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The Secretary of State, in exercise of the powers conferred on him by sections 112(1), 113, 114(1) and 129(1) of the Scotland Act 1998[1] and of all other powers enabling him in that behalf, hereby makes the following Order:

"the Taxes Act 1988" means the Income and Corporation Taxes Act 1988[2];

"actual period of reckonable service as a participating member", "actual period of reckonable service as a participating office holder" and "actual period of reckonable service as a participant" have the meanings given in article E1;

"added year" means a period of reckonable service as a participating member purchased under article Q1 and Schedule 5, including a part of a year expressed in days and any future added year;

"aggregate period of reckonable service as a participating member", "aggregate period of reckonable service as a participating office holder" and "aggregate period of reckonable service as a participant" have the meanings given in article E2;

"appropriate personal pension scheme" means a personal pension scheme which is for the time being specified in an appropriate scheme certificate issued by the Secretary of State under regulations made under section 7 of the Pension Schemes Act 1993[3];

"the AVC Scheme" means that part of the Scheme providing for additional voluntary contributions as set out in Part R and Schedule 6;

"basic or prospective pension or pensions" has the meaning given in article K5;

"contracted-out rights", in relation to a participant, mean his section 9(2B) rights, as defined in regulation 1(2) of the Occupational Pension Schemes (Contracting-out) Regulations 1996[4];

"contracted-out scheme" means an occupational pension scheme which is for the time being specified in a contracting-out certificate issued by the Secretary of State under regulations made under section 7 of the Pension Schemes Act 1993;

"contribution", (except in the expression "contributions equivalent premium"), means any amount deducted from salary and paid into the Fund under article D1 and any reference to the payment of a contribution shall be construed accordingly;

"contributions equivalent premium" means a premium payable under section 55(2) of the Pension Schemes Act 1993;

"deferred pensioner" means a person who-

(a) having been but having ceased to be a participant; and

(b) having accrued rights to a pension from the Fund,

is not, or was not at his death, yet entitled to receive a pension from the Fund;

"effective resolution" means a resolution of the Parliament relating to the remuneration of members which is not framed as an expression of opinion, and where there are at any time two or more such resolutions in force they shall be read together;

"election" includes notification under section 10(3) of the Scotland Act 1998, and "elected" shall be construed accordingly;

"eligible child" has the meaning given in article K2(5);

"final salary" shall be construed in accordance with article F3(2);

"fraction of a year" means part of a year of reckonable service expressed as the proportion borne by the number of days in that part to 365, and "fraction of an added year" shall be construed accordingly;

"the Fund" means the Scottish Parliamentary Contributory Pension Fund established under the Scheme;

"interest" (where the reference is to the payment of any sum with interest) means compound interest at the rate of four per cent per annum, calculated with annual rests;

"a member's salary" means the annual salary of a member of the Parliament at the rate specified in or determined under the Scotland Act 1998 (Transitory and Transitional Provisions) (Salaries and Allowances) Order 1999[5], or by or under an Act of the Scottish Parliament or an effective resolution which is for the time being in force;

"normal retirement date" means the date on which a participant reaches the age of 65;

"office holder" has the meaning given in article C2(3);

"office holder's salary" means the annual salary payable to a person in respect of his tenure of a qualifying office;

"opted-out member" has the meaning given in article C3(4);

"opted-out office holder" has the meaning given in article C4(4);

"overseas fund or scheme" means a fund or scheme which is established outside the United Kingdom and wholly or primarily administered outside the United Kingdom;

"participant" means a person making contributions to the Fund, and may be either a participating member or a participating office holder or both a participating member and a participating office holder;

"participating member" means a person making contributions to the Fund deducted from his member's salary (or who is excused from making such contributions because his aggregate period of reckonable service exceeds that which would give rise to the maximum pension allowed in respect of him under the Scheme);

"participating office holder" means a person making contributions to the Fund deducted from his office holder's salary;

"pension" does not include an allowance or gratuity;

"pensioner" means a person entitled to receive a pension from the Fund, and may be either a pensioner member or a pensioner office holder or both a pensioner member and a pensioner office holder;

"pensioner member" means a person entitled to receive a pension from the Fund (including an early retirement pension or an ill-health pension) in respect of his service as a member of the Parliament;

"pensioner office holder" means a person entitled to receive a pension from the Fund (including an early retirement pension or an ill-health pension) in respect of his service as an office holder;

"period of tenure of a qualifying office" has the meaning given in article C2(2);

"permitted maximum" for any tax year means the figure specified for that tax year in an order made under section 590C of the Taxes Act 1988[6];

"qualifying office" has the meaning given in article C2(3);

"relevant date" means the relevant date for the determination under any provision of the Scheme of the pension of a person;

"the Scheme" means the pension scheme constituted by this Order;

"tax year" means a year beginning on the 6th April in any year and ending on the following 5th April;

    (2) In this Order, except where the context otherwise requires-

(a) a reference to a numbered article or Schedule is a reference to the article of, or the Schedule to, this Order so numbered; and

(b) a reference in an article or Schedule to a numbered paragraph is a reference to the paragraph of that article or Schedule so numbered.

Period of application of this Order
     A3. This Order shall apply until the coming into force of provision for the payment of pensions made by the Parliament in accordance with section 81(3) of the Scotland Act 1998.

Right to opt out for members of the Parliament
     C3.  - (1) A participating member may exercise an option in writing under this article not to be a participant in the Scheme.

    (2) Subject to paragraph (3), the effective opt-out date in respect of a member is whatever date the Parliamentary corporation shall determine to be the earliest practicable date after that on which it receives from him written notice of the exercise of the option.

    (3) If the Parliamentary corporation receives the written notice not more than three months after the date of the election at which the person was elected for the first time to membership of the Parliament, the effective opt-out date is the date of that election and any contributions deducted from him under article D1 since that election shall be repaid to him.

    (4) A member of the Parliament who has exercised his right under paragraph (1) to opt out of the Scheme is referred to in this Order as "an opted-out member".

Right to opt out for office holders
     C4.  - (1) An office holder who is a participating member or who is not a member of the Parliament may exercise an option in writing under this article not to be a participating office holder in the Scheme.

    (2) Subject to paragraph (3), the effective opt-out date in respect of an office holder is whatever date the Parliamentary corporation shall determine to be the earliest practicable date after that on which it receives from him written notice of the exercise of the option.

    (3) If the Parliamentary corporation receives the written notice not more than 12 months after the date of commencement of a period of tenure of a qualifying office, the effective opt-out date is the date on which that period of tenure commenced and any contributions deducted under article D1 from his office holder's salary in respect of that period of tenure shall be repaid to him.

    (4) An office holder who has exercised an option under paragraph (1) not to be a participating office holder or who has exercised the option under article C3(1) is referred to in this Order as "an opted-out office holder".

Right to opt in for members of the Parliament
     C5. An opted-out member may apply to rejoin the Scheme as a participating member as from the date of any election at which he was elected to membership of the Parliament ("the effective opt-in date") by giving notice in writing to the Parliamentary corporation within a period of three months beginning with the effective opt-in date:

Provided that-

(a) he pays to the Parliamentary corporation within 28 days of its acceptance of his application, or within such longer period as it may determine, the sum certified by it as being the amount which would have been deducted from his member's salary under article D1 between the effective opt-in date and the first date thereafter when a deduction from that salary under article D1 is made; and

(b) at the effective opt-in date, at least three months had elapsed since he was last elected to membership of the Parliament.

Right to opt in for office holders
     C6. An opted-out office holder who is either-

(a) a participating member; or

(b) not a member of the Parliament,

may apply to rejoin the Scheme as a participating office holder as from the date of commencement of a new period of tenure of a qualifying office ("the effective opt-in date") by giving notice in writing to the Parliamentary corporation within a period of 12 months beginning with the effective opt-in date provided that he pays to the Parliamentary corporation within 28 days of its acceptance of his application, or within such longer period as it may determine, the sum certified by the Parliamentary corporation as being the amount which would have been deducted from his office holder's salary under article D1 between the effective opt-in date and the first date thereafter when a deduction from that salary under article D1 is made.

    (3) Where a person's aggregate period of reckonable service as a participating member exceeds that which would give rise to the maximum pension allowed in respect of that person as a participating member under article F4 or F5, no deduction shall be made under this article from payments in respect of his member's salary.

    (4) If any salary from which a deduction is required to be made under this article is not drawn, there shall be set aside, out of moneys available for the payment, a sum equal to the relevant deduction; and any sum so set aside shall be paid into the Fund.

Earnings cap
     D2. Where the annual salary of a participating member as-

(a) a member of the Parliament;

(b) an office holder; or

(c) both a member of the Parliament and an office holder,

exceeds the permitted maximum, the contributions deducted from that annual salary shall be limited to 6% of that permitted maximum and where sub-paragraph (c) applies his contributions under article D1 in respect of his office holder's salary shall be reduced before his contributions under that article in respect of his member's salary.

Contributions from Scottish Consolidated Fund
     D3.  - (1) In respect of each financial year the Parliamentary corporation shall pay a contribution into the Fund out of the Scottish Consolidated Fund.

    (2) The amount of that contribution shall be determined from time to time by the Parliamentary corporation on the recommendation of the Government Actuary and shall be expressed as a percentage of the amount of the salaries, attributable to the financial year in question, of the persons described in article C1 or C2, in respect of which those persons contribute to the Fund in relation to that financial year.

    (4) For the purposes of the Scheme, a period of reckonable service is measured in years and fractions of a year.

Aggregate reckonable service
     E2.  - (1) In respect of a person, his aggregate period of reckonable service as a participating member is his actual period of reckonable service as a participating member together with any increases in reckonable service attributable to sums received by way of transfer value or to the purchase of added years.

    (2) In respect of a person, his aggregate period of reckonable service as a participating office holder is his actual period of reckonable service as a participating office holder together with any increase in reckonable service attributable to sums received by way of transfer value.

    (3) In respect of a person, his aggregate period of reckonable service as a participant is his actual period of reckonable service as a participant together with any increases in reckonable service attributable to sums received by way of transfer value or to the purchase of added years.

Entitlement of pensioner office holders
     F2.  - (1) Subject to the provisions of the Scheme, a person who ceases to be a participating office holder and who has reckonable service as a participating office holder under Part E shall be entitled to receive a pension under this article as from the time when the conditions specified in paragraphs (a), (b) and (c) of article F1(1) are fulfilled in respect of him.

    (2) A person may be entitled to a pension under both articles F1 and this article; and the amounts of the two pensions shall be cumulative.

Amount payable to pensioners
     F3.  - (1) Subject to articles F4 (amount payable to "dual mandate" pensioners), F5 (permitted maximum pensions), G1 (commutation), H1 (early retirement) and J1 and J3 (ill health pensions), the annual amount of the pension payable to a person under article F1 or F2 shall be-

and in either case excludes any amount in excess of the permitted maximum.

    (3) In paragraph (1) the expression "aggregate period of reckonable service" refers to the person's aggregate period of reckonable service as a participating member or office holder, as the case may be.

Amount payable to "dual mandate" pensioners
     F4.  - (1) This article applies to a pensioner who, for part of his actual period of reckonable service as a participant, also received a salary pursuant to a resolution (or combination of resolutions) of either House of Parliament relating to the remuneration of members of that House or under section 1 of the European Parliament (Pay and Pensions) Act 1979[7].

    (2) The period mentioned in paragraph (1) is referred to in this article as the pensioner's "period of dual mandate".

    (3) For the purpose of calculating the annual amount of a pension payable to a pensioner to whom this article applies-

(a) where his final salary is calculated in accordance with article F3(2) by reference to a period of dual mandate, the pensioner's aggregate period of reckonable service shall, for the purpose of article F3(1), be multiplied by three in respect of any part of his aggregate period of reckonable service that was not part of his period of dual mandate; and

(b) where his final salary is calculated in accordance with article F3(2) by reference to an actual period of reckonable service that was not a period of dual mandate, the pensioner's aggregate period of reckonable service shall, for the purpose of article F3(1), be divided by three in respect of any part of his aggregate period of reckonable service that was a period of dual mandate.

Permitted maximum pensions
     F5.  - (1) The annual amount of the pension payable under article F1 or F2 shall not exceed whichever is the least of-

(a) the amount equal to two-thirds of the participant's final salary; or

(b) such maximum pension as is calculated in respect of that person in accordance with the provisions of Schedule 2; or

(c) the amount equal to two-thirds of the permitted maximum.

    (2) In the case of a person who is entitled to a pension under both articles F1 and F2, the amount of the two pensions together shall not exceed two-thirds of the permitted maximum and, if they do, the pension payable under article F2 shall be reduced before the pension payable under article F1.

Duration of pensions
     F6.  - (1) Subject to the following provisions of this article, a pension under article F1 or F2 (including an early retirement pension or an ill-health pension by virtue of Part H or J) shall continue for the life of the person to whom it is payable.

    (2) Subject to paragraph (3), no such pension shall be payable to a person in respect of any period during which he is a member of the Parliament or a candidate for election to the Parliament, or in respect of any part of a period of tenure of a qualifying office other than a part in respect of which no salary is payable or in respect of which no salary is drawn.

    (3) Where, in the case of any person, a pension under article F1 or F2 or a pension under each of those articles would, but for paragraph (2), be payable to him in respect of a period of tenure of a qualifying office during which he is neither a member of the Parliament nor a candidate for election to the Parliament-

(a) that paragraph shall not apply to that pension or either of those pensions in respect of any part of that period;

(b) the amount or aggregate amount payable to him in right of that pension or those pensions for any part of that period shall not exceed the amount, if any, by which any office holder's salary payable to him for that part of that period falls short of the amount of a member's salary for that period; and

(c) if he is a participating office holder in respect of that period then, for the purpose of calculating the amount, if any, which would, apart from sub-paragraph (b) above, be payable to him in right of a pension under article F2 for any part of that period (but not for any other purpose, and in particular not for the purpose of recalculating at the end of that period the annual amount of the pension, if any, to which apart from sub-paragraph (b) above he is entitled under article F2), that period shall be deemed not to be a period of reckonable service as a participating office holder.

    (4) For the purposes of this article a person who ceases to be a member in consequence of the dissolution of the Parliament shall be treated as a candidate for election unless and until he gives notice in writing to the Parliamentary corporation that he is not seeking re-election.

    (5) This article shall not apply for the purposes of calculating the amounts mentioned in article M2(3) or (4)(b) or the amounts payable under M3(2), M4(2) or M7 (five year guarantee).

[2] 1988 c.1.back

[3] 1993 c.48.back

[4] S.I. 1996/1172; the definition of "section 9(2B) rights" was substituted by S.I. 1997/786, Schedule 1, paragraph 4(2).back

[5] S.I. 1999/1097.back

[6] Section 590C was inserted by the Finance Act 1989 (c.26), Schedule 6, paragraphs 4 and 18(2).back

[7] 1979 c.50.back