Regulation C3

SCHEDULE 4ADDITIONAL CONTRIBUTIONS FOR PAST PERIOD

PART 1METHOD A

1.—(1) In this Part (and throughout this Schedule) “the principal election” means the election made under regulation C3, “the past period” means the period specified under regulation C3(12)(a), and “the contribution period” means the period specified under regulation C3(12)(c).

(2) During any period for which a person is paying additional contributions for a current period under regulation C8, for the purposes of this Part (and of Part III)—

(a)he is to be treated as being in full-time pensionable employment, and

(b)his contributable salary is the notional salary described in regulation C8(7).

2.—(1) The contribution period must be one of not less than one year, and begins on the first day of the month following that in which the election becomes irrevocable under regulation C3(13).

(2) The contribution period and the past period must be such that A+B does not exceed 15 per cent of his contributable salary for the time being, where—

• A is the rate at which the additional contributions are payable, and

• B is the rate at which he pays other contributions under Part C (except any treated for the purposes of regulation G2 as employer’s contributions) or towards the provision of a pension otherwise than under these Regulations.

3.  Subject to paragraphs 4 and 5, the rate at which the additional contributions are payable is the percentage ascertained from Table 1 below of his contributable salary for the time being.

4.—(1) At any time during the contribution period the person may, subject to paragraph 2, by giving written notice to the Secretary of State elect to shorten it or, if he has already made one or more such elections, to shorten it further.

(2) An election under this paragraph—

(a)has effect only if the Secretary of State notifies the person in writing that it has been accepted, and

(b)on acceptance, has effect as from the next anniversary of the start of the contribution period (“the effective date”).

(3) From the effective date Table 1 in paragraph 3 applies with the substitution—

(a)for the person’s age at the date of the principal election, of his age at the date when notice of the election under this paragraph was given,

(b)for the number of years in the contribution period, of the number of years after the effective date in the shortened period, and

(c)for the number of years in the past period, of that number multiplied by—

5.—(1) Subject to sub-paragraphs (2) to (5), if the person—

(a)before the end of the contribution period ceases to be in full-time pensionable employment, and

(b)does not again enter such employment within one month and before becoming entitled to retirement benefits,

the principal election ceases to have effect.

(2) Unless he receives a refund of contributions under regulation C10, he may—

(a)if he became entitled to payment of retirement benefits on ceasing to hold his employment, on or after applying for them and before receiving a retirement lump sum, or

(b)in any other case, within 3 months after the end of his employment,

by giving written notice to the Secretary of State elect to complete payment of the additional contributions (so that regulation D3(1)(b) will apply instead of regulation D3(2)) by making a lump sum payment under this paragraph.

(3) Where he had not attained the age of 60 when he ceased to hold his employment, the amount of the payment is, subject to sub-paragraph (4) and to paragraph 3 of Schedule 3, the actuarial equivalent, when the employment ended, of the additional contributions that would have been payable for the remainder of the contribution period.

(4) Where—

(a)when he ceased to hold his employment he had become incapacitated and had not attained the age of 60, and

(b)he would have attained that age before the end of the contribution period,

the amount of the payment is, subject to paragraph 3 of Schedule 3, the actuarial equivalent, when the employment ended, of the additional contributions that would have been payable after he attained that age.

(5) Where he had attained the age of 60 when he ceased to hold his employment, the amount of the payment is, subject to paragraph 3 of Schedule 3, E×F, where—

• E is the amount of the additional contributions for one year at the rate at which they were last payable, and

• F is the multiplier ascertained from, or where the remainder of the contribution period is not an exact number of years by extrapolation from, Table 2 below.

(6) If the payment is not made within the period allowed by sub-paragraph (2) for making the election, the election ceases to have effect.

6.  Where paragraph 5 has become applicable and the person is entitled to a retirement lump sum which is smaller than the payment he could elect to make under that paragraph, he may instead elect, in the same way and during the same period, to make a payment under this paragraph of a lump sum equal to the retirement lump sum.

7.  Any retirement lump sum to which the person is entitled may, subject to paragraph 8(2)(d), be set off in whole or part against any payment to be made under paragraph 5 or 6.

8.—(1) This paragraph applies—

(a)where paragraph 5 has become applicable because the person died while in full-time pensionable employment, or

(b)where he dies within 3 months after ceasing to be in such employment without having made an election under paragraph 5 or 6,

and another person (“the pensioner”) is entitled under regulation E25 to a long-term pension in respect of him.

(2) Where this paragraph applies—

(a)the person is to be treated as having ceased to hold the employment when incapacitated,

(b)any election that could have been made under paragraph 5 or 6 may, within 3 months after the death, be made by the pensioner, or in the case of a child by a person acting on his behalf,

(c)if any payment due by virtue of such an election is not made within 3 months after the death the election ceases to have effect, and

(d)a terminal sum may be set off against such a payment only to the extent that the person entitled to it consents.

PART IIMETHOD B

9.—(1) Subject to paragraphs 10 to 12, the additional contributions consist of a lump sum of A×B×C, where—

• A is the length of the past period, expressed in years and any fraction of a year,

• B is the annual rate of the person’s contributable salary at the date on which notice of the election was given, and

• C is the percentage ascertained from Table 3 below.

(2) If the lump sum is not paid within one month after the date on which the election became irrevocable under regulation C3(13) the election ceases to have effect.

10.—(1) Subject to paragraphs 11 and 12 and paragraph 16(3) of Schedule 10, this paragraph applies where the person’s contributable salary was reduced (whether in consequence of a change of post or otherwise) within—

(a)the year, or

(b)if when notice of the election was given he had attained the age of 57, the period of 3 years,

ending immediately before the date on which notice of the election was given.

(2) Where this paragraph applies, paragraph 9 has effect with the substitution as “B” of the annual rate of the contributable salary that would have been payable at that date if he had continued to be employed in the same post and on the same terms.

11.  Where notice of the election was given on or after applying for payment of retirement benefits, paragraph 9 has effect with the substitution as “B” of the person’s average salary.

12.  Where notice of the election was given when the person was in part-time pensionable employment, the references in paragraphs 9 and 10 to contributable salary are to be construed as references to that which would have been payable if the person had at all material times been in comparable full-time employment.

PART IIIMETHOD C

13.—(1) The contribution period begins on the commencement date, that is to say 1st October next following the date on which notice of the principal election was given.

(2) Where at the commencement date the person has attained the age of 55, the contribution period must be one of not less than one nor more than 5 years.

(3) In any other case, the contribution period must be one of not less than one nor more than 10 years, ending on or before his 60th birthday.

(4) The contribution period and the past period must be such that at the commencement date A+B does not exceed 15% of his contributable salary, where—

• A is the rate at which the additional contributions are payable, and

• B is the rate at which he pays other contributions under Part C (except any treated for the purposes of regulation G2 as employer’s contributions) or towards the provision of a pension otherwise than under these Regulations.

14.—(1) Subject to paragraph 15, the amount of the additional contributions is to be paid in equal monthly instalments.

(2) The amount of the additional contributions is C×D×E, where—

• C is the Method B sum,

• D is the number of instalments to be paid, and

• E is the multiplier ascertained from, or where the contribution period is not an exact number of years by extrapolation from, the appropriate Table.

(3) Where paragraph 13(2) applies, the appropriate Table is Table 4 below.

(4) In any other case, the appropriate Table is Table 5 below.

(5) The relevant rate of interest is the average gross redemption yield described in sub-paragraph (6) on the last 1st August before the date on which the election became irrevocable under regulation C3(13) or, if The Stock Exchange was not then open, on the last day on which it had been open.

(6) The average gross redemption yield is that computed and designated jointly by the Financial Times, the Institute of Actuaries and the Faculty of Actuaries as that appropriate to British Government high-coupon 5-year stocks.

15.—(1) Subject to sub-paragraphs (2) and (3) (and having regard to paragraph 1(2)), if the person—

(a)before the end of the contribution period ceases to be in full-time pensionable employment, and

(b)does not again enter such employment within one month and before becoming entitled to payment of retirement benefits,

the principal election ceases to have effect.

(2) Unless he receives a refund of contributions under regulation C10, he may by giving written notice to the Secretary of State within 3 months after the end of his employment elect to complete payment of the additional contributions (so that regulation D3(1)(b) will apply instead of regulation D3(2)) by making a lump sum payment under this paragraph.

(3) The amount of the payment is, subject to paragraph 3 of Schedule 3, the actuarial equivalent, when the employment ended, of the additional contributions that would have been payable for the remainder of the contribution period.

(4) If the payment is not made within 3 months after the end of the person’s employment the election ceases to have effect.

(5) A lump sum payable under this paragraph may be set off against any retirement lump sum to which the person is entitled.

PART IVMETHOD D

16.—(1) Where the person has not attained the age of 60 when he ceases to be in pensionable employment, the additional contributions consist of a lump sum which is the actuarial equivalent of the actual or prospective increase in benefits attributable to his becoming entitled to count the past period as reckonable service under regulation D3.

(2) In any other case, the additional contributions consist of a lump sum calculated in accordance with paragraph 9(1) but with the substitution as B of his average salary.

(3) A lump sum payable under this paragraph may be set off against any retirement lump sum to which the person is entitled.