Office of Public Sector Information

unless an election is made under regulation G7(2) to pay the additional contribution referred to in that regulation.

(12) Paragraph (11) does not apply —

(a) in relation to a person who becomes entitled to the payment of retirement benefits by virtue of regulation E4(4),

(b) for the purpose of calculating—

(i) a death grant under regulation E20, or

(ii) a pension payable under regulation E28 (amount of surviving spouses’, surviving civil partner’s, surviving nominated partner’s or nominated beneficiary’s long-term pensions) in relation to a person who died while in pensionable employment, or

(c) to any increase in contributable salary which was received while the person was employed by an employer other than the body which was the person’s employer immediately before he became entitled to the payment of retirement benefits.

(13) For the purposes of paragraph (11), paragraph (12) and this paragraph—

(a) where the person receives more than one increase in salary in a financial year the increases taken together shall be treated as one increase and accordingly, in paragraph (11), A is the person’s salary before the first increase and B is the person’s salary after the last increase,

(b) the material date is the date on which the increase of salary took effect,

(c) the standard increase of salary is the average percentage of the increases, if any, that would have been received on the material date by persons (the comparable employees”) who were employed at the school or institution where the person in question was employed and whose circumstances corresponded, most closely to those of that person or, if there were no comparable employees, by persons so employed as teachers (as the case may be) would have received no increases on that date, the next increases they would have received.

(14) For the purposes of this regulation, in computing periods consisting of numbers of days, no account shall be taken of a leap year day (29th February) except as provided by paragraph (15).

(15) Where however a person’s average salary service ends in a leap year on or after the leap year day that leap year day shall be included in the period of 365 days referred to in paragraph (2).

(16) Where an election under regulation G7 is made after the person becomes entitled to payment of retirement benefits the person is, until the date on which the election is received by the Department, entitled to retirement benefits calculated on the basis only of the contributable salary he is treated as receiving in the absence of such an election and accordingly as from the date on which the election is received by the Department becomes entitled to—

(a) a lump sum payment (where regulation E6 applies to the person) equal to the difference between the retirement lump sum to which the person is entitled taking into account the election and the retirement lump sum previously paid to the person; and

(b) a retirement pension taking into account the election.”.

45.  After regulation E31 insert—

“Average salary – supplemental

E31A.—(1) This regulation has effect for the purpose of determining a person’s salary where regulation E31(2A) applies (“the alternative average salary”).

(2) In this regulation “salary period” is each period in which the person’s salary rate is unchanged.

(3) The average of the person’s full salary for the best consecutive 1095 days of average salary service (increased as specified in paragraph (4)) during the period of 10 years ending on the last day of the person’s average salary service shall first be determined.

(4) For the purposes of paragraph (3) the person’s full salary for each salary period is increased by the amount (if any) by which, immediately before the end of the person’s average salary service, it would have increased if it had been the annual rate of an official pension within the meaning of section 5(1) of the Pensions (Increase) Act (Northern Ireland) 1971(16) beginning, and first qualifying for increases under that Act, on the same day as the salary period ended.

(5) The alternative average salary is the average of the actual full salary for the 1095 days which, resulting from and in accordance with the determination under paragraph (3), are the best consecutive 1095 days of average salary service, multiplied by A/B.

(6) “A” in paragraph (5) is the annual rate of retirement pension to which the person would have been entitled by virtue of these Regulations if—

(a) in calculating the person’s full salary for each salary period the person’s full salary for that period had in fact been increased as specified in paragraph (4), and

(b) the Pensions (Increase) Act (Northern Ireland) 1971 did not apply.

(7) “B” in paragraph (5) is the annual rate of retirement pension to which the person would have been entitled by virtue of the combined effect of these Regulations and the increase effected by the Pensions (Increase) Act (Northern Ireland) 1971 up to the last day of the person’s average salary service, if the person’s average salary had been the amount determined under paragraph (5) without the multiplication by A/B.

(8) For the purposes of paragraph (3) periods when the person was not in pensionable employment shall be disregarded, except in relation to the period of 10 years, and accordingly the 1095 days referred to in paragraphs (3) and (5) may be discontinuous.

(9) In computing the period of 1095 days referred to in paragraphs (3) and (5) no account shall be taken of a leap year day (29th February).

(10) Where however a person’s average salary service ends in a year on or after the leap year day that leap year day shall be included in the period of 1095 days referred to in paragraphs (3) and (5).

(11) In this regulation “full salary” has the same meaning as in regulation E31.”.

Effective reckonable service

46.  In regulation E32—

(a) omit paragraph (2)(b),

(b) in paragraph (4) for “the age of 60” substitute “the normal pension age”.

Payment of benefits

47.  In regulation E33—

(a) after paragraph (2) insert—

“(2A) Where the application for payment is made on the basis that the person is entitled to retirement benefits under regulation E4(4) or (5)(incapacity), the application shall—

(a) where the person falls within regulation E4(5)(c)(i)(aa) or (bb), be signed by, or on behalf of, the person’s employer, and

(b) shall be accompanied by all medical evidence necessary to determine whether the person falls within regulation E4(4) or (5) and, where applicable, that the person’s ability to carry out any work is impaired by more than 90% and is likely permanently to be so.”.

(b) In paragraph (3) after “any relevant information” insert “(including medical evidence such as is mentioned in paragraph (2A))”.

Benefits not assignable

48.  In regulation E34(2) omit “An allocation under regulation E11 is not an assignment, and”.

Payment of transfer values

49.  In regulation F1(4)(b) after “his 60th birthday” insert “in the case of a pre-1st April 2007 entrant or his 65th birthday in any other case”.

Acceptance of transfer values

50.  In regulation F4(7)(b) after “his 60th birthday” insert “in the case of a pre-1st April 2007 entrant or his 65th birthday in any other case”.

Receipts etc. to be credited

51.  In regulation G2—

(a) in paragraph (2)(a) for “regulations C2(1), C3, C4, C5, and C8” substitute “regulations C2(1), C2A, C11 and Schedules 4 and 5”,

(b) in paragraph (2)(b) for “regulation C6 or C7” substitute “old regulation C6 or regulation C7”.

Employers’ Contributions

52.  For regulation G5 substitute—

“Employers’ contributions

G5.—(1) In this regulation—

(a) “relevant period” is to be construed in accordance with regulation G4(3),

(b) the “net contribution rate” for any relevant period is the aggregate of the percentage specified for that period under regulation G4(3) and any percentage specified for that period under regulation G4(7) less any percentage specified for that period under regulation G4(8).

(2) The employer of a person in pensionable employment is, during every relevant period, to pay contributions of the required percentage of the person’s contributable salary for the time being.

(3) The required percentage for the relevant period starting on 1st April 2007 is 13.6%.

(4) The required percentage for subsequent relevant periods shall be A‑X, where A is the net contribution rate as defined in paragraph (1)(b) and X is the percentage determined in accordance with regulation C2.

(5) No contributions are to be paid in respect of any person to whom regulation E32(2) (a) (restriction of reckonable service to 45 years) has become applicable.”.

Employers’ additional contributions

53.  After regulation G6 insert—

“Employers additional contributions

G7.—(1) Where a person receives an increase in contributable salary as is mentioned in regulation E31(11), the person’s last employer before he became entitled to payment of retirement benefits (“the former employer”) may make an election under paragraph (2).

(2) An election under this paragraph is an election to pay an additional contribution of

A-B-C

where—

A is the actuarial value of the retirement benefits to which the person would be entitled calculated by reference to the salary he received,

B is the actuarial value of the retirement benefits to which the person would be entitled if he was treated as receiving the increase in his contributable salary referred to in regulation E31(11), and

C is the aggregate of contributions which would be repaid under regulation H6A if no election had been made.

(3) An election under paragraph (2) may be made by giving written notice to the Department no later than six weeks beginning with the date on which the person became entitled to payment of retirement benefits.

(4) Where an election is made under paragraph (2) the payment to the Department under the election shall be made within 14 days beginning with the date of the election.

(5) If the full amount of payment under the election under paragraph 2) is not received by the end of the period referred to in paragraph (4), interest is payable by the former employer on the amount outstanding at 12% per annum compounded with monthly rests from the day after the end of the period referred to in paragraph (4) to the date of payment.”.

Modified application in case of employment at reduced salary

54.  In regulation H1(1)—

(a) for sub-paragraph (a) substitute—

“(a) a person who has been in pensionable employment either—

(i) continues to be employed by the same employer at a reduced rate of contributable salary, where the reduced rate of contributable salary had effect before 1st April 2007, or

(ii) ceases to be employed before 1st April 2007 and is re-employed before 1st May 2007 (whether by the same or a different employer) as a reduced rate of contributable salary, and”,

(b) for sub-paragraph (d) substitute—

“(d) the relevant employer notifies the Department in writing of the matters specified in paragraph (2) before 1st June 2007.”.

Declaration where lump sum payments are made

55.  After regulation H4 insert—

“Declaration where lump sum payments are made

H4A.—(1) The Department may, before paying any lump sum under regulations E4A, E6, E6A, E19A, I3 or I5A require the person to whom the payment is to be made to provide a declaration as specified in paragraph (2) by a date determined by the Department.

(2) The declaration is a declaration, in a form specified by the Department, signed by the person, to the effect that paragraph 3A of Schedule 29 to the Finance Act 2004(17)(recycling of lump sum) does not apply.

(3) Where no such declaration is received by the Department by the date referred to in paragraph (1) —

(a) where the payment in question would otherwise have been a lump sum under regulation E4A, E6A, or I5A, the Department may treat the election under regulation E4A, E6A or I5A as being of no effect,

(b) where the payment in question would otherwise have been a lump sum under regulation E6, E31(16) or I3, the Department may, in place of the lump sum, pay an additional pension representing the value of the lump sum,

(c) where the payment in question would otherwise have been a lump sum under regulation E19A, the Department need not pay the lump sum.

(4) The amount of the additional pension referred to in paragraph (3)(b) shall be determined by the Department after taking advice from the Government Actuary.

Repayment of contributions where an election is not made under regulation G7

H4B.—(1) This regulation applies where—

(a) a person receives an increase in contributable salary as is mentioned in regulation E31(11), but

(b) no election under regulation G7(2) has been made.

(2) Where this regulation applies the Department shall repay—

(a) to the person who was in pensionable employment a sum equivalent to A-B, and

(b) to that person’s last employer before he became entitled to retirement benefits a sum equivalent to C-D.

(3) In paragraph (2)—

A is the aggregate of the contributions paid by the person under regulation C2 or C8 or Schedule 4 or 5,

B is the aggregate of the contributions which would have been paid under regulation C2 or C8 or Schedule 4 or 5 during the relevant period if the person had actually received the salary which he was treated as having received under regulation E31(11),

C is the aggregate of the contributions paid by the person’s employer under regulation G5 during the relevant period, and

D is the aggregate of the contributions which would have been paid by the person’s employer under regulation G5 during the relevant period if the person had actually received the salary which he was treated as having received under regulation E31(11)

and in this paragraph the “relevant period” is the period which started when the person received the increase in contributable salary as mentioned in regulation E31(11) and ended when the person became entitled to the payment of retirement benefits.”.

Pension sharing – normal pension age

56.  After regulation I2 insert—

“Normal Pension Age

I2A.—(1) For the purposes of this Part a pension credit member’s normal pension age is, subject to paragraph (2), the normal pension age of the corresponding debit member.

(2) Where—

(a) the corresponding debit member is a person with mixed service, and

(b) at the time when the relevant arrangement referred to in Article 25 of the 1999 Order(18) took effect the corresponding debit member had not ceased to be a pre-1st April 2007 entrant by virtue of regulation EA1(4),

the pension credit member’s normal pension age shall be 60.”.

Pension credit benefits

57.  In regulation I3—

(a) in paragraph (1) after “shall consist of a pension and” insert “(where paragraph (3) applies)”,

(b) after paragraph (2) insert —

“(2A) Paragraph (3) applies where the pension credit member’s normal pension age is 60.”,

(c) at the beginning of paragraph (3) insert “Where this paragraph applies,”,

(d) in paragraph (5) for “the age of 60” substitute “the normal pension age”.

Commutation

58.  In regulation I4(1) and (2) for “the age of 60” substitute “the normal pension age”.

59.  After regulation I(4) insert—

“Commutation on election by pension credit member

I4A.—(1) A pension credit member may, by an election made with the application for payment under regulation E33(2), elect to receive a further lump sum of such amount as is specified in the election (subject to paragraph (2)) in place of part of his pension.

(2) The amount of such lump sum must be a multiple of £12 and cannot exceed—

(a) in the case of a pension credit member with a normal pension age of 65, his permitted maximum, and

(b) in the case of a pension credit member with a normal pension age of 60, his permitted maximum less the lump sum paid under regulation I3(3).

(3) Where a lump sum is paid under this regulation the annual rate of the pension credit member’s pension is reduced by £1 for every £12 of lump sum.”.

Death grant

60.  In regulation I6(3)(a), (3)(b) and (4)(b) for “the age of 60” substitute “the normal pension age”.

Glossary of expressions

61.  In Schedule 1—

(a) Insert the following definitions at the appropriate place in alphabetical order—

(b) for the definition of “retirement lump sum” substitute—

(c) for the definition of “retirement pension” substitute—

(d) at the end of the definition of “average salary” insert “or, where applicable, regulation E31A”,

(e) for paragraph (a)(i) and (ii) of the definition of “entitled” substitute—

“(i) has not yet attained the normal pension age, or

(ii) regardless of his age has ceased to be in further employment in circumstances where regulation E15A applies, and”,

(f) for paragraph (b) of the definition of “excluded employment” substitute—

“(b) being in part-time employment—

(i) has not made an election pursuant to regulation B1(4), where such an election is required pursuant to that paragraph for part-time employment to be pensionable, or

(ii) is at the same time in full-time employment.”.

Elections in respect of additional benefits

62.  After Schedule 2 insert as Schedule 2A the Schedule set out as Schedule 4 to these Regulations.

Maximum length of additional periods

63.  In Schedule 3—

(a) omit paragraphs 1 and 2,

(b) in paragraph 3 before “regulation C3” insert “old”.

Additional contributions for past period under old regulation C3

64.  At the end of the heading to Schedule 4 insert “under old regulation C3”

65.  In Schedule 4—

(a) for the definitions of “the principal election”, “the past period” and “the contribution period” substitute—

“ “the principal election” means the election under old regulation C3(2);

“the past period” means the period specified in that election pursuant to old regulation C3(9)(a);

“the contribution period” means the period specified in that election pursuant to old regulation C3(9)(c)”. ”,

(b) in paragraph 1(3) for “regulation C6 or C7” substitute “old regulation C6 or regulation C7”,

(c) in paragraph 1(3)(b) before “regulation C6(7)” insert “old”,

(d) in paragraph 3 omit “Subject to paragraphs 4 and 5”,

(e) omit paragraphs 4 and 5,

(f) in paragraph 6(2) for “such sum as would be payable under Part II” substitute “the actuarial equivalent of the additional contributions that would have been payable”,

(g) in paragraph 9(3) for “such amount as would be payable under Part II” substitute “the actuarial equivalent of the additional contributions that would have been payable”,

(h) omit paragraph 11,

(i) in paragraph 12—

(i) insert “and” at the end of sub-paragraph (2)(b) and omit “and” at the end of sub-paragraph(2)(c),

(ii) omit sub-paragraph (2)(d).

Additional contributions for past periods under earlier provisions

66.  In Schedule 5—

(a) in paragraph 1(1)—

(i) for “Subject to sub-paragraphs (2) to (5) and paragraphs 2 to 4” substitute “Subject to paragraphs 3 and 4”

(ii) for “regulation C6 or C7” substitute “old regulation C6 or regulation C7”,

(b) omit paragraphs 1(2) to (5) and 2.

(c) in paragraph 3—

(i) omit “or 2”,

(ii) for “regulation C3” substitute “Schedule 4”,

(d) omit paragraph 6(3).

Family benefits

67.  In Schedule 6—

(a) in paragraph 10(1)(b) for “C3, C5, C6 or C7” substitute “old regulation C6, regulation C7 or Schedule 4 or 5”,

(b) for paragraph 12(1) substitute—

“(1) Subject to sub-paragraph (2) and except as otherwise provided in Part III, where payment is to be made by method A, the payment period (in years) is A/B x C, where A is the period (in years) specified under paragraph 11(1)(b), B is the rate specified under paragraph 11(1)(d), and C is the multiplier determined from time to time by the Department (after taking advice from the Government Actuary) for the purpose of this Part.

(1A) The multiplier determined for the purpose of this Part may differ depending on whether the election is made under paragraph 10(1) or 10(2).”,

(c) omit Table 5,

(d) in paragraph 12(2)—

(i) omit “(“the Table period”)”, and

(ii) for “in which the Table period ends” substitute “in which that period ends”,

(e) for paragraph 12(3) substitute—

“(3) Where payment is to be made by Method B, the lump sum payable, which must be paid within 3 months after its amount is notified by the Department, is A x B x C, where A is the multiplier determined from time to time by the Department (after taking advice from the Government Actuary) for the purpose of this Part, B is the period (in years) in respect of which the election was made, and C is the appropriate amount.”,

(f) for paragraph 13B(3) substitute—

“(3) Except as otherwise provided in Part III, the payment period (in years) is A/B x C, where A is the period (in years) specified under paragraph 13A(5), B is the percentage rate specified under paragraph 13A(6), and C is the multiplier determined from time to time by the Department (after taking advice from the Government Actuary) for the purpose of this Part for a person of the same sex as the qualifying person.”,

(g) omit Table 5A,

(h) in paragraph 13C(2) for “1.9% if the qualifying person is a man and 1.7% if the qualifying person is a woman” substitute “the multiplier determined from time to time by the Department (after taking advice from the Government Actuary) for the purpose of this Part for a person of the same sex as the qualifying person”,

(i) after Part IIA insert—

“PART IIB CONTRIBUTIONS: SURVIVING NOMINATED PARTNERS

13D.—(1) A person (other than a person who has previously made an election under sub-paragraph (2)) who has nominated a person under regulation E22A is a qualifying person for the purposes of this Part while—

(a) the nomination continues to have effect, and

(b) he is in pensionable employment.

(2) A qualifying person may by giving notice in writing to the Department before the end of the election period elect to pay family benefit contributions attributable to a period of his reckonable service which is not relevant service as mentioned in regulation E27(2B).

(3) An election under sub-paragraph (2) must be accompanied by a declaration signed by the qualifying person that he is in normal health.

(4) If a qualifying person dies before the end of the election period without making an election under sub-paragraph (2), his surviving nominated partner may by giving notice in writing to the Department within 3 months of the qualifying person’s death elect to pay family benefit contributions attributable to a period of the qualifying person’s reckonable service which is not relevant service as mentioned in regulation E27(2B).

(5) The election period begins on the day on which the qualifying person makes the nomination and ends on the earlier of the day on which—

(a) any election he makes under regulation B4 has effect,

(b) he has been a qualifying person for a period of 6 months in relation to that nomination.

(6) The person who makes an election under this paragraph must specify in the notice the period in respect of which the election is made, which must be either the whole of the qualifying person’s reckonable service which is not relevant service as mentioned in regulation E27(2B) or such part of such service as consists of one or more whole years.

(7) Where an election is made under sub-paragraph (2), the qualifying person must state in the notice whether family benefit contributions are to be paid by Method 1 (monthly payments) or by Method II (lump sum) and, if the former, must specify the percentage rate of his contributable salary at which they are to be paid, which must comply with paragraphs 14(2) and (3).

(8) Where a qualifying person’s pensionable employment is part-time, for the purpose of specifying (under sub-paragraph (7)) a percentage rate at which family benefit contributions are to be paid or varying (under paragraph 14(4)) that rate, sub-paragraph (7) and paragraph 14(2) have effect as if the reference to the qualifying person’s contributable salary were to his full-time equivalent salary.

(9) Except as provided in paragraph 14(4), an election under this paragraph is irrevocable.

13E.—(1) This paragraph applies where—

(a) the qualifying person states under paragraph 13D(7) (in accordance with an election made under paragraph 13D(2)) that family benefit contributions are to be paid by Method 1, and

(b) the payment period exceeds a year.

(2) Where this paragraph applies, except as otherwise provided in Part III, the qualifying person must pay family benefit contributions to the Department by way of monthly payments from his contributable salary at the percentage rate specified under paragraph 13D(7) or, where the rate is varied under paragraph 14(4), at the specified higher rate for the duration of the payment period.

(3) Except as otherwise provided in Part III, the payment period (in years) is A/B x C, where A is the period (in years) specified under paragraph 13D(6), B is the percentage rate specified under paragraph 13D(7), and C is the multiplier determined from time to time by the Department (after taking advice from the Government Actuary) for the purpose of this Part for a person of the same sex as the person nominated under regulation E22A.

(4) Where the payment period would (apart from this sub-paragraph) end on a day other than the last day of a month, the payment period ends with the last day of the month in which it would otherwise end.

13F.—(1) Except where paragraph 13E applies, the person who makes an election under paragraph 13D must pay family benefit contributions to the Department by way of a lump sum calculated in accordance with the Method II formula in sub-paragraph (2) within 3 months of receiving written notice of the amount of the lump sum.

(2) The Method 2 formula is A x B x C,

where—

A is the multiplier determined from time to time by the Department (after taking advice from the Government Actuary) for the purpose of this Part for a person of the same sex as the person nominated under regulation E22A,

B is the period (in years) specified under paragraph 13D(6), and

C is the annual rate of the qualifying person’s contributable salary.”,

(j) in paragraph 14(1)(c) after “paragraph 13B (Method 1)” insert “or paragraph 13D (Method 1)”,

(k) in paragraph 14(3) for “regulation C3 or C5” substitute “Schedule 4 or 5”,

(l) in paragraph 14(7) and (11) for “regulation C6 or C7” substitute “old regulation C6 or regulation C7”,

(m) in paragraph 15—

(i) in sub-paragraph (2) for “the age of 60” substitute “the normal pension age”,

(ii) in sub-paragraph (2)(b) after “his 60th birthday” insert “in the case of a pre-2007 entrant or his 65th birthday in any other case”,

(iii) after sub-paragraph (2) insert—

“(2A) But sub-paragraph (2) does not apply in a case to which sub-paragraph (2B) applies.

(2B) This sub-paragraph applies in a case where—

(a) the qualifying person dies before attaining the normal pension age or becomes entitled to payment of retirement benefits by virtue of regulation E4(4),

(b) family benefit contributions were payable by monthly payments under paragraph 13D (Method 1), and

(c) the Department is not satisfied that the declaration under paragraph 13D(3) was made in good faith.”,

(iv) in sub-paragraph (3) for “the age of 60” substitute “the normal pension age, or in a case to which sub-paragraph (2B) applies”,

(n) in paragraph 16 after “surviving civil partner” insert “, surviving nominated partner”.

Modified application in certain cases

68.  In Schedule 9—

(a) in paragraph 1 for the definition of “part-time teacher” substitute—

“ “part-time teacher” means a person whose part-time employment is pensionable employment;”.

(b) in paragraph 16(1) for “regulation C3” substitute “Schedule 4”,

Allocation of part of retirement pension

69.  Omit Schedule 10.