Explanatory note

These Regulations are made under provisions of the Pensions Act 1995 which relate to the restoration of members’ State scheme rights in cases where an occupational pension scheme winds up insolvent.

Regulation 1 provides for citation, commencement and interpretation.

Regulations 2 to 4 provide for the determination by the Secretary of State of the amount required for restoring a member’s State scheme rights. Regulation 2 provides for this to be the amount of a contributions equivalent premium where such a premium is payable. Regulations 3 and 4 provide the method of calculation in other cases. This requires the application of actuarial tables to weekly amounts representing the state benefits which the member would have foregone by reason of being contracted-out and adjustment of the amount obtained to reflect prevailing market conditions.

Regulation 5 amends the Occupational Pension Schemes (Contracting-out) Regulations 1996 by providing for persons with a right to a widow’s or widower’s pension under an occupational pension scheme to be regarded as members for the purpose of the provisions relating to restoration of State scheme rights.

Schedule 1 sets out the actuarial factors to be applied for the purposes of regulation 3.

Schedule 2 sets out a table for deriving an index number for the purposes of the market value adjustment in regulation 4.

An assessment of the compliance cost to business of the measures arising from the Pensions Act 1995, including these Regulations, has been placed in the libraries of both Houses of Parliament. Copies can be obtained by post from the Department of Social Security, The Adelphi, 1-11 John Adam Street, London WC2N 6HT.