Article 14 Participants entitled to enhanced protection

In article 2(1) of the Principal Order (interpretation) insert at the appropriate place—

• ““protected individual” has the meaning assigned to it by regulation 31A(2);”.

After article 31 of the Principal Order insert—

“Application of articles 31A to 31E

31A

(1)

Articles 31A to 31E relate to individuals in the case of whom paragraph 12 of Schedule 36 to the Finance Act 2004 applies (enhanced protection).

(2)

In this Order such individuals are referred to as “protected individuals”.

Option to cease contributions

31B

(1)

A protected individual may opt for article 5 of this Order (contributions) not to apply in respect of the individual’s salary.

(2)

The option under paragraph (1) may only be exercised by notice in writing to the Managers.

(3)

An individual who has exercised such an option may revoke it by such a notice if—

(a)

the individual has ceased to be a protected individual, and

(b)

the Managers consent.

(4)

A notice exercising or revoking such an option must specify the date on which the option is to take effect or, as the case may be, cease to have effect.

(5)

In the case of a notice exercising such an option, that date may not be earlier than—

(a)

6th April 2006, or

(b)

the beginning of the month in which the notice is given,

whichever is the later.

(6)

In the case of a notice revoking such an option, the date specified as the date on which the option is to take effect may not be earlier than the beginning of the month in which the notice is given.

(7)

Where such an option is revoked, any option as to the rate at which deductions are made under article 5 that was effective immediately before the option under this article took effect is treated as continuing in force from the date on which the revocation takes effect, subject to any further exercise of any option as to that rate.

Effect of option to cease contributions

31C

(1)

An individual shall not be regarded as a participant for the purposes of article 5 (contributions) at any time when an option exercised by the individual under article 31B has effect.

(2)

But, except as provided by paragraph (3), the fact that the individual is not making contributions deducted from his salary under article 5 shall be disregarded for the purposes of determining whether the individual falls within the definition of “participant” in article 2(1).

(3)

Notwithstanding anything in paragraph (2)—

(a)

no period during which the individual’s option has effect shall be regarded as a period of reckonable service (or actual reckonable service) as a participant, except for the purpose of determining the relevant terminal salary of the individual under article 7, and

(b)

if a pension becomes payable to the individual under article 7 by virtue of article 11 (ill-health pensions based on service as a participant) for the purposes of calculating the annual amount of the pension the words in article 11(4) from “but for the purposes of that calculation” onwards (by virtue of which the individual’s reckonable service would be increased) are disregarded.

Surrender of excess rights for the purpose of obtaining enhanced protection

31D

(1)

An individual who proposes to give notice under paragraph 12 of Schedule 36 to the Finance Act 2004 (enhanced protection) may surrender the whole or part of such rights as in accordance with regulations made under paragraph 12(5) of that Schedule are to be treated as representing the relevant excess (as defined in paragraph 12(6) of that Schedule) in the case of the individual.

(2)

Such a surrender may only be made by notice in writing to the Managers and is irrevocable.

(3)

A surrender under this article is ineffective so far as it purports to affect—

(a)

any rights in respect of an excluded pension (as defined in section 172A(10) of the Finance Act 2004) that is payable under article 18 and Schedule 6, or

(b)

any rights entitlement to which is required for the employment of the individual to be contracted-out in relation to the scheme.

Surrender to avoid relevant benefit accrual

31E

(1)

Subject to paragraphs (2) and (3), a protected individual may surrender the whole or part of any rights to any benefit to which he (or any dependant of his) has a prospective entitlement under this Order.

(2)

Such a surrender may only be made by notice in writing to the Managers and is irrevocable.

(3)

A surrender under this article is ineffective so far as it purports to affect—

(a)

any rights in respect of an excluded pension (as defined in section 172A(10) of the Finance Act 2004) that is payable under article 18 and Schedule 6, or

(b)

any rights entitlement to which is required for the employment of the individual to be contracted-out in relation to the scheme.”.