Office of Public Sector Information
132. An order under Article 1 appointing a day for the coming into operation of any provisions of this Part, being 6th April in any year, may designate that day as the principal appointed day for the purposes of this Part.
133.—(1) In section 3 of the Pension Schemes Act (issue of contracting-out, etc. certificates), after subsection (2) insert—
“(2A) The regulations may provide, in the case of contracting-out certificates issued before the principal appointed day, for their cancellation by virtue of the regulations—
(a)at the end of a prescribed period beginning with (and including) that day, or
(b)if prescribed conditions are not satisfied at any time in that period,
but for them to continue to have effect until so cancelled; and the regulations may provide that a certificate having effect on and after that day by virtue of this subsection is to have effect, in relation to any earner's service on or after that day, as if issued on or after that day.
(2B) In this Act the principal appointed day means the day designated by an order under Article 1 of the Pensions (Northern Ireland) Order 1995 as the principal appointed day for the purposes of Part IV of that Order.” .
(2) In section 4 of that Act (definition of terms), for subsection (1)(a)(i) substitute—
“(i)his service in the employment is for the time being service which qualifies him for a pension provided by an occupational pension scheme contracted out by virtue of satisfying section 5(2) (in this Act referred to as a salary related contracted-out scheme),” .
(3) In section 5 of that Act (requirements for certification of schemes: general), for subsection (2) (requirement for guaranteed minimum pension) substitute—
“(2) An occupational pension scheme satisfies this subsection only if—
(a)in relation to any earner's service before the principal appointed day, it satisfies the conditions of subsection (2A); and
(b)in relation to any earner's service on or after that day, it satisfies the conditions of subsection (2B).
(2A) The conditions of this subsection are that—
(a)the scheme complies in all respects with sections 9 to 19 or, in such cases or classes of case as may be prescribed, with those sections as modified by regulations; and
(b)the rules of the scheme applying to guaranteed minimum pensions are framed so as to comply with the relevant requirements.
(2B) The conditions of this subsection are that the Department is satisfied that—
(a)the scheme complies with section 8A;
(b)restrictions imposed under Article 40 of the Pensions (Northern Ireland) Order 1995 (restriction on employer-related investments) apply to the scheme and the scheme complies with those restrictions;
(c)the scheme satisfies such other requirements as may be prescribed (which—
(i)must include requirements as to the amount of the resources of the scheme, and
(ii)may include a requirement that, if the only members of the scheme were those falling within any prescribed class or description, the scheme would comply with section 8A), and
(d)the scheme does not fall within a prescribed class or description;
and is satisfied that the rules of the scheme are framed so as to comply with the relevant requirements.
(2C) Regulations may modify subsection (2B)(a) and (b) in their application to occupational pension schemes falling within a prescribed class or description.” .
(4) In subsection (3) of that section (requirement for protected rights, etc.), in paragraph (a), after case; insert—
“(aa)the Department is satisfied that the scheme does not fall within a prescribed class or description;” .
(5) After section 8 of that Act insert—
8A.—(1) Subject to the provisions of this Part, the scheme must, in relation to the provision of pensions for earners in employed earner's employment, and for their widows or widowers, satisfy the statutory standard.
(2) Subject to regulations made by virtue of section 5(2B)(c)(ii), in applying this section regard must only be had to—
(a)earners in employed earner's employment, or
(b)their widows or widowers,
collectively, and the pensions to be provided for persons falling within paragraph (a) or (b) must be considered as a whole.
(3) For the purposes of this section, a scheme satisfies the statutory standard if the pensions to be provided for such persons are broadly equivalent to, or better than, the pensions which would be provided for such persons under a reference scheme.
(4) Regulations may provided for the manner of, and criteria for, determining whether the pensions to be provided for such persons under a scheme are broadly equivalent to, or better than, the pensions which would be provided for such persons under a reference scheme.
(5) Regulations made by virtue of subsection (4) may provide for the determination to be made in accordance with guidance prepared by a prescribed body and approved by the Department.
(6) The pensions to be provided for such persons under a scheme are to be treated as broadly equivalent to or better than the pensions which would be provided for such persons under a reference scheme if and only if an actuary (who, except in prescribed circumstances, must be the actuary appointed for the scheme in pursuance of Article 47 of the Pensions (Northern Ireland) Order 1995) so certifies.
8B.—(1) This section applies for the purposes of section 8A.
(2) A reference scheme is an occupational pension scheme which—
(a)complies with each of subsections (3) and (4), and
(b)complies with any prescribed requirements.
(3) In relation to earners employed in employed earner's employment, a reference scheme is one which provides—
(a)for them to be entitled to a pension under the scheme commencing at a normal pension age of 65 and continuing for life, and
(b)for the annual rate of the pension at that age to be—
(i)1/80th of average qualifying earning in the last three tax years preceding the end of service,
multiplied by
(ii)the number of years service, not exceeding such number as would produce an annual rate equal to half the earnings on which it is calculated.
(4) In relation to widows or widowers, a reference scheme is one which provides—
(a)for the widows or widowers of earners employed in employed earner's employment (whether the earners die before or after attaining the age of 65) to be entitled, except in prescribed circumstances, to pensions under the scheme; and
(b)except in prescribed circumstances, for the annual rate of the pensions, at the time when the widows or widowers first become entitled to them, to be—
(i)in the case of widows or widowers of persons whose age when they died was, or was greater than, normal pension age, 50 per cent. of the annual rate which a reference scheme is required to provide for persons of that age, and
(ii)in the case of widows or widowers of other persons, 50 per cent. of the annual rate which a reference scheme would have been required to provide in respect of the persons' actual periods of service if those persons had attained that age.
(5) For the purposes of this section, an earner's qualifying earnings in any tax year are 90 per cent. of the amount by which the earner's earnings—
(a)exceed the qualifying earnings factor for that year; and
(b)do not exceed the upper earnings limit for that year multiplied by fifty-three.
(6) Regulations may modify subsections (2) to (5).
(7) In this section—
normal pension age, in relation to a scheme, means the age specified in the scheme as the earliest age at which pension becomes payable under the scheme (apart from any special provision as to early retirement on grounds of ill-health or otherwise),
qualifying earnings factor, in relation to a tax year, has the meaning given by section 121(1) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992, and
upper earnings limit, in relation to a tax year, means the amount specified for that year by regulations made by virtue of section 5(3) of that Act as the upper earnings limit for Class 1 contributions.
8C.—(1) Regulations may prohibit or restrict—
(a)the transfer of any liability—
(i)for the payment of pensions under a relevant scheme, or
(ii)in respect of accrued rights to such pensions,
(b)the discharge of any liability to provide pensions under a relevant scheme, or
(c)the payment of a lump sum instead of a pension payable under a relevant scheme,
except in prescribed circumstances or on prescribed conditions.
(2) In this section, relevant scheme means a scheme contracted out by virtue of section 5(2B) and references to pensions and accrued rights under the scheme are to such pensions and rights so far as attributable to an earner's service on or after the principal appointed day.
(3) Regulations under subsection (1) may provide that any provision of this Part shall have effect subject to such modifications as may be specified in the regulations.
8D. In the case of a scheme contracted out by virtue of section 5(2B), regulations may make provision as to the ages by reference to which benefits under the scheme are to be paid.”.
134.—(1) In section 36 of the Pension Schemes Act (scope of Chapter II of Part III), in paragraph (b), after members of insert “money purchase contracted-out schemes and members of”.
Para.(2) rep. by 1998 NI 10
(3) For section 38(1) of the Pension Schemes Act (alteration of rates of contributions under section 37) substitute—
“(1) Whenever the Secretary of State makes an order under section 42 of the Pension Schemes Act 1993 (determination of reduced rates of Class 1 contributions for members of salary related contracted-out schemes), the Department may make a corresponding order for Northern Ireland.” .
(4) After that section insert—
38A.—(1) Subsections (2) and (3) apply where—
(a)the earnings paid to or for the benefit of an earner in any tax week are in respect of an employment which is contracted-out employment at the time of the payment, and
(b)the earner's service in the employment is service which qualifies him for a pension provided by a money purchase contracted-out scheme.
(2) The amount of a Class 1 contribution in respect of so much of the earnings paid in that week in respect of that employment as exceeds the current lower earnings limit but not the current upper earnings limit for that week (or the prescribed equivalents if he is paid otherwise than weekly) shall be reduced by an amount equal to the appropriate flat-rate percentage of that part of those earnings.
(3) The Department shall, except in prescribed circumstances or in respect of prescribed periods, pay in respect of that earner and that tax week to the trustees or managers of the scheme or, in prescribed circumstances, to a prescribed person, the amount by which—
(a)the appropriate age-related percentage of that part of those earnings,
exceeds
(b)the appropriate flat-rate percentage of that part of those earnings.
(4) Regulations may make provisions—
(a)as to the manner in which and time at which or period within which payments under subsection (3) are to be made,
(b)for the adjustment of the amount which would otherwise be payable under that subsection so as to avoid the payment of trivial or fractional amounts,
(c)for earnings to be calculated or estimated in such manner and on such basis as may be prescribed for the purpose of determining whether any, and if so what, payments under subsection (3) are to be made.
(5) If the Department pays an amount under subsection (3) which it is not required to pay or is not required to pay to the person to whom, or in respect of whom, the Department pays it, the Department may recover it from any person to whom, or in respect of whom, the Department paid it.
(6) Where—
(a)an earner has ceased to be employed in an employment, and
(b)earnings are paid to him or for his benefit within the period of six weeks, or such other period as may be prescribed, from the day on which he so ceased,
that employment shall be treated for the purposes of this section as contracted-out employment at the time when the earnings are paid if it was contracted-out employment in relation to the earner when he was last employed in it.
(7) Subsection (3) of section 37 applies for the purposes of this section as it applies for the purposes of that.
38B. Whenever the Secretary of State makes an order under section 42B of the Pension Schemes Act 1993, (determination and alteration of reduced rates of primary and secondary Class 1 contributions for members of money purchase contracted-out schemes), the Department may make a corresponding order for Northern Ireland.”
(5) In Schedule 3 to that Act (priority in bankruptcy, etc), in paragraph 2(3)—
(a)in paragraph (a), for 4.8 per cent. substitute “the percentage for non-contributing earners”,
(b)in paragraph (b), for 3 per cent. substitute “the percentage for contributing earners”.
(6) In paragraph 2(5) of that Schedule—
(a)before the definition of employer insert—
“appropriate flat-rate percentage means the appropriate flat rate percentage for the purposes of section 38A(2);” and
(b)after that definition insert—
“the percentage for contributing earners
in relation to a salary related contracted-out scheme, 3 per cent, and
in relation to a money purchase contracted-out scheme, the percentage which is the appropriate flat-rate percentage for secondary Class 1 contributions,
the percentage for non-contributing earners means—
in relation to a salary related contracted-out scheme, 4.8 per cent, and
in relation to a money purchase contracted-out scheme, a percentage equal to the sum of the appropriate flat-rate percentages for primary and secondary Class 1 contributions;” .
135.—(1) Section 41 of the Pension Schemes Act (minimum contribution to personal pension schemes) is amended as setout in paragraphs (2) to (4).
(2) For subsection (1) substitute—
“(1) In relation to any tax week falling within a period for which the Department is required to pay minimum contributions in respect of an earner, the amount of those contributions shall be an amount equal to the appropriate age-related percentage of so much of the earnings paid in that week (other than earnings in respect of contracted-out employment) as exceeds the current lower earnings limit but not the current upper earnings limit for that week (or the prescribed equivalents if he is paid otherwise than weekly).” .
(3) Subsection (2) is omitted.
(4) In subsection (3)(e), the words following prescribed period are omitted.
(5) After that section insert—
41A. Whenever the Secretary of State makes an order under section 45A of the Pension Schemes Act 1993 (determination and alteration of rates of contributions to personal pension schemes) the Department may make a corresponding order for Northern Ireland.”.
136. After section 41A of the Pension Schemes Act (inserted by Article 135) insert—
41B.—(1) Regulations may make provision for the manner in which an earner's age is to be verified in determining the appropriate age-related percentages for the purposes of section 38A and 41(1).
(2) Information held by the Department as to the age of any individual may, whether or not it was obtained in pursuance of regulations under subsection (1), be disclosed by the Department—
(a)to the trustees or managers of a money purchase contracted-out scheme or an appropriate personal pension scheme, and
(b)to such other persons as may be prescribed,
in connection with the making of payments under section 38A(3) or the payment of minimum contributions.”.
137.—(1) After section 44 of the Pension Schemes Act insert—
44A.—(1) In relation to any tax week there—
(a)the amount of a Class 1 contribution in respect of the earnings paid to or for the benefit of an earner in that week is reduced under section 37 or 38A, or
(b)an amount is paid under section 41(1) in respect of the earnings paid to or for the benefit of an earner,
section 44(6) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (earnings factors for additional pension) shall have effect, except in prescribed circumstances, as if no primary Class 1 contributions had been paid or treated as paid upon those earnings for that week and section 45A of that Act did not apply (where it would, apart from this subsection, apply).
(2) Where the whole or part of a contributions equivalent premium has been paid or treated as paid in respect of the earner, the Department may make a determination reducing or eliminating the application of subsection (1).
(3) Subsection (1) is subject to regulations under paragraph 5(3A) to (3E) of Schedule 1.
(4) Regulations may, so far as is required for the purpose of providing entitlement to additional pension (such as is mentioned in section 44(3)(b) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992) but to the extent only that amount of additional pension is attributable to provision made by regulations under section 45(5) of that Act, disapply subsection (1).
(5) In relation to earners where, by virtue of subsection (1), section 44(6) of Social Security Contributions and Benefits (Northern Ireland) Act 1992 has effect, in any tax year, as mentioned in that subsection in relation to some but not all of their earnings, regulations may modify the application of section 44(5) of that Act.”.
(2) In section 44 of the Pension Schemes Act (effect of membership of money purchase contracted-out scheme or appropriate scheme on payment of social security benefits), in subsection (2), paragraph (b) is omitted and, in paragraph (c), if the earner dies before reaching pensionable age is omitted.
(3) Section 44 of that Act shall cease to have effect in relation to minimum payments made, or minimum contributions paid, on or after the principal appointed day.
138.—(1) In section 51 of the Pension Schemes Act (payment of state scheme premiums on termination of certified status), for subsection (2) substitute—
“(2) Where—
(a)an earner is serving in employment which is contracted-out employment by reference to an occupational pension scheme (other than a money purchase contracted-out scheme),
(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 may elect to pay a premium under this subsection (referred to in this Act as a contributions equivalent premium).
(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;
but paragraph (a), (b), (d) or (e) does not apply if the earner has an accrued right to short service benefit.” .
(2) In Schedule 1 to that Act, in paragraph 5 (state scheme premiums)—
(a)in sub-paragraph (3)—
(i)omit , in relation to state scheme premiums,,
(ii)omit paragraph (b), and
(iii)at the end add—
“and in this sub-paragraph and the following provisions of this paragraph premium means a contributions equivalent premium” ,
(b)after sub-paragraph (3) insert—
“(3A) Sub-paragraph (3B) applies in relation to a member of a contracted-out occupational pension scheme which is being wound up if, in the opinion of the Department—
(a)the resources of the scheme are insufficient to meet the whole of the liability for the cash equivalent of the member's rights under the scheme, and
(b)if the resources of the scheme are sufficient to meet a part of that liability, that part is less than the amount required for restoring his State scheme rights.
(3B) Where this sub-paragraph applies—
(a)regulations may provide for treating the member as if sections 42 to 44 or, as the case may be, section 44A(1) did not apply, or applied only to such extent as is determined in accordance with the regulations, and
(b)the amount required for restoring the member's State scheme rights, or a prescribed part of that amount, shall be a debt due from the trustees or managers of the scheme to the Department.
(3C) Regulations may make provision—
(a)for determining the cash equivalent of a member's rights under a scheme and the extent (if any) to which the resources of the scheme are insufficient to meet the liability for that cash equivalent,
(b)for the recovery of any debt due under sub-paragraph (3B)(b), and
(c)for determining the amount required for restoring a member's State scheme rights including provision requiring the Department to apply whichever prescribed actuarial table in force at the appropriate time is applicable.
(3D) Section 151 shall apply as if sub-paragraphs (3A) and (3B), and regulations made by virtue of those sub-paragraphs, were included among the provisions there referred to.
(3E) In sub-paragraphs (3A) and (3B), State scheme rights, in relation to a member of a scheme, are the rights for which, if the scheme had not been a contracted-out scheme, the member would have been eligible by virtue of section 44(6) of Social Security Contributions and Benefits (Northern Ireland) Act 1992 (earnings factors for additional pension.” , and
(c)omit sub-paragraph (5).
139.—(1) Section 24 of the Pension Schemes Act (ways of giving effect to protected rights) is amended as follows.
Paras. (2)(3) rep. by 1999 NI 11
(4) In subsection (3)—
(a)in paragraph (b), after the member insert “or, where section 24A(2) applies, the member's widow or widower”,
Sub-para. (b) rep. by 1999 NI 11
(5) In subsection (4)(a), for the words from 65 to the end substitute—
“65 or such later date as has been agreed by him, or
(ii)in the case of a personal pension scheme, where the member has elected to receive payments under an interim arrangement, the date by reference to which the member elects to terminate that arrangement, and otherwise such date as has been agreed by him and is not earlier than his 60th birthday nor later than his 75th birthday.”
(6) In subsection (5), after subsection insert “(1A),”.
(7) After subsection (7) add—
“(8) In this section and sections 24A, 24B and 25—
the interim period means the period beginning with (and including) the starting date in relation to the member in question and ending with the termination date;
the starting date, means the date, which must not be earlier than the member's 60th birthday, by reference to which the member elects to begin to receive payments under the interim arrangement;
the termination date means the date by reference to which the member (or, where section 24A(2) applies, the member's widow or widower) elects to terminate the interim arrangement, and that date must be not later than—
(a)the member's 75th birthday, or
(b)where section 24A(2) applies, the earlier of the member's widow or widower's 75th birthday and the 75th anniversary of the member's birth.”
140. After section 24 of the Pension Schemes Act insert—
24A.—(1) An interim arrangement must provide for payments to be made to the member, and, where subsection (2) applies, to the member's widow or widower, throughout the interim period, at intervals not exceeding twelve months.
(2) This subsection applies where the member dies during the interim period and is survived by a widow or widower who at the date of the member's death has not yet attained the age of 75 years.
(3) The aggregate amount of payments made to a person under an interim arrangement in each successive period of twelve months must not be—
(a)greater than the annual amount of the annuity which would have been purchasable by him on the relevant reference date, or
(b)less than the prescribed percentage of that amount
(4) The percentage prescribed under subsection (3)(b) may be zero.
(5) For the purposes of this section—
(a)the annual amount of the annuity which would have been purchasable by a person on any date shall be calculated in the prescribed manner by reference to—
(i)the value on that date, determined by or on behalf of the trustees or managers of the scheme, of the person's protected rights, and
(ii)the current published tables of rates of annuities prepared by the Government Actuary for the purposes of section 28A of the Pension Schemes Act 1993, and
(b)the relevant reference date is—
(i)in relation to payments made to the member during the three years beginning with (and including) the member's starting date, that date, and in relation to such payments made during each succeeding period of three years, the first day of the period of three years in question, or
(ii)where subsection (2) applies, in relation to payments made to the member's widow or widower during the three years beginning with (and including) the date of the member's death, that date, and in relation to such payments made during each succeeding period of three years, the first day of the period of three years in question.
24B.—(1) The trustees or managers of a personal pension scheme must, if required to do so by the Department, produce any document relevant to—
(a)the level of payments made under any interim arrangement, or
(b)the value of protected rights to which such an arrangement gives effect,
or otherwise connected with the making of payments under such an arrangement.
(2) In this section, document includes information recorded in any form, and the reference to the production of a document, in relation to information recorded otherwise than in legible form, is a reference to producing a copy of the information in legible form.”.
The Pensions (Northern Ireland) Order 1995