Explanatory note

These Regulations amend the main pension scheme and the AVC scheme (constituted by Regulations under the Parliamentary and other Pensions Act 1987) for Members of the House of Commons and certain office holders specified in that Act. The effect of the amendments is to enable pension sharing orders and similar provisions to be implemented in respect of those schemes pursuant to the Welfare Reform and Pensions Act 1999 (the Act).

Schedules 1 and 2 of these Regulations amend the main scheme. Schedule 3 amends the AVC scheme.

Provision is made to enable each scheme to take account of pension credits and pension debits. A pension credit is the amount awarded to an ex-spouse of a member of the scheme and represents a percentage of the member’s pension benefits (including future pension benefits) following a pension sharing order or equivalent. Pension debits represent the amount by which a member’s pension benefits, including future benefits, are reduced following a pension sharing order or equivalent.

Ex-spouses of members of either scheme who are awarded pension credits will be entitled to a cash equivalent transfer payment equal to the pension credit. This payment must be transferred to another scheme or arrangement provided that the scheme or arrangement is able and willing to accept the transfer payment and otherwise meets the requirements of the Act. The ex-spouse may nominate a scheme or arrangement to accept the transfer. If the Trustees are not able to make a transfer payment to the scheme or arrangement of the ex-spouse’s choice they may make a payment to another scheme or arrangement of their choosing.

If the ex-spouse dies before the Trustees have made such a payment, a lump sum representing 25% of the cash equivalent of the pension credit may, at the Trustees' discretion, be paid to a person nominated by the deceased or to the deceased’s dependants. If no such lump sum is paid at the Trustees' discretion, a lump sum representing 25% of the cash equivalent of the pension credit must be paid to the deceased’s personal representatives. In any case where a lump sum has been paid the Trustees may at their discretion use the balance to take out an insurance policy or annuity contract on behalf of any dependants. Any remaining funds must be retained by the Parliamentary Contributory Pension Fund.

Under these Regulations a member of either scheme subject to a pension debit following a pension sharing order or equivalent will have his benefits reduced under that scheme in accordance with section 31 of the Act. Benefits payable to the member’s dependants are also reduced to take account of the reduced pension.

These Regulations have effect from 1st December 2000. Section 2(4) of the Parliamentary and other Pensions Act 1987 provides that regulations made under that section may have retrospective effect.