Pensions (No. 2) Act (Northern Ireland) 2008

PART 1 — REVALUATION OF ACCRUED PENSION BENEFITS

Amendments to Schedule 2 to the Pension Schemes (Northern Ireland) Act 1993

1

This Part makes amendments to Schedule 2 to the Pension Schemes Act (methods of revaluing accrued pension benefits).

2

In paragraph 1 (the final salary method), for sub-paragraphs (1) to (3) substitute—

(1) The final salary method is to add to the amount that would be payable but for Chapter 2 of Part 4, or regulations made under it, the additional amount specified in sub-paragraph (1A), (1B), (1C) or (1D) (whichever applies). (1A) Where— (a) the termination of pensionable service occurs before 1st January 1991, and (b) the whole of the member's pensionable service falls on or after 1st January 1985, the additional amount is the appropriate higher revaluation percentage of the accrued benefit. (1B) Where— (a) the termination of pensionable service occurs before 1st January 1991, and (b) some of the member's pensionable service falls before 1st January 1985, the additional amount is such proportion of the appropriate higher revaluation percentage of the accrued benefit as the member's pensionable service falling on or after 1st January 1985 bears to the member's total pensionable service. (1C) Where the termination of pensionable service occurs— (a) on or after 1st January 1991, but (b) before the day on which section 80 of the Pensions (No. 2) Act (Northern Ireland) 2008 comes into operation (“the Pensions Act commencement day”), the additional amount is the appropriate higher revaluation percentage of the accrued benefit. (1D) Where the termination of pensionable service occurs on or after the Pensions Act commencement day, the additional amount is the aggregate of— (a) the appropriate higher revaluation percentage of so much of the accrued benefit as is attributable to the member's pensionable service falling before the Pensions Act commencement day, and (b) the appropriate lower revaluation percentage of so much of the accrued benefit as is attributable to the member's pensionable service falling on or after that day. (1E) In this paragraph “the accrued benefit” means the amount of the pension or other benefit which on the termination date has accrued to the member or to any other person in respect of the member (excluding any part of that amount which consists of— (a) the member's guaranteed minimum, or (b) the guaranteed minimum of the member's widow, widower or surviving civil partner). (2) For the purposes of this paragraph, a member's pensionable service includes any notional pensionable service which is credited to the member by the scheme (“notional service”). But notional service shall not be taken into account in determining which of sub-paragraphs (1A), (1B), (1C) and (1D) applies. (3) For the purposes of determining the additional amount where sub-paragraph (1B) applies, any notional service shall be taken to have ended immediately before the member's actual pensionable service began. (3A) For the purposes of determining the additional amount where sub-paragraph (1D) applies, any notional service shall be treated as falling on or after the Pensions Act commencement day only if, or to the extent that, it is so treated for the purposes of the scheme.

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• (1) Paragraph 2 (the revaluation percentage and the appropriate revaluation percentage) is amended as follows.

• (2) In sub-paragraph (1)—

• (a) for “a revaluation percentage” substitute “ a higher revaluation percentage and a lower revaluation percentage ”;

• (b) for “a corresponding revaluation percentage” substitute “ a corresponding higher revaluation percentage and a corresponding lower revaluation percentage ”.

• (3) For sub-paragraph (3) substitute—

(3) In paragraph 1— - “the appropriate higher revaluation percentage” means the higher revaluation percentage specified in the last calendar year before the date on which the member attains normal pension age as the higher revaluation percentage for the revaluation period which is of the same length as the number of complete years in the pre-pension period; - “the appropriate lower revaluation percentage” has a corresponding meaning.

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PART 2 — REVALUATION OF ACCRUED AMOUNTS ETC.

Amendments to Schedule 6 to the 2005 Order

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This Part makes amendments to Schedule 6 to the 2005 Order (pension compensation provisions).

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• (1) Paragraph 12 (active members who have not attained normal pension age at assessment date: the revaluation amount for the revaluation period) is amended as follows.

• (2) In sub-paragraph (3), for paragraph (b) substitute—

(b) in any other case, the aggregate of— (i) the higher revaluation percentage of so much of the accrued amount as is attributable to the active member's pensionable service falling before the day on which section 80 of the Pensions (No. 2) Act (Northern Ireland) 2008 comes into operation (“the Pensions Act commencement day”), and (ii) the lower revaluation percentage of so much of the accrued amount as is attributable to the active member's pensionable service falling on or after that day.

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• (3) After sub-paragraph (3) insert—

(3A) For the purposes of sub-paragraph (3)(b)— (a) any service within paragraph 36(4)(b) (notional pensionable service) is to be treated as falling on or after the Pensions Act commencement day if, or to the extent that, it is so treated for the purposes of the scheme; (b) regulations may make provision in relation to cases where it is unclear whether or not any particular pensionable service (either actual or notional) falls, or is to be treated as falling, on or after that day.

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• (4) For sub-paragraphs (4) and (5) substitute—

(4) In sub-paragraph (3)(b)— - “the higher revaluation percentage” means the lesser of— 1. the percentage increase referred to in paragraph (a) of the definition of “the higher revaluation percentage” in paragraph 12(4) of Schedule 7 to the Pensions Act 2004 (“the inflation percentage”), and 2. the higher maximum revaluation rate; - “the lower revaluation percentage” means the lesser of— 1. the inflation percentage, and 2. the lower maximum revaluation rate. (5) For the purposes of sub-paragraph (4)— - “the higher maximum revaluation rate”, in relation to the revaluation period, is— 1. if that period is a period of 12 months, 5%, and 2. in any other case, the percentage referred to in paragraph (b) of the definition of “the higher maximum revaluation rate” in paragraph 12(5) of Schedule 7 to the Pensions Act 2004; - “the lower maximum revaluation rate”, in relation to the revaluation period, is— 1. if that period is a period of 12 months, 2.5%, and 2. in any other case, the percentage referred to in paragraph (b) of the definition of “the lower maximum revaluation rate” in paragraph 12(5) of Schedule 7 to the Pensions Act 2004. This is subject to paragraph 29 (power of Board to determine maximum revaluation rates etc.).

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• (1) Paragraph 17 (deferred members who have not attained normal pension age at assessment date: the revaluation amount for the second revaluation period) is amended as follows.

• (2) In sub-paragraph (3), for paragraph (b) substitute—

(b) in any other case, the aggregate of— (i) the higher revaluation percentage of so much of the relevant amount as is attributable to the deferred member's pensionable service falling before the day on which section 80 of the Pensions (No. 2) Act (Northern Ireland) 2008 comes into operation (“the Pensions Act commencement day”), and (ii) the lower revaluation percentage of so much of the relevant amount as is attributable to the deferred member's pensionable service falling on or after that day.

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• (3) After sub-paragraph (3) insert—

(3A) For the purposes of sub-paragraph (3)(b)— (a) any service within paragraph 36(4)(b) (notional pensionable service) is to be treated as falling on or after the Pensions Act commencement day if, or to the extent that, it is so treated for the purposes of the scheme; (b) regulations may make provision in relation to cases where it is unclear whether or not any particular pensionable service (either actual or notional) falls, or is to be treated as falling, on or after that day.

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• (4) For sub-paragraphs (4) and (5) substitute—

(4) In sub-paragraph (3)— - “the higher revaluation percentage” means the lesser of— 1. the percentage increase referred to in paragraph (a) of the definition of “the higher revaluation percentage” in paragraph 17(4) of Schedule 7 to the Pensions Act 2004 (“the inflation percentage”), and 2. the higher maximum revaluation rate; - “the lower revaluation percentage” means the lesser of— 1. the inflation percentage, and 2. the lower maximum revaluation rate; - “the relevant amount” means the aggregate of— 1. the accrued amount, and 2. the revaluation amount for the first revaluation period (see paragraph 16). (5) For the purposes of sub-paragraph (3)— - “the higher maximum revaluation rate”, in relation to the second revaluation period, is— 1. if that period is a period of 12 months, 5%, and 2. in any other case, the percentage referred to in paragraph (b) of the definition of “the higher maximum revaluation rate” in paragraph 17(5) of Schedule 7 to the Pensions Act 2004; - “the lower maximum revaluation rate”, in relation to the second revaluation period, is— 1. if that period is a period of 12 months, 2.5%, and 2. in any other case, the percentage referred to in paragraph (b) of the definition of “the lower maximum revaluation rate” in paragraph 17(5) of Schedule 7 to the Pensions Act 2004. This is subject to paragraph 29 (power of Board to determine maximum revaluation rates etc.).

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In paragraph 29 (Board's powers to alter rates of revaluation etc.), for sub-paragraph (1) substitute—

(1) The Board may determine what is to be the higher maximum revaluation rate or the lower maximum revaluation rate for the purposes of paragraphs 12(4) and 17(4), and where it does so the relevant definitions in paragraphs 12(5) and 17(5) do not apply.

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PART 3 — CONSEQUENTIAL AMENDMENTS

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In Article 51ZA of the 1995 Order (meaning of “the appropriate percentage”)—

• (a) in paragraph (a), for “revaluation percentage” substitute “ higher revaluation percentage ”;

• (b) for paragraph (b) substitute—

(b) in the case of a category Y pension, means the lower revaluation percentage for that period.

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9

In Article 54(3) of the 1995 Order (Articles 51 to 53: supplementary)—

• (a) after the definition of “the commencement day” insert—

“higher revaluation percentage” and “lower revaluation percentage” mean the higher revaluation percentage and the lower revaluation percentage specified for a revaluation period by a revaluation order;

;

• (b) omit the definition of “revaluation percentage”.

SCHEDULE 2

After Schedule 4B to the Contributions and Benefits Act insert—

SCHEDULE 3

The Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)

1

The Contributions and Benefits Act is amended as follows.

2

In section 21(5A)(c) (contribution conditions) after “5(2)(b) and (4)(a)” insert “ , 5A(3)(a) ”.

3

In section 39(1) (rate of widowed mother's allowance and widow's pension) for “46(2)” substitute “ 46 ”.

4

• (1) Section 39C (rate of widowed parent's allowance and bereavement allowance) is amended as follows.

• (2) In subsection (1)—

• (a) for “45” substitute “ 45AA ”;

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) for “46(2) and (4)” substitute “ 46 ”.

• (3) In subsections (3) and (4)—

• (a) for “45” substitute “ 45AA ”;

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

• (1) After section 45 (additional pension in Category A retirement pension) insert—

(45AA) (1) For the purposes of calculating additional pension under sections 44 and 45 where, in the case of any relevant year, working families' tax credit is paid in respect of any employed earner, or disabled person's tax credit is paid to any employed earner, section 44(6)(a)(i) shall have effect as if— (a) where that person had earnings of not less than the qualifying earnings factor for that year, being earnings upon which primary Class 1 contributions were paid or treated as paid (“qualifying earnings”) in respect of that year, the amount of those qualifying earnings were increased by the aggregate amount (“AG”) of working families' tax credit, or, as the case may be, disabled person's tax credit paid in respect of that year, and (b) in any other case, that person had qualifying earnings in respect of that year and the amount of those qualifying earnings were equal to AG plus the qualifying earnings factor for that year. (2) The reference in subsection (1) to the person in respect of whom working families' tax credit is paid— (a) where it is paid to one of a couple, is a reference to the prescribed member of the couple, and (b) in any other case, is a reference to the person to whom it is paid. (3) A person's qualifying earnings in respect of any year cannot be treated by virtue of subsection (1) as exceeding the upper earnings limit for that year multiplied by 53. (4) Subsection (1) does not apply to any woman who has made, or is treated as having made, an election under regulations under section 19(4), which has not been revoked, that her liability in respect of primary Class 1 contributions shall be at a reduced rate. (5) In this section— - “couple” has the same meaning as in Part 7 (see section 133); - “relevant year” has the same meaning as in section 44.

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• (2) Sub-paragraph (1) together with paragraphs 4(2)(a) and (3)(a), 9(2)(a) and (3)(a) and 11 (which make amendments consequential on sub-paragraph (1)) are referred to in the following provisions of this paragraph as “the relevant provisions”.

• (3) Subject to sub-paragraphs (4) and (5), the relevant provisions apply to a person (“the pensioner”) who attains pensionable age after 5th April 1999 and, in relation to such a person—

• (a) have effect for 1995–96 and subsequent tax years, and

• (b) are deemed so to have had effect (with the necessary modifications) during the period—

• (i) beginning with 6th April 2003, and

• (ii) ending with the coming into operation of this paragraph.

• (4) Where the pensioner is a woman, the relevant provisions have effect in the case of additional pension falling to be calculated under sections 44 and 45 of the Contributions and Benefits Act by virtue of section 39 of that Act (widowed mother's allowance and widow's pension), including Category B retirement pension payable under section 48B(4), if her husband—

• (a) dies after 5th April 1999, and

• (b) has not attained pensionable age on or before that date.

• (5) The relevant provisions have effect, where additional pension falls to be calculated under sections 44 and 45 of the Contributions and Benefits Act as applied by section 48A or 48B(2) of that Act (other Category B retirement pension) if—

• (a) the pensioner attains pensionable age after 5th April 1999, and

• (b) the pensioner's spouse has not attained pensionable age on or before that date.

6

• (1) Section 46 (modifications of section 45 for calculating the additional pension in certain benefits) is amended as follows.

• (2) In subsection (2) for “, 48B(2) or 48BB(5)” substitute “ or 48B(2) ”.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

In section 48A(4) (Category B retirement pension for married person)—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) for “46(2)” substitute “ 46 ”.

8

In section 48B(2) (Category B retirement pension for widows and widowers)—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) for “46(2)” substitute “ 46 ”.

9

• (1) Section 48BB (Category B retirement pension: entitlement by reference to benefits under section 39A or 39B) is amended as follows.

• (2) In subsection (5)—

• (a) for “45” substitute “ 45AA ”;

• (b) after “45AA” (inserted by paragraph (a)) insert “ and 45B ”;

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) for “46(3)” substitute “ 46 ”.

• (3) In subsection (6)—

• (a) for “45” substitute “ 45AA ”;

• (b) after “45AA” (inserted by paragraph (a)) insert “ and 45B ”.

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11

In section 51(2) and (3) (Category B retirement pension for widowers) for “45” substitute “ 45AA ”.

12

• (1) Schedule 4B (additional pension: accrual rates for purposes of section 45(2)(d)) is amended as follows.

• (2) In paragraph 2 (application of Part 2 of Schedule)—

• (a) after “if” insert

— (a)

;

• (b) after paragraph (a) (created by virtue of paragraph (a) above) insert

and (b) there is a surplus in the pensioner's earnings factor for the year.

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• (3) In paragraph 3 (appropriate amount for year)—

• (a) in paragraph (a), for the words from “there is” to “which” substitute “ the pensioner's earnings factor for the year ”;

• (b) in paragraph (b), for “there is such a surplus which” substitute “ that earnings factor ”.

• (4) In paragraph 5(a) for “surplus” substitute “ earnings factor ”.

• (5) In paragraph 6 (application of Part 3 of Schedule)—

• (a) after “if” insert

— (a)

;

• (b) after paragraph (a) (created by virtue of paragraph (a) above) insert

and (b) there would be a surplus in the pensioner's earnings factor for the year if section 44A of the Pensions Act did not apply in relation to any tax week falling in the year.

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• (6) In paragraph 8(1) (calculation of amount A: assumed surplus not exceeding LET), for the words from “there” to “which” substitute “ the pensioner's assumed earnings factor for the year ”; and, accordingly, in the heading before paragraph 8 for “surplus” substitute “ earnings factor ”.

• (7) In paragraph 9 (calculation of amount A: assumed surplus exceeding LET)—

• (a) in sub-paragraph (1), for the words from “there” to “which” substitute “ the pensioner's assumed earnings factor for the year ”;

• (b) in sub-paragraph (2)(a), for “assumed surplus” substitute “ assumed earnings factor ”,

and, accordingly, in the heading before paragraph 9 for “surplus” substitute “ earnings factor ”.

• (8) In paragraph 10(1)(a) (amount B), for “assumed surplus” substitute “ pensioner's assumed earnings factor ”.

• (9) In paragraph 12 (interpretation)—

• (a) omit the definition of “assumed surplus”;

• (b) before the definition of “the QEF” insert—

“the pensioner's assumed earnings factor”, in relation to a year, means the earnings factor that the pensioner would have for the year if section 44A(1) of the Pensions Act did not apply in relation to any tax week falling in the year;

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The Social Security Administration (Northern Ireland) Act 1992 (c. 8)

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The Pension Schemes (Northern Ireland) Act 1993 (c. 49)

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SCHEDULE 4

PART 1 — INTRODUCTORY

Introductory

1

This Schedule applies for the purposes of determining the compensation payable to or in respect of a person entitled to compensation on the discharge of a pension compensation credit in accordance with this Chapter.

Interpretation

2

In this Schedule—

• “the initial annual rate of compensation” is the amount determined by the Board under section 94(4);

• the “pension compensation age” of the transferee is the age determined in accordance with paragraph 3.

Pension compensation age

3

• (1) This paragraph applies for the purpose of determining the transferee's pension compensation age.

• (2) Sub-paragraphs (3) and (4) apply where the transferor's PPF compensation, or any of it, is determined under Schedule 6 to the 2005 Order.

• (3) Where the transferor's right to PPF compensation arises by virtue of his or her status as a member of a pension scheme for which the Board assumed responsibility in accordance with Chapter 3 of Part 3 of that Order, the transferee's pension compensation age is the same as—

• (a) the normal pension age of the transferor, or

• (b) where the transferor was a pension credit member, the normal benefit age of the transferor.

• (4) Where the transferor's right to PPF compensation arises by virtue of his or her status as a person connected with a member of a scheme for which the Board assumed responsibility in accordance with Chapter 3 of Part 3 of that Order, the transferee's pension compensation age is the same as—

• (a) the normal pension age of that member, or

• (b) where that member was a pension credit member, the normal benefit age of that member.

• (5) Sub-paragraph (6) applies where the transferor's PPF compensation is determined only under this Schedule.

• (6) The transferee's pension compensation age is the same as the pension compensation age of the transferor.

• (7) In this paragraph, “normal benefit age”, “normal pension age” and “pension credit member” have the same meanings as in Schedule 6 to the 2005 Order.

PART 2 — TRANSFEREE ATTAINS PENSION COMPENSATION AGE BEFORE OR ON TRANSFER DAY

Compensation payable to transferee

4

• (1) Compensation is payable in accordance with this paragraph where the transferee attains pension compensation age before or on the transfer day.

• (2) The transferee is entitled to periodic compensation commencing on the transfer day and continuing for life.

• (3) The annual rate of the periodic compensation is the aggregate of—

• (a) the initial annual rate of compensation, ...

• (aa) if the commencement of periodic compensation under this paragraph has been postponed for any period by virtue of paragraph 16A, the amount of the actuarial increase under that paragraph, and

• (b) any increases under paragraph 17 (annual increases in periodic compensation).

• (4) This paragraph is subject to paragraph 16A (postponement of compensation) and paragraph 18 (compensation cap).

Compensation payable to widow, widower or surviving civil partner

5

• (1) This paragraph applies where—

• (a) the transferee dies after liability in respect of the pension compensation credit has been discharged under section 94,

• (b) the transferee was before death entitled under paragraph 4 to periodic compensation commencing on the transfer day, and

• (c) the transferee is survived by a widow, widower or surviving civil partner (“the surviving partner”).

• (2) Subject to sub-paragraph (4), the surviving partner is entitled to periodic compensation commencing on the day following the transferee's death and continuing for life.

• (3) The annual rate of the periodic compensation at any time is half of the annual rate of the periodic compensation (including any actuarial increase under paragraph 16A and any increases under paragraph 17) to which the transferee would at that time have been entitled under paragraph 4 had the transferee not died.

• (3A) If, on the day the transferee (“T”) died, commencement of T's periodic compensation under paragraph 4 was postponed by virtue of paragraph 16A, assume for the purposes of sub-paragraph (3) that the periodic compensation commenced immediately before the date of T's death.

• (4) The surviving partner is not entitled to periodic compensation under this paragraph in such circumstances as may be prescribed.

PART 3 — TRANSFEREE ATTAINS PENSION COMPENSATION AGE AFTER TRANSFER DAY

Compensation payable to transferee

6

• (1) Compensation is payable in accordance with this paragraph where the transferee attains pension compensation age after the transfer day.

• (2) The transferee is entitled to periodic compensation commencing at that age and continuing for life.

• (3) The annual rate of the periodic compensation is the aggregate of—

• (a) the initial annual rate of compensation,

• (b) the revaluation amount (see paragraph 8), ...

• (ba) if the commencement of periodic compensation under this paragraph has been postponed for any period by virtue of paragraph 16A, the amount of the actuarial increase under that paragraph, and

• (c) any increases under paragraph 17 (annual increases in periodic compensation).

• (4) This paragraph is subject to—

• paragraph 9 (commutation),

• paragraph 10 (early payment),

• ...

• paragraph 15 (terminal illness lump sum), ...

• paragraph 16A (postponement of compensation), and

• paragraph 18 (compensation cap).

Compensation payable to widower, widow or surviving civil partner

7

• (1) This paragraph applies where—

• (a) the transferee dies after liability in respect of the pension compensation credit has been discharged under section 94,

• (b) the transferee—

• (i) was, before death, entitled under paragraph 6 to periodic compensation commencing at pension compensation age, or

• (ii) would have become so entitled had he or she not died, and

• (c) the transferee is survived by a widow, widower or surviving civil partner (“the surviving partner”).

• (2) Subject to sub-paragraph (4), the surviving partner is entitled to periodic compensation commencing on the day following the transferee's death and continuing for life.

• (3) The annual rate of the periodic compensation at any time is—

• (a) where the transferee dies after attaining pension compensation age, half of the annual rate of the periodic compensation (including the revaluation amount (see paragraph 8) , any actuarial increase under paragraph 16A and any increases under paragraph 17) to which the transferee would at that time have been entitled under paragraph 6 had the transferee not died;

• (b) where the transferee dies before attaining pension compensation age, half of the annual rate of the periodic compensation (including the revaluation amount (see paragraph 8) and any increases under paragraph 17) to which the transferee would at that time have been entitled under paragraph 6 if—

• (i) the transferee's pension compensation age had been the transferee's actual age immediately before the date of the transferee's death, and

• (ii) the transferee had not died.

(assuming commencement of the periodic compensation was not postponed by virtue of paragraph 16A).

• (3A) For the purposes of sub-paragraph (3)(a), if on the day the transferee (“T”) died commencement of T's periodic compensation under paragraph 6 was postponed by virtue of paragraph 16A, assume that the periodic compensation commenced immediately before the date of T's death.

• (4) For the purposes of this paragraph, a person's entitlement under paragraph 6 is to be determined disregarding paragraph 15(1)(b) (successful applicant for terminal illness lump sum loses entitlement to periodic compensation).

• (5) The surviving partner is not entitled to periodic compensation under this paragraph in such circumstances as may be prescribed.

Revaluation

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• (1) This paragraph applies for the purpose of calculating the revaluation amount mentioned in paragraph 6(3)(b).

• (2) In this paragraph “the revaluation period” means the period—

• (a) beginning with the transfer day, and

• (b) ending with the day before the transferee attains pension compensation age.

• (3) The revaluation amount is—

• (a) in a case in which the revaluation period is less than a month, nil;

• (b) in any other case, the revaluation percentage of the initial annual rate of compensation.

• (4) For the purposes of sub-paragraph (3)(b) “the revaluation percentage” means the lesser of—

• (a) the percentage increase referred to in paragraph 8(4)(a) of Schedule 5 to the Pensions Act 2008, and

• (b) the maximum revaluation rate.

• (5) For the purposes of sub-paragraph (4)(b) “the maximum revaluation rate” is—

• (a) in a case in which the revaluation period is a period of 12 months, 2.5%, and

• (b) in any other case, the percentage referred to in paragraph 8(5)(b) of Schedule 5 to the Pensions Act 2008.

This is subject to paragraph 20 (power of Board to alter rates of revaluation and indexation).

Commutation of periodic compensation

9

• (1) A transferee who is entitled to periodic compensation under paragraph 6 may, in prescribed circumstances, opt to commute for a lump sum a portion of the periodic compensation with effect from the time it commences .

• (2) Except in such circumstances as may be prescribed, the portion commuted under sub-paragraph (1) must not exceed 25%.

• (3) Any reduction required to be made by virtue of paragraph 18 (compensation cap) must be made before determining the amount of the transferee's periodic compensation which may be commuted under this paragraph.

• (4) Where the transferee opts to commute any part of his or her periodic compensation under this paragraph, the lump sum payable under sub-paragraph (1) is the actuarial equivalent of the commuted portion of the periodic compensation calculated from tables designated for this purpose by the Board.

• (5) The Board must publish in such manner as it considers appropriate the tables designated by it for the purposes of sub-paragraph (4).

• (6) Regulations may prescribe the manner in which an option to commute periodic compensation under this paragraph may be exercised.

• (7) The Department may, by order, amend sub-paragraph (2) so as to substitute a different percentage for that for the time being specified there.

Early payment of compensation

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• (1) Regulations may prescribe circumstances in which, and conditions subject to which, the transferee may become entitled to periodic compensation under paragraph 6 before attaining pension compensation age.

• (2) The Board must determine the amount of the actuarial reduction to be applied to compensation to which the transferee is entitled by virtue of this paragraph.

• (3) Where, by virtue of this paragraph, periodic compensation is payable to the transferee before he or she attains pension compensation age, paragraph 8(2)(b) (end of revaluation period) applies as if the reference to the day before the transferee attains pension compensation age were to the day on which compensation is payable by virtue of this paragraph.

Deferral of compensation

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Terminal illness lump sum: eligibility

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• (1) This paragraph applies where all of the following conditions are met—

• (a) the transferee is terminally ill;

• (b) if the transferee lived to the relevant age, he or she would become entitled on attaining that age to compensation under paragraph 6 in respect of the pension compensation credit;

• (c) the transferee has not yet become entitled to any compensation under this Chapter in respect of the pension compensation credit;

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) The transferee may make an application to the Board to commute the future entitlement mentioned in sub-paragraph (1)(b) for a lump sum (“a terminal illness lump sum”) payable on the granting of the application.

• (3) For the purposes of this Chapter a person is “terminally ill” at any time if at that time the person suffers from a progressive disease and the person's death in consequence of that disease can reasonably be expected within six months.

• (4) In this paragraph—

• ...

• “relevant age”, in relation to a person, means—in relation to compensation entitlement to which has been accelerated ... under regulations under paragraph 10 ..., the age at which the person becomes entitled to the compensation in accordance with the regulations;in relation to compensation entitlement to which has not been so accelerated ..., pension compensation age.

• (5) Sub-paragraph (6) applies where the commencement of a person's periodic compensation under paragraph 6 is postponed by virtue of paragraph 16A.

• (6) This paragraph applies as if—

• (a) the person first becomes entitled to compensation under paragraph 6 immediately after the period of postponement ends, and

• (b) in sub-paragraph (1)(b), for “if the transferee lived to the relevant age, he or she would become entitled on attaining that age” there were substituted “ if the period of postponement ended, the transferee would become entitled ”.

Terminal illness lump sum: application and evidence

13

An application for a terminal illness lump sum—

• (a) must be made in writing, either on a form approved by the Board for the purposes of this paragraph or in such other manner as the Board may accept as sufficient in the circumstances of the case;

• (b) must be accompanied by such information as the Board may require for the purpose of determining the application.

Terminal illness lump sum: determination of application

14

• (1) The Board must determine an application for a terminal illness lump sum in accordance with this paragraph.

• (2) The Board must—

• (a) if satisfied that the conditions in paragraph 12(1) are met, grant the application;

• (b) in any other case (subject to sub-paragraph (3)), reject the application.

• (3) The Board may hold over the application for determination at a later date if it is satisfied that—

• (a) although the condition in paragraph 12(1)(a) is not met, the transferee suffers from a progressive disease and may become terminally ill within six months, and

• (b) the conditions in paragraph 12(1)(b) to (d) are met.

Terminal illness lump sum: effect of successful application

15

• (1) If the Board grants an application for a terminal illness lump sum, the transferee—

• (a) becomes entitled to a terminal illness lump sum calculated in accordance with this paragraph, and

• (b) loses the entitlement he or she otherwise would have had on attaining the relevant age to compensation under paragraph 6 in respect of the pension compensation credit.

• (2) The amount of the terminal illness lump sum is 2 times the amount to which the transferee would have been entitled under paragraph 6 in respect of the pension compensation credit in the year following the granting of the application, if he or she had attained the relevant age on the granting of the application.

• (3) In this paragraph “the relevant age” has the same meaning as in paragraph 12.

• (4) Where on the granting of the application the commencement of a person's periodic compensation under paragraph 6 is postponed by virtue of paragraph 16A, this paragraph applies as if the references to the transferee attaining the relevant age were references to the period of postponement ending.

Terminal illness lump sum: information

16

• (1) Relevant information held by the Department or the Secretary of State about an individual may be disclosed to the Board for use for a purpose relating to its functions under paragraphs 12 to 15.

• (2) In sub-paragraph (1) “relevant information” means—

• (a) information held for the purposes of any function of the Department relating to social security; or

• (b) information held for the purposes of any function of the Secretary of State relating to any scheme made under section 286 of the Pensions Act 2004 (c. 35) (financial assistance scheme).

PART 4 — PROVISIONS APPLICABLE IRRESPECTIVE OF AGE OF TRANSFEREE ON TRANSFER DAY

Annual increase in periodic compensation

17

• (1) This paragraph provides for annual increases to compensation payable to the transferee.

• (2) The transferee is entitled, on each indexation date, to an increase of the appropriate percentage of the underlying rate.

• (3) The increase to which the transferee is entitled on the first indexation date is restricted to 1/12 of the amount calculated under sub-paragraph (2) for each full month in the period beginning with the transfer day and ending with that indexation date.

• (4) For the purposes of sub-paragraph (2)—

• “the appropriate percentage”, as at an indexation date, is the lesser of—the percentage increase referred to in paragraph (a) of the definition of “the appropriate percentage” in paragraph 17(4) of Schedule 5 to the Pensions Act 2008, and2.5%;

• “the indexation date” means—the 1st January next falling after the transferee first becomes entitled to the periodic compensation, andeach subsequent 1st January during the transferee's lifetime;

• “the underlying rate”, as at an indexation date, is the aggregate of—the indexed proportion (as determined under sub-paragraph (5) or (6)) of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6) the revaluation amount, ...so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), andany annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates.

• (5) Where the transferor's PPF compensation is payable in accordance with paragraph 3, 5, 8, 11, 15 or 22 of Schedule 6 to the 2005 Order (“the relevant paragraph of Schedule 6”), “the indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the relevant paragraph of Schedule 6 that is attributable to the transferor's post-1997 service.

Paragraph 28(4) of that Schedule applies for the purpose of attributing amounts to the transferor's post-1997 service under this sub-paragraph.

• (6) Where the transferor's PPF compensation is payable otherwise than as mentioned in sub-paragraph (5), “the indexed proportion” is such proportion as is determined in accordance with regulations made by the Department.

• (7) Where the compensation payable to the transferee is—

• (a) reduced as a result of the commutation of periodic compensation under paragraph 9, or

• (b) restricted under regulations under paragraph 18 (compensation cap),

the references in paragraph (a) of the definition of “the underlying rate” in sub-paragraph (4) to the initial annual compensation rate and the revaluation amount are to that rate and that amount as so restricted or reduced (and paragraph (aa) of the definition applies accordingly). .

• (7A) Where the commencement of periodic compensation has been postponed by virtue of paragraph 16A, this paragraph applies as if the transferee first becomes entitled to the periodic compensation on the day on which the periodic compensation commences.

• (8) the definition of “the appropriate percentage” in sub-paragraph (4) is subject to paragraph 20 (power of Board to alter rates of revaluation and indexation).

• (9) In this paragraph “post-1997 service” has the same meaning as in paragraph 28 of Schedule 6 to the 2005 Order (annual increase in periodic pension compensation).

Compensation cap

18

• (1) The Department may by regulations make provision for restricting the amount of periodic compensation payable under this Schedule in a case in which, on the transfer day, the transferor is not entitled to present payment of PPF compensation.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Compensation in form of dependant's benefits

19

• (1) The Department may by regulations make provision for compensation to be payable to—

• (a) prescribed descriptions of partners, or

• (b) prescribed descriptions of dependants,

of prescribed descriptions of transferees.

• (2) The regulations may, in particular—

• (a) provide for compensation in the form of periodic or lump sum payments;

• (b) provide for periodic compensation to be payable for a prescribed period;

• (c) apply paragraph 17 (annual increases in respect of periodic compensation), with or without modifications, in respect of compensation in the form of periodic payments.

Board's power to alter rates of revaluation and indexation

20

• (1) The Board may determine the percentage that is to be—

• (a) the maximum revaluation rate for the purposes of paragraph 8(4)(b);

• (b) the appropriate percentage for the purposes of paragraph 17(2).

• (2) Before making a determination under this paragraph the Board must—

• (a) consult such persons as it considers appropriate, and

• (b) publish details of the proposed determination in such manner as it considers appropriate and consider any representations made in respect of it.

• (3) The rate determined under this paragraph may be nil.

• (4) A determination under this paragraph may be expressed so as to have effect for a limited period.

• (5) A determination under sub-paragraph (1)(b)—

• (a) has effect in relation to future increases under paragraph 17 only, and

• (b) may be expressed to have effect—

• (i) in all cases (whether the entitlement to the periodic compensation first arose before or after the date the determination is made), or

• (ii) only in cases where entitlement to the periodic compensation first arose on or after a date determined by the Board.

• (5A) A determination under sub-paragraph (1)(b) which has effect as mentioned in sub-paragraph (5)(b)(ii) may provide that, where the payment of periodic compensation to the transferee is postponed by virtue of paragraph 16A, the determination applies as if the transferee first becomes entitled to the periodic compensation on the day on which the periodic compensation commences.

• (6) Notice of any determination under this paragraph must be published in such manner as the Board considers appropriate.

SCHEDULE 5

PART 1 — AMENDMENTS OF THE MATRIMONIAL CAUSES (NORTHERN IRELAND) ORDER 1978

1

The Matrimonial Causes (Northern Ireland) Order 1978 (NI 15) is amended as follows.

2

After Article 23A (pension sharing orders) insert—

(23B) (1) For the purposes of this Order, a pension compensation sharing order is an order which— (a) provides that one party's shareable rights to PPF compensation that derive from rights under a specified pension scheme are to be subject to pension compensation sharing for the benefit of the other party, and (b) specifies the percentage value to be transferred. (2) In paragraph (1)— (a) the reference to shareable rights to PPF compensation is to rights in relation to which pension compensation sharing is available under Chapter 1 of Part 3 of the Pensions (No. 2) Act (Northern Ireland) 2008 or under Chapter 1 of Part 3 of the Pensions Act 2008; (b) “party” means a party to a marriage; (c) “specified” means specified in the order. (23C) In this Part— - “PPF compensation” means compensation payable under the pension compensation provisions; - “the pension compensation provisions” means— 1. Chapter 3 of Part 3 of the Pensions (Northern Ireland) Order 2005 (pension protection) and any regulations or order made under it, 2. Chapter 1 of Part 3 of the Pensions (No. 2) Act (Northern Ireland) 2008 (pension compensation on divorce etc.) and any regulations or order made under it, and 3. any provision corresponding to the provisions mentioned in paragraph (a) or (b) in force in Great Britain.

.

3

After Article 26C (pension sharing orders: apportionment of charges) insert—

(26D) (1) On granting a decree of divorce or a decree of nullity of marriage or at any time thereafter (whether before or after the decree is made absolute), the court may, on an application made under this Article, make a pension compensation sharing order in relation to the marriage. (2) A pension compensation sharing order under this Article is not to take effect unless the decree on or after which it is made has been made absolute. (3) A pension compensation sharing order under this Article may not be made in relation to rights to PPF compensation that— (a) are the subject of pension attachment, (b) derive from rights under a pension scheme that were the subject of pension sharing between the parties to the marriage, (c) are the subject of pension compensation attachment, or (d) are or have been the subject of pension compensation sharing between the parties to the marriage. (4) For the purposes of paragraph (3)(a), rights to PPF compensation “are the subject of pension attachment” if any of the following three conditions is met. (5) The first condition is that— (a) the rights derive from rights under a pension scheme in relation to which an order was made under Article 25 imposing a requirement by virtue of Article 27B(4), and (b) that order, as modified under Article 27E(3), remains in force. (6) The second condition is that— (a) the rights derive from rights under a pension scheme in relation to which an order was made under Article 25 imposing a requirement by virtue of Article 27B(7), and (b) that order— (i) has been complied with, or (ii) has not been complied with and, as modified under Article 27E(5), remains in force. (7) The third condition is that— (a) the rights derive from rights under a pension scheme in relation to which an order was made under Article 25 imposing a requirement by virtue of Article 27C, and (b) that order remains in force. (8) For the purposes of paragraph (3)(b), rights under a pension scheme “were the subject of pension sharing between the parties to the marriage” if the rights were at any time the subject of a pension sharing order in relation to the marriage or a previous marriage between the same parties. (9) For the purposes of paragraph (3)(c), rights to PPF compensation “are the subject of pension compensation attachment” if there is in force a requirement imposed by virtue of Article 27F relating to them. (10) For the purposes of paragraph (3)(d), rights to PPF compensation “are or have been the subject of pension compensation sharing between the parties to the marriage” if they are or have ever been the subject of a pension compensation sharing order in relation to the marriage or a previous marriage between the same parties. (26E) (1) No pension compensation sharing order may be made so as to take effect before the end of such period after the making of the order as may be prescribed by regulations made by the Department of Justice . (2) Regulations under this Article shall be subject to negative resolution . (26F) The court may include in a pension compensation sharing order provision about the apportionment between the parties of any charge under section 95 of the Pensions (No. 2) Act (Northern Ireland) 2008 (charges in respect of pension compensation sharing costs), or under section 117 of the Pensions Act 2008.

.

4

• (1) Article 27 (matters to which court is to have regard) is amended as follows.

• (2) In the heading, for “and 26” substitute “ , 26, 26A and 26D ”.

• (3) In paragraphs (1) and (2) for “or 26A” substitute “ , 26A or 26D ”.

5

In Article 27A(1) (exercise of court's powers in favour of party to marriage on decree of divorce or nullity of marriage) for “or 26A” substitute “ , 26A or 26D ”.

6

In Article 27E(9) (the Pension Protection Fund) omit the definition of “PPF compensation”.

7

After Article 27E insert—

(27F) (1) This Article applies where, having regard to any PPF compensation to which a party to the marriage is or is likely to be entitled, the court determines to make an order under Article 25. (2) To the extent to which the order is made having regard to such compensation, the order may require the Board of the Pension Protection Fund, if at any time any payment in respect of PPF compensation becomes due to the party with compensation rights, to make a payment for the benefit of the other party. (3) The order must express the amount of any payment required to be made by virtue of paragraph (2) as a percentage of the payment which becomes due to the party with compensation rights. (4) Any such payment by the Board of the Pension Protection Fund— (a) shall discharge so much of its liability to the party with compensation rights as corresponds to the amount of the payment, and (b) shall be treated for all purposes as a payment made by the party with compensation rights in or towards the discharge of that party's liability under the order. (5) Where the party with compensation rights has a right to commute any PPF compensation, the order may require that party to exercise it to any extent; and this Article applies to any payment due in consequence of commutation in pursuance of the order as it applies to other payments in respect of PPF compensation. (6) The power conferred by paragraph (5) may not be exercised for the purpose of commuting compensation payable to the party with compensation rights to compensation payable to the other party. (7) The power conferred by paragraph (2) or (5) may not be exercised in relation to rights to PPF compensation that— (a) derive from rights under a pension scheme that were at any time the subject of a pension sharing order in relation to the marriage, or a previous marriage between the same parties, or (b) are or have ever been the subject of a pension compensation sharing order in relation to the marriage or a previous marriage between the same parties. (27G) (1) The Department of Justice may by regulations— (a) make provision, in relation to any provision of Article 27F which authorises the court making an order under Article 25 to require the Board of the Pension Protection Fund to make a payment for the benefit of the other party, as to the person to whom, and the terms on which, the payment is to be made; (b) make provision, in relation to payment under a mistaken belief as to the continuation in force of a provision included by virtue of Article 27F in an order under Article 25, about the rights or liabilities of the payer, the payee or the person to whom the payment was due; (c) require notices to be given in respect of changes of circumstances relevant to orders under Article 25 which include provision made by virtue of Article 27F; (d) make provision for the Board of the Pension Protection Fund to be discharged in prescribed circumstances from a requirement imposed by virtue of Article 27F; (e) make provision about calculation and verification in relation to the valuation of PPF compensation for the purposes of the court's functions in connection with the exercise of any of its powers under this Part. (2) Regulations under paragraph (1)(e) may include— (a) provision for calculation or verification in accordance with guidance from time to time prepared by a prescribed person; (b) provision by reference to regulations under section 90 of the Pensions (No. 2) Act (Northern Ireland) 2008. (3) Regulations under this Article shall be subject to negative resolution . (4) In this Article and Article 27F— - “the party with compensation rights” means the party to the marriage who is or is likely to be entitled to PPF compensation, and “the other party” means the other party to the marriage; - “prescribed” means prescribed by regulations.

.

8

• (1) Article 33 (variation, discharge etc. of certain orders for financial relief) is amended as follows.

• (2) In paragraph (2)(dd)—

• (a) omit “or” at the end of head (i);

• (b) at the end of head (ii) add “ or ”;

• (c) after that head insert—

(iii) Article 27F(2),

;

• (d) in the closing words, after “pension rights” insert “ or pension compensation rights ”.

• (3) In paragraph (2)(f) after “a pension sharing order under Article 26A” insert “ , or a pension compensation sharing order under Article 26D, ”.

• (4) In paragraph (4B) after “pension sharing order” insert “ , or a pension compensation sharing order, ”.

• (5) In paragraph (4C) after “pension sharing order” insert “ , or a pension compensation sharing order, ”.

• (6) In paragraph (5) after “pension sharing order” insert “ or pension compensation sharing order ”.

9

After Article 42A (appeals relating to pension sharing orders which have taken effect) insert—

(42B) (1) This Article applies where an appeal against a pension compensation sharing order is begun on or after the day on which the order takes effect. (2) If the Board of the Pension Protection Fund has acted to its detriment in reliance on the taking effect of the order the appeal court— (a) may not set aside or vary the order; (b) may make such further orders (including a pension compensation sharing order) as it thinks fit for the purpose of putting the parties in the position it considers appropriate. (3) In determining for the purposes of paragraph (2) whether the Board has acted to its detriment the appeal court may disregard any detriment which in the court's opinion is insignificant. (4) Article 26E (duty to stay) only applies to a pension compensation sharing order under this Article if the decision of the appeal court can itself be the subject of an appeal.

.

PART 2 — AMENDMENTS OF THE MATRIMONIAL AND FAMILY PROCEEDINGS (NORTHERN IRELAND) ORDER 1989

10

The Matrimonial and Family Proceedings (Northern Ireland) Order 1989 (NI 4) is amended as follows.

11

In Article 21 (orders for financial provision and property adjustment) at the end of paragraph (b) add—

(c) if the marriage has been dissolved or annulled, make an order which would, within the meaning of that Part, be a pension compensation sharing order in relation to the marriage.

.

12

In Article 22(7) (matters to which court is to have regard) for sub-paragraph (c) substitute—

(c) “PPF compensation” means compensation payable under— (i) Chapter 3 of Part 3 of the Pensions (Northern Ireland) Order 2005 (pension protection) or any regulations or order made under it, (ii) Chapter 1 of Part 3 of the Pensions (No. 2) Act (Northern Ireland) 2008 (pension compensation sharing) or any regulations or order made under it, or (iii) any provision corresponding to the provisions mentioned in head (i) or (ii) in force in Great Britain.

.

13

• (1) Article 25 (application of certain provisions of Part 3 of the Matrimonial Causes (Northern Ireland) Order 1978) is amended as follows.

• (2) After paragraph (1)(bc) insert—

(bca) Article 26D(3) to (10) (provisions about pension compensation orders in relation to divorce and nullity); (bcb) Article 26E (duty to stay pension compensation sharing orders); (bcc) Article 26F (apportionment of pension compensation sharing charges);

.

• (3) After paragraph (1)(bf) insert—

(bg) Article 27F (power, by financial provision order, to attach pension compensation payments, or to require the exercise of a right of commutation of pension compensation);

.

• (4) After paragraph (1)(l) add—

(m) Article 42B (appeals relating to pension compensation sharing orders which have taken effect).

.

• (5) In paragraph (2) for “and (be)” substitute “ , (be) and (bg) ”.

• (6) In paragraph (4) at the end add “ or under paragraphs (1) and (2) of Article 27G of that Order ”.

PART 3 — AMENDMENTS OF THE CIVIL PARTNERSHIP ACT 2004

14

The Civil Partnership Act 2004 (c. 33) is amended as follows.

15

After Part 3 of Schedule 15 (pension sharing orders on or after dissolution or nullity order) insert—

(14A) (1) The court may make a pension compensation sharing order— (a) on making a dissolution or nullity order, or (b) at any time afterwards. (2) In this Schedule “pension compensation sharing order” means a pension compensation sharing order under this Part. (14B) (1) A pension compensation sharing order is an order which— (a) provides that one civil partner's shareable rights to PPF compensation that derive from rights under a specified pension scheme are to be subject to pension compensation sharing for the benefit of the other civil partner, and (b) specifies the percentage value to be transferred. (2) Shareable rights to PPF compensation are rights in relation to which pension compensation sharing is available under— (a) Chapter 1 of Part 3 of the Pensions (No. 2) Act (Northern Ireland) 2008, or (b) Chapter 1 of Part 3 of the Pensions Act 2008. (3) In sub-paragraph (1) “specified” means specified in the order. (14C) The court may include in a pension compensation sharing order provision about the apportionment between the civil partners of any charge under— (a) section 95 of the Pensions (No. 2) Act (Northern Ireland) 2008 (charges in respect of pension compensation sharing costs), or (b) section 117 of the Pensions Act 2008. (14D) (1) A pension compensation sharing order may not be made in relation to rights to PPF compensation that— (a) are the subject of pension attachment, (b) derive from rights under a pension scheme that were the subject of pension sharing between the civil partners, (c) are the subject of pension compensation attachment, or (d) are or have been the subject of pension compensation sharing between the civil partners. (2) For the purposes of sub-paragraph (1)(a), rights to PPF compensation “are the subject of pension attachment” if any of the following three conditions is met. (3) The first condition is that— (a) the rights derive from rights under a pension scheme in relation to which an order was made under Part 1 imposing a requirement by virtue of paragraph 20(2), and (b) that order, as modified under paragraph 26, remains in force. (4) The second condition is that— (a) the rights derive from rights under a pension scheme in relation to which an order was made under Part 1 imposing a requirement by virtue of paragraph 20(5), and (b) that order— (i) has been complied with, or (ii) has not been complied with and, as modified under paragraph 27, remains in force. (5) The third condition is that— (a) the rights derive from rights under a pension scheme in relation to which an order was made under Part 1 imposing a requirement by virtue of paragraph 21, and (b) that order remains in force. (6) For the purposes of sub-paragraph (1)(b), rights under a pension scheme “were the subject of pension sharing between the civil partners” if the rights were at any time the subject of a pension sharing order in relation to the civil partnership or a previous civil partnership between the same parties. (7) For the purposes of sub-paragraph (1)(c), rights to PPF compensation “are the subject of pension compensation attachment” if there is in force a requirement imposed by virtue of Part 5 relating to them. (8) For the purposes of sub-paragraph (1)(d), rights to PPF compensation “are or have been the subject of pension compensation sharing between the civil partners” if they are or have ever been the subject of a pension compensation sharing order in relation to the civil partnership or a previous civil partnership between the same parties. (14E) (1) A pension compensation sharing order is not to take effect unless the dissolution or nullity order on or after which it is made has been made final. (2) No pension compensation sharing order may be made so as to take effect before the end of such period after the making of the order as may be prescribed by regulations made by the Department of Justice . (3) The power to make regulations under sub-paragraph (2) is exercisable by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979. (4) Regulations under sub-paragraph (2) are subject to negative resolution (within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954) . (14F) In this Schedule— - “PPF compensation” means compensation payable under the pension compensation provisions; - “the pension compensation provisions” means— 1. Chapter 3 of Part 3 of the Pensions (Northern Ireland) Order 2005 (pension protection) and any regulations or order made under it, 2. Chapter 1 of Part 3 of the Pensions (No. 2) Act (Northern Ireland) 2008 (pension compensation sharing) and any regulations or order made under it, and 3. any provision corresponding to the provisions mentioned in paragraph (a) or (b) in force in Great Britain.

.

16

• (1) Part 4 of Schedule 15 (matters to which court is to have regard under Parts 1 to 3) is amended as follows.

• (2) In the heading of the Part for “3” substitute “ 3A ”.

• (3) In paragraph 15—

• (a) omit “or” at the end of paragraph (a)(ii);

• (b) for “and” at the end of paragraph (a)(iii) substitute “ or ”;

• (c) after that provision add—

(iv) any provision of Part 3A (pension compensation sharing orders) other than paragraph 14C (apportionment of charges), and

.

• (4) In paragraph 16(1)—

• (a) omit “or” at the end of paragraph (b);

• (b) at the end of paragraph (c) insert “ , or ”;

• (c) after that paragraph add—

(d) Part 3A (pension compensation sharing orders).

.

• (5) In paragraph 18(1)—

• (a) omit “or” at the end of paragraph (b);

• (b) at the end of paragraph (c) insert “ or ”;

• (c) after that paragraph add—

(d) Part 3A (pension compensation sharing orders),

.

17

• (1) Part 6 of Schedule 15 (pension protection fund compensation etc.) is amended as follows.

• (2) Omit paragraph 25(3) (definition of PPF compensation).

• (3) After paragraph 29 insert—

(29A) (1) This paragraph applies if, having regard to any PPF compensation to which a civil partner is or is likely to be entitled, the court decides to make an order under Part 1. (2) To the extent to which the Part 1 order is made having regard to such compensation, it may require the Board, if at any time any payment in respect of PPF compensation becomes due to the civil partner with compensation rights, to make a payment for the benefit of the other civil partner. (3) The Part 1 order must express the amount of any payment required to be made by virtue of sub-paragraph (2) as a percentage of the payment which becomes due to the civil partner with compensation rights. (4) Any such payment by the Board— (a) discharges so much of its liability to the civil partner with compensation rights as corresponds to the amount of the payment, and (b) is to be treated for all purposes as a payment made by the civil partner with compensation rights in or towards the discharge of that civil partner's liability under the order. (5) If the civil partner with compensation rights has a right to commute any PPF compensation, the Part 1 order may require that civil partner to exercise it to any extent. (6) This paragraph applies to any payment due in consequence of commutation in pursuance of the Part 1 order as it applies to other payments in respect of PPF compensation. (7) The power conferred by sub-paragraph (5) may not be exercised for the purpose of commuting a benefit payable to the civil partner with compensation rights to a benefit payable to the other civil partner. (8) The powers conferred by sub-paragraphs (2) and (5) may not be exercised in relation to rights to PPF compensation that— (a) derive from rights under a pension scheme that were at any time the subject of a pension sharing order in relation to the civil partnership or a previous civil partnership between the same parties, or (b) are or have ever been the subject of a pension compensation sharing order in relation to the civil partnership or a previous civil partnership between the same parties.

.

• (4) Before paragraph 30 insert—

(29B) (1) Regulations may— (a) make provision, in relation to any provision of paragraph 29A which authorises the court making a Part 1 order to require the Board to make a payment for the benefit of the other civil partner, as to the person to whom, and the terms on which, the payment is to be made; (b) make provision, in relation to payment under a mistaken belief as to the continuation in force of a provision included by virtue of paragraph 29A in a Part 1 order, about the rights or liabilities of the payer, the payee or the person to whom the payment was due; (c) require notices to be given in respect of changes of circumstances relevant to Part 1 orders which include provision made by virtue of paragraph 29A; (d) make provision for the Board to be discharged in prescribed circumstances from a requirement imposed by virtue of paragraph 29A; (e) make provision about calculation and verification in relation to the valuation of PPF compensation for the purposes of the court's functions in connection with the exercise of any of its powers under this Schedule. (2) Regulations under sub-paragraph (1)(e) may include— (a) provision for calculation or verification in accordance with guidance from time to time prepared by a prescribed person; (b) provision by reference to regulations under section 90 of the Pensions (No. 2) Act (Northern Ireland) 2008.

.

• (5) In paragraph 32(1) of that Schedule—

• (a) after the definition of “the Board” insert—

“the civil partner with compensation rights” means the civil partner who is or is likely to be entitled to PPF compensation;

;

• (b) after the definition of “occupational pension scheme” insert—

“prescribed” means prescribed by regulations;

.

18

• (1) Part 10 of Schedule 15 (variation, discharge etc. of certain orders for financial relief) is amended as follows.

• (2) In paragraph 45(1)(f)—

• (a) omit “or” at the end of sub-paragraph (i);

• (b) at the end of sub-paragraph (ii) insert “ or ”;

• (c) after that sub-paragraph add—

(iii) paragraph 29A(2),

;

• (d) in the closing words after “pension rights” insert “ or pension compensation rights ”.

• (3) In paragraph 45(1)(h) after “a pension sharing order” insert “ , or a pension compensation sharing order, ”.

• (4) In the italic heading before paragraph 49 for “and pension sharing orders” substitute “ , pension sharing and pension compensation sharing orders ”.

• (5) In the following provisions of paragraph 50, after “pension sharing order” insert “ or pension compensation sharing order ”

• (a) the opening words of sub-paragraph (1);

• (b) sub-paragraph (1)(a)(i);

• (c) sub-paragraph (1)(b);

• (d) sub-paragraph (2);

• (e) sub-paragraph (3).

• (6) In paragraph 51(1) for “or pension sharing order” substitute “ , pension sharing order or pension compensation sharing order ”.

19

In Part 13 of Schedule 15 (miscellaneous and supplementary) after paragraph 74 insert—

(74A) (1) This paragraph applies where an appeal against a pension compensation sharing order is begun on or after the day on which the order takes effect. (2) If the Board of the Pension Protection Fund has acted to its detriment in reliance on the taking effect of the order the appeal court— (a) may not set aside or vary the order; (b) may make such further orders (including a pension compensation sharing order) as it thinks fit for the purpose of putting the parties in the position it considers appropriate. (3) In determining for the purposes of sub-paragraph (2) whether the Board has acted to its detriment the appeal court may disregard any detriment which in the court's opinion is insignificant. (4) Paragraph 14E only applies to a pension compensation sharing order under this paragraph if the decision of the appeal court can itself be the subject of an appeal.

.

20

• (1) In Schedule 17 (financial relief in Northern Ireland after overseas dissolution etc. of a civil partnership), in the italic heading before paragraph 9, for “and pension sharing” substitute “ , pension sharing and pension compensation sharing ”.

• (2) In paragraph 9(2) of that Schedule—

• (a) for “or 3” substitute “ , 3 or 3A ”;

• (b) for “and pension sharing” substitute “ , pension sharing and pension compensation sharing ”.

• (3) In paragraph 10(9)(c) of that Schedule omit “Part 6 of”.

• (4) In paragraph 14 of that Schedule—

• (a) after sub-paragraph (1)(b) insert—

(ba) paragraphs 14C, 14D and 14E(2) to (4) (pension compensation sharing);

;

• (b) in sub-paragraph (1)(d) for “32” substitute “ 29 and 30 to 32 ”;

• (c) after that provision insert—

(da) paragraph 29A (orders under Part 1 relating to pension compensation attachment);

;

• (d) in sub-paragraph (1)(h) for “74” substitute “ 74A ”;

• (e) in that provision for “and pension-sharing appeals” substitute “ pension-sharing appeals and pension compensation-sharing appeals ”;

• (f) in sub-paragraph (2) after “Sub-paragraph (1)(d)” insert “ and (da) ”;

• (g) in sub-paragraph (4) at the end add “ or under paragraphs 29B to 31 of that Schedule (supplementary provision about orders relating to pension compensation) ”.

SCHEDULE 6

1

Schedule 6 to the 2005 Order (pension compensation provisions) is amended as follows.

2

In paragraph 3(6), at the end, add “ to the scheme ”.

3

In paragraph 5(5), at the end, add “ to the scheme ”.

4

In paragraph 11(8), after paragraph (b) insert—

(ba) paragraph 25E (terminal illness lump sum),

.

5

In paragraph 13, after sub-paragraph (3) insert—

(3A) For the purposes of this paragraph, a person's entitlement under paragraph 11 is to be determined disregarding paragraph 25E(1)(b) (successful applicant for terminal illness lump sum loses entitlement to periodic compensation).

.

6

In paragraph 14(9), after paragraph (a) insert—

(aa) paragraph 25E (terminal illness lump sum),

.

7

In paragraph 15(6), after paragraph (a) insert—

(aa) paragraph 25E (terminal illness lump sum),

.

8

In paragraph 18, after sub-paragraph (3) insert—