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[DRAFT] Statutory Instruments [2015] No. Pensions

Made 鈥� [***]

Laid before Parliament 鈥� [***]

Coming into force 鈥� 6 April 2015

The Secretary of State for Work and Pensions makes the following Regulations in exercise of the powers conferred by sections [93(5), 93(10), 93A(5), 95(6A), 97(2), (3B) and (4), 99(4A) and (4B), 101F(6A), 113(1) and 181] of the Pension Schemes Act 1993^{[footnote 1]} and [clause 48(7) of the Pension Schemes Bill 2015^{[footnote 2]}b.

These Regulations were not subject to consultation because in this case the Secretary of State considered consultation to be inexpedient by reason of urgency.

Citation, commencement and interpretation

1.鈥�(1) These Regulations may be cited as the Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2015 and come into force on 6th April 2015. (2) In these Regulations, 鈥榯he principal Regulations鈥� means the Occupational Pension Schemes (Transfer Values) Regulations 1996^{[footnote 3]}.

Amendment of Part 1 of the principal Regulations

2.鈥�(1) In Regulation 1(2) of the principal Regulations鈥�

(a) In the definition of 鈥渃ash balance benefit鈥�, for 鈥渂y regulation 2 of the Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014鈥� substitute 鈥渢o that expression in [clause 75 of the Pensions Schemes Bill 2014];鈥�;

(b) In the definition of 鈥渃ash equivalent鈥�, for 鈥渙r guaranteed cash equivalent mentioned in section 93A(1) or 94(1)鈥� substitute 鈥渕entioned in section 94(1) or (2)鈥�;

(c) In the definition of 鈥済uarantee date鈥�, for 鈥渟ection 93A(2)鈥� substitute 鈥渟ection 93A(4)鈥�;

(d) Omit the definition of 鈥渞elevant date鈥�;

(e) In the definition of 鈥渟tatement of entitlement鈥�, for 鈥渟ection 93A(1) of the 1993 Act (salary related schemes: right to statement of entitlement)鈥� substitute 鈥渟ection 93A(3) of the 1993 Act (Right to statement of entitlement: benefits other than money purchase)鈥�.

Amendment of Part 2 of the principal Regulations

3.鈥�(1) In regulation 2, for 鈥淐hapter IV of Part IV鈥� substitute 鈥淐hapter 1 of Part 4ZA鈥�^{[footnote 4]}.

(2) Omit regulations 3, 4 and 5.

Amendment of Part 3 of the principal Regulations

4.鈥�(1) In the heading to Part 3 (guaranteed statements of entitlement and calculation of transfer values), omit the word 鈥済uaranteed鈥�.

(2) In regulation 6鈥�

(a) In the heading, omit the word 鈥淕uaranteed鈥�;

(b) In paragraph (1)(a)^{[footnote 5]}, omit the words 鈥渦nder section 93A of the 1993 Act (salary related schemes: right to statement of entitlement)鈥�;

(c) After paragraph 1B 颈苍蝉别谤迟鈥�

鈥�(1C) Where a member has transferrable rights in relation to two categories of benefit other than money purchase benefits, the trustees or managers must provide the member with a statement of entitlement setting out a separate cash equivalent value in relation to each category of benefit, unless the member鈥檚 application relates to one category of benefit only.鈥�;

(d) In paragraph (3), omit the words 鈥渦nder section 93A(1) of the 1993 Act鈥�;

(e) Omit paragraph (4);

(f) At the end of regulation 6 颈苍蝉别谤迟鈥�

鈥�(5) In this regulation, 鈥渁pplication鈥� means an application for a statement of entitlement made under section 93A(1) of the 1993Act.鈥�.

(3) In regulation 7C(3)(b)(ii)^{[footnote 6]}, for 鈥淐hapter IV of Part IV鈥� substitute 鈥淐hapter 1 of Part 4ZA鈥�.

(4) In regulation 9鈥�

(a) in the heading, for 鈥済uaranteed cash equivalents鈥� substitute 鈥渃ash equivalents shown in the statement of entitlement鈥�;

(b) for paragraph (1), 蝉耻产蝉迟颈迟耻迟别鈥�

鈥�(1) This regulation applies to a cash equivalent in respect of transferrable rights in relation to categories of benefits other than money purchase benefits where a statement of entitlement has been sent to a member of a salary related scheme by the trustees of the scheme.鈥�;

(c) in paragraph (2)鈥�

(i) in the first place where it appears, for 鈥済uaranteed cash equivalent鈥� substitute 鈥渃ash equivalent shown in the statement of entitlement鈥�; and

(ii) in the second place where it appears, for 鈥済uaranteed cash equivalent鈥� substitute 鈥渃ash equivalent shown in the statement of entitlement鈥�;

(d) in paragraphs (3)^{[footnote 7]}, (5) and (6), in each place where it appears, for 鈥済uaranteed cash equivalent鈥� substitute 鈥渃ash equivalent shown in the statement of entitlement鈥�;

(e) in paragraph (5), for 鈥淐hapter IV of Part IV鈥� substitute 鈥淐hapter 1 of Part 4ZA鈥�.

(5) In regulation 11鈥�

(a) For paragraph (1)^{[footnote 8]} 蝉耻产蝉迟颈迟耻迟别鈥�

鈥�(1) Subject to paragraphs (1A) and (1B), a member to whom paragraph (1C) applies is entitled to receive from the trustees, on request, the information mentioned in Schedule 1 in writing.鈥�;

(b) After paragraph (1B)^{[footnote 9]} 颈苍蝉别谤迟鈥�

鈥�(1C) This paragraph applies鈥�

(a) to a member who is currently accruing rights to benefits in a category (as defined in section 93(6) of the 1993 Act); and

(b) to a member who is no longer accruing rights to money purchase benefits unless, in respect of those benefits, a crystallisation event under section 93(7) has occurred.鈥�;

(c) omit paragraph (3)^{[footnote 10]};

(d) in paragraph (4)^{[footnote 11]}鈥�

(i) For 鈥渢o a guaranteed cash equivalent鈥� substitute 鈥減rovided under section 93A of the 1993 Act鈥�;

(ii) Before paragraph (ii) of sub-paragraph (b), 颈苍蝉别谤迟鈥�

鈥�(i) indicating the amount of the cash equivalent which is attributable to each category of benefit included in the statement of entitlement;鈥�;

(iii) In subparagraph (ii) after the first appearance of the words 鈥渃ash equivalent鈥� insert 鈥渋n relation to each category of benefit鈥�;

(e) In paragraphs (4)(b)(iv), (v), (vi)(aa) and (5), in each place where it appears, for 鈥済uaranteed cash equivalent鈥� substitute 鈥渃ash equivalent shown in the statement of entitlement鈥�.

Amendment of Part 5 of the principal Regulations

5. In regulation 13(a)(vi)^{[footnote 12]}, for 鈥済uaranteed cash equivalent鈥� substitute 鈥渃ash equivalent shown in the statement of entitlement鈥�.

Amendment of Part 6 of the principal Regulations

6.鈥�(1) In regulation 14鈥�

(a) In the heading, for 鈥済uaranteed cash equivalent鈥� substitute 鈥渃ash equivalent shown in the statement of entitlement鈥�;

(b) For paragraph (1) 蝉耻产蝉迟颈迟耻迟别鈥�

鈥�(1) Paragraph (2) will apply in the following situations鈥�

(a) Where a member鈥檚 cash equivalent shown in the statement of entitlement has been reduced or increased under regulation 9;

(b) Where, within three months of the trustees or managers informing a member in writing that the cash equivalent has been reduced or increased in accordance with regulation 9, the member disputes the basis or amount of the increase or reduction; and

(c) Where, within three months beginning with the guarantee date, a member disputes the amount of the cash equivalent shown in the statement of entitlement.鈥�

(c) For paragraph (2) 蝉耻产蝉迟颈迟耻迟别鈥�

鈥�(2) Where any of the situations mentioned in paragraph (1) occurs鈥�

(a) if the member has made an application to take the cash equivalent under section 95(1) of the 1993 Act, that application lapses unless the trustees or managers have done what is needed to carry out what the member requires or the application has been withdrawn;

(b) the time for making a fresh application to take the cash equivalent under section 95(1) is three months beginning with the date on which the trustees or managers inform the member in writing of the reduced or increased cash equivalent, or the finally determined cash equivalent; and

(c) the period specified in section 99(2) (trustees鈥� duties after exercise of option) is six months beginning with the date on which the trustees or managers inform the member in writing of the reduced or increased cash equivalent, or the finally determined cash equivalent.鈥�

(2) In regulation 15鈥�

(a) For 鈥�93(1)(a)(i)鈥� substitute 鈥�93(4)(b)鈥�;

(b) For 鈥淐hapter IV鈥� substitute 鈥淐hapter 1 of Part 4ZA鈥�;

(c) For 鈥渟ections 95(8)(a), 98(7)(a)(variation and loss of rights under section 94) and 99(2)(a) and (b)鈥� substitute 鈥渟ection 95(1A)(b)鈥�.

(3) In regulation 16(2), for 鈥淐hapter IV of Part IV鈥� substitute 鈥淐hapter 1 of Part 4ZA鈥�.

(4) In regulation 17(2), for 鈥淐hapter IV of Part IV鈥� substitute 鈥淐hapter 1 of Part 4ZA鈥�.

(5) Omit regulations 18 and 19 of the principal Regulations.

Amendment of Part 7 of the principal Regulations

7. In regulation 20, for 鈥渟ection 93A(4)鈥� substitute 鈥渟ection 93A(6)鈥�.

Amendment of Part 8 of the principal Regulations

8.鈥�(1) Omit regulation 21 of the principal Regulations.

Amendment of Schedule 1 of the principal Regulations

9.鈥�(1) In paragraph 1^{[footnote 13]}鈥�

(a) for 鈥淐hapter IV of Part IV鈥� substitute 鈥淐hapter 1 of Part 4ZA鈥�;

(b) for 鈥渢he member鈥檚 pensionable service were to terminate鈥� substitute 鈥渢he conditions specified in section 93(2) to (4) of the 1993 Act were met鈥�;

(c) In sub-paragraph (a), for 鈥渢he member鈥檚 pensionable service terminated or will terminate on a particular date;鈥� substitute 鈥渢he conditions specified in section 93(2) to (4) of the 1993 Act were met or will be met on a particular date鈥�.

(2) In paragraph 2鈥�

(a) for 鈥淐hapter IV of Part IV鈥� substitute 鈥淐hapter 1 of Part 4ZA鈥�;

(b) in sub-paragraph (d), after 鈥渆stimated amount of the transfer value鈥� insert 鈥渋n relation to the member鈥檚 rights to benefits other than money purchase benefits鈥�.

(3) In paragraph 3^{[footnote 14]}, at the beginning of paragraph (c) insert 鈥渆xcept where [clause 48 of the Bill] applies,鈥�.

Amendment of Schedule 1A of the principal Regulations^{[footnote 15]}

10.鈥�(1)In paragraph 2 of Schedule 1A鈥�

(a) In sub-paragraph (a) omit the word 鈥渁nd鈥�;

(b) After sub-paragraph (b) 颈苍蝉别谤迟鈥�

鈥�(c) the guarantee date in relation to the statement of entitlement is at least one year before the member attains normal pension age in relation to the rights to benefits covered by the statement of entitlement.鈥�.

(2) For paragraph 8 of Schedule 1A.蝉耻产蝉迟颈迟耻迟别鈥�

鈥�8. Where the cash equivalent shown in a member鈥檚 statement of entitlement鈥�

(a) relates to safeguarded benefits;

(b) is to be used for acquiring transfer credits in relation to safeguarded benefits under the rules of another scheme; and

(c) the receiving scheme has undertaken to provide benefits at least equal in value to the benefits represented by that cash equivalent on payment of a lesser sum (including nil),

the initial cash equivalent may be reduced so that the cash equivalent is that lesser sum.鈥�

Amendment of the Personal Pension Schemes (Transfer Values) Regulations 1987^{[footnote 16]}

11.鈥�(1) In regulations 1^{[footnote 17]} and 3^{[footnote 18]}, on each occasion where it occurs, for 鈥淐hapter IV of Part IV鈥� substitute 鈥淐hapter 1 of Part 4ZA鈥�.

(2) In regulation 4^{[footnote 19]}, for 鈥渟ection 94(1)(b)鈥� substitute 鈥渟ection 94鈥�.

Amendment of the Transfer Values (Disapplication) Regulations 2010^{[footnote 20]}

12.鈥�(1) In regulation 1, for 鈥淐hapter IV of Part IV鈥� substitute 鈥淐hapter 1 of Part 4ZA鈥�.

(2) In regulation 2鈥�

(a) In paragraph (2)(a), for 鈥渟ection 94(1)鈥� substitute 鈥渟ection 94(2)鈥�; and

(b) In paragraph (2)(b), for 鈥減ension credit benefit鈥� substitute 鈥減ension credit rights鈥�.

Transitional Provisions

13.鈥�(1) The effect Schedule 1 paragraph 3 of the principal Regulations shall be preserved in respect of a member who has made an application under section 95(1) of the 1993 Act before the commencement of these Regulations.

Explanatory note

(This note is not part of the Regulations)

Regulation 1 contains general provisions providing for the date the regulations are to come into force, how the regulations are to be cited and interpretation.

Regulation 2 makes consequential amendments to regulation 1 of the Occupational Pension Schemes (Transfer Values) Regulations 1996 (S.I. 1996/1847) (鈥渢he principal Regulations鈥�) following the introduction of the Pension Schemes Act 2015.

Regulation 3(1) makes consequential amendments to regulation 2 of the principal Regulations. Regulation 3(2) repeals regulations 3, 4 and 5 of the principal Regulations.

Regulation 4 makes consequential amendments to Part 3 of the principal Regulations.

Regulation 4(2)(c) confirms that where a member applies for a statement of entitlement in respect of more than one category of benefit, the trustees must provide a separate cash equivalent for each category.

Regulation 5 makes consequential amendments to regulation 13 of the principal Regulations.

Regulation 6 makes consequential amendments to Part 6 of the principal Regulations. Regulation 6(1) amends regulation 14 of the principal regulations and provides for where the time for a member to make an application to take the cash equivalent will be extended. The Regulation also extends time for the trustee to do what is required in the same circumstances.

Regulation 7 makes consequential amendments to regulation 20 of the principal Regulations.

Regulation 8 repeals regulation 21 of the principal Regulations.

Regulation 9 makes consequential amendments to Schedule 1 of the principal Regulations. Regulation 9(3) ensures that where a trustee is not required by section 48 of the Pension Schemes Act 2015 to check that the member has received independent financial advice, the trustees make a recommendation that the member should take financial advice.

Regulation 10 makes consequential amendments to Schedule 1A of the principal Regulations. Regulation 10(2) makes amendments to paragraph 8 so that it applies to the transfer of safeguarded benefits.

Regulation 11 makes consequential amendments to the Personal Pension Schemes (Transfer Values) Regulations 1987 (S.I. 1987/1112).

Regulation 12 makes consequential amendments to the Transfer Values (Disapplication) Regulations 2010 (S.I. 2010/6).

Regulation 13 provides a transitional provision preserving the effect of Schedule 1 paragraph 3 of the principal Regulations in respect of a member who has made an application to take the cash equivalent under section 95(1) before the commencement of the Regulations.