Regulation 5 Provision for lump sum death benefitI1
Scotland
This regulation shall apply where a person elects under regulation 4(1)(c) to pay regular contributions to provide for a lump sum death benefit.
A person who elects to pay regular contributions to provide for a lump sum death benefit may at the same time, or at any time while paying those contributions, elect that if the lump sum becomes payable, the whole or part of it (“the pension element”) shall be applied by the Scottish Ministers for the purchase of an annuity policy from an authorised provider to provide a pension or pensions for one or more dependants.
The notice of an election under paragraph (2) is to specify—
for whom a pension is, or pensions are, to be provided;
if more than one pension is to be provided, the proportion of the pension element that is to be applied to the purchase of each of them; and
in respect of every pension to be provided, whether the annual rate of the pension—
is to be fixed,
is to vary in accordance with the Index,
is to increase yearly by a specified percentage,
where the authorised provider offers pensions which vary in accordance with an index of prices other than the Index, is to vary in accordance with the index specified in the notice, or
is to be an Investment Linked Pension.
A person (P) who has continued to pay regular contributions up to P’s AVC policy age, but does not then cease to be in pensionable service, may elect to pay regular contributions up to P’s first birthday after P reached AVC policy age to provide for a lump sum death benefit unless the authorised provider determines that provision under this regulation shall continue without the need for the authorised provider to verify P’s entitlement to that provision; and, so long as P has not ceased to be in pensionable service, further elections may be made annually in respect of years commencing on P’s first birthday after P reached AVC policy age and subsequent birthdays.
An election made by P under paragraph (4) lapses if P retires, ceases to be in pensionable service during the year in question or ceases to pay contributions pursuant to an election under regulation 4(1).
An election under regulation 4(1)(c) or an election under paragraph (4) shall have effect for the purpose of the entitlement to benefit from the date when the election is accepted by the Scottish Ministers.