Explanatory note

Section 10 of the Social Security Act 1986 (c. 50) makes amendments to Schedule 16 to the Social Security Act 1973 so that members of occupational pension schemes have the benefit of the “preservation requirements”set out in the latter Act after 2, instead of 5, years' qualifying service.

Most of the provisions of these Regulations make amendments of other regulations which are consequential upon section 10, and regulation 2(2) also removes, from the regulation it amends, some wording which refers to the earner's being under the age of 26.

Regulation 3(2) and (3) makes amendments so that where a member's service in employment to which a scheme applies is terminated when he has at least 2, but less than 5, years' qualifying service, and other specified conditions are satisfied, benefits under an insurance policy or annuity contract different from those required to constitute short service benefit (as defined in Schedule 16 to the Social Security Act 1973) may be substituted for his short service benefit without his consent.

Regulation 4(4) makes amendments so that where a member dies when he has at least 2, but less than 5, years' qualifying service, and other specified conditions are satisfied, the trustees or managers of the scheme may be discharged of their liability to provide for the member's widow or widower a benefit which is or includes a guaranteed minimum pension by substituting benefits under an insurance policy or annuity contract.

Regulation 6 enables the Occupational Pensions Board to authorise the modification of an occupational pension scheme to enable it (if its rules would not otherwise allow it) to take advantage of the provisions of regulations 3(2) and (3) and 4(4).

The report of the Occupational Pensions Board on the draft of these Regulations, dated 3rd February 1987, is contained in Command Paper (Cmnd 165) published by Her Majesty's Stationery Office.