ukpga/1975/60 — Social Security Pensions Act 1975

Social Security Pensions Act 1975 1975 c.60 An Act to provide for relating the rates of social security retirement pensions and certain other benefits to the earnings on which contributions have been paid; to enable employed earners to be contracted-out of full social security contributions and benefits where the requisite benefits are provided by an occupational pension scheme; to make provision for securing that men and women are afforded equal access to occupational pension schemes; and to make other amendments in the law relating to social security (including an amendment of Part II of the Social Security Act 1975 introducing a new non-contributory benefit called “mobility allowance”); and to make other provision about occupational pensions. [7th August 1975] Part I Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–5 Part II Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6–10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12–16A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18–21 22 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23–25 Part III Contracting-Out Preliminary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Contracted-out rates of contributions and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29C Arrangements for contracting-out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Requirements for contracting-out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Protection of pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41E State scheme premiums 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supplementary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Part IV Occupational Pensions The revaluation percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52B Extinguishment of liability of scheme for pensions secured by insurance policies or annuity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52D Equal access to occupational pension schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Information about and registration of occupational pension schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56B–56D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56F–56J 56K 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56M Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56P Other provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58B Increase of official pensions. 59 1 Where by virtue of section 151 of the Administration Act a direction is given that the sums mentioned in section 150(1)(c) of that Act are to be increased by a specified percentage the Minister for the Civil Service shall by order provide that the annual rate of an official pension may, if a qualifying condition is satisfied or the pension is a derivative or substituted pension or a relevant injury pension , be increased in respect of any period beginning on or after the date on which the direction takes effect— a if the pension began before the beginning of the base period for that direction, by the same percentage as that specified in the direction; b if the pension began during the base period, by that percentage multiplied byA/B where A is the number of complete months in the period between the beginning of the pension and the end of the base period and B is the number of complete months in the base period. 2 Where an order is made under this section in consequence of any such direction as aforesaid the order shall, in addition to the provision required by subsection (1) above, authorise the payment of an increase in respect of any lump sum that becomes payable during the base period for that direction, being an increase equal to the percentage specified in the direction multiplied by A B where— a A is the number of complete months in the period between the beginning date for the lump sum (or, if later, the date from which it was last authorised to be increased by an order under this section) and the date on which it becomes payable; and b B is the number of complete months in that base period. 3 In the case of the first order made under this section in consequence of any such direction as aforesaid, subsection (1) above shall have effect as if the increase required to be authorised in the case of any pension (whether beginning before or during the base period) were an increase equal to the percentage specified in the direction multiplied by A B where— a A is the number of complete months in the period between the beginning of the pension (or, if later, the date from which it was last authorised to be increased by an order under section 2 of the Pensions (Increase) Act 1971) and the end of the base period for that direction; and b B is the number of complete months in that base period. 4 In the case of the first order so made under this section, subsection (2) above shall have effect as if— a for the reference to any lump sum that becomes payable during the base period there were substituted a reference to any lump sum that becomes or has become payable before the end of the base period but after the date from which official pensions were last increased by an order under section 2 of the Pensions (Increase) Act 1971; and b the reference in paragraph (a) of the subsection to the date from which the lump sum was last authorised to be increased were a reference to the date specified in paragraph (a) above. 5 The increases in the rate of a pension that may be provided for by an order under this section are to be calculated by reference to the basic rate of the pension as authorised to be increased by section 1 of the said Act of 1971 or by any order under section 2 of that Act or this section; but where— a a person is entitled to a guaranteed minimum pension when an order under this section comes into force; and b entitlement to that guaranteed minimum pension arises from an employment from which (either directly or by virtue of the payment of a transfer credit ...) entitlement to the official pension also arises; the amount by reference to which any increase authorised by that or any subsequent order is to be calculated shall be reduced by an amount equal to the rate of the guaranteed minimum pension. 5ZA In the application of subsection (5) above in relation to a surviving spouse’s or surviving civil partner's pension in a case where the pensioner becomes entitled on the death of the deceased spouse or civil partner to such a guaranteed minimum pension as is there mentioned. a the pensioner shall be treated as having been entitled to that guaranteed minimum pension at all times during the period beginning with the date on which the deceased spouse or civil partner became entitled to a guaranteed minimum pension and ending with the date of the death; b the rate of the guaranteed minimum pension to which the pensioner is treated as so entitled at any time during that period (“ the relevant time ”) shall be taken to be the rate provided for in subsection (5ZB); and c the amount by reference to which any increase in the surviving spouse’s or surviving civil partner's pension is to be calculated shall, subject to any directions under section 59A below (whether made before or after the coming into force of this subsection), be accordingly reduced under that subsection by an amount equal to the rate, as determined under paragraph (b) above, of the guaranteed minimum pension to which the pensioner is treated as entitled; ... 5ZB The rate referred to in subsection (5ZA)(b) is— a in the case of a pension payable to a woman in respect of the services— i of her deceased male spouse; or ii of her deceased female spouse in a relevant gender change case; one half of the rate of the deceased spouse’s guaranteed minimum pension at the relevant time; b in the case of any other surviving spouse’s pension, one half of so much of the rate of the deceased spouse’s guaranteed minimum pension at the relevant time as is attributable to earnings factors for the tax year 1988-89 and subsequent tax years; c in the case of a surviving civil partner's pension, one half of so much of the rate of the deceased civil partner's guaranteed minimum pension at the relevant time as is attributable to earnings factors for the tax year 1988-89 and subsequent tax years. 5ZC Subsection (5ZA)— a does not apply to— i a pension payable to a woman in respect of the services of her deceased male spouse; ii a pension payable to a man in respect of the services of his deceased female spouse; iii a pension payable to a woman in respect of the services of her deceased female spouse in a relevant gender change case; or iv a pension payable to a man in respect of the services of his deceased male spouse in a relevant gender change case, in respect of any service of the deceased spouse if that deceased spouse’s pension in respect of that service became payable before 24th July 1990; a does not apply to a pension payable to the survivor of a couple in respect of any service of the deceased member of the couple if— i the deceased member’s pension in respect of that service became payable before 24 July 1990, ii a marriage between the couple is solemnised at a time (whether or not before the deceased member’s pension in respect of that service became payable) when one of them is a man and the other is a woman and they are not civil partners, and iii at the deceased member’s death (and whether or not the couple are still not of the same sex), the couple are parties to that marriage or to the civil partnership resulting from conversion of that marriage; b applies to a pension due to a surviving spouse who was married to someone of the same sex (other than a pension within paragraph (a)(iii) or (iv)) (other than such a pension in respect of the services of the deceased spouse in a relevant gender change case) and a surviving civil partner's pension only in respect of amounts payable after the coming into force of this subsection. 5A Nothing in section 110(2) or (3) of, or paragraph 10 of Schedule 6 to, the Pension Schemes Act 1993 authorises any deduction from an increase in the rate of an official pension under this section. 6 Any order under this section shall be made by statutory instrument and shall be laid before Parliament after being made. 7 In this section— “ base period ”, in relation to any such direction as is mentioned in subsection (1) above, means the period ending with the coming into force of that direction and beginning with the coming into force of the last previous such direction or, if there was none, with 13th November 1978 (date of the relevant order under section 124 of the principal Act, increasing rates of benefit); “ beginning date ”, in relation to a lump sum, shall be construed in accordance with sections 8(2) and 9(2)(a) of the said Act of 1971; “conversion”, in relation to a marriage, means— the conversion of that marriage into a civil partnership under Part 3 of the Marriage and Civil Partnership (Northern Ireland) (No. 2) Regulations 2020, or the conversion of that marriage into a civil partnership under Part 4 or 5 of those Regulations; “ employment ”, “ guaranteed minimum pension ” and “ transfer credit ” have the same meaning as in section 181(1) of the Pension Schemes Act 1993 “ lump sum ” includes an instalment of a lump sum; “relevant gender change case” means a case where— the deceased spouse was a man or a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004; and the marriage of the deceased spouse and the surviving spouse (that ends with the deceased spouse’s death) subsisted before the time when the certificate was issued, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and this section and section 59A of this Act and the said Act of 1971 shall have effect as if this section and section 59A of this Act were contained in Part I of that Act. 8 Where, for the purposes of this section, it is necessary to calculate the number of complete months in any period an incomplete month shall be treated as a complete month if it consists of at least 16 days. Modification of effect of section 59(5). 59A 1 This section applies where the amount by reference to which an increase in an official pension is to be calculated would, but for the provisions of this section, be reduced under section 59(5) of this Act by an amount equal to the rate of a guaranteed minimum pension. 2 The Minister for the Civil Service may direct that in such cases or classes of case as may be specified in the direction— a no such reduction shall be made; or b the reduction shall be of an amount less than the rate of the guaranteed minimum pension; and in any case to which such a direction applies the increase shall, in respect of such period or periods as may be specified in the direction, be calculated in accordance with the direction, notwithstanding section 59(5). 2A Where in any tax year as defined in section 181(1) of the Pension Schemes Act 1993 — a an increase is calculated in accordance with a direction under this section; and b the amount by reference to which the increase is calculated, or any part of it, is increased in that tax year under section 109 of the Pension Schemes Act 1993 , the increase calculated in accordance with the direction shall be reduced by the amount of the increase under that section . 3 A direction under this section may provide that where it has applied in any case and ceases to apply in that case, the rate of the official pension for any period following the date on which the direction ceases to apply shall, in such circumstances as may be specified in the direction, be calculated as if the direction had never applied. 4 A direction under this section may provide that the rate of an official pension shall, in such circumstances as may be specified in the direction, be calculated as if the direction had been in force at all times during such period as may be so specified. 5 A direction made under subsection (2) above may be varied or revoked by a subsequent direction. Part IVA The Pensions Ombudsman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59J Part V General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60ZA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60ZB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60ZC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60ZD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60ZE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60ZF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60B Consultation about regulations. 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61A Orders and regulations (general provisions). 61B 1 Powers under this Act to make regulations or orders, . . ., are excercisable by statutory instrument. 2 Except in so far as this Act otherwise provides any power conferred thereby to make regulations or an order may be exercised— a either in relation to all cases to which the power extends, or in relation to those cases subject to specified exceptions, or in relation to any specified exemptions, or in relation to any specified cases or classes of case; b so as to make, as respects the cases in relation to which it is exercised— i the full provision to which the power extends or any less provision (whether by way of exception or otherwise), ii the same provision for all cases in relation to which the power is exercised, or different provision for different cases or different classes of case or different provision as respects the same case or class of case for different purposes of this Act, iii any such provision either unconditionally or subject to any specified condition; and where such a power is expressed to be exercisable for alternative purposes it may be exercised in relation to the same case for any or all of those purposes; and powers to make regulations or an order for the purposes of any one provision of this Act are without prejudice to powers to make regulations or an order for the purposes of any other provision. 3 Without prejudice to any specific provision in this Act, a power conferred by this Act to make regulations or an order includes power to make thereby such incidental, supplementary, consequential or transitional provision as appears to the authority making the regulations or order to be expedient for the purposes of the regulations or order. 4 Without prejudice to any specific provisions in this Act, a power conferred by this Act to make regulations or an order includes power to provide for a person to exercise a discretion in dealing with any matter. 5 A power conferred on the Secretary of State to make any regulations or order, where the power is not expressed to be exercisable with the consent of the Treasury, shall if the Treasury so direct be exercisable only in conjunction with them. Other provisions about regulations and orders. 62 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 A statutory instrument— a which contains (whether alone or with other provisions) any order or regulations made under this Act by the Secretary of State, other than an order which, under any provision of this Act, is required to be laid before Parliament after being made; and b which is not subject to any requirement that a draft of the instrument shall be laid before and approved by a resolution of each house of Parliament, shall be subject to anullment in pursuance of a resolution of either House of Parliament. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitional provisions. 63 1 Regulations may make provision for any transitional matter connected with the coming into force of this Act. 2 Without prejudice to the generality of subsection (1) above, regulations may in particular— a make provision whereby a contribution paid or credited before (or in respect of a period before) commencement is treated, for the purposes of entitlement to or the calculation of any benefit, as having been paid or credited at a specified time or in respect of earnings of a specified amount; b make provision whereby a person who has satisfied any contribution condition before commencement is treated as having satisfied any contribution condition having effect by virtue of this Act; c modify any contribution condition in cases where the period in relation to which it is to be satisfied begins before and ends after commencement; d modify any provision of this Act in relation to persons who have attained the age of 16 before commencement; e make provision with respect to the operation of Schedule 1 to this Act in relation to persons who have attained pensionable age before commencement but have not then retired from regular employment; f make provision for effecting orderly transition between Part III of the National Insurance Act 1965 and Part III of this Act, including provision modifying for that purpose any provision of those Parts; g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . h make provision for the preservation of rights under any provision repealed or modified by this Act or otherwise for securing continuity between any such provision and any provision of this Act. 3 In subsection (2) above “ commencement ” means the time of the coming into force of any provision of this Act specified in the regulations in question. Expenses and receipts. 64 1 There shall be paid out of moneys provided by Parliament— a any expenses of the Secretary of State or any other government department under this Act; b any increase attributable to this Act in the sums falling to be paid out of moneys so provided under any other Act. 2 Section 165(5) of the Administration Act (reimbursement of expenses out of the National Insurance Fund) shall have effect in relation to the expenses mentioned in paragraph (a) of subsection (1) above as it has effect in relation to the expenses mentioned in section 163(2)(a) of that Act ; . . . 3 Any contributions equivalent premium received by the Secretary of State under this Act shall be paid by him into the National Insurance Fund. Amendments of enactments; repeals. 65 1 The enactments mentioned in Part I of Schedule 4 to this Act shall have effect with the amendments there specified, being amendments consequential on the provisions of this Act and otherwise required in connection with those provisions. 2 The enactments mentioned in Part II of Schedule 4 to this Act shall have effect, and be deemed always to have had effect, with the amendments there specified, being amendments required for the correction in certain minor respects of the social security consolidation Acts passed in March 1975; and paragraph 1 of Schedule 5 to the Social Security Benefits Act 1975 (commencement orders) shall be deemed not to have been repealed. 3 The enactments mentioned in Schedule 5 to this Act are hereby repealed to the extent specified in the third column of that Schedule. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The Secretary of State may, with the consent of the Minister for the Civil Service, make payments to the chairman and members of the Reserve Pension Board in consequence of its abolition by this Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Commencement. 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Short title, citation and extent. 68 1 This Act may be cited as the Social Security Pensions Act 1975. 2 The Social Security Act 1975 and this Act may be cited together as the Social Security Acts 1975. 3 The following provisions of this Act have the same extent as the Pensions (Increase) Act 1971— a sections 59 and 59A ; b paragraph 18 of Schedule 4; c Schedule 5, so far as it repeals provisions of that Act. 4 . . . this Act extends to Northern Ireland so far as it— a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c repeals Part III and section 89(3)(c) and (4) of that Act, and Schedules 18 to 20 to that Act; d by section 65(2) and Part II of Schedule 4 amends the Social Security (Northern Ireland) Act 1975 and the Social Security (Consequential Provisions) Act 1975 and reinstates paragraph 1 of Schedule 5 to the Social Security Benefits Act 1975; e repeals paragraphs 47 and (in part) 58 of Schedule 2 to the Social Security (Consequential Provisions) Act 1975; f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . h repeals provisions of the Public Records Act 1958, the Superannuation Act 1972, the Parliamentary and other Pensions Act 1972, the Pensions (Increase) Act 1974 and the House of Commons Disqualification Act 1975; but subject to the foregoing provisions of this subsection and to subsection (3) above, this Act does not extend to Northern Ireland. SCHEDULES SCHEDULE 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCHEDULE 1A Part I Revaluation of Pensions 1 1 This Part of this Schedule applies to any member of an occupational pension scheme whose pensionable service terminates after the commencement of this schedule if— a it terminates before normal pension age; and b on the date when it terminates— i he has accrued rights to benefit under the scheme; . . . ii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 In this Part of this Schedule “ the revaluation condition ” means— a in relation to benefit payable to the member, that, subject to subparagraph (3) below, there are 365 days or more in the period of which the first day is the day after the date when his pensionable service terminates and the last is the day on which he attains normal pension age; b in relation to benefit payable to any other person in respect of the member, that, subject to sub-paragraph (3) below, there are 365 days or more in the period mentioned in paragraph (a) above and the member dies after attaining normal pension age. 3 For the purpose of calculating the number of days in the period mentioned in sub-paragraph (2) above, any day which is 29th February shall be disregarded. 4 For the purposes of this Part of this Schedule “ normal pension age ” . . . and, subject to paragraph 2(3) below, “ pensionable service ” are to be construed in accordance with Schedule 16 to the Social Security Act 1973. 2 1 Subject to the following provisions of this Schedule, if the revaluation condition is satisfied— a any pension or other retirement benefit payable under the scheme to the member; and b any pension or other benefit payable under it to any other person in respect of him, is to be revalued by adding the appropriate amount to the amount that would be payable but for this Schedule or regulations made under it. 2 For the purposes of this Schedule “ the appropriate amount ” is AB C ( D - E ) , where— a A = the revaluation percentage specified in the last period of one year beginning on the date of the commencement of this Part of this Schedule or on an anniversary of that date and ending before the date on which the member attains normal pension age as the revaluation percentage for the period which is of the same length as the number of complete years in the period mentioned in paragraph 1(2)(a) above; b B = the length of the member’s qualifying pensionable service; c C = the length of his pensionable service; d D = the amount of the pension or other benefit— i which on the date when his pensionable service terminates has accrued to him or to any other person in respect of him; . . . ii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ; e E = any part of the amount mentioned in paragraph (d) above which consists of the member’s or his widow’s guaranteed minimum. 3 In sub-paragraph (2)(b) and (c) above— “ pensionable service ” includes any notional pensionable service which is credited to the member by the scheme; and “ qualifying pensionable service ” means— a where the termination of pensionable service occurs after the coming into force of this paragraph of this definition, the whole of the member’s pensionable service, as defined in this sub-paragraph; and b in any other case, so much of any such service as falls on or after 1st January 1985. 4 For the purposes of sub-paragraph (2)(b) and (c) above, any notional pensionable service which is credited to a member by a scheme shall be taken to have ended immediately before the member’s actual pensionable service began. 5 Any rule of a scheme the effect of which is that benefit fails to be revalued by reference to any period is to be disregarded in making any calculation required by this paragraph. 3 1 This paragraph applies to any benefit the rate or amount of which is calculated by reference to the member’s average salary over the period of service on which that benefit is based. 2 A benefit to which this paragraph applies is referred to in this Schedule as an “ average salary benefit ”. 3 Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any average salary benefit payable to the member or to any other person in respect of him is to be revalued— a by revaluing his salaries during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or b by the method specified in paragraph 2 above. 4 The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in sub-paragraph (3) above appears to the trustees or managers of the scheme to be appropriate. 5 In this paragraph “ salaries ” means, subject to sub-paragraph (5A) below, the member’s salaries for the period between the date when his pensionable service commenced and the date when it terminated , or such part of them as was relevant under the scheme to the calculation of the retirement benefits payable under the scheme to him or to any other person in respect of him; and those salaries are to be taken for the purposes of this paragraph to include— a any amount which is attributed to them, otherwise than by virtue of this paragraph, as the result of a revalution for which the rules of the scheme provide; and b any amount which is for any reason credited to the member by way of salary notionally earned. 5A Where the member’s pensionable service terminated before the coming into force of this sub-paragraph, sub-paragraph (5) above shall have effect with the substitution for the words from, “means” to “terminated” of the words “means the member’s salaries for the period between 1st January 1985 and the date when his pensionable service terminated”. 6 For the purposes of the application of this Paragraph to a case where a member is credited with an amount by reference to salary notionally earned over a period of time of a particular length that period shall be taken to have ended immediately before the member’s actual pensionable service began. 4 1 This paragraph applies to any benefit the rate or amount of which is calculated by reference solely to the member’s length of service. 2 A benefit to which this paragraph applies is referred to in this Schedule as a “flat rate benefit”. 3 Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any flat rate benefit payable to the member or to any other person in respect of him is to be revalued— a by revaluing the benefits which have accrued to him during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or b by the method specified in paragraph 2 above. 4 The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in sub-paragraph (3) above appears to the trustees or managers of the scheme to be appropriate. 5 1 This paragraph applies to any benefit the rate or amount of which is calculated by reference to a payment or payments made by the member, or by any other person in respect of him and which is not an average salary benefit . 2 A benefit to which this paragraph applies is referred to in this Schedule as a “ money purchase benefit ”. 3 In the case of such a benefit, if the revaluation condition is satisfied, the investment yield and any bonuses arising from payments made by or on behalf of a member shall be applied, subject to sub-paragraph (4) below, towards providing any pension or other retirement benefit which is payable under the scheme to him or to any other person in respect of him in the manner in which they would have been applied if his pensionable service had not been terminated. 4 The Secretary of State may by regulations authorise trustees and managers of schemes to deduct from any pension or other retirement benefit provided under sub-paragraph (3) above an appropriate amount in respect of the administrative expenses incurred by them in carrying this paragraph into effect. 6 Nothing in paragraph 2, 3, 4 or 5 above is to be construed as requiring the revaluation of any pension or other benefit provided by virtue of paragraph 9(2)(b) of Schedule 16 to the Social Security Act 1973 by way of complete substitute for another pension or benefit. 7 1 Subject to sub-paragraph (2) below, this Part of this Schedule overrides any provision of a scheme to the extent that it conflicts with this Part of this Schedule. 2 This Part of this Schedule does not override a protected provision of a scheme. 3 Subject to sub-paragraph (4) below, in sub-paragraph (2) above “ protected provision ” has the same meaning as it has in subsection (2) of section 41C above by virtue of subsection (3) of that section. 4 In its application to schemes which are not contracted-out section 41C(3) above shall have effect for the purpose of this paragraph as if— a there were omitted— i from paragraph (a), sub-paragraph (ii) and the word “or” immediately preceding it; ii from paragraph (b), the word “and”; . . . iii from paragraph (c), the words from “authorised” to the end; and iv from paragraph (e), the words from “as respects” to “guaranteed minimum pension”. b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 If under a scheme— a the amount of the pension or other benefit for a member or for any other person in respect of him falls to be increased during the period mentioned in paragraph 1(2)(a) above— i by the percentages specified during that period under section 151(1) of the Administration Act ; or ii under any arrangement which, in the opinion of the Occupational Pensions Board, maintains the value of the pension or other benefit by reference to the rise in the general level of prices in Great Britain during that period; and b the increase falls to be determined by reference to an amount from which the guaranteed minimum for a member or his widow has not been deducted, the fact that the scheme provides as mentioned in sub-paragraph (a) above does not in itself result in conflict with paragraph 2, 3 or 4 above. 9 In making any calculation for the purposes of this Part of this Schedule any commutation, forfeiture or surrender of the whole or part of a pension shall be disregarded. 10 The same money may not be treated as providing both the benefit required by section 41A or 41B above and the increase in benefit required by this Part of this Schedule. Part II Transfer Values 11 1 This Part of this Schedule applies to any member of an occupational pension scheme whose pensionable service terminates after the commencement of this Part of this Schedule if— a it terminates at least one year before normal pension age; and b on the date when it terminates— i he has accrued rights to benefit under the scheme; . . . ii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 For the purposes of this Part of this Schedule . . . , “ pensionable service ” and “ normal pension age ” are to be construed in accordance with Schedule 16 to the Social Security Act 1973. 3 Any reference to a member in the following provisions of this Part of this Schedule is a reference to a member of an occupational pension scheme to whom this Part of this Schedule applies. 12 1 Subject to the following provisions of this Schedule, a member acquires a right, when his pensionable service terminates, to the cash equivalent at the relevant date of any benefits— a which have accrued to or in respect of him under the applicable rules; . . . b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 In this paragraph “ the applicable rules ” means— a the rules of the scheme, except so far as— i section 41A or 41B above; or ii Part I of this Schedule, overrides them; and b any provision which the rules of the scheme do not contain but which a scheme must contain if it is to conform with the preservation requirements; and c any provision— i of section 41A or 41B above; or ii of Part I of this Schedule, which overrides any of the rules of the scheme; “ the relevant date ” means , subject to regulations under sub-paragraph (2C) below, the date when the member’s pensionable service terminates or the date of the relevant application, whichever is the later; and “ the relevant application ” means any application which the member has made under paragraph 16 below and which he has not withdrawn. 2A Where a member continues in employment to which a scheme applies after his pensionable service in that employment terminates— a if regulations so provide, he only acquires a right to the cash equivalent of such part of the benefits specified in sub-paragraph (1) above as may be prescribed; and b if regulations so provide, he acquires no right to a cash equivalent. 2B Regulations may provide for the purposes of sub-paragraph (2A) above that in prescribed circumstances a number of employments (whether or not consecutive) shall be treated as a single employment. 2C Regulations— a may provide that a right at the relevant date to the cash equivalent of any part of the benefits specified in sub-paragraph (1) above which but for regulations under the foregoing provisions of this paragraph a member would have on the termination of his pensionable service in an employment to which a scheme applies shall, if his employment terminates at least one year before normal pension age, accrue to him on the date when it terminates and be valued accordingly; and b may substitute, in relation to any case to which the regulations apply— i a new definition of the “relevant date” for the definition in sub-paragraph (2) above, and ii a new definition of “the last option date” for the definition in paragraph 15(2) below. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . in sub-paragraph (2) above “ the preservation requirements ” means the requirements set out in Part I of Schedule 16 to the Social Security Act 1973 as the requirements of Part II of that Act relating to preservation of benefit under occupational pension schemes. 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1 A member who acquires a right to a cash equivalent under this Part of this Schedule may only take it by exercising the option conferred by sub-paragraph (2) below. 2 Subject to sub-paragraphs (3) and (4) below, the option conferred by this sub-paragraph on any such member is that of requiring the trustees or managers of the scheme of which he is a member to use the cash equivalent to which he has acquired a right in whichever of the ways specified in paragraphs (a), (b) and (c) below he chooses— a for acquiring transfer credits allowed under the rules of another occupational pension scheme, or for acquiring rights allowed under the rules of a personal pension scheme whose trustees or managers , in either case, are able and willing to accept him and which , in either case, satisfies prescribed requirements; b except in respect of the cash equivalent of his protected rights, if any, under a scheme which is, or was formerly, a money purchase contracted-out scheme for purchasing from one or more insurance companies such as are mentioned in section 52C (4)(a) above, chosen by the member and willing to accept payment on account of the member from the trustees or managers, one or more annuities which satisfy prescribed requirements; c subject to sub-paragraph (3) below, for subscribing to other pension arrangements which satisfy prescribed requirements . 2 Subject to sub-paragraphs (3) and (4) below, the option conferred by this sub-paragraph on any such member is that of requiring the trustees or managers of the scheme of which he is a member to use the cash equivalent to which he has acquired a right in whichever of the ways specified in paragraphs (a), (b) and (c) below he chooses— a for acquiring transfer credits allowed under the rules of an occupational pension scheme, or for acquiring rights allowed under the rules of another personal pension scheme whose trustees or managers, in either case, are able and willing to accept him and which, in either case, satisfies prescribed requirements; c subject to sub-paragraph (3) below, for subscribing to other pension arrangements which satisfy prescribed requirements. 2A Without prejudice to the generality of sub-paragraph (2) above, the powers conferred by that sub-paragraph include power to provide that a scheme, an annuity or pension arrangements must satisfy requirements of the Inland Revenue. 3 Except in such circumstances as may be prescribed sub-paragraph (2) above is to be construed as if paragraph (c) were omitted. 4 A member may exercise the option conferred by sub-paragraph (2) above in different ways in relation to different portions of his cash equivalent, but a member who exercises that option must do so in relation to the whole of his cash equivalent or, where sub-paragraph (5) below applies, in relation to the whole of the sum mentioned in sub-paragraph (6) below. 5 Where— a the trustees or managers of an occupational pension scheme which is not a contracted:-out scheme, or of a personal pension scheme which is not an appropriate scheme, or of a self-employed pension arrangement within the meaning of regulation 2D of the Occupational Pension Schemes (Transfer Values) Regulations 1985 or regulation 2A of the Personal Pension Schemes (Transfer Values) Regulations 1987 are able or willing to accept a transfer payment only in respect of a member’s rights other than his accrued rights to guaranteed minimum pensions or his protected rights; and b the member has not required the trustees or managers of the scheme from which he is being transferred to use that portion of his cash equivalent that represents guaranteed minimum pensions or protected rights in any of the ways specified in sub-paragraph (2) above. paragraph 12 above, this paragraph and paragraph 14 below are to be construed as conferring on the member an option only in respect of the sum mentioned in sub-paragraph (6) below. 6 The sum referred to in sub-paragraph (5) above is the sum equal to the balance of the cash equivalent to which the member would be entitled if sub-paragraph (5) above did not apply, after deduction of an amount sufficient for the trustees or managers of the scheme from which he is being transferred to meet their liability in respect of his and his widow’s guaranteed minimum pensions or his protected rights . 5 Where— a the trustees or managers of an occupational pension scheme which is not a contracted-out scheme, or of a personal pension scheme which is not an appropriate scheme, or of a self-employed pension arrangement within the meaning of regulation 2D of the Occupational Pension Schemes (Transfer Values) Regulations 1985 or regulation 2A of the Personal Pension Schemes (Transfer Values) Regulations 1987 are able or Willing to accept a transfer payment only in respect of a member’s rights other than his protected fights within the meaning given by Schedule 1 to the Social Security Act 1986; and b the member has not required the trustees or managers of the scheme from which he is being transferred to use that portion of his cash equivalent that represents protected rights within the meaning given by Schedule 1 to te Social Security Act 1986 in either of the ways specified in sub-paragraph (2) above, paragraph 12 above, this paragraph and paragraph 14 below are to be construed as conferring on the member an option only in respect of the sum mentioned in sub-paragraph (6) below. 6 The sum referred to in sub-paragraph (5) above is the sum equal to the balance of the cash equivalent to which the member would be entitled if sub-paragraph (5) above did not apply, after deduction of an amount sufficient for the trustees or managers of the scheme from which he is being transferred to meet their liability in respect of his protected rights within the meaning given by Schedule 1 to the Social Security Act 1986. 14 1 Cash equivalents are to be calculated and verified in the prescribed manner. 2 The power to make regulations conferred by sub-paragraph (1) above includes power to provide that cash equivalents are to be calculated and verified in such manner as may be approved in particular cases— a by prescribed persons; or b by persons with prescribed professional qualifications or experience; or c by persons approved by the Secretary of State and power to provide that they shall be calculated and verified in accordance with guidance prepared by a prescribed body . 3 Regulations may provide— a that in calculating cash equivalents account shall be taken— i of any surrender, commutation or forfeiture of the whole or part of a member’s pension which occurs before the trustees or managers of the scheme of which he is a member do what is needed to comply with what he requires under paragraph 16 below; ii in a case where a paragraph 13(5) above applies, of the need to deduct an appropriate amount to provide guaranteed minimum pensions or give effect to protected rights ; and ii in a case where paragraph 13(5) above applies, of the need to deduct an appropriate amount to make provision for protected rights; and b that in prescribed circumstances a cash equivalent shall be increased or reduced. 4 Without prejudice to the generality of sub-paragraph (3) above— a the circumstances that may be specified by virtue of paragraph (b) of that sub-paragraph include— i the length of time which elapses between the termination of a member’s pensionable service and his exercise of the option conferred by this Part of this Schedule or regulations under it; ii failure by the trustees or managers of a scheme to do what is needed to carry out what a member of the scheme requires within six months of the date on which they receive an application from him under paragraph 16 below; and iii the state of the funding of a scheme; and b regulations under that sub-paragraph may specify as the amount by which a cash equivalent is to be reduced such an amount that a member has no right to receive anything. 15 1 A member may only exercise the option conferred by paragraph 13 above on or before the last option date. 2 In this paragraph “ the last option date ” means the date which falls— a one year before the date on which he attains normal pension age, or b six months after the date when his pensionable service terminates, whichever is the later. 3 A member loses the right to any cash equivalent under this Part of this Schedule— a if his pension or benefit in lieu of a pension or any part of it becomes payable before he attains normal pension age; b if he fails to exercise the option conferred by paragraph 13 above on or before the last option date; or c if the scheme is wound up. 16 1 A member may only exercise the option conferred by paragraph 13 above by making an application in writing to the trustees or managers of the scheme. 2 In any case where— a a member has exercised that option; and b the trustees or managers of the scheme have done what is needed to carry out what the member requires. the trustees or managers shall be discharged from any obligation to provide benefits to which the cash equivalent related except, in any such cases as are mentioned in paragraph 13(5) above, to the extent that an obligation to provide such guaranteed minimum pensions or give effect to such protected rights continues to subsist. 2 In any case where— a a member has exercised that option; and b the trustees or managers of the scheme have done what is needed to carry out what the member requires, the trustees or managers shall be discharged from any obligation to provide benefits to which the cash equivalent related except, in any such cases as are mentioned in paragraph 1 3(5) above, to the extent that an obligation to make provision for such protected rights continues to subsist. 3 If the trustees or managers of a scheme receive an application under this paragraph, it shall be their duty, subject to the following provisions of this paragraph, to do what is needed to carry out what the member requires— a within twelve months of the date on which they receive the application; or b by the date on which the member attains normal pension age, whichever is the earlier. 4 If— a disciplinary proceedings or proceedings before a court have been commenced against a member at any time before the expiry of the period of twelve months beginning with the date when his pensionable service terminates; and b it appears to the trustees or managers of the scheme of which he is a member that the proceedings may lead to the whole or part of the pension or benefit in lieu of a pension payable to the member or his widow being forfeited, it shall be the trustees’ or managers’ duty, subject to the following provisions of this paragraph, to do what is needed to carry out what the member requires before— i the date before which they would be obliged to do it under sub-paragraph (3) above; or ii the end of the period of three months after the conclusion of the disciplinary or court proceedings (including any proceedings on appeal), whichever is the later. 5 The Occupational Pensions Board may grant an extension of the period within which the trustees or managers of a scheme are obliged to do what is needed to carry out what a member of the scheme requires— a in any case where in the opinion of the Board— i the scheme is being wound up or is about to be wound up; ii the scheme is ceasing to be a contracted-out scheme; iii the interests of the members of the scheme generally will be prejudiced if the trustees or managers of the scheme do what is needed to carry out what is required within that period; or iv the member has not taken all such steps as the trustees or managers can reasonably expect him to take in order to satisfy them of any matter which falls to be established before they can properly carry out what he requires; b in any case where the provisions of section 49 above apply; and c in any case where a request for an extension has been made on a ground specified in paragraph (a) or (b) above, and the Board’s consideration of the request cannot be completed before the end of that period. 6 A request under sub-paragraph (5) above may only be made by the trustees or managers. 7 The Board shall have power, if they are satisfied that there has been a relevant change of circumstances since they granted an extension, or that they granted an extension in ignorance of a material fact or on the basis of a mistake as to a material fact— a to direct that the extension shall end on a date earlier than that on which it would otherwise have ended; or b to revoke the grant of the extension. 8 An application to the trustees or managers of a scheme under this paragraph is to be taken to have been made if it is delivered to them personally, or sent by post in a registered letter or by the recorded delivery service. 17 1 Subject to sub-paragraph (2) below, a member of a scheme may withdraw an application under paragraph 16 above by giving the trustees or managers of the scheme notice in writing that he no longer wishes them to do what is needed to carry out what he previously required. 2 Such a notice shall be of no effect if it is given to the trustees or managers at a time when, in order to comply with what the member previously required, they have already entered into an agreement with a third party to use the whole or part of the member’s cash equivalent in a way specified in paragraph 13(2)(a), (b) or (c) above. 3 A member who withdraws an application may make another. 4 A notice to the trustees or managers of a scheme under this paragraph is to be taken to have been given if it is delivered to them personally, or sent by post in a registered letter or by recorded delivery service. 18 1 Subject to sub-paragraph (2) below, this Part of this Schedule overrides any provision of a scheme to the extent that it conflicts with this Part of this Schedule. 2 This Part of this Schedule does not override any provision of a scheme to the extent that it deals with priorities on a winding-up. Part III SUPPLEMENTARY 19 In making any calculation for the purposes of this Schedule— a any charge or lien on the whole or part of a pension; and b any set-off against the whole or part of a pension, shall be disregarded. 20 1 The Secretary of State may by regulations direct that this Schedule shall have effect, in such cases as he may specify in the regulations, subject to such modifications as he may there specify. 2 In sub-paragraph (1) above “ modification ” includes, without prejudice to the generality of that sub-paragraph, addition, omission and amendment. 21 The Occupational Pensions Board may at any time, and shall if requested by the trustees or managers of an occupational pension scheme, advise on any question whether— a any provision of this Schedule (including, without prejudice to section 20(2) of the Interpretation Act 1978, any such provision as modified by regulations under paragraph 20 above) does or does not override any provision of the scheme; b any benefit is an average salary benefit, a flat rate benefit or a money purchase benefit. 22 1 On an application made to them in respect of an occupational pension scheme (other than a public service pension scheme) by persons competent to make such an application in respect of it, the Occupational Pensions Board shall issue a determination on any such question as is mentioned in paragraph 21 above. 2 The persons competent to make an application under this paragraph in respect of a scheme are— a the persons mentioned in section 41E(2)(a) to (d) above; and b such other persons as regulations may specify, in relation to any category of schemes into which the scheme falls, as being proper persons to make an application for the purposes of this paragraph in respect of a scheme of that category. 23 It is hereby declared that nothing in the foregoing provisions of this Schedule is to be taken to preclude a scheme from being framed or managed more favourably to beneficiaries than is called for by those provisions. SCHEDULE 2 General regulations 1 In relation to employments which are or at any time have been contracted-out employments, and to the operation of schemes by reference to which such employments are or have been contracted-out, provision may be made by regulations— a for treating an earner’s employment, where it ends before a person succeeds to the business of the earner’s employer, as having been employment under the employer’s successor; b for disregarding changes in an earner’s employment due to the death of an employer or other cause, or any cesser of contracted-out employment so due, or for treating employment under one employer as a continuation of that under another and treating any contracting-out certificate issued to, or election made by, the former employer as issued to or made by the latter; c for disregarding temporary interruptions in an earner’s employment or contracted-out employment, and for treating the employment in either case as continuing during the interruption; and d generally as to the circumstances in which an earner’s employment is or is not to be treated as having begun, or as having come to an end; and references in this paragraph to an earner’s employment beginning or ending shall include references to his employment beco