Regulation 2 Amendment of the Occupational Pension Schemes (Contracting-out) Regulations 1984

(1)

The Occupational Pension Schemes (Contracting-out) Regulations 1984^f1 shall be amended in accordance with the provisions of this regulation.

(2)

In regulation 1(2), in paragraph (b)(i) of the definition of“responsible paying authority”, for“satisfies the conditions specified in regulation 39” there shall be substituted“is an appropriate policy of insurance or an appropriate annuity contract for the purposes of section 52C”^f2.

(3)

For paragraph (2) of regulation 2, there shall be substituted the following paragraph—

“(2)

The employer of the earners in an employment who are members of a scheme may elect that that employment shall be contracted-out by reference to that scheme in relation to all those earners with or without the exception of those mentioned in either or both of sub-paragraphs (a) and (b), namely—

(a)

where a scheme makes provision whereby an earner in an employment to which the scheme relates may opt in writing not to join or, as the case may be, not to remain as a member of a section of the scheme whose members' employment will be contracted-out by reference to the scheme (whether or not the provision imposes any restriction on the number of times such an option may be exercised), any earner who so opts; and

(b)

in a case where it is possible for one or more earners to be unable to complete 5 years' service in that employment as members of that scheme before reaching the normal pension age of that scheme, the earner or earners whose length of service (consisting of service in that employment as a member of that scheme, or linked qualifying service in relation to such service, or both) falls short of a minimum length of service (not exceeding 5 years) specified in the rules of the scheme and who cannot (so far as is known when the contracting-out certificate is issued, or if later in the case of a particular earner, when he enters the employment) complete such a minimum length of service before reaching the normal pension age of the scheme.”.

(4)

In regulation 18—

(a)

in paragraph (3), for“£5” there shall be substituted“£16”; and

(b)

in sub-paragraph (a) of paragraph (4), for“the subject of a certificate issued by the Secretary of State under section 22(9) of the 1977 Act and still in force” there shall be substituted“appropriately secured within the meaning of section 52C”.

(5)

For sub-paragraph (e) of paragraph (1) of regulation 19, there shall be substituted the following sub-paragraph—

“(e)

cases where an earner’s accrued rights to guaranteed minimum pensions are appropriately secured within the meaning of section 52C.”.

(6)

At the beginning of paragraph (3), of regulation 22 there shall be inserted“Subject to paragraph (3A)” and after that paragraph there shall be inserted—

“(3A)

In a case where an earner’s employment in contracted-out employment by reference to the scheme terminates on or after 6th April 1988 paragraph (3) shall have effect as if, for the reference to 8⅛ per cent. compound, there were a reference to 7½ per cent. compound; but if there has been transferred to the scheme the earner’s accrued rights to guaranteed minimum pension arising from contracted-out employment which terminated before that date and in relation to another scheme, this paragraph does not apply to those rights.”.

(7)

In regulation 22(4), there shall be added at the end,“or for members whose guaranteed minimum pensions are, or are to be, appropriately secured within the meaning of section 52C(4)”.

(8)

At the beginning of paragraph (7) of regulation 22, there shall be inserted“Subject to paragraph (7A)” and after that paragraph there shall be inserted—

“(7A)

In a case where an earner’s employment in contracted-out employment by reference to the scheme terminates on or after 6th April 1988 paragraph (7) shall have effect as if for the reference to 8½ per cent. compound there were a reference to 7½ per cent. compound; but if there has been transferred to the scheme the earner’s accrued rights to guaranteed minimum pension arising from contracted-out employment which terminated before that date and in relation to another scheme, this paragraph does not apply to those rights.”.

(9)

In regulation 23—

(a)

in paragraph (5)(b)(ii), for“£5”, in both places where it occurs, there shall be substituted“£16”; and

(b)

in paragraph (7)—

(i)

in sub-paragraph (a), for“the conditions prescribed in regulation 39” there shall be substituted“is an appropriate policy of insurance or an appropriate annuity contract for the purposes of section 52C”; and

(ii)

the word“or” at the end of sub-paragraph (b)(i) and sub-paragraph (b)(ii) shall be omitted.

(10)

In regulation 24(8)—

(a)

in sub-paragraph (a), the reference to“42(2)” shall be omitted; and

(b)

after sub-paragraph (a), there shall be inserted the following sub-paragraph—

“(aa)

where it was paid under section 42(2), and the person in respect of whom it was paid has died, without leaving a widow, on or before the day 7 months after the date of termination of contracted-out employment in respect of which the premium is payable;”.

(11)

In regulation 33A, for“are appropriately secured” there shall be substituted“are, or are to be, appropriately secured”.

(12)

In regulation 38(1), for sub-paragraph (d) there shall be substituted the following sub-paragraph—

“(d)

any person who is, or who in the opinion of the Secretary of State is likely to become, the responsible paying authority.”.

(13)

Regulation 39 shall be omitted.

(14)

In regulation 43—

(a)

in paragraph (1), for“£5” there shall be substituted“£16”;

(b)

at the beginning of paragraph (4A)^f3 there shall be inserted“Except in a case to which paragraph (4B) applies,”; and

(c)

after paragraph (4A) there shall be inserted the following paragraph—

“(4B)

Where the member is a married woman or widow, and effect has been given to her protected rights at a time when an election is operative that her liability in respect of primary Class 1 contributions shall be a liability to contribute at a reduced rate, paragraph (4A) shall not apply.”.

Annotations

Footnotes

f1: S.I. 1984/380; the relevant amending instruments are S.I. 1985/1928, 1987/1104.
f2: Section 52C was inserted by the Social Security Act 1985, section 2 and Schedule 1, paragraph 2, and was amended by the Social Security Act 1986, section 86 and Schedule 10, paragraph 26.
f3: Regulation 43(4A) was inserted by the Personal and Occupational Pension Schemes (Protected Rights) Regulations 1987 (S.I. 1987/1117), regulation 14 as of 6th April 1988.