of the key plan and the site plan, numbered HA 10/MP/080 and marked “Al Trunk Road (A57, A638 and B1164 Junction Improvement Markham Moor) Order 2006”, signed by authority of the Secretary of State for Transport and deposited at DfT Records Management Branch, Floor 13 (IMD), Ashdown House, St Leonards on Sea, Hastings, East Sussex TN37 7GA; and
c
“the slip roads” means the new highways which the Secretary of State proposes to construct along the routes described in the Schedule to this Order and which connect the new main road with other highways or proposed highways at the places stated in that Schedule.
3
The slip roads shall become trunk roads from the date when this Order comes into force.
4
The centre line of each of the trunk roads is indicated by a heavy black line on the plan.
5
The Secretary of State directs as respects any part of a highway which crosses the route of any of the new trunk roads that —
a
where the highway is maintainable at the public expense by a local highway authority, the part in question shall be maintained by that authority, and
b
where the highway is not so maintainable and is not maintainable under a special enactment or by reason of tenure, enclosure or prescription, the Secretary of State shall be under no duty to maintain the part in question,
until, in either case, a date to be specified in a notice given by the Secretary of State to the highway authority for that highway. The date specified will not be later than the date on which the relevant route is opened for traffic.
Signed by authority of the Secretary of State for Transportt
Ian Scholey
A Divisional Director
Highways Agency
16 October 2006


text:
Citation, and commencement
1
These Regulations may be cited as the Social Security (Contributions) (Amendment No. 6) Regulations 2006 and shall come into force on 14th November 2006.
2
1
The Social Security Contributions Regulations 2001 shall be amended as follows.
2
In Part 8 of Schedule 3 (sums by way of travelling, relocation and other expenses and allowances of the employment disregarded in the computation of employed earners’ earnings) after paragraph 12 (foreign service allowance) insert —
HM Forces’ operational allowance
12A
A payment by the Secretary of State for Defence of an operational allowance to a member of Her Majesty’s forces in respect of service in an operational area specified by the Secretary of State for Defence.
.
Frank Roy
Alan Campbell
Two of the Lords Commissioners of Her Majesty’s Treasury
8th November 2006
The Secretary of State concurs.
Signed by authority of the Secretary of State
James Purnell
Minister of State,
Department for Work and Pensions
7th November 2006
The Department for Social Development concurs.
Sealed with the Official Seal of the Department is on the 7th November 2006
John O’Neill
A senior officer of the Department for Social Development


text:
Introductory
Citation, commencement and interpretation
1
1
This Order may be cited as the European Parliamentary (United Kingdom Representatives) Pensions (Amendment) Order 2006.
2
This Order comes into force on 6th April 2006.
3
In this Order —
“the Principal Order ” means the European Parliamentary (United Kingdom Representatives) Pensions (Consolidation and Amendment) Order 1994 ; and
“the AVC Order ” means the European Parliamentary (United Kingdom Representatives) Pensions (Additional Voluntary Contributions Scheme) (No 2) Order 1995 .
Amendments of the Principal Order
The earnings cap and maximum pensions
2
1
Article 2 of the Principal Order (interpretation) is amended as specified in paragraphs (2) and (3).
2
In paragraph (1) —
a
after the definition of “guaranteed minimum pension” insert —
“index” means the retail prices index, as defined for the purposes of the Income Tax Acts by section 833(2) of the Taxes Act 1988 and, except in paragraphs (1B) and (1C) of this article, references to the index at any time are to the index for the calendar month three months before that time;
,
b
for the definition of “permitted maximum” substitute —
“permitted maximum”, except in article 8(5)(a), (b)(i), (c), (5B)(a), (5C)(a) and (5D) —
in relation to the tax years 1988-89 and 1989-90, means £60,000,
in relation to any other tax year before the tax year 2006-07, means the figure specified for that tax year in an order made under section 590C of the Taxes Act 1988, and
in relation to any later tax year, means the figure found for that year by virtue of paragraphs (1A) to (1C) of this article;
and, except where the context indicates otherwise, references to the permitted maximum in relation to a person mean the permitted maximum for the tax year in which the person ceases to be a participant;
, and
c
after the definition of “permitted maximum” insert —
“registered pension scheme” has the same meaning as in Part 4 of the Finance Act 2004 (see section 150(2) of that Act);
.
3
After paragraph (1) insert —
1A
The figure is £108,600 subject to paragraphs (1B) and (1C) of this article.
1B
If the index for the month of September preceding the tax year 2007-08 or any later tax year is higher than it was for the previous September, the figure for that year shall be an amount arrived at by —
a
increasing the figure for the previous tax year by the same percentage as the percentage increase in the index, and
b
if the result is not a multiple of £600, rounding it up to the nearest amount which is such a multiple.
1C
If the index for the month of September preceding the tax year 2007-08 or any later tax year is not higher than it was for the previous September, the figure for that year shall be the same as for the previous tax year.
.
4
Schedule 2 to the Principal Order (maximum pensions) is amended as follows.
5
In paragraph 1 (interpretation) —
a
omit the definition of “index”,
b
after the definition of “the multiple” insert —
“pension value”, in relation to a person’s retained benefits, means —
in the case of a pension to which the person is actually entitled, the annual amount of the pension, adjusted by an amount determined by the Managers having regard to guidance issued from time to time by the Government Actuary in any case where the Managers consider, in view of that guidance, that the amount of the pension may fluctuate,
in the case of a lump sum to which the person has become entitled, the annual amount of a pension payable under the scheme to someone of the person’s description that has a value equal to that sum as determined by the Managers having regard to such guidance, and
in the case of a benefit to which the person is prospectively entitled, the annual amount of a pension payable under the scheme to someone of the person’s description that has a value equal to the value of that benefit as determined by the Managers, having regard to such guidance;
, and
c
in the definition of “retained benefits” for the words from the beginning to the end of paragraph (e) substitute —
“retained benefits”, in relation to a participant, means benefits for the participant that —
are derived from a registered pension scheme, or
were retained benefits in relation to the participant for the purposes of this Schedule immediately before 6th April 2006,
.
6
In paragraph 3(4) (restriction of Class A participant’s total retirement benefit under the Principal Order and additional voluntary contributions to one thirtieth of the permitted maximum for each year of service) omit “total”, in the first and third places where it occurs, and “from any additional free-standing voluntary contributions scheme and from any other additional voluntary contributions”.
Limits on purchase of added years
3
1
Schedule 7 to the Principal Order (purchase of added years) is amended as follows.
2
In paragraphs 2(1)(c) and 6(2)(d) for “the maximum permitted” substitute “the maximum permitted by virtue of the contributions that are permitted to be made”.
3
In paragraph 5(5) (interrupted service) for “8(1)” substitute “8”.
4
For paragraph 8 (limits on purchase of added years) substitute —
Limits on contributions for purchase of added years
8
The total amount of a participant’s contributions for the purchase of added years (whether made as periodical contributions or by way of lump sum) shall not in any tax year exceed 10 % of a participant’s pensionable salary.
Re-employment of pensioners
4
1
Article 7 of the Principal Order (pension entitlement) is amended as follows.
2
In paragraph (7) —
a
for “no such pension shall be payable” substitute “such a pension shall be reduced to nil if it is payable”, and
b
omit “or a candidate for election as a Representative”.
Pension commencement lump sums
5
1
Article 8 of the Principal Order (commutation into lump sum) is amended as follows.
2
After paragraph (1) insert —
1A
But a person may only give notice under paragraph (1) at least six months before he reaches the age of 75 or at such later time before he reaches that age as the Managers allow, and the lump sum payable as a result of the notice must be paid to him before he reaches that age.
.
3
For paragraph (5) substitute —
5
For the purposes of paragraph (4) above, subject to paragraph (6), the maximum commutable lump sum is —
a
in the case of a person who becomes a participant after 5th April 2006, the permitted maximum, as defined in paragraph 2 of Schedule 29 to the Finance Act 2004 (which is usually the applicable amount, as defined in paragraph 3(6) of that Schedule),
b
in the case of a person who was a participant before 6th April 2006 and has pension commencement lump sum protection (see paragraph (5A)), the higher of —
i
the permitted maximum referred to in sub-paragraph (a), and
ii
the sum of the appropriate amount in respect of the person’s service before 6th April 2006 (see paragraphs (5B) and (5C)) and the permitted maximum referred to in sub-paragraph (a) in respect of the person’s service on and after that date,
c
in the case of a person who was a participant before 6th April 2006 and does not have pension commencement lump sum protection, the permitted maximum referred to in sub-paragraph (a).
5A
A person has pension commencement lump sum protection for the purposes of paragraph (5) if he is a person in relation to whom the provisions of Schedule 29 to the Finance Act 2004 relating to pension commencement lump sums apply with the modifications specified in paragraph 34 of Schedule 36 to that Act by virtue of paragraph 31 of Schedule 36 to that Act (entitlement to lumps sums exceeding 25% of uncrystallised rights).
5B
In the case of a person who became a participant before 1st June 1989, the appropriate amount in respect of the person’s service before 6th April 2006 is the higher of —
a
the permitted maximum referred to in paragraph (5)(a) in respect of that service, and
b
so much of the maximum commutable sum calculated in accordance with Schedule 3 as may be paid to the person in respect of that service as a pension commencement lump sum (see paragraph (5D)).
5C
In the case of a person who became a participant on or after 1st June 1989, the appropriate amount in respect of the person’s service before 6th April 2006 is the higher of —
a
the permitted maximum referred to in paragraph (5)(a) in respect of that service, and
b
the lower of —
i
so much of the maximum commutable sum calculated in accordance with Schedule 3 as may be paid to the person in respect of that service as a pension commencement lump sum, and
ii
one and a half times the permitted maximum in respect of that service, as defined in article 2(1).
5D
In this article “pension commencement lump sum” has the meaning given in paragraph 1 of Schedule 29 to the Finance Act 2004; and in determining for the purposes of paragraphs (5B)(b) and (5C)(b) the maximum sum that may be paid to a person in respect of his service before 6th April 2006 as a pension commencement lump sum, it is to be assumed that the whole of the permitted maximum referred to in paragraph (5)(a) in respect of his service on and after that date qualifies as a pension commencement lump sum.
.
4
In Schedule 3 to the Principal Order —
a
for “article 8(4)”, wherever it occurs, substitute “article 8(5B)(b) and (5C)(b)”, and
b
in paragraph 4 after “maximum commutable sum” insert “for the purposes of article 8(5B)(b) and (5C)(b)”.
Death benefits: dependants' pensions
6
1
In article 12(3) after “(7) and (8)” insert “and article 15B (restriction on the amount of dependants' scheme pensions under Finance Act 2004)”.
2
At the beginning of articles 12A(3) , 13(3), 14(2) and 15(5) (amount of pensions payable to surviving adults and children) insert “Subject to article 15B (restriction on the amount of dependants' scheme pensions under Finance Act 2004)”.
3
In article 14 of the Principal Order (children’s pensions) in paragraph (5) (meaning of “child” in that article) —
a
for “in relation to any person” substitute “in relation to any deceased person does not include any person who is not a dependant of the deceased person for the purposes of section 167 of the Finance Act 2004 (pension death benefit rules) because paragraph 15(2) or (3) of Schedule 28 to that Act applies to him, but subject to that it”, and
b
in sub-paragraph (c) for “bodily or mental infirmity” substitute “physical or mental impairment”.
4
At the end of article 15(8) add “or article 15B”.
5
In article 15A(1) after “12A”, in the second place where it occurs, insert “(before account is taken of article 15B)”.
6
After article 15A insert —
Restriction on the amount of dependants' scheme pensions under Finance Act 2004
15B
1
This article applies if, apart from this article, any part of a pension to which any person becomes entitled under articles 11A to 15A on the death of a former participant after the age of 75 would not qualify as a dependants' scheme pension for the purposes of section 167 of the Finance Act 2004 (the pension death benefit rules) (see paragraphs 16 to 16C of Schedule 28 to that Act).
2
Only so much of the pension as is a dependants' scheme pension for those purposes is payable.
.
Death benefits: lump sum gratuities
7
1
In article 16 of the Principal Order (gratuity on the death of a serving participant) after paragraph (1) insert —
1A
But no gratuity may be granted under paragraph (1) if the deceased person had reached the age of 75.
.
2
Omit article 17 of the Principal Order (gratuity on death of a pensioner after retirement).
Death benefits: participants' pension guarantees
8
1
In article 12 of the Principal Order (widows', widowers' and surviving civil partners' pensions) in paragraph (2) after “Subject to the provisions of this article” insert “and paragraph 1(2)(a) of Schedule 6”.
2
In article 12A of the Principal Order (pensions for surviving adult dependants) at the beginning of paragraph (2) insert “Subject to paragraph 1(2)(a) of Schedule 6,”.
3
In article 14(1) and (1A) of the Principal Order (children’s pensions) after “Subject to the provisions of this article” insert “and paragraphs 1(3)(a) and 2(2)(a) of Schedule 6”.
4
For paragraphs 1 to 5 of Schedule 6 to the Principal Order (five year guarantees) substitute —
Guarantees for adult survivors
1
1
This paragraph applies if a pensioner dies during the pensioner’s five year period (see sub-paragraph (4)) leaving an adult survivor.
2
Until the end of the pensioner’s five year period —
a
no pension is payable to the adult survivor under article 12 or 12A (including any enhancement payable under article 15), but
b
so much of the pensioner’s unpaid pension (see sub-paragraph (4)) as is not payable to any person under sub-paragraph (3) is payable as a pension under this paragraph —
i
to the adult survivor, or
ii
if the adult survivor dies within that period, to his personal representatives.
3
If the pensioner leaves any person for whose benefit any amount would (apart from this paragraph) be payable as a pension under article 14 (by virtue of a direction of the Managers under article 14(4)) until the end of the pensioner’s five year period —
a
no pension is payable to the person under article 14, but
b
so much of the pensioner’s unpaid pension (see sub-paragraph (4)) as does not exceed the amount that would from time to time be payable to the person apart from paragraph (a) is payable to the person as a pension under this paragraph.
4
In this Schedule —
a
“the pensioner’s five year period”, in relation to a pensioner, means the period of five years beginning with the day on which he became entitled to the pension under article 7 (including an early retirement pension or an ill-health pension payable by virtue of article 10 or 11),
b
“the pensioner’s unpaid pension” means any amount which, if the pensioner had lived, would have been payable to him by way of pension under article 7 (including an early retirement pension or an ill-health pension payable by virtue of article 10 or 11), and
c
references to a person becoming entitled to a pension have the same meaning as in Part 4 of the Finance Act 2004 (see section 165(3) of that Act).
Guarantees where children but no adult survivor
2
1
This paragraph applies if a pensioner dies during the pensioner’s five year period (see paragraph 1(4) of this Schedule) leaving any person for whose benefit any amount would (apart from this paragraph) be payable as a pension under article 14 (by virtue of a direction of the Managers under article 14(4)), but not leaving any adult survivor.
2
Until the end of the pensioner’s five year period —
a
no pension is payable to the person under article 14,
b
so much of the pensioner’s unpaid pension (see paragraph 1(4)) as does not exceed the amount that would from time to time be payable to the person apart from paragraph (a) is payable to the person as a pension under this paragraph, and
c
so much of the pensioner’s unpaid pension as is not payable to any person under paragraph (b) is payable as a pension under this paragraph to his personal representatives.
Guarantees where no survivors: death before 75
3
1
This paragraph applies if a pensioner dies before reaching the age of 75 leaving no person for whose benefit any amount is payable as a pension under article 14 (by virtue of a direction of the Managers under article 14(4)), nor any adult survivor.
2
If the pensioner dies during the pensioner’s five year period (see paragraph 1(4)), then, unless a payment is made under sub-paragraph (3), a lump sum is payable to the pensioner’s personal representatives that is equal to the aggregate of the amounts of the pensioner’s unpaid pension (see paragraph 1(4)) that, apart from his death, would have been payable to him in the period from his death until the end of the pensioner’s five year period.
3
If —
a
the pensioner was a participant at any time on or after 6th April 1988,
b
there is a guarantee shortfall, and
c
in a case where sub-paragraph (2) applies, the guarantee shortfall exceeds the lump sum payable to the personal representatives under sub-paragraph (2),
the Managers may pay a lump sum equal to the guarantee shortfall to the personal representatives.
4
For the purposes of this paragraph —
a
there is a guarantee shortfall if the article 16 gratuity exceeds the paid pension amount, and
b
the guarantee shortfall is equal to the amount of the excess.
5
In sub-paragraph (4) —
“the article 16 gratuity” means the gratuity that the Managers could have granted the pensioner’s personal representatives under article 16 if the pensioner had died immediately before he last ceased to be a participant, and
“the paid pension amount” means the aggregate amount of the payments made to the pensioner by way of pension under article 7, 10 or 11, together with any lump sum paid to him under article 8.
Guarantees where no survivors: death after reaching 75
4
1
This paragraph applies if a pensioner dies after reaching the age of 75 leaving no person for whose benefit any amount is payable as a pension under article 14 (by virtue of a direction of the Managers under article 14(4)), nor any adult survivor.
2
If the pensioner —
a
was a pensioner on 5th April 2006, and
b
dies during the pensioner’s five year period (see paragraph1(4)),
then, unless a pension is granted under sub-paragraph (4), a lump sum is payable to the pensioner’s personal representatives that is equal to the aggregate of the amounts of the pensioner’s unpaid pension (see paragraph 1(4)) that, apart from his death, would have been payable to him in the period from his death until the end of the pensioner’s five year period.
3
If the pensioner —
a
was not a pensioner on 5th April 2006, and
b
dies during the pensioner’s five year period (see paragraph 1(4)),
then, unless a pension is granted under sub-paragraph (4), the pensioner’s pension is payable to his personal representatives until the end of the pensioner’s five year period as a pension under this paragraph.
4
If —
a
the pensioner was a participant at any time on or after 6th April 1988,
b
he dies during the pensioner’s ten year period (see sub-paragraph (6)),
c
there is a guarantee shortfall (see paragraph 1(4)),
d
in a case where sub-paragraph (2) applies, the aggregate amount of the pension payable under this sub-paragraph exceeds the lump sum payable to the personal representatives under that sub-paragraph, and
e
in a case where sub-paragraph (3) applies, that aggregate exceeds the aggregate amount of the pension payable under that sub-paragraph,
the Managers may grant the pensioner’s personal representatives a pension under this sub-paragraph of amounts totalling in aggregate not less than the guarantee shortfall.
5
A pension payable under this paragraph is payable for —
a
the pension shortfall period (see sub-paragraph (6)), or
b
the pensioner’s ten year period,
whichever is the shorter.
6
For the purposes of this paragraph —
a
there is a guarantee shortfall if the assumed article 16 gratuity exceeds the paid pension amount, and
b
the guarantee shortfall is equal to the amount of the excess.
7
In this paragraph —
“the assumed article 16 gratuity” means the gratuity that the Managers could have granted the pensioner’s personal representatives under article 16 if the pensioner had died immediately before he last ceased to be a participant and had not reached the age of 75,
“the paid pension amount” means the aggregate amount of the payments made to the pensioner by way of pension under article 7, article 10 or article 11, together with any lump sum paid to him under article 8,
“the pension shortfall period” means the shortest period in which an amount at least equal to the guarantee shortfall will be paid if —
payments of amounts equal to the pension payments payable to the pensioner under this Order immediately before his death are made at the same intervals as those at which those pension payments were paid to him, and
the first payment is made on the date on which the first payment of a pension granted to the personal representatives under this paragraph would be made, and
“the pensioner’s ten year period” means the period of ten years beginning with the day on which the pensioner became entitled to the pension under article 7 (including an early retirement pension or an ill-health pension payable by virtue of article 10 or 11).
Power to remove adult survivor’s pension on change of status
5
1
This paragraph applies if —
a
a pensioner who ceased to be a participant before 3rd November 2004 dies during the pensioner’s five year period (see paragraph 1(4)) leaving an adult survivor, and
b
the adult survivor marries, forms a civil partnership or cohabits with another person.
2
The Managers may direct that any pension payable to the adult survivor under this Schedule is payable instead to the pensioner’s personal representatives.
3
If the adult survivor is entitled to a guaranteed minimum pension in respect of the pensioner, sub-paragraph (2) only applies to so much of the pension payable to the adult survivor under this Schedule as exceeds the guaranteed minimum.
4
The amendments made by this paragraph only apply where the death in question occurs after 5th April 2006.
.
Ill-health pensions
9
1
Article 11 of the Principal Order (ill-health pensions) is amended as follows.
2
After paragraph (10) insert —
10A
No person is entitled to receive a pension by virtue of this article unless the person has in fact ceased to carry on the person’s occupation.
.
3
For paragraph (11) (medical evidence) substitute —
11
Every application under this article must be accompanied by evidence from a registered medical practitioner that the applicant is (and will continue to be) incapable of carrying on the applicant’s occupation because of physical or mental impairment.
.
Cases where certain charges under the Finance Act 2004 apply
10
1
After article 29 of the Principal Order insert —
Payment on behalf of participants of lifetime allowance charge
29A
1
A participant or former participant may request the person who is the scheme administrator for the purposes of section 217 of the Finance Act 2004 (“the administrator”) to pay on his behalf any amount that is payable by way of the lifetime allowance charge under section 214 of the Finance Act 2004 when —
a
an event that is a benefit crystallisation event listed in the table in section 216(1) of the Finance Act 2004 occurs in relation to him, and
b
the participant or former participant and the administrator are jointly and severally liable to the charge in respect of the event.
2
Such a request may only be made by notice in writing given before the event occurs.
3
The administrator may only comply with such a request if the participant or former participant pays him the amount in question on or before the date on which the event occurs.
Reduction of benefits and transfer values where lifetime allowance charge payable
29B
1
This article applies if —
a
an event that is a benefit crystallisation event listed in the table in section 216(1) of the Finance Act 2004 (“the table”) occurs in relation to a participant or former participant,
b
the participant or former participant and the person who is the scheme administrator for the purposes of section 217 of the Finance Act 2004 (“the administrator”) are jointly and severally liable to the charge in respect of the event, and
c
no request has been duly made under article 29A in relation to the event or, if such a request has been made, the administrator is prevented from complying with it by paragraph (3) of that article.
2
Where this article applies —
a
the administrator must pay the tax payable on the event,
b
if the event is benefit crystallisation event 8 in the table (transfer to qualifying recognised overseas pension scheme), the amount or value of the sums or assets transferred must be reduced, and
c
in the case of any other event, the amount or value of the benefits payable to or in respect of the participant must be reduced.
3
The amount or value of the reduction must be determined by the Managers, having regard to the opinion of the Government Actuary, such that it fully reflects the amount of the tax paid under this article.
Deduction from payments of other tax due under the Finance Act 2004
29C
1
This article applies where —
a
a payment is made under article 18 and Schedule 6 of this Order that is a pension protection lump sum death benefit for the purposes of Part 4 of the Finance Act 2004 (see paragraph 14 of Schedule 29 to that Act), or
b
a repayment of contributions (including interest on contributions) is made under article 25 of this Order that is a short service refund lump sum for the purposes of Part 4 of that Act (see paragraph 5 of Schedule 29 to that Act).
2
Before making the payment the person who is the scheme administrator for the purposes of section 217 of that Act may deduct from it any tax due in respect of it under —
a
section 206 of that Act (the special lump sum death benefits charge), or
b
section 205 of that Act (short service refund lump sum charge).
.
2
Omit article 30 (deduction of tax from contributions).
Transfers to and from other schemes
11
1
For articles 19 to 24 of the Principal Order substitute the articles set out in Schedule 1.
2
In article 1(2) of the Principal Order (interpretation) —
a
in the definition of “actual reckonable service” for paragraph (ii) substitute “any period increased pursuant to article 24C or added by a direction of the Managers made before 6th April 2006 in respect of a transfer from another pension scheme; and”,
b
in the definition of “aggregate period of reckonable service” for “24(2)(b)” substitute “24C (or a direction made by the Managers before 6th April 2006 in respect of a transfer from another pension scheme)”,
c
after the definition of “fraction of a year” insert —
“guarantee date” has the meaning assigned to it by article 20(2);
“guaranteed cash equivalent transfer payment” has the meaning assigned to it by article 21(2);
, and
d
after the definition of “normal retirement date” insert ““occupational pension scheme” has the meaning given in section 1 of the Pension Schemes Act 1993;“.
3
In article 6(1) of the Principal Order for “22” substitute “24”.
4
In articles 6(2)(a)(ii) and 7(13)(b) for the words from “under” to “that date”, substitute “made before that date in respect of a transfer from another pension scheme”.
5
In article 7(13)(ii) for the words from “under” to “that date”, substitute “in respect of a transfer from another pension scheme or increased by the appropriate period under article 24C”.
6
In paragraph 3(4) of Schedule 2 to the Principal Order for “19, 20 or 21” substitute “19 to 24”.
7
In paragraph 2(2)(ii) of Schedule 3 to the Principal Order (commutation of pensions), for “under article 24” substitute “by virtue of articles 24C(3) and 24D”.
Refunds of contributions
12
1
Article 25 of the Principal Order (repayment of contributions) is amended as follows.
2
In paragraph (2) —
a
at the end of sub-paragraph (c) add “and he is not entitled to short service benefit by virtue of section 71 of the Pensions Act 1993 (basic principles as to short service benefit);” and
b
after that sub-paragraph insert —
cc
there has been no previous benefit crystallisation event (within the meaning given by section 216(1) of the Finance Act 2004) in relation to the person and the scheme;
.
3
Omit paragraph (3).
4
In paragraph (4) omit from “provided that” onwards.
5
In paragraph (6) for the words from “certified” onwards substitute “of any contributions equivalent premium paid in respect of the person”.
Application of pensions
13
For article 28 substitute —
A pension under this Order or under the 1979 Act shall not be assignable or chargeable with debts or other liabilities except to the extent permitted by section 44 of the Welfare Reform and Pensions Act 1999.
.
Participants entitled to enhanced protection
14
1
In article 2(1) of the Principal Order (interpretation) insert at the appropriate place —
“protected individual” has the meaning assigned to it by regulation 31A(2);
.
2
After article 31 of the Principal Order insert —
Application of articles 31A to 31E
31A
1
Articles 31A to 31E relate to individuals in the case of whom paragraph 12 of Schedule 36 to the Finance Act 2004 applies (enhanced protection).
2
In this Order such individuals are referred to as “protected individuals”.
Option to cease contributions
31B
1
A protected individual may opt for article 5 of this Order (contributions) not to apply in respect of the individual’s salary.
2
The option under paragraph (1) may only be exercised by notice in writing to the Managers.
3
An individual who has exercised such an option may revoke it by such a notice if —
a
the individual has ceased to be a protected individual, and
b
the Managers consent.
4
A notice exercising or revoking such an option must specify the date on which the option is to take effect or, as the case may be, cease to have effect.
5
In the case of a notice exercising such an option, that date may not be earlier than —
a
6th April 2006, or
b
the beginning of the month in which the notice is given,
whichever is the later.
6
In the case of a notice revoking such an option, the date specified as the date on which the option is to take effect may not be earlier than the beginning of the month in which the notice is given.
7
Where such an option is revoked, any option as to the rate at which deductions are made under article 5 that was effective immediately before the option under this article took effect is treated as continuing in force from the date on which the revocation takes effect, subject to any further exercise of any option as to that rate.
Effect of option to cease contributions
31C
1
An individual shall not be regarded as a participant for the purposes of article 5 (contributions) at any time when an option exercised by the individual under article 31B has effect.
2
But, except as provided by paragraph (3), the fact that the individual is not making contributions deducted from his salary under article 5 shall be disregarded for the purposes of determining whether the individual falls within the definition of “participant” in article 2(1).
3
Notwithstanding anything in paragraph (2) —
a
no period during which the individual’s option has effect shall be regarded as a period of reckonable service (or actual reckonable service) as a participant, except for the purpose of determining the relevant terminal salary of the individual under article 7, and
b
if a pension becomes payable to the individual under article 7 by virtue of article 11 (ill-health pensions based on service as a participant) for the purposes of calculating the annual amount of the pension the words in article 11(4) from “but for the purposes of that calculation” onwards (by virtue of which the individual’s reckonable service would be increased) are disregarded.
Surrender of excess rights for the purpose of obtaining enhanced protection
31D
1
An individual who proposes to give notice under paragraph 12 of Schedule 36 to the Finance Act 2004 (enhanced protection) may surrender the whole or part of such rights as in accordance with regulations made under paragraph 12(5) of that Schedule are to be treated as representing the relevant excess (as defined in paragraph 12(6) of that Schedule) in the case of the individual.
2
Such a surrender may only be made by notice in writing to the Managers and is irrevocable.
3
A surrender under this article is ineffective so far as it purports to affect —
a
any rights in respect of an excluded pension (as defined in section 172A(10) of the Finance Act 2004) that is payable under article 18 and Schedule 6, or
b
any rights entitlement to which is required for the employment of the individual to be contracted-out in relation to the scheme.
Surrender to avoid relevant benefit accrual
31E
1
Subject to paragraphs (2) and (3), a protected individual may surrender the whole or part of any rights to any benefit to which he (or any dependant of his) has a prospective entitlement under this Order.
2
Such a surrender may only be made by notice in writing to the Managers and is irrevocable.
3
A surrender under this article is ineffective so far as it purports to affect —
a
any rights in respect of an excluded pension (as defined in section 172A(10) of the Finance Act 2004) that is payable under article 18 and Schedule 6, or
b
any rights entitlement to which is required for the employment of the individual to be contracted-out in relation to the scheme.
.
Election for non-aggregation of reckonable service on entering new service
15
1
In article 2(1) of the Principal Order (interpretation) after the definition of “aggregate period of reckonable service” insert —
”article 31F optant” has the meaning assigned to it by article 31F(3);
,
2
At the end of article 6 of the Principal Order add —
3
This article is subject to articles 31F and 31G.
.
3
After article 31E of the Principal Order (as inserted by this Order) insert —
Election for separate treatment on becoming a participant again
31F
1
Articles 31F and 31G apply if a person who has ceased to be a participant becomes a participant again on or after 6th April 2006 and makes an election for articles 31F and 31G to apply.
2
An election under this article is made by giving notice in writing to the Managers within the period of 6 months beginning with the day on which the person becomes a participant.
3
A person who makes such an election is referred to in this Order as an “article 31F optant”.
4
More than one election may be made under this article.
Effect of election
31G
1
Where a person makes an election under article 31F, the general rule is that this Order applies as if the person becoming a participant again were a different person from the person who ceased to be a participant earlier.
2
Accordingly, in particular, for the purposes of this Order —
a
the reckonable service (“the earlier service”) that the person was entitled to count immediately before becoming a participant again (including reckonable service that is attributable to the purchase of added years or any transfer payment accepted by the Managers during the course of that service) (“the earlier service”) is disregarded in determining rights in respect of his service after becoming a participant again,
b
he is regarded as a deferred pensioner in respect of the earlier service, and
c
in determining rights in respect of the earlier service —
i
the reckonable service that the person is entitled to count as a result of becoming a participant again (including reckonable service that is attributable to the purchase of added years or any transfer payment accepted by the Managers during the course of that service), and
ii
the fact that he has again become a participant and a Representative,
are disregarded.
3
Paragraphs (1) and (2) are subject to paragraphs (4) and (5) and need to be read with article 16(5)(b).
4
The fact that a person who has made an election under this article is a Representative is not disregarded for the purposes of article 10 (early retirement).
5
For the purpose of articles 19 to 24E(transfers), paragraphs (1) and (2) apply only so far as they affect the value of the rights of the person who has made the election.
.
4
In article 16(5)(b) after “not refunded to him” insert “(whether during the aggregate period of reckonable service in which he died or, in the case of an article 31F optant, any earlier period of reckonable service)”.
Amendments of the AVC Order
Restrictions on contributions and transfers in and benefits attributable to them
16
1
The AVC Order is amended as follows.
2
In article 2(1) (interpretation) omit the definitions of “Class A contributor”, “Class B contributor”, “Class C contributor”, “final remuneration”, “maximum pension”, “permitted maximum”, “retained benefits” and “retained death benefits”.
3
In article 5 (contributions) —
a
omit paragraphs (3) and (4), and
b
for paragraph (5) substitute —
5
The Managers shall only accept payment of a transfer value in respect of a person to the AVC scheme if it is from a registered pension scheme and —
a
the scheme is a personal pension scheme, or
b
the transfer value relates to voluntary contribution rights.
.
4
Omit article 11 (maximum benefits) and Schedules 1 and 2 (final remuneration and maximum benefits).
Restriction of membership to contributors under 75
17
In article 4(1) of the AVC Order (application to become contributor) after “any participant in the principal scheme” insert “who has not reached the age of 75”.
Benefits which may be provided
18
1
Article 7 of the AVC Order (benefits which may be provided) is amended as specified in paragraphs (2) to (5).
2
For paragraph (1) substitute —
1
A contributor will be entitled to such benefits as —
a
are secured by the contributions paid by the contributor and by any transfer value accepted under article 5(5), and
b
are benefits for which a registered pension scheme that is a money purchase arrangement for the purposes of Part 4 of the Finance Act 2004 (see section 152(2) of that Act) is authorised to make payments under section 160(1) of the Finance Act 2004.
.
3
In paragraph (2) (death in service benefits) —
a
at the beginning insert “In particular, but without prejudice to the generality of paragraph (1),”
b
in sub-paragraph (a) at the beginning insert “in the case of a contributor who dies before reaching the age of 75,”,
c
in sub-paragraph (b) —
i
for “retirement benefits” substitute “pension benefits and any transfer values accepted under article 5(5)”,
ii
after “by the contributor” insert “and any transfer value accepted under article 5(5)”, and
d
in sub-paragraph (c) for “spouse” substitute “adult survivor”.
4
In paragraph (3) (benefits at or after retirement) —
a
in sub-paragraph (a) —
i
at the beginning insert “In particular, but without prejudice to the generality of paragraph (1),”
ii
for “after retirement” substitute “after he becomes entitled to the payment of a pension under this Order”, and
iii
omit “and” at the end,
b
in sub-paragraph (b)(ii) for the words “being paid in one lump sum on death” substitute “being paid, in the case of a participant who dies before reaching the age of 75, in one lump sum on death”, and
c
after sub-paragraph (b) insert —
c
if a pension is secured under sub-paragraph (b), a lump sum payable to the contributor at the time that pension becomes payable not exceeding the permitted maximum, as defined in paragraph 2 of Schedule 29 to the Finance Act 2004 (which is usually the applicable amount, as defined in paragraph 3(6) of that Schedule); and
d
a lump sum meeting the conditions required for it to be a lifetime allowance excess lump sum for the purposes of Part 4 of the Finance Act 2004 (see paragraph 11 of Schedule 29 to the Finance Act 2004).
.
5
For paragraph (5) substitute —
5
A pension under paragraph (3)(b) must commence —
a
not later than the day before the contributor’s 75th birthday; and
b
not earlier than the earlier of —
i
the date on which the contributor becomes entitled to receive a pension under article 7 of the principal Order and
ii
the day mentioned in sub-paragraph (a).
.
6
In article 8 of the AVC Order (payment of lump sums on death) omit paragraph (3) (payment to contributor’s personal representatives of any part of a lump sum payable on his death that has not been paid within 2 years of the death).
7
In article 9 of the AVC Order (purchase of pensions) for paragraph (1) substitute —
1
At least six months before the date on which a contributor would like a pension to come into payment or at such later time before that date as the Managers allow, the contributor shall specify in writing to the Managers —
a
the pension or pensions which are to be purchased on his behalf or on behalf of his dependants, and
b
where a pension is to be purchased on his behalf and he would also like a lump sum to be paid to him or he wishes a sum that is a lifetime allowance excess lump sum for the purposes of Part 4 of the Finance Act 2004 to be paid to him —
i
that that is the case, and
ii
the amount he would like to be paid as a lump sum.
.
Leaving the AVC scheme: refunds of contributions, transfers out etc.
19
1
Article 10 of the AVC Order (leaving the AVC scheme) is amended as follows.
2
In paragraph (1) —
a
for paragraphs (a) and (b) substitute —
a
to apply an amount equal to the value of the contributor’s accrued benefits in such one or more of the ways permitted under section 95 of that Act as the contributor specifies;
and
b
in paragraph (c) after “less than two years” insert “and the payment to the contributor of an amount equal to the contributions paid by him would qualify as a short service refund lump sum for the purposes of section 166(1) of the Finance Act 2004 (lump sum rule) (see paragraph 5 of Schedule 29 to that Act)”.
3
In paragraph (2) at the end insert “and any transfer values accepted under article 5(5)”.
The lifetime allowance charge
20
For article 14 of the AVC Order (taxation) substitute —
Reduction of benefits where lifetime allowance charge payable
14
1
This article applies if —
a
an event that is a benefit crystallisation event listed in the table in section 216(1) of the Finance Act 2004 (“the table”) occurs in relation to a contributor or former contributor, and
b
the contributor or former contributor and the Managers are jointly and severally liable to the charge in respect of the event.
2
Where this article applies —
a
the Managers must pay the tax payable on the event,
b
if the event is benefit crystallisation event 8 in the table (transfer to qualifying recognised overseas pension scheme), the amount or value of the sums or assets transferred must be reduced, and
c
in the case of any other event, the total realisable value of the investments made with the contributions made by the contributor and any transfer values accepted under article 5(5) must be reduced.
3
The amount or value of the reduction must be determined by the Managers, having regard to the opinion of the Government Actuary, such that it fully reflects the amount of the tax so paid.
.
Minor amendments of the AVC Order
21
1
The AVC Order is amended as follows.
2
In article 2(1) —
a
omit the definitions of “approved scheme”, “FSAVC scheme” and “retirement benefits scheme”,
b
for the definition of “personal pension scheme” substitute —
“personal pension scheme” has the meaning given in section 1 of the Pensions Act 1993;
,
c
at the appropriate places insert the following definitions —
“occupational pension scheme” has the meaning given in section 1 of the Pensions Act 1993;
,
“registered pension scheme” has the same meaning as in Part 4 of the Finance Act 2004 (see section 150(2) of that Act);
and
“voluntary contribution rights”, in relation to a person, means rights under an occupational pension scheme that derive from voluntary contributions made by the person;
.
3
In article 2(2) —
a
in paragraph (a) omit “or Schedule” and “or the Schedule to,”, and
b
in paragraph (b) omit “or Schedule” both times it occurs.
4
For article 3(5) substitute —
5
The Managers shall be responsible for the discharge of the functions conferred or imposed on the scheme administrator of the AVC scheme by or under Part 4 of the Finance Act 2004.
.
5
Omit article 12 (surplus monies).
Revocations
Revocations
22
The subordinate legislation specified in Schedule 2 is revoked to the extent specified in the second column of that Schedule.
Geoffrey Hoon
Leader of the House of Commons
23 March 2006


text:
Citation, commencement and interpretation
1
1
These Regulations may be cited as the Registered Pension Schemes (Modification of the Rules of Existing Schemes) Regulations 2006 and shall come into force on 6 th April 2006.
2
In these Regulations —
“ the Act ” means the Finance Act 2004 and a reference (without more) to a numbered provision is a reference to the provision of the Act bearing that number;
“the commencement day” means 6 th April 2006;
“existing scheme” means a pension scheme to which paragraph 1(1) of Schedule 36 applies;
“the permitted maximum” —
in relation to times before the commencement day, has the meaning which it has by virtue of section 590C of the Income and Corporation Taxes Act 1988 ; and
in relation to times during the transitional period has the meaning which it would have had if —
section 590C of the Income and Corporation Taxes Act 1988 (permitted maximum) had continued in force, and
the Treasury had made the orders required by that section, as it had effect immediately before its repeal, in respect of each tax year during that period;
“rules”, in relation to an existing scheme, means the rules (whether contained in the governing instruments or otherwise) of an existing scheme;
“the transitional period”, in relation to an existing scheme, means the period beginning with the commencement day and ending with the date on which, by virtue of paragraph 3(2) of Schedule 36 , the modifications in these Regulations cease to have effect.
3
In the application of these Regulations to an annuity contract falling within paragraph 1(1)(d) of Schedule 36, references to the trustees or managers of a scheme are to be read as references to the insurance company with whom that contract is made.
4
For the purposes of these Regulations whether something would have prejudiced the approval of an existing scheme by the Inland Revenue or by Her Majesty’s Revenue and Customs is to be determined —
a
in the case of an occupational pension scheme, in accordance with the publication IR 12(2001) (known as the Occupational Pension Scheme Practice Notes) published by the former Inland Revenue Pension Scheme Office on 23 rd March 2001 , and
b
in the case of a personal pension scheme, in accordance with the publication IR 76(2000) published by the former Inland Revenue Pension Scheme Office on 20th November 2000 ,
as each of those publications stood immediately before the making of these Regulations.
Existing schemes to which these Regulations apply
2
Each of the following provisions of these Regulations apply to existing schemes, unless —
a
before the commencement day amendments have been adopted, to have effect on and after that day, which have a corresponding effect to the modification contained in that provision; or
b
the rules of the scheme are framed in a way which means that no such amendment is necessary.
Schemes rules not to require the making of unauthorised payments
3
1
Any provision (however framed) in the rules of an existing scheme as they stood immediately before the commencement day, which would require the trustees or managers of the scheme —
a
to make a payment which, by virtue of section 160 would be an unauthorised payment, or
b
to make such a payment if the consent of the sponsoring employer or any other person was given for their doing so,
shall be construed, in respect of the transitional period, as conferring a discretion upon the trustees or managers to make that payment.
This is subject to the following qualification.
2
If, immediately before the commencement day, the consent of a sponsoring employer, or any other person, was required before the trustees or managers of a pension scheme could make any other discretionary payment under the scheme, then the discretion conferred by paragraph (1) may only be exercised with the consent of that person.
References to the permitted maximum
4
1
If the rules of an existing scheme, as they stood immediately before the commencement day, imposed a limit on a person’s entitlement to any benefit, or liability to make any contribution, by reference to the permitted maximum (whether expressly or by necessary implication), paragraph (2) applies.
2
If this paragraph applies, the permitted maximum shall continue to apply in respect of the transitional period.
Limits on amounts of remuneration to be taken into account
5
1
This paragraph applies in the case of the rules of an existing scheme which becomes a registered pension scheme by virtue of paragraph 1(1)(a), (c) or (d) of Schedule 36 —
a
where the existing scheme came into existence before 14th March 1989, as regards an employee who became a member of that scheme on or after 1st June 1989;
b
where the existing scheme came into existence on or after 14th March 1989, as regards any employee who is a member of that scheme (whenever he became a member).
This paragraph is subject to the following qualifications.
2
Paragraph (1) does not apply to the rules of an existing scheme in their application to an employee to whom paragraph 20 of Schedule 6 to the Finance Act 1989 did not apply, immediately before its repeal, by virtue of regulation 3(2), (3), (4), (6) or (8) or 3A(2) of the Continuation of Rights Regulations .
3
If, and to the extent that, paragraph (1) applies, paragraphs (4) to (7) have effect —
a
in respect of the transitional period and
b
regardless of anything contained in the rules of the existing scheme to the contrary.
4
In arriving at the employee’s relevant annual remuneration for the purposes of calculating benefits, any excess of what would be the employee’s relevant annual remuneration (apart from this paragraph) over the permitted maximum for the year of assessment in which his participation in the scheme ceases shall be disregarded.
5
In arriving at the employee’s remuneration for the year 2006-07 or any subsequent year of assessment for the purposes of any restriction on the aggregate amount of contributions payable under the scheme by the employee and the employer, there shall be disregarded any excess of what would be his remuneration for the year (apart from this paragraph) over the permitted maximum for the year.
6
If —
a
a transfer payment having been accepted by the existing scheme under its rules, the payment has been treated as entitling the employee to be regarded as having additional years of service (“inserted years”), and
b
by virtue of the modification of paragraph 20 of Schedule 6 to the Finance Act 1989 contained in regulation 5 of the Continuation of Rights Regulations that paragraph did not apply to the inserted years, but did apply to the member’s actual years of service,
paragraph (5) applies only to the computation of pension benefits so far as they are referable to the member’s actual years of service.
7
The amount of contributions payable under the scheme by an employee in the year 2006-07 or any subsequent year of assessment shall be limited to 15 per cent of the employee’s remuneration for the year in respect of the employment.
8
In this regulation “the Continuation of Rights Regulations” means the Retirement Benefits Schemes (Continuation of Rights of Members of Approved Schemes) Regulations 1990 .
Payments not prejudicing HM Revenue and Customs approval
6
1
If the rules of an existing scheme —
a
provide for an absolute entitlement to the making of a transfer or the payment of a specified sum or rate of pension; and
b
refer (in whatever terms) to the possibility of making a transfer or a payment in any greater amount which would not prejudice approval of the scheme by —
i
the Inland Revenue, or
ii
Her Majesty’s Revenue and Customs,
the following provisions of this regulation apply.
2
The scheme’s rules shall be construed, in respect of the transitional period, as —
a
authorising the trustees or managers of the scheme to make transfers or payments falling within paragraph (1)(b) only to the extent that the payments would have been authorised by the rules immediately before the coming into force of these Regulations; and
b
to prohibit the making of transfers or payments which would not have been so authorised.
This is subject to the following qualification.
3
If, immediately before the commencement day, the consent of a sponsoring employer, or any other person except Her Majesty’s Revenue and Customs, was required before the trustees or managers of a pension scheme could make a payment of the kind referred to in paragraph (1)(b), then the power conferred by paragraph (2)(a) may only be exercised with the consent of that person.
Limits on payments in amounts “which would not prejudice Revenue approval”
7
1
If the rules of an existing scheme provide for an absolute entitlement to —
a
the making of a transfer, or
b
the payment of a specified sum or rate of pension,
in an amount which would not prejudice approval of the scheme by the Inland Revenue or Her Majesty’s Revenue and Customs, paragraph (2) applies.
2
If this paragraph applies the rules of the existing scheme shall be construed, in respect of the transitional period, as prohibiting the trustees or managers of the scheme from making payments to the extent that they would not have been authorised by the rules immediately before the commencement day.
Recovery of tax in respect of lifetime allowance charge
8
1
The rules of an existing scheme shall be modified, during the transitional period, so as to provide for the recovery, from present or future benefits or entitlement under the scheme in respect of a member, of an amount reflecting any liability of the scheme administrator in respect of the lifetime allowance charge under section 215 in respect of that member.
But this does not authorise the reduction of entitlement to a benefit which has not crystallised, except that in relation to which the lifetime allowance charge arises.
2
The methods of recovery authorised by virtue of paragraph (1) include reduction of benefits or entitlement determined in accordance with normal actuarial practice.
This paragraph does not limit the generality of paragraph (1).
David Varney
D. Hartnett
Two of the Commissioners for Her Majesty’s Revenue and Customs
16th February 2006