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The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010

Draft Legislation:

This is a draft item of legislation. This draft has since been made as a UK Statutory Instrument: The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010 No. 1149

Regulation 17

SCHEDULE 2Insertion of Schedules 3 to 7 to the FAS Regulations

This schedule has no associated Explanatory Memorandum

Regulation 17(8)(b) to (f)and (16)(a)

“SCHEDULE 3Determination of certain annual payments

Introductory

1.—(1) This Schedule applies for the purposes of determining the amount of an annual payment payable to a beneficiary to whom regulation 17(8)(b) to (f) or (16)(a) applies.

(2) In this Schedule—

“A” means—

(a)

where the qualifying member is a qualifying member to whom regulation 17D applied, the amount by which the qualifying member’s annual payment has been commuted; and

(b)

in all other cases, nil;

“B” means—

(a)

where either or both sub-paragraphs (3) or (6) apply, the amount by which the scheme manager determines the annual payment which would otherwise be payable under this Schedule is to be reduced;

(b)

where the beneficiary is a qualifying member to whom regulation 17H applied, the amount, if any, by which the scheme manager determined the payment which would otherwise have been payable under Schedule 7 should be reduced; and

(c)

in all other cases, nil;

“D” means—

(a)

subject to paragraph (b), where sub-paragraph (4) of paragraph 4 applies, the total amount of annual increases to which any surviving dependant was entitled under this Schedule on the day on which the event referred to in paragraphs (a) to (c) of that sub-paragraph occurred;

(b)

where paragraph 4(4)(a) applies and, as a result, the annual payment payable to a surviving dependant is redetermined under paragraph 4(3)(a), nil; and

(c)

in all other cases, nil;

“J” means—

(a)

where the qualifying member became entitled to an annual payment or began to receive a present payment from the qualifying scheme prior to the day on which the transfer notice was given, the total amount of any annual increases which the scheme manager considers could have been paid from the relevant date until the day on which the transfer notice is given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17(11); and

(b)

in all other cases, nil;

“N” means—

(a)

in paragraph 3, the number of survivors of that qualifying member; and

(b)

in paragraph 4, the number of surviving dependants of that qualifying member;

“Q” means—

(a)

where the beneficiary is a person to whom regulation 17(17)(a) applies, the payment to which the qualifying member was entitled in accordance with Schedule 7 immediately before the qualifying member died; and

(b)

in all other cases, the sum of—

(i)

R-A;

(ii)

the total amount of any annual increases which the scheme manager considers could have been paid, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17(11), from the relevant date until the earlier of—

(aa)

the day on which the transfer notice is given; and

(bb)

the day on which the qualifying member died;

(iii)

where the qualifying member died after the calculation date but before the day on which the transfer notice was given, double the total amount of any annual increases which the scheme manager considers could have been paid to a survivor (on the basis that there is one survivor) from the day after the day on which the qualifying member died until the day on which the transfer notice is given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17(11); and

(iv)

where the qualifying member died on or after the day on which the transfer notice was given, the total amount of any annual increases to which the qualifying member was entitled in accordance with paragraph 6 on the day on which the qualifying member died;

“R” means the amount of the revalued notional pension as construed in accordance with regulation 17(10);

“S” means—

(a)

where paragraph 3(2) applies, the total amount of increases to which any survivor was entitled under this Schedule on the day on which the survivor died; and

(b)

where sub-paragraph (4) of paragraph 4 applies, the total amount of increases to which any survivor was entitled under this Schedule on the day on which the event referred to in paragraphs (a) to (c) of that sub-paragraph occurred; and

(c)

in all other cases, nil; and

“relevant date” means—

(a)

where the beneficiary began to receive a payment from the scheme after the calculation date and prior to becoming entitled to an annual payment under these Regulations, the date on which the beneficiary began to receive a present payment from the scheme;

(b)

where the beneficiary is a qualifying member to whom paragraph (a) does not apply, but to whom paragraph (3) or (3C) applies, the date on which the qualifying member became entitled to an annual payment under that paragraph; and

(c)

in all other cases, the date from which the notional pension or survivor notional pension could have been payable as determined in accordance with regulation 27(3) and (4).

(3) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before the day on which a transfer notice is given, a debt to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the annual payment which would otherwise be payable under this Schedule is to be reduced, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(4) Sub-paragraph (6) applies where the scheme manager is satisfied that the sum of the interim pension paid to a beneficiary and any payment made under these Regulations in respect of any year in the period determined in accordance with sub-paragraph (5) is higher or lower than the sum of—

(a)the revalued notional pension, or the survivor notional pension, as the case may be; and

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

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

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

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

(5) For the purposes of sub-paragraph (4), the period is the period from—

(a)the earlier of—

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

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

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

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

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

(a)determine the amount by which the annual payment which would otherwise be payable under this Schedule in respect of the beneficiary is to be reduced, having regard to—

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

(ii)the amount of the sum of—

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

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

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

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

(b)where the sum of the interim pension paid and any payments made under these Regulations in respect of any year is lower than the sum of the amounts referred to in sub-paragraph (4)(a) and (b) in respect of that year, make a payment to the beneficiary or, where the beneficiary has died prior to the scheme manager making this determination, to the beneficiary’s estate, having regard to—

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

(ii)the amount of the sum of—

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

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

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

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

Amount of an annual payment – qualifying members

2.  The annual payment payable to a qualifying member to whom this Schedule applies shall be—

Amount of an annual payment - survivors

3.—(1) Where this Schedule applies, the annual payment payable to a survivor of a qualifying member shall be—

(a)where regulation 17(8)(f) applies, the amount which is the sum of—

(i)the survivor notional pension determined in respect of that survivor; and

(ii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the relevant date until the day on which the transfer notice is given,

less the amount, if any, by which the scheme manager determines the payment should be reduced in accordance with paragraph 1(3) or (6); and

(b)where regulation 17(8)(c) to (e) or (16)(a) applies—

(i)where sub-paragraph (ii) does not apply—

(ii)where the qualifying member was a party to a polygamous marriage—

(2) Where a survivor to whom sub-paragraph (1)(b)(ii) applies dies, the annual payment payable to all remaining survivors of the qualifying member shall be redetermined with effect from the day after the day on which the survivor died.

Surviving Dependants

4.—(1) Where this Schedule applies, the annual payment payable to a surviving dependant of a qualifying member shall be—

(a)where regulation 17(8)(f) applies, the amount which is the sum of—

(i)the survivor notional pension determined in respect of that surviving dependant; and

(ii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the relevant date until the day on which the transfer notice is given,

less the amount, if any, by which the scheme manager determines the payment should be reduced in accordance with paragraph 1(3) or (6); and

(b)where regulation 17(8)(c) to (e) or (16)(a) applies, determined in accordance with sub-paragraphs (2) to (4).

(2) Where an annual payment is also payable to a survivor of a qualifying member and—

(a)there is only one surviving dependant, the amount of the annual payment shall be—

(b)there are two or more surviving dependants, the amount of the annual payment shall be—

(3) Where an annual payment is not payable to a survivor of a qualifying member and—

(a)there is only one surviving dependant, the amount of the annual payment shall be—

(b)there are two or more surviving dependants, the amount of the annual payment shall be—

(4) Where—

(a)a survivor of a qualifying member dies;

(b)a person ceases to be a surviving dependant of a qualifying member; or

(c)another person becomes a surviving dependant of a qualifying member,

the annual payment payable to a surviving dependant of that qualifying member shall be redetermined with effect from the day after the day on which the event referred to in paragraphs (a) to (c) occurred.

Rounding

5.  Where the amount of an annual payment determined in accordance with this Schedule results in a fraction of a penny, that fraction shall be treated as a penny.

Annual increases to an annual payment

6.—(1) Except where there is no percentage increase in the retail prices index for the period of 12 months ending with 31st May last falling before the indexation date, a beneficiary entitled to an annual amount determined in accordance with this Schedule shall be entitled, on each indexation date after the day on which the transfer notice is given, to an increase of—

(a)the appropriate percentage of the amount of the underlying rate immediately before that date; or

(b)where the beneficiary first became entitled to an annual payment during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the annual payment was first payable.

(2) In this paragraph—

“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 before the indexation date; and

(b)

2.5%;

“underlying rate” means the aggregate of—

(a)

the product of X multiplied by—

(i)

where the beneficiary is a qualifying member or a survivor or surviving dependant of a qualifying member who died on or after the calculation date—

(aa)

where the qualifying member is not a qualifying member to whom regulation 17D applied, so much of the revalued notional pension as is attributable to post-1997 service; or

(bb)

where the qualifying member is a qualifying member to whom regulation 17D applied, so much of the sum of R-A as is attributable to post-1997 service; and

(ii)

where the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, so much of the survivor notional pension as is attributable to the qualifying member’s post-1997 service;

(b)

where the beneficiary is a qualifying member, the total amount of any annual increases which the scheme manager considers could have been paid from the relevant date until the day on which the transfer notice was given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17(11);

(c)

where the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the relevant date until the day on which the transfer notice is given;

(d)

where the beneficiary is a survivor or a surviving dependant of a qualifying member who died on or after the calculation date but before the day on which the transfer notice was given, the sum of—

(i)

the product of X multiplied by the total amount of any annual increases which the scheme manager considers could have been paid from the relevant date until the date on which the qualifying member died, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17(11); and

(ii)

the total amount of any annual increases which the scheme manager considers could have been paid to the beneficiary from the day after the day on which the qualifying member died until the day on which the transfer notice is given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17(11);

(e)

where the beneficiary is the survivor or surviving dependant of a qualifying member who died after the day on which the transfer notice was given, the product of X multiplied by the sum of—

(i)

the total amount of any annual increases which the scheme manager considers could have been paid from the relevant date until the day on which the transfer notice was given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17(11); and

(ii)

the total amount of any annual increases to which the qualifying member was entitled in accordance with sub-paragraph (1) on the day on which the qualifying member died; and

(f)

any annual increases to which the beneficiary is entitled under this Schedule immediately before the indexation date;

“post-1997 service” means—

(a)

pensionable service (either actual or notional) which occurred on or after 6th April 1997; or

(b)

where the pension was payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred on or after 6th April 1997;

“X” means—

(a)

1, where the beneficiary is the qualifying member or a survivor or surviving dependant in respect of whom a survivor notional pension has been determined;

(b)

0.5, where the beneficiary is a survivor who is neither—

(i)

a survivor to whom paragraph 3(1)(b)(ii) applies; nor

(ii)

a survivor in respect of whom a survivor notional pension has been determined;

(c)

the product of 0.5 divided by Y, where the beneficiary is a survivor to whom paragraph 3(1)(b)(ii) applies;

(d)

the product of 1 divided by Z, where the beneficiary is a surviving dependant in respect of whom a survivor notional pension has not been determined and the qualifying member does not have a survivor; or

(e)

the product of 0.5 divided by Z, where the beneficiary is a surviving dependant in respect of whom a survivor notional pension has not been determined and an annual payment is also payable to a survivor of the qualifying member;

“Y” means the number of survivors of the qualifying member; and

“Z” means—

(a)

where there is only one surviving dependant, 2; or

(b)

where there is more than one surviving dependant, the number of surviving dependants of the qualifying member.

(3) In determining the underlying rate where a qualifying member is a qualifying member to whom regulation 17D applied, the amount of R-A that is attributable to post-1997 service is determined by attributing the sum to pre-1997 service and post-1997 service in the same proportions as the revalued notional pension would have been attributed had regulation 17D not applied.

Regulation 17(8)(g) to (k)and (16)(b)

SCHEDULE 4Determination of annual payments where a present payment was being received on the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010

Introductory

1.—(1) This Schedule applies for the purposes of determining the amount of an annual payment payable to a beneficiary to whom regulation 17(8)(g) to (k) or (16)(b) applies.

(2) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before a transfer notice is given, a debt to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the annual payment which would otherwise be payable under this Schedule is to be reduced, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(3) Sub-paragraph (5) applies where the scheme manager is satisfied that the sum of the interim pension paid to a beneficiary and any payment made under these Regulations in respect of any year in the period determined in accordance with sub-paragraph (4) is higher or lower than the sum of—

(a)the notional pension, or the survivor notional pension, as the case may be; and

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

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

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

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

(a)the earlier of—

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

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

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

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

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

(a)determine the amount by which the annual payment which would otherwise be payable under this Schedule in respect of the beneficiary is to be reduced, having regard to—

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

(ii)the amount of the sum of—

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

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

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

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

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

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

(ii)the amount of the sum of—

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

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

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

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

(6) In this Schedule—

“relevant date” means the date from which the notional pension or survivor notional pension could have been payable as determined in accordance with regulation 27(3) and (4); and

“relevant proportion”, in relation to a beneficiary, means the proportion of the notional pension which relates to the beneficiary.

(7) Where—

(a)the beneficiary is a qualifying member to whom regulation 17H applied; and

(b)the scheme manager made a determination in accordance with paragraph 1(2) or (5) of Schedule 7, to reduce the payment under that Schedule by any amount,

the scheme manager shall reduce the amount of the annual payment payable under this Schedule by the same amount.

Qualifying members

2.  Where this Schedule applies, the annual payment payable to a qualifying member shall be the sum of—

(a)the notional pension determined in respect of the qualifying member; and

(b)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2), (5) or (7).

Survivors

3.  Where this Schedule applies, the annual payment payable to a survivor of a qualifying member shall be—

(a)where regulation 17(8)(h) or (i) applies, the amount which is the sum of—

(i)the survivor notional pension determined in respect of that survivor; and

(ii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the day after the qualifying member died until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5);

(b)where regulation 17(8)(j) applies, the amount which is the sum of—

(i)the proportion of the notional pension which relates to a pension payable to the survivor;

(ii)the relevant proportion of the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which the qualifying member died; and

(iii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the relevant proportion of the notional pension from the day after the day on which the qualifying member died until the day on which the transfer notice was given;

(c)where regulation 17(8)(k) applies, the amount which is the sum of—

(i)the proportion of the notional pension which relates to a pension payable to the survivor;

(ii)the relevant proportion of the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which transfer notice was given; and

(iii)the relevant proportion of the total amount of any annual increases to which the qualifying member was entitled on the day on which the qualifying member died; and

(d)where regulation 17(17)(b) applies, the relevant proportion of the payment to which the qualifying member was entitled in accordance with Schedule 7 immediately before the qualifying member died.

Surviving Dependants

4.  Where this Schedule applies, the annual payment payable to a surviving dependant of a qualifying member shall be—

(a)where regulation 17(8)(h) or (i) applies, the amount which is the sum of—

(i)the survivor notional pension determined in respect of that surviving dependant; and

(ii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the day after the qualifying member died until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5);

(b)where regulation 17(8)(j) applies, the amount which is the sum of—

(i)the proportion of the notional pension which relates to a pension payable to the surviving dependant;

(ii)the relevant proportion of the amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which the qualifying member died; and

(iii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the relevant proportion of the notional pension, from the day after the day on which the qualifying member died until the day on which the transfer notice was given;

(c)where regulation 17(8)(k) applies, the amount which is the sum of—

(i)the proportion of the notional pension which relates to a pension payable to the surviving dependant;

(ii)the relevant proportion of the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which transfer notice was given; and

(iii)the relevant proportion of the total amount of any annual increases to which the qualifying member was entitled on the day on which the qualifying member died; and

(d)where regulation 17(17)(b) applies, the relevant proportion of the payment to which the qualifying member was entitled in accordance with Schedule 7 immediately before the qualifying member died.

Redetermination

5.—(1) This paragraph applies where the notional pension or survivor notional pension includes an amount in respect of an amount which under scheme rules—

(a)would be payable for a period which is shorter than the period in respect of which the remainder of a pension would be payable; or

(b)would be payable as a result of a qualifying member dying within a period specified in scheme rules which begins on the day on which the member became entitled to a pension from the scheme, or the day on which the pension was first paid.

(2) Where this paragraph applies, the scheme manager shall redetermine the annual payment payable to the beneficiary with effect from the date on which the amount referred to in sub-paragraph (1)(a) would have ceased to be payable, or the period referred to in sub-paragraph (1)(b) would have ended.

(3) When redetermining an annual payment under sub-paragraph (2), the scheme manager shall redetermine the notional pension or survivor notional pension having regard to the amount referred to in sub-paragraph (1).

Rounding

6.  Where the amount of an annual payment determined in accordance with this Schedule results in a fraction of a penny, that fraction shall be treated as a penny.

Annual increases to an annual payment

7.—(1) Except where there is no percentage increase in the retail prices index for the period of 12 months ending with 31st May last falling before the indexation date, where the asset share determined in respect of the beneficiary was sufficient to be applied to the amounts referred to in regulation 27(7)(a)(ii) or (10)(a)(ii), a beneficiary shall be entitled, on each indexation date after the day on which the transfer notice is given, to an increase of—

(a)the appropriate percentage of the amount of the underlying rate immediately before that date; or

(b)where the beneficiary first became entitled to an annual payment during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the annual payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—

(a)

the percentage increase in the retail prices index for the period of 12 months ending with 31st May last falling before the indexation date; and

(b)

2.5%;

“underlying rate” means—

(a)

where the beneficiary is a qualifying member or a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, the aggregate of—

(i)

so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) or (10)(a)(ii) could be increased;

(ii)

the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension, or survivor notional pension, as the case may be, from the relevant date until the day on which the transfer notice is given; and

(iii)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date;

(b)

where the beneficiary is a survivor or surviving dependant of a qualifying member who died after the day on which the transfer notice was given, the aggregate of—

(i)

the relevant proportion of so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) could be increased;

(ii)

the relevant proportion of the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid to the qualifying member on the notional pension from the relevant date until the day on which the transfer notice is given;

(iii)

the relevant proportion of any annual increases to which the qualifying member was entitled in accordance with this Schedule on the day on which the qualifying member died; and

(iv)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date; and

(c)

where the beneficiary is a survivor or surviving dependant of a qualifying member who died after the calculation date but prior to the day on which the transfer notice was given, the aggregate of—

(i)

the relevant proportion of so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) could be increased;

(ii)

the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the relevant proportion of the notional pension from the relevant date until the day on which the qualifying member died;

(iii)

the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the relevant proportion of the notional pension from the day after the day on which the qualifying member died until the day on which the transfer notice was given; and

(iv)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date.

(3) In the definition of “underlying rate” in sub-paragraph (2), the reference to annual payments is to the amount of annual payment prior to any reduction made by the scheme manager under paragraph 1(2) or (5).

Regulation 17A(8)(b) to (e)

SCHEDULE 5Determination of certain ill health payments

Introductory

1.—(1) This Schedule applies for the purposes of determining the amount of an ill health payment payable to a beneficiary to whom regulation 17A(8)(b) to (e) applies.

(2) In this Schedule—

“A” means—

(a)

where the qualifying member is a qualifying member to whom regulation 17D applied, the amount by which the qualifying member’s ill health payment has been commuted; and

(b)

in all other cases, nil;

“B” means—

(a)

where either or both sub-paragraphs (3) or (6) apply, the amount by which the scheme manager determines the ill health payment which would otherwise be payable under this Schedule is to be reduced;

(b)

where the beneficiary is a qualifying member to whom regulation 17H applied, the amount, if any, by which the scheme manager determined the payment which would otherwise have been payable under Schedule 7 should be reduced; and

(c)

in all other cases, nil;

“C” means—

(a)

1, where the qualifying member was—

(i)

entitled to an ill health payment on the calculation date; or

(ii)

receiving a present payment from the scheme on the calculation date; and

(b)

the actuarial factor to be applied in respect of the beneficiary for the purposes of this Schedule, where the qualifying member was not receiving a present payment from the scheme on the calculation date and became entitled to an ill health payment after the calculation date;

“D” means—

(a)

subject to paragraph (b), where sub-paragraph (4) of paragraph 4 applies, the total amount of annual increases to which any surviving dependant was entitled under this Schedule on the day on which the event referred to in paragraphs (a) to (c) of that sub-paragraph occurred;

(b)

where paragraph 4(4)(a) applies and, as a result, the ill health payment payable to a surviving dependant is redetermined under paragraph 4(3)(a), nil; and

(c)

in all other cases, nil;

“J” means—

(a)

where the qualifying member became entitled to an ill health payment or began to receive a present payment from the qualifying scheme prior to the day on which the transfer notice was given, the total amount of any annual increases which the scheme manager considers could have been paid from the relevant date until the day on which the transfer notice is given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17A (11); and

(b)

in all other cases, nil;

“N” means—

(a)

in paragraph 3, the number of survivors of that qualifying member; and

(b)

in paragraph 4, the number of surviving dependants of that qualifying member;

“Q” means the sum of—

(a)

the product of C multiplied by the revalued notional pension in respect of the qualifying member;

(b)

the total amount of any annual increases which the scheme manager considers could have been paid, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17A(11), from the relevant date until the earlier of—

(i)

the day on which the transfer notice is given; and

(ii)

the day on which the qualifying member died;

(c)

where the qualifying member died after the calculation date but before the day on which the transfer notice was given, double the total amount of any annual increases which the scheme manager considers could have been paid to a survivor (on the basis that there is one survivor) from the day after the day on which the qualifying member died until the day on which the transfer notice is given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17A(11); and

(d)

the total amount of any annual increases to which the qualifying member was entitled in accordance with paragraph 6 on the day on which the qualifying member died,

less, where the qualifying member was a qualifying member to whom regulation 17D applied, the amount by which the qualifying member’s ill health payment has been commuted;

“R” means the revalued notional pension as construed in accordance with regulation 17A(10);

“S” means—

(a)

where paragraph 3(2) applies, the total amount of annual increases to which any survivor was entitled under this Schedule on the day on which the survivor died;

(b)

where sub-paragraph (4) of paragraph 4 applies, the total amount of annual increases to which any survivor was entitled under this Schedule on the day on which the event referred to in paragraphs (a) to (c) of that sub-paragraph occurred; and

(c)

in all other cases, nil;

“relevant date” means—

(a)

where the beneficiary began to receive a payment from the scheme after the calculation date and prior to becoming entitled to an ill health payment under these Regulations, the date on which the beneficiary began to receive a present payment from the scheme;

(b)

where the beneficiary became entitled to an ill health payment after the calculation date and prior to receiving a payment from the scheme, the date on which the beneficiary became so entitled; and

(c)

in all other cases, the date from which the notional pension or survivor notional pension could have been payable as determined in accordance with regulation 27(3) and (4).

(3) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before a transfer notice is given, a debt to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the ill health payment which would otherwise be payable under this Schedule is to be reduced, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(4) Sub-paragraph (6) applies where the scheme manager is satisfied that the sum of the interim pension paid to a beneficiary and any payment made under these Regulations in respect of any year in the period determined in accordance with sub-paragraph (5) is higher or lower than the sum of—

(a)the revalued notional pension, or the survivor notional pension, as the case may be; and

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

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

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

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

(5) For the purposes of sub-paragraph (4), the period is the period from—

(a)the earlier of—

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

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

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

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

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

(a)determine the amount by which the annual payment which would otherwise be payable under this Schedule in respect of the beneficiary is to be reduced, having regard to—

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

(ii)the amount of the sum of—

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

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

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

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

(b)where the sum of the interim pension paid and any payments made under these Regulations in respect of any year is lower than the sum of the amounts referred to in sub-paragraph (4)(a) and (b) in respect of that year, make a payment to the beneficiary or, where the beneficiary has died prior to the scheme manager making this determination, to the beneficiary’s estate, having regard to—

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

(ii)the amount of the sum of—

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

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

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

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

Amount of an ill health payment – qualifying members

2.  The ill health payment payable to a qualifying member to whom this Schedule applies shall be—

Amount of an ill health payment - survivors

3.—(1) Where this Schedule applies, the ill health payment payable to a survivor of a qualifying member shall be—

(a)where regulation 17A(8)(e) applies, the amount which is the sum of—

(i)the survivor notional pension determined in respect of that survivor; and

(ii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the relevant date until the day on which the transfer notice is given,

less the amount, if any, by which the scheme manager determines the payment should be reduced in accordance with paragraph 1(3) or (6); and

(b)where regulation 17A(8)(c) or (d) applies—

(i)where sub-paragraph (ii) does not apply—

(ii)where the qualifying member was a party to a polygamous marriage—

(2) Where a survivor to whom sub-paragraph (1)(b)(ii) applies dies, the ill health payment payable to all remaining survivors of the qualifying member shall be redetermined with effect from the day after the day on which the survivor died.

Amount of an ill health payment - surviving dependants

4.—(1) Where this Schedule applies, the ill health payment payable to a surviving dependant of a qualifying member shall be—

(a)where regulation 17A(8)(e) applies, the amount which is the sum of—

(i)the survivor notional pension determined in respect of that surviving dependant; and

(ii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the relevant date until the day on which the transfer notice is given,

less the amount, if any, by which the scheme manager determines the payment should be reduced in accordance with paragraph 1(3) or (6); and

(b)where regulation 17A(8)(b) to (d) applies, determined in accordance with sub-paragraphs (2) to (4).

(2) Where an ill health payment is also payable to a survivor of a qualifying member and—

(a)there is only one surviving dependant, the amount of the ill health payment shall be—

(b)there are two or more surviving dependants, the amount of the ill health payment shall be—

(3) Where an ill health payment is not payable to a survivor of a qualifying member and—

(a)there is only one surviving dependant, the amount of the ill health payment shall be—

(b)there are two or more surviving dependants, the amount of the ill health payment shall be—

(4) Where—

(a)a survivor of a qualifying member dies;

(b)a person ceases to be a surviving dependant of a qualifying member; or

(c)another person becomes entitled to an ill health payment as a surviving dependant of a qualifying member,

the ill health payment payable to a surviving dependant of that qualifying member shall be redetermined with effect from the day after the day on which the event referred to in paragraphs (a) to (c) occurred.

Rounding

5.  Where the amount of an ill health payment determined in accordance with this Schedule results in a fraction of a penny, that fraction shall be treated as a penny.

Annual increases to an ill health payment

6.—(1) Except where there is no percentage increase in the retail prices index for the period of 12 months ending with 31st May last falling before the indexation date, a beneficiary entitled to an amount determined in accordance with this Schedule shall be entitled, on each indexation date after the day on which the transfer notice is given, to an increase of—

(a)the appropriate percentage of the amount of the underlying rate immediately before that date; or

(b)where the beneficiary first became entitled to an ill health payment during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the ill health payment was first payable.

(2) In this paragraph—

“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 before the indexation date; and

(b)

2.5%;

“underlying rate” means the aggregate of—

(a)

the product of X multiplied by (C x V);

(b)

where the beneficiary is a qualifying member, the total amount of any annual increases which the scheme manager considers could have been paid from the relevant date until the day on which the transfer notice was given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17A(11);

(c)

where the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the relevant date until the day on which the transfer notice is given;

(d)

where the beneficiary is a survivor or a surviving dependant of a qualifying member who died on or after the calculation date but before the day on which the transfer notice was given, the sum of—

(i)

the product of X multiplied by the total amount of any annual increases which the scheme manager considers could have been paid from the relevant date until the date on which the qualifying member died, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17A(11); and

(ii)

the total amount of any annual increases which the scheme manager considers could have been paid to the beneficiary from the day after the day on which the qualifying member died until the day on which the transfer notice is given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17A(11);

(e)

where the beneficiary is the survivor or surviving dependant of a qualifying member who died after the day on which the transfer notice was given, the product of X multiplied by the sum of—

(i)

the total amount of any annual increases which the scheme manager considers could have been paid from the relevant date until the day on which the transfer notice was given, taking into account the determination under regulation 27(1)(d) and the revaluation amount determined in accordance with regulation 17A(11); and

(ii)

the total amount of any annual increases to which the qualifying member was entitled in accordance with sub-paragraph (1) on the day on which the qualifying member died; and

(f)

any annual increases to which the beneficiary is entitled under this Schedule immediately before the indexation date;

“post-1997 service” means—

(a)

pensionable service (either actual or notional) which occurred on or after 6th April 1997; or

(b)

where the pension was payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred on or after 6th April 1997;

“V” means—

(a)

where the beneficiary is a qualifying member or a survivor or surviving dependant of a qualifying member who died on or after the calculation date—

(i)

where the qualifying member is not a qualifying member to whom regulation 17D applied, so much of the revalued notional pension as is attributable to post-1997 service; or

(ii)

where the qualifying member is a qualifying member to whom regulation 17D applied, so much of the sum of R-A as is attributable to post-1997 service; and

(b)

where the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, so much of the survivor notional pension as is attributable to the qualifying member’s post 1997 service;

“W” means the amount of any annual increases to which the qualifying member was entitled in accordance with sub-paragraph (1) on the day on which the qualifying member died;

“X” means—

(a)

1, where the beneficiary is the qualifying member or a survivor or surviving dependant in respect of whom a survivor notional pension has been determined;

(b)

0.5, where the beneficiary is a survivor who is neither—

(i)

a survivor to whom paragraph 3(1)(b)(ii) applies; nor

(ii)

a survivor in respect of whom a survivor notional pension has been determined;

(c)

the product of 0.5 divided by Y, where the beneficiary is a survivor to whom paragraph 3(1)(b)(ii) applies;

(d)

the product of 1 divided by Z, where the beneficiary is a surviving dependant in respect of whom a survivor notional pension has not been determined and the qualifying member does not have a survivor; or

(e)

the product of 0.5 divided by Z, where the beneficiary is a surviving dependant in respect of whom a survivor notional pension has not been determined and an annual payment is also payable to a survivor of the qualifying member;

“Y” means the number of survivors of the qualifying member; and

“Z” means—

(a)

where there is only one surviving dependant, 2; or

(b)

where there is more than one surviving dependant, the number of surviving dependants of the qualifying member.

(3) In determining the underlying rate where a qualifying member is a qualifying member to whom regulation 17D applied, the amount of R-A that is attributable to post-1997 service is determined by attributing the sum to pre-1997 service and post-1997 service in the same proportions as the revalued notional pension would have been attributed had regulation 17D not applied.

Regulation 17A(8)(f) to (i)

SCHEDULE 6Determination of ill health payments where a present payment was being received on the coming into force of the Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010

Introductory

1.—(1) This Schedule applies for the purposes of determining the amount of an ill health payment payable to a beneficiary to whom regulation 17A(8)(f) to (i) applies.

(2) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before a transfer notice is given, a debt to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the ill health payment which would otherwise be payable under this Schedule is to be reduced, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(3) Sub-paragraph (5) applies where the scheme manager is satisfied that the sum of the interim pension paid to a beneficiary and any payment made under these Regulations in respect of any year in the period determined in accordance with sub-paragraph (4) is higher or lower than the sum of—

(a)the notional pension, or the survivor notional pension, as the case may be; and

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

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

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

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

(a)the earlier of—

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

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

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

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

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

(a)determine the amount by which the annual payment which would otherwise be payable under this Schedule in respect of the beneficiary is to be reduced, having regard to—

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

(ii)the amount of the sum of—

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

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

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

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

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

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

(ii)the amount of the sum of—

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

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

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

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

(6) In this Schedule—

“relevant date” means the date from which the notional pension or survivor notional pension could have been payable as determined in accordance with regulation 27(3) and (4); and

“relevant proportion”, in relation to a beneficiary, means the proportion of the notional pension which relates to the beneficiary.

(7) Where—

(a)the beneficiary is a qualifying member to whom regulation 17H applied; and

(b)the scheme manager made a determination in accordance with paragraph 1(2) or (5) of Schedule 7, to reduce the payment under that Schedule by any amount,

the scheme manager shall reduce the amount of the ill health payment payable under this Schedule by the same amount.

Qualifying members

2.  Where this Schedule applies, the ill health payment payable to a qualifying member shall be the sum of—

(a)the notional pension determined in respect of the qualifying member; and

(b)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2), (5) or (7).

Survivors

3.  Where this Schedule applies, the ill health payment payable to a survivor of a qualifying member shall be—

(a)where regulation 17A(8)(g) applies, the amount which is the sum of —

(i)the survivor notional pension determined in respect of that survivor; and

(ii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the day after the qualifying member died until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5);

(b)where regulation 17(8)(h) applies, the amount which is the sum of—

(i)the proportion of the notional pension which relates to a pension payable to the survivor;

(ii)the relevant proportion of the amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which the qualifying member died; and

(iii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the relevant proportion of the notional pension, from the day after the day on which the qualifying member died until the day on which the transfer notice was given; and

(c)where regulation 17A(8)(i) applies, the amount which is the sum of—

(i)the proportion of the notional pension which relates to a pension payable to the survivor;

(ii)the relevant proportion of the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which transfer notice was given; and

(iii)the relevant proportion of the total amount of any annual increases to which the qualifying member was entitled on the day on which the qualifying member died.

Surviving Dependants

4.  Where this Schedule applies, the ill health payment payable to a surviving dependant of a qualifying member shall be—

(a)where regulation 17A(8)(g) applies, the amount which is the sum of—

(i)the survivor notional pension determined in respect of that surviving dependant; and

(ii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the survivor notional pension from the day after the qualifying member died until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5);

(b)where regulation 17A(8)(h) applies, the amount which is the sum of—

(i)the proportion of the notional pension which relates to a pension payable to the surviving dependant;

(ii)the relevant proportion of the amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which the qualifying member died; and

(iii)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the relevant proportion of the notional pension, from the day after the day on which the qualifying member died until the day on which the transfer notice was given; and

(c)where regulation 17A(8)(i) applies, the amount which is the sum of—

(i)the proportion of the notional pension which relates to a pension payable to the surviving dependant;

(ii)the relevant proportion of the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which transfer notice was given; and

(iii)the relevant proportion of the total amount of any annual increases to which the qualifying member was entitled on the day on which the qualifying member died.

Redetermination

5.—(1) This paragraph applies where the notional pension or survivor notional pension includes an amount in respect of an amount which under scheme rules—

(a)would be payable for a period which is shorter than the period in respect of which the remainder of a pension would be payable; or

(b)would be payable as a result of a qualifying member dying within a period specified in scheme rules which begins on the day on which the member became entitled to a pension from the scheme, or the day on which the pension was first paid.

(2) Where this paragraph applies, the scheme manager shall redetermine the ill health payment payable to the beneficiary with effect from the date on which the amount referred to in sub-paragraph (1)(a) would have ceased to be payable, or the period referred to within sub-paragraph (1)(b) would have ended.

(3) When redetermining an ill health payment under sub-paragraph (2), the scheme manager shall redetermine the notional pension or survivor notional pension having regard to the amount referred to in sub-paragraph (1).

Rounding

6.  Where the amount of an ill health payment determined in accordance with this Schedule results in a fraction of a penny, that fraction shall be treated as a penny.

Annual increases to an ill health payment

7.—(1) Except where there is no percentage increase in the retail prices index for the period of 12 months ending with 31st May last falling before the indexation date, where the asset share determined in respect of the beneficiary was sufficient to be applied to the amounts referred to in regulation 27(7)(a)(ii) or (10)(a)(ii), a beneficiary shall be entitled, on each indexation date after the day on which the transfer notice is given, to an increase of—

(a)the appropriate percentage of the amount of the underlying rate immediately before that date; or

(b)where the beneficiary first became entitled to an ill health payment during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the ill health payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—

(a)

the percentage increase in the retail prices index for the period of 12 months ending with 31st May last falling before the indexation date; and

(b)

2.5%; and

“underlying rate” means—

(a)

where the beneficiary is a qualifying member or a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, the aggregate of—

(i)

so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) or (10)(a)(ii) could be increased;

(ii)

the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension, or survivor notional pension, as the case may be, from the relevant date until the day on which the transfer notice is given; and

(iii)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date;

(b)

where the beneficiary is a survivor or surviving dependant of a qualifying member who died after the day on which the transfer notice was given, the aggregate of—

(i)

the relevant proportion of so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) could be increased;

(ii)

the relevant proportion of the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid to the qualifying member on the notional pension from the relevant date until the day on which the transfer notice is given;

(iii)

the relevant proportion of any annual increases to which the qualifying member was entitled in accordance with this Schedule on the day on which the qualifying member died; and

(iv)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date; and

(c)

where the beneficiary is a survivor or surviving dependant of a qualifying member who died after the calculation date but prior to the day on which the transfer notice was given, the aggregate of—

(i)

the relevant proportion of so much of the annual payments as the scheme manager determined under regulation 27(7)(a)(ii) could be increased;

(ii)

the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the relevant proportion of the notional pension from the relevant date until the day on which the qualifying member died;

(iii)

the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the relevant proportion of the notional pension from the day after the day on which the qualifying member died until the day on which the transfer notice was given; and

(iv)

any annual increases to which the beneficiary is entitled in accordance with sub-paragraph (1) immediately before the indexation date.

(3) In the definition of “underlying rate” in sub-paragraph (2), the reference to annual payments is to the amount of annual payment prior to any reduction made by the scheme manager under paragraph 1(2) or (5).

Regulations 17G(2) and 17H(2)

SCHEDULE 7Determination of payments to early retirees and other beneficiaries

Introductory

1.—(1) This Schedule applies for the purposes of determining the amount of a payment payable to a person to whom regulation 17G or 17H applies.

(2) Where the scheme manager is satisfied that an amount is owed by the beneficiary to the Secretary of State as a result of the beneficiary owing, before a transfer notice is given, a debt to a qualifying pension scheme to which Part 7 applies, the scheme manager may determine how the payment which would otherwise be payable under this Schedule is to be reduced, having regard to the amount owed by the beneficiary and to such other matters as the scheme manager considers relevant.

(3) Sub-paragraph (5) applies where the scheme manager is satisfied that the amount of interim pension paid to a beneficiary in respect of any year in the period determined in accordance with sub-paragraph (4) is higher or lower than the sum of—

(a)the notional pension; and

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

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

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

(4) For the purposes of sub-paragraph (3), the period is the period from the later of—

(a)the day on which the beneficiary began to receive a payment from the scheme; and

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

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

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

(a)determine the amount by which the payment which would otherwise be payable under this Schedule in respect of the beneficiary is to be reduced, having regard to—

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

(ii)the amount of the sum of—

(aa)the notional pension; and

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

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

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

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

(ii)the amount of the sum of—

(aa)the notional pension; and

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

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

Amount of the payment where regulation 17G applies

2.  Where a person is entitled to a payment in accordance with regulation 17G, the amount of that payment shall be sum of—

(a)the amount of the notional pension determined in respect of that person; and

(b)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the day on which the scheme’s liability to provide a pension or other benefit to the person arose until the day on which the transfer notice was given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5).

Amount of the payment where regulation 17H applies

3.  Where a qualifying member is entitled to a payment in accordance with regulation 17H, the amount of that payment shall be the sum of—

(a)the notional pension in relation to the qualifying member; and

(b)the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the later of—

(i)the date on which the qualifying member began to receive a present payment from the scheme; and

(ii)the date on which the scheme began to be wound up,

until the day on which the transfer notice is given,

less any amount by which the scheme manager determines a payment is to be reduced under paragraph 1(2) or (5).

Annual increases

4.—(1) Except where there is no percentage increase in the retail prices index for the period of 12 months ending with 31st May last falling before the indexation date, where the asset share determined in respect of a person to whom an amount is payable in accordance with this Schedule was sufficient to be applied to annual increases, that person shall be entitled, on each indexation date after the day on which the transfer notice is given, to an increase of—

(a)the appropriate percentage of the amount of the underlying rate immediately before that date; or

(b)where that person first became entitled to a payment in accordance with regulation 17G or 17H during the period of 12 months ending immediately before that date, one twelfth of that amount for each full month since the date on which the payment was first payable.

(2) In this paragraph—

“appropriate percentage” means the lesser of—

(a)

the percentage increase in the retail prices index for the period of 12 months ending with 31st May last falling before the indexation date; and

(b)

2.5%;

“relevant date” means—

(a)

in the cases of a person to whom regulation 17G applies, the day on which the scheme’s liability to provide a pension or other benefit to the person arose; and

(b)

in the case of a person to whom regulation 17H applies, the later of—

(i)

the day from which the beneficiary began to receive a present payment from the scheme; and

(ii)

the day on which the scheme began to be wound up.

“underlying rate” means—

the aggregate of—

(i)

where regulation 17G applies, so much of the payment as the scheme manager determined under regulation 27(7)(b)(ii) could be increased; and

(ii)

where regulation 17H applies, so much of the payment as the scheme manager determined under regulation 27(7)(a)(ii) could be increased;

(b)

the total amount of any annual increases which the scheme manager has determined under regulation 27 could be paid on the notional pension from the relevant date until the day on which the transfer notice is given; and

(c)

any annual increases to which the person is entitled in accordance with sub-paragraph (1) immediately before the indexation date.

(3) The reference to payments in the definition of “underlying rate” in sub-paragraph (2) is to the amount of payment prior to any reduction made by the scheme manager under paragraph 1(2) or (5).”

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