Part IIIN.I.F1 [F2Schemes that were contracted-out etc.] and Effects on Members’ State Scheme Rights ...

Chapter IIIN.I. Termination of Contracted-out or Appropriate Scheme Status: State Scheme Premiums

State scheme premiumsN.I.

51 Payment of state scheme premiums on termination of certified status.N.I.

F3[F4(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F5(2)Where—

(a)an earner is serving in employment which is contracted-out employment by reference to an occupational pension scheme F6...,

(b)paragraph (a) ceases to apply, by reason of any of the following circumstances, before the earner attains the scheme’s normal pension age or (if earlier) the end of the tax year preceding that in which the earner attains pensionable age, and

(c)the earner has served for less than two years in the employment,

the prescribed person [F7shall, if subsection (2B) applies, pay and otherwise] may elect to pay a premium under this subsection (referred to in this Act as a “contributions equivalent premium”).

[F8(2ZA)In this section “prescribed” means prescribed by regulations made by the Secretary of State.]

(2A)The circumstances referred to in subsection (2) are that—

(a)the earner’s service in the employment ceases otherwise than on the earner’s death,

(b)the earner ceases to be a member of the scheme otherwise than on the earner’s death,

(c)the earner’s service in the employment ceases on the earner’s death and the earner dies leaving a widow or widower,

(d)the scheme is wound up,

(e)the scheme ceases to be a contracted-out occupational pension scheme;

[F9. . .]]

[F10(2B)Except in prescribed circumstances, this subsection applies in any case where the earner has no accrued right to any benefit under the scheme.

(2C)Where a contributions equivalent premium is required to be paid in respect of an earner by virtue of subsection (2), the prescribed person must notify the Inland Revenue of that fact within the prescribed period and in the prescribed manner.]

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

52 Provisions supplementary to s. 51.N.I.

F11[F4(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)A premium under section 51 shall be paid by the prescribed person to the [F12Inland Revenue] within the prescribed period F13. . ..

F11(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)[F14Where under the rules of the scheme, transfer credits have been allowed—

(a)in respect of the earner’s rights under another scheme, or

(b)in respect of the earner by reference to the payment of a cash transfer sum (within the meaning of [F15Chapter 2 of Part 4ZA] ) to the trustees or managers of the scheme by the trustees or managers of another occupational pension scheme,]

the reference in section 51(2) to employment which is contracted-out by reference to the scheme shall include references to employment in any period of linked qualifying service which was contracted-out employment by reference to the other scheme.

[F16(5)F17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)Subject to regulations under paragraph 1 of Schedule 1, service in any employment which ceases with the death of the employer shall be treated for the purposes of section 51(2A) as ceasing immediately before the death]

[F18(7)In this section “prescribed” means prescribed by regulations made by the Secretary of State.]

[F19(8)Where a premium under section 51 is payable by the Board of the Pension Protection Fund by virtue of a transfer under Article 145 of the Pensions (Northern Ireland) Order 2005 (effect of the Board assuming responsibility for an occupational pension scheme), then, subject to subsection (9), sections 51 to 64 apply with such modifications as may be prescribed in relation to that premium.

(9)A premium under section 51 in respect of an earner ceases to be payable if—

(a)the liability to pay the premium is transferred to the Board of the Pension Protection Fund by virtue of Article 145 of the Pensions (Northern Ireland) Order 2005, and

(b)prescribed requirements are met.]]

53 Elections to pay contributions equivalent premiums.N.I.

[F4(1)An election under section 51(2) must be made within the prescribed period and in the prescribed manner.

(2)Except in such cases as may be prescribed, the prescribed person shall not, in making or abstaining from making elections under that section, discriminate between different earners on any grounds other than their respective lengths of relevant service.

(3)In subsection (2) “relevant service” means service in contracted-out employment by reference to the scheme, together with any service in contracted-out employment which in relation to service in that employment is linked qualifying service.

(4)If [F20the Inland Revenue consider] that the prescribed person is contravening subsection (2), [F21they] may cancel any contracting-out certificate held by the earner’s employer in respect of the scheme in question.

[F22(5)In this section “prescribed” means prescribed by regulations made by the Secretary of State.]]

[F454 Amount of premiums payable under s. 51.N.I.

F23(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F24(4)Subject to subsection (4A), the amount of the contributions equivalent premium shall be equal to the sum of the following amounts—

(a)the amount of every reduction made under section 37 (as from time to time in force) in the amount of Class 1 contributions payable in respect of the earner’s employment in employment which was contracted-out by reference to the scheme; and

(b)the total amount by which the reductions falling within paragraph (a) would have been larger if the amount of the contributions falling to be reduced had in each case been at least equal to the amount of the reduction of those contributions provided for by section 37.

(4A)The amounts brought into account in accordance with subsection (4)(b) shall not include any amount which, by virtue of regulations made under section 37(1D) so as to avoid the payment of trivial or fractional amounts, is an amount that was not payable by the Inland Revenue to the secondary contributor.]

(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)Section 52(4) applies for the purposes of subsection (4) as it applies for the purposes of section 51(2).]

F2555. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.I.

56 Effect of payment of premiums on rights.N.I.

F26[F4(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F26(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F26(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Payment of a contributions equivalent premium in the circumstances mentioned in section [F2751(2A)(a) and (b), (d) and (e)] shall extinguish the earner’s accrued rights to guaranteed minimum pensions under the relevant scheme [F28or (in relation to service on or after the principal appointed day( rights to pensions under the scheme so far as attributable to the amount of the premium].

(5)Payment of a contributions equivalent premium in the circumstances mentioned in section [F2951(2A)(c)] shall extinguish any such accrued rights in respect of the earner’s [F30widow, widower or surviving civil partner] .

F31(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F31(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F31(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F31(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F31(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

57 Deduction of contributions equivalent premium from refund of scheme contributions.N.I.

[F4(1)This section applies where—

[F32(a)an earner’s service in contracted-out employment ceases or his employment ceases to be contracted-out employment, and]

(b)he (or, by virtue of a connection with him, any other person) is entitled to a refund of any payments made by or in respect of him towards the provision of benefits under the scheme by reference to which that employment was contracted-out; and

(c)a contributions equivalent premium falls to be paid by any person in respect of him.

(2)Where this section applies, then, subject to the following provisions of this section, the person by whom the premium falls to be paid shall be entitled on paying it to recover an amount equal to so much of the premium as is attributable to [F33any actual reductions of] primary Class 1 contributions (and on paying any part of it to recover a proportionate part of that amount) from the person liable for the refund.

(3)The amount recoverable under this section shall not exceed the amount of the refund or so much of it as has not been made.

(4)Where the period taken into account in arriving at the amount mentioned in subsection (2) does not coincide with that in respect of which the refund is to be made, the sum recoverable under this section shall be determined by reference to so much of that amount and of the refund as are referable to the same period.

(5)Where the refund—

(a)is made in respect of more than one period of service, and one or more of those periods is a period of previous linked qualifying service; and

(b)includes any amount paid under a contracted-out scheme in relation to that service on or in connection with a transfer of accrued rights to another scheme,

the amount which may be recovered under this section shall be increased by such amount as may be prescribed.

(6)Where the person liable for the premium is himself liable for the refund, he shall be entitled to retain out of the refund the amount which he could recover under this section from another person liable for the refund.

(7)The amount of the refund shall be reduced by the amount recovered or retained under this section; and provision shall be made by regulations for requiring the making of refunds to be delayed for the purpose of enabling any right of recovery or retainer conferred by this section to be exercised, notwithstanding anything in any enactment relating to the making of the refund.

(8)Where—

[F34(a)an earner’s service in contracted-out employment ceases or his employment ceases to be contracted-out employment,]

(b)he (or, by virtue of a connection with him, any other person) is entitled to a refund of any payments made by or in respect of him under the scheme by reference to which that employment was contracted-out in relation to any previous contracted-out employment of his, being payments towards the provision of benefits under that scheme;

(c)a contributions equivalent premium falls to be paid in respect of him; and

(d)the period taken into account in arriving at the amount mentioned in subsection (2) includes the period of the previous contracted-out employment,

then the person liable for that premium shall have the like right of recovery from that refund (so far as the premium is not recoverable or retainable out of a refund in respect of a later employment) as a person has under this section where the refund relates to service in the employment on the [F35cessation] of which the premium falls to be paid (and subsection (7) shall apply accordingly).

(9)This section shall apply in relation to such a refund as is referred to in subsection (1)(b) which becomes payable after the [F36cessation] of an earner’s service in contracted-out employment as it applies to such a refund becoming payable on the [F36cessation] of an earner’s service in such employment.

[F37(9A)Where under section 97AH the trustees or managers of an occupational pension scheme may pay a contribution refund to a member of the scheme, the member is to be treated for the purposes of this section as being entitled to the contribution refund.]

(10)Where the earner (or, by virtue of a connection with him, any other person) becomes entitled to any payment in lieu of benefit, this section shall apply in relation to the payment as if it were such a refund as is referred to in subsection (1)(b).

(11)For the purposes of subsection (10), a payment in lieu of benefit is any payment falling to be made to or for the benefit of, or in respect of, a person by virtue of his being or having been a member of an occupational pension scheme, being a payment which either—

(a)is made or to be made otherwise than out of the resources of the scheme; or

(b)is made or to be made out of those resources but by way of distribution on a winding up; or

(c)falls within such other description of payments as may be prescribed for the purposes of that subsection.

[F38(12)In this section “prescribed” means prescribed by regulations made by the Secretary of State.]]

58 No recovery of state scheme premiums from earners, etc.N.I.

[F4(1)Notwithstanding any contract to the contrary, a person shall not be entitled—

(a)to recover any part of a [F39contributions equivalent] premium from any earner in respect of whom it is payable; or

(b)except in accordance with section 57, to recover or retain any part of such a premium out of any money payable to or for the benefit of the earner or any other person.

F40(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

59 Further provisions concerning calculations relating to premiums.N.I.

[F4(1)The following amounts shall be certified by the [F41Inland Revenue]—

F42(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F43(b)the sum of the amounts specified in section 54(4);]

(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)the amount mentioned in section 57(2).

F44(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)If the [F41Inland Revenue]—

F45(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)[F46are satisfied] that records of earnings relevant for determining the amount mentioned in [F47section 54(4)] have not been maintained or retained or are otherwise unobtainable,

then the [F41Inland Revenue] may for that purpose—

(i)compute, in such manner as [F48they think] fit, an amount which shall be regarded as the amount of those earnings; or

(ii)take their amount to be such sum as [F49they may] specify in the particular case,

F50. . ..

F51(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)For the purposes of subsection (1) the [F41Inland Revenue] may make such adjustments as [F48they think] necessary for avoiding fractional amounts.]

F5260

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5361. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.I.

F5462. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.I.

63 Non-payment of state scheme premiums.N.I.

[F4(1)If a person fails to pay any [F55contributions equivalent] premium which is payable by him at or within the time prescribed for the purpose, he shall be liable on summary conviction to a fine of not more than level 3 on the standard scale.

(2)Where—

(a)a person is convicted of the offence under subsection (1) of failing to pay a premium, and

(b)the premium remains unpaid at the date of the conviction,

he shall be liable to pay to the [F56Inland Revenue] a sum equal to the amount which he failed to pay.

(3)Subject to subsection (4), where a person is convicted of an offence mentioned in subsection (2), evidence may be given of any previous failure by him to pay [F55contributions equivalent] premiums within the time prescribed for the purpose; and in that subsection “the conviction” and “the offence” mean respectively the conviction referred to in this subsection and the offence of which the person is convicted.

(4)Such evidence may be given only if notice of intention to give it is served with the summons or warrant on which the person appeared before the court which convicted him.]

64 Unpaid premiums: supplementary.N.I.

[F4(1)Where a person charged with an offence to which section 63(2) applies is convicted of that offence in his absence under Article 24(2) of the M1Magistrates’ Courts (Northern Ireland) Order 1981, then if—

(a)it is proved to the satisfaction of the court, on oath or by affidavit or in the manner prescribed by magistrates’ courts rules, that notice under section 63(4) has been duly served specifying the other premiums in respect of which the complainant intends to give evidence; and

(b)the clerk of petty sessions has received a statement in writing purporting to be made by the accused or by a solicitor acting on his behalf to the effect that if the accused is convicted in his absence of the offence charged he desires to admit failing to pay the other premiums so specified or any of them,

section 63(3) and (4) shall have effect as if the evidence had been given and the failure so admitted had been proved, and the court shall proceed accordingly.

(2)Where—

(a)a person is convicted of an offence to which section 63(2) applies; and

(b)an order is made under the M2Probation Act (Northern Ireland) 1950 placing the offender on probation or discharging him absolutely or conditionally,

subsection (1) and section 63(2) to (4) shall apply as if it were a conviction for all purposes.

(3)Any sum which a person is liable to pay under subsection (1) or section 63(2) to (4) shall be recoverable from him as a penalty.

(4)[F57contributions equivalent] premiums recovered by the [F58Inland Revenue] under those provisions shall be treated for all purposes as premiums paid to the [F58Inland Revenue] in respect of the person in respect of whom they were originally payable.]