Finance Act 2004

Unsecured pension year and basis amount for unsecured pension yearU.K.

10(1)The period of five unsecured pension years beginning with the first unsecured pension year, and each succeeding period of five unsecured pension years, is a “reference period”; and the first day of each reference period is, in relation to that period, “the reference date”.U.K.

(2)For the first unsecured pension year falling within a reference period, the basis amount is the annual amount of the relevant annuity which could have been purchased by the application of the sums and assets representing the member’s unsecured pension fund on the nominated date (but subject to sub-paragraph (5)).

(3)“The nominated date”—

(a)in relation to the first reference period, is the reference date, and

(b)in relation to any subsequent reference period, is such day, within the period of 60 days ending with the reference date, as is nominated by the scheme administrator (or, if no day is nominated by the scheme administrator, is the reference date).

(4)For each other unsecured pension year falling within a reference period, the basis amount is the annual amount of the relevant annuity which could have been purchased by the application of the sums and assets representing the member’s unsecured pension fund—

(a)if there has been no recent annuity purchase [F1, recent additional fund designation or recent pension sharing event], on the nominated date, and

(b)otherwise, immediately after the last annuity purchase [F2, additional fund designation or pension sharing event],

(but subject to sub-paragraph (5)).

(5)On the occasion of each additional fund designation during an unsecured pension year, the basis amount for that unsecured pension year is to be recalculated in accordance with sub-paragraph (6).

(6)The basis amount for the unsecured pension year is the annual amount of the relevant annuity which could have been purchased by the application of the sums and assets representing the member’s unsecured pension fund immediately after the additional fund designation.

(7)“Annuity purchase” means the purchase of a scheme pension or a lifetime annuity by the application of sums or assets representing the whole or part of the member’s unsecured pension fund.

(8)“Additional fund designation” means the designation under the arrangement of further sums or assets held for the purposes of the arrangement as available for the payment of unsecured pension.

[F3(8A)“Pension sharing event” means the coming into operation of a pension sharing order or provision relating to the sums and assets representing the member's unsecured pension fund.]

(9)An annuity purchase [F4, additional fund designation or pension sharing event] is “recent”if it took place during the period—

(a)beginning with the reference date, and

(b)ending with the last day of the immediately preceding unsecured pension year.

(10)Paragraph 14 defines “relevant annuity”.