The National Health Service Pension Scheme and Injury Benefits (Amendment) Regulations 2009

Amendment of Schedule 2A

14.—(1) Schedule 2A (Pension Sharing on Divorce or Nullity of Marriage or, on the Dissolution or Nullity of a Civil Partnership) shall be amended as follows.

(2) Omit paragraph 2 (safeguarded rights).

(3) In paragraph 3 (pension credit benefit)—

(a)in the heading, after “benefit” insert “on attaining normal benefit age”;

(b)in sub-paragraph (2), for “paragraph 4” substitute “paragraphs 3A to 4”;

(c)in sub-paragraph (5), for “The value” substitute “Subject to paragraph (7), the value”;

(d)after sub-paragraph (6), add—

“(7) A pension credit member who is entitled to a lump sum in accordance with sub-paragraph (1)(b) may opt to exchange part of a pension to which the pension credit member would otherwise be entitled for a lump sum, which must be an evenly divisible multiple of £12.

(8) If a pension credit member so opts, for every £1 by which the pension credit member’s annual pension is reduced, the pension credit member is to be paid a lump sum of £12.

(9) An option under paragraph (7) must relate to an annual amount of pension that is a whole number of pounds (and accordingly the lump sum will be exactly divisible by 12).

(10) In paragraph (9) “annual amount” in relation to a pension means the amount of the annual pension to which the pension credit member would be entitled under these regulations apart from the option, together with any increases payable under the Pensions (Increase) Act 1971, calculated as at the time the payment would be first due.

(11) A pension credit member may not exchange pension for lump sum under this paragraph to the extent that it would result in a scheme chargeable payment for the purposes of Part 4 of the 2004 Act.

(12) The option under sub paragraph (7) may only be exercised by giving notice in writing to the scheme administrator in the form required by the Secretary of State—

(a)at the time of claiming the pension; or

(b)before a later time specified in writing by the scheme administrator.”.

(4) After paragraph 3, insert—

“Pension credit benefit before attaining normal benefit age (with actuarial reduction)

3A.—(1) Subject to sub-paragraph (2), a pension credit member shall be entitled to the payment of the pension credit benefit described in paragraph 3 of this Schedule on or after attaining normal minimum pension age but before attaining normal benefit age.

(2) The pension and the lump sum (if any) described in that paragraph will be reduced by such amount as the Secretary of State, after taking the advice of the Scheme Actuary, may determine.

Pension credit benefit before attaining normal benefit age (on grounds of ill health)

3B.—(1) A pension credit member shall be entitled to the payment of the pension credit benefit described in paragraph 3 of this Schedule before attaining normal benefit age if the Secretary of State is satisfied that the pension credit member—

(a)meets the ill-health condition specified in paragraph 1 of Schedule 28 to the 2004 Act, and

(b)had previously been engaged in regular employment but is now permanently incapable of engaging in regular employment due to mental or physical infirmity.

(2) For the purpose of sub-paragraph (1), the Secretary of State may require whatever medical evidence that the Secretary of State considers necessary.”.

(5) In paragraph 4 (commutation of the whole of pension credit benefit before normal benefit age)—

(a)in sub-paragraph (1), for “in the circumstances described in regulation 3(2)(a) of the Pension Sharing (Pension Credit Benefit) Regulations 2000 (commutation of pension credit benefit)” substitute “in the circumstances permitted by paragraph (b) of the lump sum rule in section 166(1) of the 2004 Act”;

(b)after sub-paragraph (1), insert—

“(1A) For the purpose of sub-paragraph (1), the Secretary of State may require whatever medical evidence that the Secretary of State considers necessary.”;

(c)for sub-paragraph (2), substitute—

“(2) The pension credit payable in the circumstances described in sub-paragraph (1) shall consist of—

(a)where paragraph 3(1)(b) applies, a lump sum equal to the aggregate of—

(i)3 times the annual rate of the pension otherwise payable under paragraph 3 of this Schedule had the pension credit member reached normal benefit age on the date when commutation in accordance with this paragraph is applied for,

(ii)5 times the annual rate of the pension referred to in paragraph (i) after that annual rate has been reduced by the maximum amount of pension that the pension credit member may exchange for a lump sum under paragraph 3(7) of this Schedule, and

(iii)the lump sum resulting from the reduction to the pension credit member’s pension referred to in paragraph (ii);

(b)where paragraph 3(1)(b) does not apply, a lump sum equal to 5 times the annual rate of the pension otherwise payable under paragraph 3 of this Schedule had the pension credit member reached normal benefit age on the date when commutation in accordance with this paragraph is applied for.”.

(6) In paragraph 5 (commutation of the whole of pension credit benefit at normal benefit age) for sub-paragraph (2), substitute—

“(2) The pension credit payable in the circumstances described in sub-paragraph (1)(a) shall consist of—

(a)where paragraph 3(1)(b) applies, a lump sum equal to the aggregate of—

(i)3 times the annual rate of the pension otherwise payable under paragraph 3 of this Schedule,

(ii)5 times the annual rate of the pension referred to in paragraph (i) after that annual rate has been reduced by the maximum amount of pension that the pension credit member may exchange for a lump sum under paragraph 3(7) of this Schedule, and

(iii)the lump sum resulting from the reduction to the pension credit member’s pension referred to in paragraph (ii);

(b)where paragraph 3(1)(b) does not apply, a lump sum equal to 5 times the annual rate of the pension otherwise payable under paragraph 3 of this Schedule.”.

(7) In paragraph 7 (pension credit member dies after pension credit benefit becomes payable) for sub-paragraph (3), substitute—

“(3) The maximum payment under this regulation shall not exceed the amount calculated in accordance with sub-paragraph (4), less the aggregate of—

(a)the amount of any lump sum paid to the pension credit member in accordance with paragraph 3(6), and

(b)the amount of any lump sum paid to the pension credit member in accordance with paragraph 3(7).”.

(8) In paragraph 12 (offset for crime, negligence or fraud), omit sub-paragraph (b).

(9) In paragraph 13 (loss of rights to benefits), omit sub-paragraph (b).

(10) After paragraph 15 (administrative matters), add—

“Medical determinations

16.  The Secretary of State may make arrangements for the Secretary of State’s functions under this Schedule in relation to a decision whether a person is—

(a)permanently incapable of regular employment because of physical or mental infirmity for the purpose of paragraph 3B;

(b)expected to live for less than one year for the purposes of the lump sum rule referred to in paragraph 4,

to be discharged by—

(i)a registered medical practitioner (whether practising on his own or as part of a group); or

(ii)a body corporate or unincorporate employing such practitioners (whether under a contract of service or for services),

approved by the Secretary of State to act on the Secretary of State’s behalf.”.