The Contracting-out (Transfer and Transfer Payment) Regulations (Northern Ireland) 1996

These Regulations may be cited as the Contracting-out (Transfer and Transfer Payment) Regulations (Northern Ireland) 1996 and shall come into operation on 6th April 1997.

In these Regulations—

• “the 1985 Regulations” means the Contracting-out (Transfer) Regulations (Northern Ireland) 1985^f1;

• “the 1993 Act” means the Pension Schemes (Northern Ireland) Act 1993;

• “accrued rights”, for the purposes of Parts II and IV, has the meaning given to that expression in section 16(6);

• “appropriate personal pension scheme” shall be construed in accordance with section 3^f2;

• “appropriate policy” means a policy of insurance or an annuity contract such as is described in section 15(4);

• “appropriately secured” has the meaning given to that expression in section 15(3);

• “connected employer transfer” and “connected employer transfer payment” mean respectively a transfer of guaranteed minimum pensions from a salary related contracted-out scheme to a salary related contracted-out scheme and a transfer payment in respect of section 5(2B) rights from a salary related contracted-out scheme to a salary related contracted-out scheme where either—

  1. (a)

     the transferring scheme and the receiving scheme apply to employment with the same employer, or

  2. (b)

     the transferring scheme and the receiving scheme apply to employment with different employers, the earner or person concerned is one of a group of persons in respect of whom transfers or transfer payments are being made from the transferring scheme to the receiving scheme, and either—

     1. (i)

        the transfer or transfer payment is a consequence of a financial transaction between the employers;

     2. (ii)

        each of the employers is one of a group of companies consisting of a holding company and one or more subsidiaries within the meaning of Article 4 of the Companies (Northern Ireland) Order 1986^f3, or

     3. (iii)

        the employers are associated employers within the meaning of section 590A(3) and (4) of the Income and Corporation Taxes Act 1988^f4;

• “earner” includes an earner who is not in employment at the time of the transfer or transfer payment;

• “money purchase contracted-out scheme” means an occupational pension scheme which is contracted-out by virtue of satisfying section 5(3)^f5;

• “overseas arrangement” means a scheme or arrangement, other than an occupational pension scheme, which—

  1. (a)

     has effect, or is capable of having effect, so as to provide benefits on termination of employment or on death or retirement to, or in respect of, earners;

  2. (b)

     is not an appropriate personal pension scheme, and

  3. (c)

     is administered wholly or primarily outside the United Kingdom;

• “overseas scheme” means an occupational pension scheme which is administered wholly or primarily outside the United Kingdom but does not include one which is contracted-out within the meaning of section 3(3) nor one in respect of which section 49^f6 applies;

• “the principal appointed day” has the meaning given to that expression in section 3(2B)^f7;

• “salary related contracted-out scheme” means an occupational pension scheme which is contracted-out by virtue of satisfying section 5(2)^f8;

• “scheme” means an occupational pension scheme or a personal pension scheme;

• “section 5(2B) rights” are—

  1. (a)

     rights (other than rights attributable to voluntary contributions within the meaning of section 107) which are attributable to an earner’s service on or after the principal appointed day in employment which is contracted-out in accordance with section 5(2B), and

  2. (b)

     where a transfer payment has been made to a salary related contracted-out scheme in respect of rights mentioned in paragraph (a) or of post-97 protected rights (as defined in regulation 1(2) of the Protected Rights (Transfer Payment) Regulations (Northern Ireland) 1996^f9), any rights arising under that scheme as a consequence of that payment, or, where only part of it was made in respect of such rights, of that part of it;

• “trustees”, in relation to a scheme which is not set up or established under a trust, means the managers of the scheme.

The Interpretation Act (Northern Ireland) 1954^f10 shall apply to these Regulations as it applies to a Measure of the Assembly.

In these Regulations any reference to a numbered section is a reference to the section of the 1993 Act bearing that number.

A transfer or transfer payment from an occupational pension scheme of, or in respect of, the accrued rights of an earner to guaranteed minimum pensions may be made in accordance with whichever of regulations 3 to 6 is applicable and no such transfer or transfer payment may otherwise be made from such a scheme.

A transfer or transfer payment from an appropriate policy of, or in respect of, the accrued rights of an earner to guaranteed minimum pensions which are appropriately secured may be made in accordance with whichever of regulations 3, 5 or 6 is applicable and no such transfer or transfer payment may otherwise be made from such a policy.

A transfer of liability for the payment of guaranteed minimum pensions to, or in respect of, any person who has become entitled to them may be made from an occupational pension scheme in accordance with whichever of regulations 3 or 4 is applicable and no such transfer may otherwise be made.

In regulations 3 to 6 “transfer” means a transfer, of accrued rights or liability, such as is described in this regulation and “transfer payment” means a payment in respect of accrued rights such as is described in this regulation.

the earner or person concerned consents in writing;

in the case of a transfer of the accrued rights of an earner—

in the case of a transfer of the accrued rights of an earner who is not in employment which is contracted-out by reference to the receiving scheme, the conditions specified in paragraphs 1 to 4 of Schedule 1 are satisfied, unless the transfer is from an appropriate policy in which case the condition set out in paragraph 5 of Schedule 1 must be satisfied;

in the case of a transfer of the accrued rights of an earner from an appropriate policy, the receiving scheme does not make provision under section 12(2) and (3)^f1 (revaluation of earnings factors for purposes of section 10: early leavers, etc.), or any analogous provision, in relation to the rights transferred where the effect would be to increase them at a different rate from that at which they would have been increased had the transfer not taken place, and

in the case of a transfer of liability for the payment of guaranteed minimum pensions to, or in respect of, a person who has become entitled to them, the transfer is from a scheme and the conditions set out in paragraph 6 of Schedule 1 are satisfied.

the earner consents in writing;

the transfer payment is to a money purchase contracted-out scheme—

the transfer payment is applied so as to provide money purchase benefits under the receiving scheme for, or in respect of, the earner, and

the transfer payment (whether or not it forms part of a larger payment in respect of both guaranteed minimum pensions and other rights) is of an amount at least equal to the cash equivalent of the earner’s accrued rights to guaranteed minimum pensions, as calculated and verified in a manner consistent with regulations made under section 93^f1 (calculation of cash equivalents).

the earner consents in writing;

the trustees of the transferring scheme have taken reasonable steps to satisfy themselves that the earner has emigrated on a permanent basis and has entered employment to which the receiving scheme applies;

the transfer payment (whether or not it forms part of a larger payment in respect of both guaranteed minimum pensions and other rights) is of an amount at least equal to the cash equivalent of the earner’s accrued rights to guaranteed minimum pensions, as calculated and verified in a manner consistent with regulations made under section 93;

the earner has acknowledged in writing that he accepts that the scheme to which the transfer payment is to be made may not be regulated in any way by the law of the United Kingdom and that as a consequence there may be no obligation under that law on the receiving scheme or its trustees or administrators to provide any particular value or benefit in return for the transfer payment, and

the trustees of the transferring scheme have taken reasonable steps to satisfy themselves that the earner has received a statement from the receiving scheme showing the benefits to be awarded in respect of the transfer payment and the conditions (if any) on which these could be forfeited or withheld.

A transfer of liability—

may be made in accordance with arrangements which satisfy paragraph (2) and no such transfer may be made otherwise.

The arrangements referred to in paragraph (1) must result in there being made—

In this regulation and regulations 8 to 11 “transfer payment” means a payment to effect a transfer of liability such as is referred to in paragraph (1).

the earner consents in writing;

the earner—

the transfer payment is applied to provide rights for the earner or person concerned which, had they accrued in the receiving scheme, would be provided in accordance with the rules of the receiving scheme relating to earners who are in employment which is contracted-out in relation to the receiving scheme or have been in employment which was so contracted-out.

the condition set out in regulation 8(c), and

the condition set out in regulation 12(3) of the Occupational Pension Schemes (Preservation of Benefit) Regulations (Northern Ireland) 1991^f1 (requirement for actuarial certificate).

the earner consents in writing;

the transfer payment is to a money purchase contracted-out scheme, the earner—

the transfer payment is applied so as to provide money purchase benefits under the receiving scheme for, or in respect of, the earner.

the earner consents in writing;

the trustees of the transferring scheme have taken reasonable steps to satisfy themselves that the earner has emigrated on a permanent basis and, where the receiving scheme is an occupational pension scheme, that he has entered employment to which the receiving scheme applies;

the earner has acknowledged in writing that he accepts that the scheme or arrangement to which the transfer payment is to be made may not be regulated in any way by the law of the United Kingdom and that as a consequence there may be no obligation under that law on the receiving scheme or arrangement or its trustees or administrators to provide any particular value or benefit in return for the transfer payment, and

the trustees of the transferring scheme have taken reasonable steps to satisfy themselves that the earner has received a statement from the receiving scheme or arrangement showing the benefits to be awarded in respect of the transfer payment and the conditions (if any) on which these could be forfeited or withheld.

where the transfer was of the accrued rights to guaranteed minimum pensions of an earner who was in employment which was contracted-out by reference to the receiving scheme, the modification of section 10(1)^f2 (earner’s guaranteed minimum) specified in paragraph 2 of Schedule 2;

in the case of any other transfer of the accrued rights of an earner to guaranteed minimum pensions, the modifications of sections 4(2)^f3 (meaning of “guaranteed minimum pension”), 16(6) (transfer of accrued rights: meaning of “accrued rights”) and 155^f4 (inalienability of guaranteed minimum pension and protected rights payments) specified in paragraphs 1, 3 and 5 of Schedule 2;

in the case of any transfer of the liability for payment of guaranteed minimum pensions to, or in respect of, a person who had become entitled to them, the modifications of sections 4(2) and 155 specified in paragraphs 1 and 5 of Schedule 2;

in the case of any transfer payment to an overseas scheme in respect of the accrued rights of an earner to guaranteed minimum pensions, the modification of section 42^f5 (effect of entitlement to guaranteed minimum pensions on payment of social security benefits) specified in paragraph 4 of Schedule 2.

where the earner was in employment which was contracted-out by reference to the receiving scheme, the modification of section 10(1) specified in paragraph 2 of Schedule 2;

where the earner was in employment which was not contracted-out by reference to the receiving scheme, the modifications of sections 4(2), 16(6) and 155 specified in paragraphs 5, 6 and 7 of Schedule 2;

in the case of any transfer payment to an overseas scheme, the modification of section 42 specified in paragraph 4 of Schedule 2.

Subject to paragraphs (2) and (3) and to Schedule 4, the regulations specified in column (1) of Schedule 3 are revoked to the extent mentioned in column (3) of Schedule 3.

Where a transfer such as is mentioned in regulation 12 has taken place in accordance with regulation 2 of the 1985 Regulations, then paragraph 6 of Schedule 3 to those Regulations (as in operation immediately before these Regulations came into operation) shall continue to have effect in relation to any state scheme premium which has been paid before the principal appointed day or is payable immediately before that day.

Where an application under section 91^f1 (ways of taking right to cash equivalent) has been made before the principal appointed day, for the purposes of dealing with that application regulations 2 to 11 of these Regulations shall not apply and regulations 1, 2, 2A and 2B of the 1985 Regulations^f2 (as in operation immediately before these Regulations came into operation) shall continue to apply subject to the modifications to the 1985 Regulations set out in Schedule 4.

provide for pensions payable at the rates at which guaranteed minimum pensions would have been payable by the transferring scheme if the transfer had not taken place, and

contain the same provision for commencement and continuation of payment of those pensions and (if any) for commutation, suspension and forfeiture as for guaranteed minimum pensions provided by the receiving scheme in accordance with sections 9^f1 and 13^f2.

his service in contracted-out employment by reference to the transferring scheme had been terminated, but

the transfer had not taken place.

there had never been a provision made, or a provision analogous to one made, or

in the case only of the first transfer of the rights in question, a different provision had been made,

if payable to the person who has become entitled to it, must be the date from which liability for payment is assumed by the receiving scheme, and

if payable to his widow or her widower, must be the same as it would have been under the provisions of the transferring scheme,

after “sections 9 and 13” there were inserted “or in compliance with the condition set out in paragraph 1 or 6 of Schedule 1 to the Contracting-out (Transfer and Transfer Payment) Regulations (Northern Ireland) 1996 (or, as the case may be, in paragraph 1 or 5 of Schedule 2 to the Contracting-out (Transfer) Regulations (Northern Ireland) 1985)”;

at the end there were added “or of that condition”.

after “sections 9 and 13” there were inserted “or in compliance with the condition set out in paragraph 5 of Schedule 1 to the Contracting-out (Transfer and Transfer Payment) Regulations (Northern Ireland) 1996 (or, as the case may be, in regulation 2A(4) of the Contracting-out (Transfer) Regulations (Northern Ireland) 1985)”, and

at the end there were added “or of that condition”.