OpenLegislation

Section 23 Test schemeF1I1C1C2

England, Wales and Scotland

(1)

A test scheme is an occupational pension scheme which satisfies—

(a)

the requirement in subsection (2),

(b)

the requirement in subsection (4) or requirements prescribed under subsection (6) (as appropriate), and

(c)

any further requirements that are prescribed.

(2)

The scheme must either—

(a)

provide for a member to be entitled to a pension commencing at the appropriate age and continuing for life, or

(b)

provide for a sum of money to be made available for the provision of benefits to a member commencing at the appropriate age and continuing for life.

(3)

The appropriate age is 65 or any higher age prescribed.

(4)

In the case of a scheme that provides entitlement to a pension as mentioned in subsection (2)(a), the annual rate of the pension at the appropriate age must be—

(a)

1/120th of average qualifying earnings in the last three tax years preceding the end of pensionable service,

multiplied by

(b)

the number of years of pensionable service, up to a maximum of 40.

(5)

Section 13(1) (qualifying earnings) applies for the purposes of subsection (4) as if the reference to a pay reference period were a reference to a tax year.

(6)

In the case of a scheme that provides for a sum of money to be made available as mentioned in subsection (2)(b), regulations must prescribe requirements relating to that sum.

Annotations

Textual amendments

F1

S. 23 substituted (3.11.2011 for specified purposes otherwise 30.6.2012) by Pensions Act 2011 (c. 19), ss. 11(2), 38(1)(4); S.I. 2012/1681, art. 2(1)(c)

Modifications

C1

S. 23 modified (1.7.2012) by The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations (S.I. 2010/772), regs. 1(1) (as amended by S.I. 2012/1257, reg. 3(b)) and 41

C2

S. 23 modified (1.7.2012) by The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations (S.I. 2010/772), regs. 1(1) (as amended by S.I. 2012/1257, reg. 3(b)) and 42

Commencement

I1

S. 23 (as originally enacted) in force for certain purposes at Royal Assent see s. 149(2)(k)

Notes on Part 1

Modifications

C1

Pt. 1 applied (with modifications) (temp. 1.7.2012 to 30.6.2020) by The Automatic Enrolment (Offshore Employment) Order 2012 (S.I. 2012/1388), art. 2 (with saving in art. 5)