Legalize / United Kingdom / Public General Act

Pension Schemes (Northern Ireland) Act 1993

Type Public General Act

Publication 1993-11-05

Last updated 2025-04-07

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

Part I — Preliminary

Staying court proceedings where a complaint is made or a dispute is referred.

1

(1) In this Act—

“occupational pension scheme” means a pension scheme—

(a) that—

(i) for the purpose of providing benefits to, or in respect of, people with service in employments of a description, or

(ii) for that purpose and also for the purpose of providing benefits to, or in respect of, other people,

is established by, or by persons who include, a person to whom subsection (2) applies when the scheme is established or (as the case may be) to whom that subsection would have applied when the scheme was established had that subsection then been in force, ...

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or

a pension scheme that is prescribed or is of a prescribed description;

“personal pension scheme” means a pension scheme that—

(a) is not an occupational pension scheme, and

(b) is established by a person within ... section 154(1) of the Finance Act 2004;

“public service pension scheme” means an occupational pension scheme established by or under an enactment or the Royal prerogative or a Royal charter, being a scheme—

(a) all the particulars of which are set out in, or in a legislative instrument made under, an enactment, Royal warrant or charter, or

(b) which cannot come into force, or be amended, without the scheme or amendment being approved by a Minister of the Crown or government department,

and includes any occupational pension scheme established, with the concurrence of the Department of Finance and Personnel, by or with the approval of another government department and any occupational pension scheme prescribed by regulations made by the Department and the Department of Finance and Personnel jointly as being a scheme which ought in their opinion to be treated as a public service pension scheme for the purposes of this Act.

(2) This subsection applies—

(a) where people in employments of the description concerned are employed by someone, to a person who employs such people,

(b) to a person in an employment of that description, and

(i) interests of persons who employ people in employments of the description mentioned in paragraph (a), or

(ii) interests of people in employments of that description.

(3) For the purposes of subsection (2), if a person is in an employment of the description concerned by reason of holding an office (including an elective office) and is entitled to remuneration for holding it, the person responsible for paying the remuneration shall be taken to employ the office-holder.

(4) In the definition in subsection (1) of “occupational pension scheme”, the reference to a description includes a description framed by reference to an employment being of any of two or more kinds.

(5) In subsection (1) “pension scheme” (except in the phrases “occupational pension scheme”, “personal pension scheme” and “public service pension scheme”) means a scheme or other arrangements, comprised in one or more instruments or agreements, having or capable of having effect so as to provide benefits to or in respect of people—

(a) on retirement,

(b) on having reached a particular age, or

Part II — Administration

Registration of schemes

Registration of occupational and personal pension schemes

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Part III — Schemes that were contracted-out etc. and Effects on Members’ State Scheme Rights ...

Chapter I — Schemes that were contracted-out: guaranteed minimum pensions and alteration of scheme rules etc.

Preliminary

Issue of contracting-out and appropriate scheme certificates

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(1) Regulations shall provide for HMRC to issue certificates stating that the employment of an earner in employed earner's employment is contracted-out employment by reference to an occupational pension scheme.

(1A) In this Act such a certificate is referred to as “a contracting-out certificate”.

(2) The regulations shall provide for contracting-out certificates to be issued to employers and to specify—

(a) the employments which are to be treated, either generally or in relation to any specified description of earners, as contracted-out employments; and

(b) the occupational pension schemes by reference to which those employments are to be so treated.

(2A) The regulations may provide, in the case of contracting-out certificates issued before the principal appointed day, for their cancellation by virtue of the regulations—

(a) at the end of a prescribed period beginning with (and including) that day, or

(b) if prescribed conditions are not satisfied at any time in that period.

but for them to continue to have effect until so cancelled; and the regulations may provide that a certificate having effect on and after that day by virtue of this subsection is to have effect, in relation to any earner’s service on or after that day, as if issued on or after that day.

(2B) In this Act “the principal appointed day” means the day designated by an order under Article 1 of the Pensions (Northern Ireland) Order 1995 as the principal appointed day for the purposes of Part IV of that Order.

(3) An occupational pension scheme is a contracted-out scheme in relation to an earner’s employment if it is for the time being specified in a contracting-out certificate in relation to that employment; and references in this Act to the contracting-out of a scheme are references to its inclusion in such a certificate.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) Except in prescribed circumstances, no contracting-out certificate ... shall have effect from a date earlier than that on which the certificate is issued.

(8) References in this Act to a contracting-out certificate, a contracted-out scheme and to contracting-out in a context relating to a money purchase contracted-out scheme are to be construed in accordance with section 176A.

Meaning of “contracted-out employment”, “guaranteed minimum pension” and “minimum payment”

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(1) In relation to any period before the second abolition date, the employment of an earner in employed earner's employment was “contracted-out employment” in relation to the earner during that period if—

(a) the earner was under pensionable age;

(b) the earner's service in the employment was service which qualified the earner for a pension provided by a salary related contracted-out scheme; and

(c) there was in force a contracting-out certificate issued in accordance with this Chapter (as it then had effect) stating that the employment was contracted-out employment by reference to the scheme.

(1A) In addition, in relation to any period before the first abolition date, the employment of an earner in employed earner's employment was “contracted-out employment” in relation to him during that period if—

(a) he was under pensionable age;

(b) his employer made minimum payments in respect of his employment to a money purchase contracted-out scheme, and

(c) there was in force a contracting-out certificate issued in accordance with this Chapter (as it then had effect) stating that the employment was contracted-out employment by reference to the scheme.

(1B) In the following provisions of this Act “earner”, in relation to a scheme, means a person who was an earner in contracted-out employment by reference to the scheme.

(2) In this Act—

“guaranteed minimum pension” means any pension which is provided , by a scheme that was a salary related contracted-out scheme, in accordance with the requirements of sections 9 and 13 to the extent to which its weekly rate is equal to the earner’s or, as the case may be, the earner’s widow's, widower’s , surviving same sex spouse’s or surviving civil partner's guaranteed minimum as determined for the purposes of those sections respectively; and

“minimum payment”, in relation to an earner’s employment in any tax week, means the rebate percentage of so much of the earnings paid to or for the benefit of the earner in that week as exceeds the current lower earnings limit but not the applicable limit (or the prescribed equivalents if he is paid otherwise than weekly);

and for the purposes of this subsection “rebate percentage” means the appropriate flatrate percentage for the tax year in which the week falls as specified in an order made under section 38B (as it had effect before the first abolition date).

(2A) In subsection (2) “the applicable limit” means—

(a) in relation to a tax year before 2009–10, the upper earnings limit;

(b) in relation to 2009–10 or any subsequent tax year, the upper accrual point.

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

(4) A contracting-out certificate that was in force in respect of an employed earner's employment is to be taken as conclusive that the employment was, at that time, contracted-out employment.

(5) Regulations shall provide for the determination by the Department of any question whether an employment is to be treated as contracted-out employment or as to the persons in relation to whom, or the period for which, an employment is to be so treated.

General requirements for certification

Requirements for certification of schemes: general

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(1) Subject to subsection (4), an occupational pension scheme can be contracted-out in relation to an earner’s employment only if it satisfies subsection (2) ....

(2) An occupational pension scheme satisfies this subsection only if—

(a) in relation to any earner’s service before the principal appointed day, it satisfies the conditions of subsection (2A); and

(b) in relation to any earner’s service on or after that day, it satisfies the conditions of subsection (2B).

(2A) The conditions of this subsection are that—

(a) the scheme complies in all respects with sections 9 to 20E or, in such cases or classes of case as may be prescribed, with those sections as modified by regulations; and

(b) the rules of the scheme applying to guaranteed minimum pensions are framed so as to comply with the relevant requirements.

(2B) The conditions of this subsection are that the Inland Revenueare satisfied that—

(a) the scheme complies with section 8A;

(b) restrictions imposed under Article 40 of the Pensions (Northern Ireland) Order 1995 (restriction on employer-related investments) apply to the scheme and the scheme complies with those restrictions;

(i) must include requirements as to the amount of the resources of the scheme, and

(ii) may include a requirement that, if the only members of the scheme were those falling within any prescribed class or description, the scheme would comply with section 8A), and

(d) the scheme does not fall within a prescribed class or description;

and are satisfied that the rules of the scheme are framed so as to comply with the relevant requirements.

(2C) Regulations may modify subsection (2B)(a) and (b) in their application to occupational pension schemes falling within a prescribed class or description.

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

(4) Where there are two or more occupational pension schemes in force in relation to an earner’s employment, none of which can by itself be a contracted-out scheme, the Inland Revenue may, if they think fit, treat them for contracting-out purposes as a single scheme.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5A) Regulations about pension schemes made under this Chapter may contain provisions framed by reference to whether or not a scheme is a registered pension scheme under section 153 of the Finance Act 2004.

(6) In this section “relevant requirements” means—

(a) the requirements of any regulations prescribing the form and content of rules of contracted-out ... schemes; and

(b) such other requirements as to form and content (not inconsistent with regulations) as may be imposed by the Department as a condition of contracting-out ... either generally or in relation to a particular scheme.

Protected rights and money purchase benefits

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Elections as to employments covered by contracting-out certificates

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(1) Subject to the provisions of this Part, an employment otherwise satisfying the conditions for inclusion in a contracting-out certificate shall be so included if and so long as the employer so elects and not otherwise.

(2) Subject to subsections (3) and (4), an election may be so made, and an employment so included, either generally or in relation only to a particular description of earners.

(3) Except in such cases as may be prescribed, an employer shall not, in making or abstaining from making any election under this section, discriminate between different earners on any grounds other than the nature of their employment.

(4) If the Inland Revenue consider that an employer is contravening subsection (3) in relation to any scheme, they may—

(a) refuse to give effect to any election made by him in relation to that scheme; or

(b) cancel any contracting-out certificate held by him in respect of it.

(5) Regulations may make provision—

(a) for regulating the manner in which an employer is to make an election with a view to the issue, variation or surrender of a contracting-out certificate;

(b) for requiring an employer to give a notice of his intentions in respect of making or abstaining from making any such election in relation to any existing or proposed scheme—

(i) to employees in any employment to which the scheme applies or to which it is proposed that it should apply;

(ii) to any independent trade union recognised to any extent for the purpose of collective bargaining in relation to those employees;

(iii) to the trustees and managers of the scheme; and

(iv) to such other persons as may be prescribed;

(c) for requiring an employer, in connection with any such notice, to furnish such information as may be prescribed and to undertake such consultations as may be prescribed with any such trade union as is mentioned in paragraph (b)(ii);

(d) for empowering the Inland Revenue to refuse to give effect to an election made by an employer unless they are satisfied that he has complied with the requirements of the regulations;

(e) for referring to an industrial tribunal any question—

(i) whether an organisation is such a trade union as is mentioned in paragraph (b)(ii), or

(ii) whether the requirements of the regulations as to consultation have been complied with.

Determination of basis on which scheme is contracted-out

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Guaranteed minimum pensions

Minimum pensions for earners

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(1) Subject to the provisions of this Part, the scheme must—

(a) provide for the earner to be entitled to a pension under the scheme if he attains pensionable age; and

(b) contain a rule to the effect that the weekly rate of the pension will be not less than his guaranteed minimum (if any) under sections 10 to 12.

(1A) But a scheme may be amended so as to omit provision of the kind specified in subsection (1)(a) and (b) if the conditions specified in section 20B are satisfied.

(2) In the case of an earner who was a married woman or widow who was liable to pay primary Class 1 contributions at a reduced rate by virtue of section 19(4) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 at a time during a relevant year when she was in contracted-out employment by reference to the scheme, subject to the provisions of this Part, the scheme must—

(a) provide for her to be entitled to a pension under the scheme if she attains pensionable age . . .

(b) satisfy such other conditions as may be prescribed.

“Relevant year” has the meaning given by section 10(8).

(3) Subject to subsection (4), the scheme must provide for the pension to commence on the date on which the earner attains pensionable age and to continue for his life.

(4) Subject to subsection (5), the scheme may provide for the commencement of the earner’s guaranteed minimum pension to be postponed for any period for which he continues in employment after attaining pensionable age.

(5) The scheme must provide for the earner’s consent to be required—

(a) for any such postponement by virtue of employment to which the scheme does not relate; and

(b) for any such postponement after the expiration of five years from the date on which he attains pensionable age.

(6) Equivalent pension benefits for the purposes of the former legislation are not to be regarded as constituting any part of the earner’s guaranteed minimum pension.

(7) The benefits referred to in subsection (6) are any to which the earner may be immediately or prospectively entitled in respect of a period of employment which—

(a) was for him non-participating employment under that legislation; and

(b) was not on its termination the subject of any payment in lieu of contributions;

but subsection (6) excludes only so much of those benefits as had to be provided in order that the employment should for that period be treated as non-participating.

(8) In this section “the former legislation” means Part III of the National Insurance Act (Northern Ireland) 1966 and the previous corresponding enactments.

Earner’s guaranteed minimum

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(1) An earner has a guaranteed minimum in relation to the pension provided by a scheme that was a salary related contracted-out scheme if in any tax week in a relevant year—

(a) earnings were paid to or for the earner's benefit in respect of employment which was contracted-out by reference to the scheme; and

(b) those earnings were in excess of the lower earnings limit for that tax week (or the prescribed equivalent if the earner was paid otherwise than weekly).

(2) Subject to section 11(1), the guaranteed minimum shall be the weekly equivalent of an amount equal to the appropriate percentage of the total of the earner’s earnings factors for the relevant years, so far as derived from excess earnings mentioned in subsection (1)(b) upon which primary Class 1 contributions have been paid or treated as paid.

(2A) Where any liability of a scheme in respect of an earner’s guaranteed minimum pension ceases by virtue of a civil recovery order, his guaranteed minimum in relation to the scheme is extinguished or reduced accordingly.

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

(4) Where the amount of a person’s earnings for any period is relevant for any purpose of subsection (1) or (2) and the Inland Revenue are satisfied that records of those earnings have not been maintained or retained or are otherwise unobtainable, they may for that purpose—

(a) compute, in such manner as theythink fit, an amount which shall be regarded as the amount of those earnings; or

(b) take their amount to be such sum as they may specify in the particular case.

(5) In subsection (2) the “appropriate percentage” means—

(a) in respect of the earner’s earnings factors for any tax year not later than the tax year 1987-88—

(i) if the earner was not more than 20 years under pensionable age on 6th April 1978, 1.25 per cent.;

(ii) in any other case 25/N per cent.;

(b) in respect of the earner’s earnings factors for the tax year 1988-89 and for subsequent tax years—

(i) if the earner was not more than 20 years under pensionable age on 6th April 1978, 1 per cent.;

(ii) in any other case 20/N per cent.;

where N is the number of years in the earner’s working life (assuming he will attain pensionable age) which fall after 5th April 1978.

(6) Regulations may prescribe rules as to the circumstances in which earnings factors are derived from earnings for the purposes of subsection (2).

(7) For the purposes of subsection (2) the weekly equivalent of the amount there mentioned shall be calculated by dividing that amount by 52.

(8) In this section “relevant year” means any tax year in the earner’s working life (not being earlier than the tax year 1978-79 or later than tax year ending immediately before the principal appointed day).

Increase of guaranteed minimum where commencement of guaranteed minimum pension postponed

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(1) Where in accordance with section 9(4) the commencement of an earner’s guaranteed minimum pension is postponed for any period and there are at least seven complete weeks in that period, his guaranteed minimum in relation to the scheme shall, for each complete week in that period, be increased by one-seventh per cent.—

(a) of the amount of that minimum apart from this subsection; or

(b) if for that week (or a period which includes that week) a pension is paid to him under the scheme at a weekly rate less than that minimum, of the difference between that pension and that minimum.

(2) In subsection (1) “week” means any period of seven consecutive days.

(3) Where an earner’s guaranteed minimum pension is increased under subsection (1), the increase of that part of it which is attributable to earnings factors for the tax year 1987-88 and earlier tax years shall be calculated separately from the increase of the rest.

(4) Where one or more orders have come into operation under section 105 during the period for which the commencement of a guaranteed minimum pension is postponed, the amount of the guaranteed minimum pension for any week in that period shall be determined as if the order or orders had come into operation before the beginning of the period.

Revaluation of earnings factors for purposes of s. 10: early leavers, etc

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(1) Subject to subsection (2), for the purpose of section 10(2) the earner’s earnings factor for any relevant year (so far as derived as mentioned in that section) shall be taken to be that factor as increased by the same percentage as that prescribed for the increase of that factor by the last order under Article 23 of the Social Security Pensions (Northern Ireland) Order 1975 or section 130 of the Social Security Administration (Northern Ireland) Act 1992 to come into operation before the end of the final relevant year.

(2) The scheme may provide that the earnings factors of an earner whose service in contracted-out employment by reference to the scheme is terminated before the final relevant year shall be determined for the purposes of section 10(2) by reference to the last such order to come into operation before the end of the tax year in which that service ends (“the last service tax year”).

The scheme may provide that in a case where—

(a) an earner was, before the second abolition date, in contracted-out employment by reference to a scheme, and

(b) the earner ceases to be in pensionable service under the scheme before the final relevant year,

the earnings factors for that person shall be determined for the purposes of section 10(2) by reference to the last such order to come into operation before the end of the tax year in which the earner ceases to be in pensionable service under the scheme (“the last service tax year”).

(3) Where a scheme provides as mentioned in subsection (2) the scheme shall provide for the weekly equivalent mentioned in section 10(2) to be increased by at least the prescribed percentage for each relevant year after the last service tax year; and the provisions included by virtue of this subsection may also conform with such additional requirements as may be prescribed

(4) Except in such cases or classes of case as may be prescribed, the provision made by virtue of subsections (2) and (3) must be the same for all members of the scheme.

(5) In this section—

Minimum pensions for widows and widowers

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(1) Subject to the provisions of this Part, the scheme must provide that if the earner dies leaving a widow, widower or surviving civil partner (whether before or after attaining pensionable age), the widow, widower or surviving civil partner will be entitled to a guaranteed minimum pension under the scheme.

(1A) But a scheme may be amended so as to omit provision of the kind specified in subsection (1) if the conditions specified in section 20B are satisfied.

(2) The scheme must contain a rule to the effect that—

(a) if the earner is a man , or a woman in a relevant gender change case, who has a guaranteed minimum under section 10, the weekly rate of the widow’s pension will be not less than the widow’s guaranteed minimum;

(b) if the earner is a woman who has a guaranteed minimum under that section, the weekly rate of the widower’s pension will be not less than the widower’s guaranteed minimum.

(ba) if the earner is a man, or a woman in a relevant gender change case, who has a guaranteed minimum under that section, the weekly rate of the surviving civil partner’s pension in the case of a surviving civil partner who is a woman will be not less than the widow’s guaranteed minimum;

(c) subject to paragraph (ba), if the earner is a person who has a guaranteed minimum under that section, the weekly rate of the surviving civil partner’s pension will not be less than the surviving civil partner’s guaranteed minimum.

(d) if the earner is a man who has a guaranteed minimum under that section, the weekly rate of the widower’s pension will not be less than the surviving same sex spouse’s guaranteed minimum;

(e) if the earner is a woman (other than in a relevant gender change case) who has a guaranteed minimum under that section, the weekly rate of the widow’s pension will not be less than the surviving same sex spouse’s guaranteed minimum.

(3) The widow’s guaranteed minimum shall be half that of the earner.

(4) The widower’s or surviving civil partner's or surviving same sex spouse’s guaranteed minimum shall be one-half of that part of the earner’s guaranteed minimum which is attributable to earnings factors for the tax year 1988-89 and subsequent tax years.

(4A) Subject to subsection (4B) The scheme must provide for the widow's, widower’s or surviving civil partner's pension to be payable to the widow, widower or surviving civil partner—

(a) for any period for which a Category B retirement pension is payable to the widow, widower or surviving civil partner by virtue of the earner’s contributions or would be so payable but for section 43(1) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (persons entitled to more than one retirement pension);

(aa) for life, in a case where—

(i) the widow, widower or surviving civil partner attained state pension age on or after the second abolition date, and

(ii) the earner died on or after the date on which the widow, widower or surviving civil partner attained state pension age;

(ab) for any period after the widow, widower or surviving civil partner has attained state pension age, in a case where—

(i) the earner died before the widow, widower or surviving civil partner attained state pension age,

(ii) the widow, widower or surviving civil partner did not marry or form a civil partnership after the death and before attaining state pension age, and

(iii) the widow, widower or surviving civil partner attained state pension age on or after the second abolition date;

(b) for any period for which widowed parent’s allowance or bereavement allowance is payable to the widow, widower or surviving civil partner by virtue of the earner’s contributions; and

(c) in the case of a widow, widower or surviving civil partner whose entitlement by virtue of the earner’s contributions to a widowed parent’s allowance or bereavement allowance has come to an end at a time after the widow, widower or surviving civil partner attained the age of 45, for so much of the period beginning with the time when the entitlement came to an end as neither—

(i) comprises a period during which—

(a) the widow, widower or surviving civil partner, and

(b) another person,

are living together as if spouses of each other, nor

(ii) falls after the time of any—

(a) marriage, or

(b) formation of a civil partnership,

by the widow or widower or surviving civil partner which takes place after the earner’s death.

(4B) Sub-paragraphs (i)(b) and (ii)(b) of subsection (4A)(c) do not apply where the earner dies before 5th December 2005.

(5) In the case of a woman who is the widow of a man, the scheme must also make provision for the widow’s pension to be payable to her for any period for which a . . . widowed mother’s allowance or widow’s pension is payable to her by virtue of the earner’s contributions . . ..

(6) In any other case, the scheme must also make provision for the widower’s , widow’s or surviving civil partner’s pension to be payable in the prescribed circumstances and for the prescribed period.

(7) The trustees or managers of the scheme shall supply to the Inland Revenue any such information as the Inland Revenue may require relating to the payment of pensions under the scheme to widows, widowers or surviving civil partners.

(8) Where—

(a) a lump sum is paid to an earner under provisions included in a scheme by virtue of section 17(1), and

(b) those provisions are of a prescribed description,

the earner shall be treated for the purposes of this section as having any guaranteed minimum under section 10 that he would have had but for that payment.

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) For the purposes of subsection (4A)(aa) and (ab) a person attains state pension age when he or she attains pensionable age within the meaning given by the rules in paragraph 1 of Schedule 2 to the Pensions (Northern Ireland) Order 1995.

(11) This section is subject to regulations under section 34A.

(12) In relation to an earner who is a woman, a reference in this section to a relevant gender change case is a reference to a case where—

(a) the earner is a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004, and

(b) the marriage of the earner and her widow , or the civil partnership between the earner and her surviving civil partner, (that ends with the earner’s death) subsisted before the time when the certificate was issued.

Treatment of insignificant amounts

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(1) Where an amount is required to be calculated in accordance with the provisions of section 10(7), 11(1) or 13(2), (3) or (4) and, apart from this subsection, the amount so calculated is less than 0.5p, then, notwithstanding any other provision of this Act, that amount shall be taken to be zero, and other amounts so calculated shall be rounded to the nearest whole penny, taking 0.5p as nearest to the next whole penny above.

(2) Where a guaranteed minimum pension is attributable in part to earnings factors for the period before the tax year 1988-89 and in part to earnings factors for that tax year or for that tax year and subsequent tax years, the pension shall be calculated by—

(a) applying subsection (1) separately to the amount attributable to the period before the tax year 1988-89 and to the amount attributable to that and subsequent tax years, and

(b) aggregating the two amounts so calculated.

Discharge of liability where guaranteed minimum pensions secured by insurance policies or annuity contracts

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(1) A transaction to which this section applies discharges the trustees or managers of an occupational pension scheme from their liability to provide for or in respect of any person guaranteed minimum pensions—

(a) if it is carried out not earlier than the time when that person’s pensionable service terminates; and

(b) if and to the extent that it results in guaranteed minimum pensions for or in respect of that person being appropriately secured; and

(2) This section applies to the following transactions—

(a) the taking out of a policy of insurance or a number of such policies;

(b) the entry into an annuity contract or a number of such contracts;

(3) In this section “appropriately secured” means secured by an appropriate policy of insurance or an appropriate annuity contract, or by more than one such policy or contract.

(4) A policy of insurance or annuity contract is appropriate for the purposes of this section if—

(a) the insurer with which it is or was taken out or entered into—

(i) is, or was at the relevant time, carrying on . . . long-term insurance business in the United Kingdom ...; and

(ii) satisfies, or at the relevant time satisfied, prescribed requirements; and

(b) it may not be assigned or surrendered except on conditions which satisfy such requirements as may be prescribed; and

(c) it contains or is endorsed with terms whose effect is that the amount secured by it may not be commuted except on conditions which satisfy such requirements as may be prescribed; and

(d) it satisfies such other requirements as may be prescribed.

(5) The requirements referred to in subsection (1) are—

(a) that the arrangement for securing the amount by means of the policy or contract was made—

(i) at the written request of the earner or, if the earner has died, of the earner’s widow, widower or surviving civil partner; or

(ii) with the consent of the earner or the widow, widower or surviving civil partner given in writing in a prescribed form;

(b) that—

(i) the case is one such as is mentioned in section 92(2); and

(ii) the policy or contract only secures guaranteed minimum pensions;

(i) the case is not one such as is mentioned in section 92(2); and

(ii) such conditions as may be prescribed are satisfied.

(6) In subsection (4)(a), “the relevant time” means the time when the policy of insurance was taken out or the annuity contract was entered into or, as the case may be, when the benefit of the policy or contract was transferred.

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfer of accrued rights

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(1) Regulations may prescribe circumstances in which and conditions subject to which—

(a) a transfer of or a transfer payment in respect of—

(i) an earner’s accrued rights to guaranteed minimum pensions under a scheme that was a contracted-out scheme;

(ii) an earner’s accrued rights to pensions under an occupational pension scheme ... to the extent that those rights derive from his accrued rights to guaranteed minimum pensions under a scheme that was a contracted-out scheme; or

(iii) the liability for the payment of guaranteed minimum pensions to or in respect of any person who has become entitled to them,

may be made by an occupational pension scheme to another such scheme , to a personal pension scheme or to an overseas arrangement;

(b) a transfer of or a transfer payment in respect of an earner’s accrued rights to guaranteed minimum pensions which are appropriately secured for the purposes of section 15 may be made to an occupational pension scheme , a personal pension scheme or an overseas arrangement.

(2) Any such regulations may be made so as to apply to earners who are not in employment at the time of the transfer.

(3) Regulations under subsection (1) may provide that any provision of this Part (other than sections 14, 15 and 39 to 41, ... so far as they apply to personal pension schemes) or of Chapter III of Part IV or Chapter II of Part V shall have effect, where there has been a transfer to which they apply, subject to such modifications as may be specified in the regulations.

(4) Regulations under subsection (1) shall have effect in relation to transfers whenever made unless they provide that they are only to have effect in relation to transfers which take place after they come into operation.

(5) The power conferred by subsection (1) is without prejudice to the generality of section 177(2) or section 17(5) of the Interpretation Act (Northern Ireland) 1954.

(6) In the provisions mentioned in subsection (3) “accrued rights”, in relation to an earner, means the rights conferring prospective entitlement under the scheme in question to the pensions to be provided for the earner and the earner’s widow, widower or surviving civil partner in accordance with sections 9 and 13, and references to an earner’s accrued rights to guaranteed minimum pensions shall be construed accordingly.

Commutation, surrender and forfeiture

17

(1) A scheme may, in such circumstances and subject to such restrictions and conditions as may be prescribed, provide for the payment of a lump sum instead of a pension required to be provided by the scheme in accordance with section 9 or 13.

(2) Neither section 9 nor section 13 shall preclude a scheme from providing for the earner’s or the earner’s widow's, widower’s or surviving civil partner's guaranteed minimum pension to be suspended or forfeited in such circumstances as may be prescribed.

Financing of benefits

18

Securing of benefits

19

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Subject to subsection (3), the scheme must contain a rule by which any liabilities of the scheme in respect of—

(a) guaranteed minimum pensions and accrued rights to guaranteed minimum pensions;

(b) any such benefits as are excluded by section 9(6) from earners’ guaranteed minimum pensions;

(c) pensions and other benefits (whether or not within paragraph (a) or (b)) in respect of which entitlement to payment has already arisen; and

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

are accorded priority on a winding up over other liabilities under the scheme in respect of benefits attributable to any period of service after the rule has taken effect.

(3) The rule may also accord priority, on a winding up occurring after an earner has attained normal pension age, to liabilities of the scheme in respect of pensions and other benefits to which—

(a) he will be entitled on ceasing to be in employment, or

(b) the earner’s widow, widower or surviving civil partner or any dependant of the earner’s will be entitled on the earner’s death.

(4) Subsections (2) and (3) do not apply to public service pension schemes.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) Subsections (2) and (3) do not apply to schemes falling within any category or description prescribed as being exempt from the requirements of those subsections.

(7) If the scheme provides for the payment out of any sum representing the surrender value of a policy of insurance taken out for the purposes of the scheme, it must make provision so that there may be no payment out in relation to guaranteed minimum pensions except in such circumstances as may be prescribed.

Sufficiency of resources

20

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Discretionary requirements

Power for Board to impose conditions as to investments and resources

21

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) A scheme that was a salary related contracted-out scheme must, in relation to any earner’s service before the principal appointed day, comply with any requirements prescribed for the purpose of securing that—

(a) the Inland Revenue are kept informed about any matters affecting the security of the minimum pensions guaranteed under the scheme, and

(b) the resources of the scheme are brought to and are maintained at a level satisfactory to the Inland Revenue.

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

Requirements for certification of occupational and personal money purchase schemes

Persons who may establish scheme

22

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Identification and valuation of protected rights

23

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ways of giving effect to protected rights

24

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The pension and annuity requirements

25

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Securing of liability for protected rights

26

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment and resources of schemes

27

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Suspension or forfeiture

28

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax requirements to prevail over certification requirements

29

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cancellation, variation, surrender and refusal of certificates

30

(1) Regulations shall provide for the cancellation, variation or surrender of a contracting-out certificate, or the issue of a new certificate—

(a) on any change of circumstances affecting the treatment of an employment as contracted-out employment; or

(b) where the certificate was issued on or after the principal appointed day, if any employer of persons in the description of employment to which the scheme in question relates, or the actuary of the scheme, fails to provide HMRC, at prescribed intervals, with such documents as may be prescribed for the purpose of verifying that the conditions of section 5(2B) are satisfied.

(2) Regulations may enable the Inland Revenue to cancel or vary a contracting-out certificate where—

(a) they have reason to suppose that any employment to which it relates ought not to be treated as contracted-out employment in accordance with the certificate; and

(b) the employer does not show that it ought to be so treated.

(3) Where by or by virtue of any provision of this Part the contracting-out of a scheme in relation to an employment depends on the satisfaction of a particular condition, the continued contracting-out of the scheme ... shall be dependent on continued satisfaction of the condition; and if the condition ceases to be satisfied, that shall be a ground (without prejudice to any other) for the cancellation or variation of the contracting-out ... certificate.

(4) A contracting-out certificate in respect of any employment may be withheld or cancelled by the Inland Revenue if they consider that there are circumstances which make it inexpedient that the employment should be or, as the case may be, continue to be, contracted-out employment by reference to the scheme, notwithstanding that the relevant scheme is one that they would otherwise treat as proper to be contracted-out in relation to all earners in that employment.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) Without prejudice to their powers apart from this subsection, the Inland Revenue may withhold or cancel a contracting-out certificate in respect of a scheme if they consider that the rules of the scheme are such that persons over particular ages may be prevented from participating in the scheme.

(7) Without prejudice to the preceding provisions of this section, failure of a scheme to comply with any requirements prescribed by virtue of section 21(2) shall be a ground on which the Inland Revenue may, in respect of any employment to which the scheme relates, cancel a contracting-out certificate.

(8) Except in prescribed circumstances, no cancellation, variation or surrender of a contracting-out certificate ...shall have effect from a date earlier than that on which the cancellation, variation or surrender is made.

(9) A reference in this section to a contracting-out certificate does not include a reference to a contracting-out certificate issued in respect of a money purchase contracted-out scheme.

Surrender and cancellation of contracting-out certificates: issue of further certificates

31

(1) This section applies in any case where—

(a) a contracting-out certificate (“the first certificate”) has been surrendered by an employer or cancelled by the Board; and

(b) at any time before the end of the period of 12 months beginning with the date of the surrender or cancellation, that or any connected employer makes an election under section 7 in respect of any employment which was specified by virtue of section 3(2)(a) in the first certificate, with a view to the issue of a further contracting-out certificate.

(2) This section applies whether or not the scheme specified in the first certificate in relation to the employment concerned is the same as the scheme which would be specified in the further certificate if it were issued.

(3) The Board shall not give effect to the election referred to in subsection (1) by issuing a further certificate unless they consider that, in all the circumstances of the case, it would be reasonable to do so.

(4) Regulations may make such supplemental provision in relation to cases falling within this section as the Department considers necessary or expedient.

(5) For the purposes of subsection (1)—

(a) an employment (“the second employment”) in respect of which an election of the kind referred to in subsection (1)(b) has been made; and

(b) an employment (“the first employment”) which was specified by virtue of section 3(2)(a) in the first certificate,

shall be treated as one employment if, in the opinion of the Board—

(i) they are substantially the same, however described; or

(ii) the first employment falls wholly or partly within the description of the second employment or the second employment falls wholly or partly within the description of the first employment.

(6) Regulations shall prescribe the cases in which employers are to be treated as connected for the purposes of this section.

Surrender and cancellation of contracting-out certificates: cancellation of further certificates

32

(1) This section applies in any case where—

(a) a contracting-out certificate (“the first certificate”) has been surrendered by an employer or cancelled by the Board;

(b) a further contracting-out certificate (“the further certificate”) has been issued, after the surrender or cancellation of the first certificate but before the end of the period of 12 months beginning with the date of the surrender or cancellation, in respect of any employment which was specified by virtue of section 3(2)(a) in the first certificate; and

(c) the Board have formed the opinion that had they been aware of all the circumstances of the case at the time when the further certificate was issued they would have been prevented by section 31(3) from issuing it.

(2) This section applies whether or not the scheme specified in the first certificate in relation to the employment concerned is the same as the scheme specified in the further certificate.

(3) The Board may, before the end of the period of 12 months beginning with the date on which the further certificate was issued, cancel that certificate.

(4) Where a contracting-out certificate is cancelled under subsection (3) the provisions of this Act and of any regulations and orders made under it shall have effect as if the certificate had never been issued.

(5) Regulations may make such supplemental provision in relation to cases falling within this section as the Department considers necessary or expedient.

(6) Without prejudice to subsection (5), regulations may make provision, in relation to any case in which the Board have cancelled a contracting-out certificate under subsection (3), preventing the recovery by the employer concerned (whether by deduction from emoluments or otherwise) of such arrears which he is required to pay to the Department in respect of an earner’s liability under section 6(3) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 as may be prescribed.

(7) For the purposes of subsection (1)—

(a) an employment (“the second employment”) in respect of which a further contracting-out certificate of the kind referred to in subsection (1)(b) has been issued; and

(b) an employment (“the first employment”) which was specified by virtue of section 3(2)(a) in the first certificate,

shall be treated as one employment if, in the opinion of the Board—

(i) they are substantially the same, however described; or

(ii) the first employment falls wholly or partly within the description of the second employment or the second employment falls wholly or partly within the description of the first employment.

Alteration of rules of contracted-out schemes

33

(1) Except in prescribed cases, the rules of a scheme that was a salary related contracted-out scheme cannot be altered unless the alteration is of a prescribed description.

(2) Regulations made by virtue of subsection (1) may operate so as to validate with retrospective effect any alteration of the rules which would otherwise be void under this section.

(3) Subsection (1) does not apply to a scheme if no person is entitled to receive, or has accrued rights to, any benefits under the scheme attributable to a period when the scheme was contracted-out.

(4) The reference in subsection (3) to a person entitled to receive benefits under a scheme includes a person who is so entitled by virtue of a qualifying relationship only in such cases as may be prescribed.

(5) For that purpose a person is entitled to receive benefits by virtue of a qualifying relationship if the person is so entitled by virtue of being—

(a) the widower of a female earner;

(b) the widower of a male earner;

(d) the survivor of a civil partnership with an earner , except for a surviving civil partner who is a woman in the case of an earner to whom subsection (5A) applies.

(5A) This subsection applies to an earner who is—

(a) a man, or

(b) a woman in a relevant gender change case.

(6) A reference in subsection (5)(c) or (d) or (5A) to a relevant gender change case is a reference to a case where—

(a) the earner is a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004, and

(b) the marriage of the earner and her widow , or the civil partnership between the earner and her surviving civil partner, (that ends with the earner’s death) subsisted before the time when the certificate was issued.

(7) This section is subject to regulations under section 34A.

Alteration of rules of appropriate schemes

34

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General regulations as to administration of Part III

General power to make regulations

35

Schedule 1 shall have effect for enabling regulations to be made in relation to the operation and administration of this Part, and Part I of that Schedule has effect as respects occupational pension schemes, ... .

Preliminary

Scope of Chapter II

36

This Chapter has effect for the purpose—

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

(b) of providing for contributions to be paid by the Inland Revenue in respect of earners who are members of money purchase contracted-out schemes and members of appropriate personal pension schemes; and

(c) of making provision concerning the payment of certain social security benefits payable in respect of members and former members of schemes that were contracted-out pension schemes.

Reduced rates of Class 1 contributions for earners in contracted-out employment

37

(1) Subsections (1A) to (1E) apply where—

(a) the earnings paid to or for the benefit of an earner in any tax week are in respect of an employment which is contracted-out employment at the time of the payment; and

(b) the earner’s service in the employment is service which qualifies him for a pension provided by a salary related contracted-out scheme,

and in subsections (1A) and (1B) “the relevant part”, in relation to those earnings, means so much of those earnings as exceeds the current lower earnings limit but not the upper accrual point (or the prescribed equivalents if the earner is paid otherwise than weekly).

(1ZA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1A) The amount of any primary Class 1 contribution attributable to section 8(1)(a) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7) in respect of the earnings shall be reduced by an amount equal to 1.4 per cent of the relevant part of the earnings (“Amount R1”).

(1B) The amount of any secondary Class 1 contribution in respect of the earnings shall be reduced by an amount equal to 3.4 per cent of the relevant part of the earnings (“Amount R2”).

(1C) The aggregate of Amounts R1 and R2 shall be set off—

(a) first against the aggregate amount which the secondary contributor is liable to pay in respect of the contributions mentioned in subsections (1A) and (1B); and

(b) then (as to any balance) against any amount which the secondary contributor is liable to pay in respect of any primary or secondary Class 1 contribution in respect of earnings—

(i) paid to or for the benefit of any other employed earner (whether in contracted-out employment or not), and

(ii) in relation to which the secondary contributor is such a contributor;

and in this subsection any reference to a liability to pay an amount in respect of a primary Class 1 contribution is a reference to such a liability under paragraph 3 of Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

(1D) If—

(a) any balance remains, and

(b) the secondary contributor makes an application for the purpose to the Inland Revenue,

the Inland Revenue shall, in such manner and at such time (or within such period) as may be prescribed by regulations made by the Secretary of State, pay to the secondary contributor an amount equal to the remaining balance.

(1E) If the Inland Revenue pay any amount under subsection (1D) which they are not required to pay, they may recover that amount from the secondary contributor in such manner and at such time (or within such period) as may be prescribed by such regulations.

(2) Where—

(a) an earner has ceased to be employed in an employment; and

(b) earnings are paid to him or for his benefit within the period of 6 weeks, or such other period as may be prescribed by regulations made by the Secretary of State, from the day on which he so ceased,

that employment shall be treated for the purposes of subsection (1) as contracted-out employment at the time when the earnings are paid if it was contracted-out employment in relation to the earner when he was last employed in it.

(3) This section shall not affect the amount of any primary Class 1 contribution which is payable at a reduced rate by virtue of regulations under section 19(4) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (reduced rates for married women and widows).

Alteration of rates of contributions under s. 37

38

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Minimum contributions: members of appropriate personal pension schemes

Payment of minimum contributions to personal pension schemes

39

(1) Subject to the following provisions of this Part, the Inland Revenue shall, except in such circumstances or in respect of such periods as may be prescribed, pay minimum contributions in respect of an employed earner for any period during which the earner—

(a) is over the age of 16 but has not attained pensionable age;

(b) is not a married woman or widow who has made an election which is still operative that so much of her liability in respect of primary Class 1 contributions as is attributable to section 8(1)(a) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 shall be a liability to contribute at a reduced rate; and

(2) Subject to subsection (3), minimum contributions in respect of an earner shall be paid to the earner .

(3) In such circumstances as may be prescribed minimum contributions shall be paid to a prescribed person.

(4) Where the condition mentioned in subsection (1)(a) or (c) ceases to be satisfied in the case of an earner in respect of whom the Inland Revenueare required to pay minimum contributions, the duty of the Inland Revenue to pay them shall cease as from a date determined in accordance with regulations made by the Secretary of State.

(5) If the Inland Revenuepay an amount by way of minimum contributions which they are not required to pay, the Inland Revenue may recover it—

(a) from the person to whom the Inland Revenue paid it, or

(b) from any person in respect of whom the Inland Revenue paid it.

(6) If the Inland Revenuepay in respect of an earner an amount by way of minimum contributions which the Inland Revenueare required to pay, but do not pay it to the trustees or managers of the earner’s chosen scheme, the may recover it from the person to whom the Inland Revenue paid it or from the earner.

(6A) Where a payment under subsection (1) is due in respect of an earner, HMRC are not required to make the payment if they determine that the cost to them of administering the payment would exceed the amount of the payment.

(7) In this section “prescribed” means prescribed by regulations made by the Secretary of State.

(8) In this section “the earner's chosen scheme” means the scheme which was immediately before the first abolition date the earner's chosen scheme in accordance with section 40 (as it had effect prior to that date).

Earner’s chosen scheme

40

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount of minimum contributions

41

(1) In relation to any tax week falling within a period for which the Inland Revenue are required to pay minimum contributions in respect of an earner, the amount of those contributions shall be an amount equal to the appropriate age-related percentage of so much of the earnings paid in that week (other than earnings in respect of contracted-out employment) as exceeds the current lower earnings limit but not the upper accrual point (or the prescribed equivalents if he is paid otherwise than weekly).

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

(3) Regulations made by the Secretary of State may make provision—

(a) for earnings to be calculated or estimated in such manner and on such basis as may be prescribed for the purpose of determining whether any, and if so what, minimum contributions are payable in respect of them;

(b) for the adjustment of the amount which would otherwise be payable by way of minimum contributions so as to avoid the payment of trivial or fractional amounts;

(c) for the intervals at which, for the purposes of minimum contributions, payments of earnings are to be treated as made;

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

(e) for this section to have effect in prescribed cases as if for any reference to a tax week there were substituted a reference to a . . .

(f) as to the manner in which and time at which or period within which minimum contributions are to be made.

(4) In subsection (3) “prescribed” means prescribed by regulations made by the Secretary of State.

(5) For the purposes of this section “the appropriate age-related percentage”, in relation to a tax year beginning before the first abolition date, is the percentage (or percentages) specified as such for that tax year in an order made under section 41A (as it had effect prior to that date).

42

(1) Where for any period a person is entitled both—

(a) to a Category A or Category B retirement pension, a widowed mother’s allowance , a widowed parent’s allowance, or a widow’s pension under the Social Security Contributions and Benefits (Northern Ireland) Act 1992; and

(b) to one or more guaranteed minimum pensions,

the weekly rate of the benefit mentioned in paragraph (a) shall for that period be reduced by an amount equal—

(i) to that part of its additional pension which is attributable to earnings factors for any tax years ending before the principal appointed day,

(ii) to the weekly rate of the pension mentioned in paragraph (b) (or, if there is more than one such pension, their aggregate weekly rates),

whichever is the less.

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

(3) Where for any period—

(a) a person is entitled to one or more guaranteed minimum pensions; and

(b) he is also entitled to long-term incapacity benefit under section 30A of the Social Security Contributions and Benefits (Northern Ireland) Act 1992,

for that period an amount equal to the weekly rate or aggregate weekly rates of the guaranteed minimum pension or pensions shall be deducted from any increase payable under regulations under section 30B(7) of that Act and he shall be entitled to such an increase only if there is a balance after the deduction and, if there is such a balance, at a weekly rate equal to it.

(4) Where for any period—

(a) a person is entitled to one or more guaranteed minimum pensions;

(b) he is also entitled to a Category A retirement pension under section 44 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992; and

for that period section 47 of that Act shall have effect as if the following subsection were substituted for subsection (3)—

(3) In subsection (2) above “the relevant amount” means an amount equal to the aggregate of— (a) the additional pension; and (b) the weekly rate or aggregate weekly rates of the guaranteed minimum pension or pensions, reduced by the amount of any reduction in the weekly rate of the Category A retirement pension made by virtue of section 42(1) of the Pension Schemes (Northern Ireland) Act 1993.

(5) Where for any period—

(a) a person is entitled to one or more guaranteed minimum pensions;

(b) he is also entitled to a Category A retirement pension under section 44 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992; and

(c) the weekly rate of his Category A retirement pension does not include an additional pension such as is mentioned in subsection (3)(b) of that section,

for that period the relevant amount shall be deducted from the amount that would otherwise be the increase under section 47(1) of that Act and the pensioner shall be entitled to an increase under that section only if there is a balance remaining after that deduction and, if there is such a balance, of an amount equal to it.

(6) Where for any period—

(a) a person is entitled to one or more guaranteed minimum pensions;

(b) he is also entitled—

(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii) to a Category A retirement pension under section 44 of that Act; or

(iii) to a Category B retirement pension under section 48A , 48B or 48BB of that Act; and

for that period paragraph 3 of Schedule 7 to that Act shall have effect as if the following sub-paragraph were substituted for sub-paragraph (3)—

(3) In this paragraph “the relevant amount” means an amount equal to the aggregate of— (a) the additional pension; and (b) the weekly rate or aggregate weekly rates of the guaranteed minimum pension or pensions, reduced by the amount of any reduction in the weekly rate of the pension made by virtue of section 42(1) of the Pension Schemes (Northern Ireland) Act 1993.

(7) Where for any period—

(a) a person is entitled to one or more guaranteed minimum pensions;

(b) he is also entitled to any of the pensions under the Social Security Contributions and Benefits (Northern Ireland) Act 1992 mentioned in subsection (6)(b); and

(c) the weekly rate of the pension does not include an additional pension such as is mentioned in section 44(3)(b) of that Act,

for that period the relevant amount shall be deducted from the amount that would otherwise be the increase under paragraph 3 of Schedule 7 to that Act and the beneficiary shall be entitled to an increase only if there is a balance after that deduction and, if there is such a balance, only to an amount equal to it.

(8) In this section “the relevant amount” means an amount equal to the weekly rate or aggregate weekly rates of the guaranteed minimum pension or pensions—

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

(b) in the case of subsection (5), reduced by the amount of any reduction in the weekly rate of the Category A retirement pension made by virtue of subsection (1);

and references in this section to the weekly rate of a guaranteed minimum pension are references to that rate without any increase under section 11(1).

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) In this section a reference to “additional pension” does not include any amount of additional pension attributable to units of additional pension.

(11) For units of additional pension, see section 14A of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

Further provisions concerning entitlement to guaranteed minimum pensions for the purposes of s. 42

43

(1) The reference in section 42(1) to a person entitled to a guaranteed minimum pension shall be construed as including a reference to a person so entitled by virtue of being the widower , surviving same sex spouse or surviving civil partner of an earner in any case where he is entitled to a benefit other than a widowed parent's allowance ... only if—

(a) he is also entitled to a Category B retirement pension by virtue of the earner's contributions (or would be so entitled but for section 43(1) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992); or

(b) he is also entitled to a Category A retirement pension by virtue of section 41(5) of that Act.

(2) For the purposes of section 42 a person shall be treated as entitled to any guaranteed minimum pension to which he would have been entitled—

(a) if its commencement had not been postponed, as mentioned in section 9(4); or

(b) if there had not been made a transfer payment or transfer under regulations made by virtue of section 16 as a result of which—

(i) he is no longer entitled to guaranteed minimum pensions under the scheme by which the transfer payment or transfer was made, and

(ii) he has not become entitled to guaranteed minimum pensions under the scheme to which the transfer payment or transfer was made.

(3) Where—

(a) guaranteed minimum pensions provided for a member or the member’s widow, widower or surviving civil partner under a contracted-out scheme have been wholly or partly secured as mentioned in subsection (3) of section 15; and

(b) either—

(i) the transaction wholly or partly securing them was carried out before 1st January 1986 and discharged the trustees or managers of the scheme as mentioned in subsection (1) of that section; or

(ii) it was carried out on or after that date without any of the requirements specified in subsection (5)(a) to (c) of that section being satisfied in relation to it and the scheme has been wound up; and

(c) any company with which any relevant policy of insurance or annuity contract was taken out or entered into is unable to meet the liabilities under policies issued or securities given by it; and

(d) the combined proceeds of—

(i) any relevant policies and annuity contracts, and

(ii) any cash sums paid or alternative arrangements made under the Financial Services Compensation Scheme,

are inadequate to provide the whole of the amount secured,

the member and the member’s widow, widower or surviving civil partner shall be treated for the purposes of section 42 as only entitled to such part (if any) of the member’s or, as the case may be, the member’s widow's, widower’s or surviving civil partner's guaranteed minimum pension as is provided by the proceeds mentioned in paragraph (d).

(4) A policy or annuity is relevant for the purposes of subsection (3) if taking it out or entering into it constituted the transaction to which section 15 applies.

(5) For the purposes of section 42 a person shall be treated as entitled to any guaranteed minimum pension to which he would have been entitled—

(a) if a lump sum had not been paid instead of that pension under provisions included in a scheme by virtue of section 17(1); or

(b) if that pension had not been forfeited under provisions included in a scheme by virtue of section 17(2).

(6) For the purposes of section 42, a person shall be treated as entitled to any guaranteed minimum pension to which he would have been entitled but for section 10(2A) and any reduction under section 11A.

(7) For the purposes of section 42, a person shall be treated as entitled to any guaranteed minimum pension to which he would have been entitled but for any order under Article 315A of the Insolvency (Northern Ireland) Order 1989 (recovery of excessive pension contributions).

(8) For the purposes of section 42, a person shall be treated as entitled to a guaranteed minimum pension to which he would have been entitled but for the fact that the trustees or managers were discharged from their liability to provide that pension on the Board of the Pension Protection Fund assuming responsibility for the scheme.

(9) For the purposes of section 42, a person shall be treated as entitled to a guaranteed minimum pension to which, in the opinion of the Commissioners for Her Majesty's Revenue and Customs, he would have been entitled but for the amendment of a scheme so that it no longer contains the guaranteed minimum pension rules GMP conversion (within the meaning given by section 20A(1)) in relation to the person .

(10) Where the earner's accrued rights have been transferred after the amendment of the scheme, in making the calculation under subsection (9) the Commissioners shall assume the application of section 12(1) after the transfer.

(11) In making the calculation under subsection (9) the Commissioners shall ignore any effect of the scheme being wound up.

Reduced benefits where minimum payments or minimum contributions paid

44

(1) Subject to subsection (3), this subsection applies where for any period—

(a) minimum payments have been made in respect of an earner to an occupational pension scheme which is a money purchase contracted-out scheme in relation to the earner’s employment, or

(b) minimum contributions have been paid in respect of an earner under section 39.

(2) Where subsection (1) applies then, for the purposes of section 42—

(a) the earner shall be treated, as from the date on which he reaches pensionable age, as entitled to a guaranteed minimum pension at a prescribed weekly rate arising from that period in that employment;

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

(c) in prescribed circumstances . . . any widow, widower or surviving civil partner of the earner shall be treated as entitled to a guaranteed minimum pension at a prescribed weekly rate arising from that period;

and where subsection (1)(b) applies, paragraphs (a) to (c) of this subsection apply also for the purposes of section47(2) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 and paragraph 3(2) of Schedule 7 to that Act, but with the omission from paragraph (a) of the words “in that employment”.

(3) Where the earner is a married woman or widow, subsection (1) shall not have effect by virtue of paragraph (a) of that subsection in relation to any period during which there is operative an election that her liability in respect of primary Class 1 contributions shall be a liability to contribute at a reduced rate.

(4) The power to prescribe a rate conferred by subsection (2)(a) includes power to prescribe a nil rate.

Women, married women and widows

Married women and widows

45

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter III — Termination of Contracted-out or Appropriate Scheme Status: State Scheme Premiums

Approval of arrangements for schemes ceasing to be certified

Powers of Board to approve arrangements for scheme ceasing to be certified

46

(1) In the case of an occupational pension scheme ... which is or has been certified as a salary related contracted-out scheme, the Inland Revenue may, for the event of, or in connection with, its ceasing to be such a scheme, approve any arrangements made or to be made in relation to the scheme, or for its purposes, for the preservation or transfer—

(a) of earners’ accrued rights to guaranteed minimum pensions under the scheme or accrued rights to pensions under the scheme attributable to their service on or after the principal appointed day, and

(b) of the liability for the payment of such pensions in respect of persons who have then become entitled to receive them.

(1A) The power of the Inland Revenue to approve arrangements under this section—

(a) includes power to approve arrangements subject to conditions, and

(b) may be exercised either generally or in relation to a particular scheme.

(1B) Arrangements may not be approved under this section unless any prescribed conditions are met

(2) If the scheme ceases to be a salary related contracted-out scheme (whether by being wound up or otherwise) and the Inland Revenue either—

(a) have withdrawn their approval of previously approved arrangements relating to it; or

(b) have declined to approve arrangements relating to it,

the Inland Revenue may issue a certificate to that effect.

(3) A certificate issued under subsection (2)(a) or (b) shall be cancelled by the Inland Revenue if they subsequently approve the arrangements.

(4) Regulations may provide that where the Inland Revenue have approved arrangements under subsection (1) in respect of an occupational pension scheme ... any provision of this Part (other than sections 14, 15, 27 and 29 and 39 and 41) or Chapter III of Part IV or Chapter II of Part V shall have effect subject to such modifications as may be specified in the regulations.

(5) Any such regulations shall have effect in relation to arrangements whenever approved, unless they provide that they are only to have effect in relation to arrangements approved after they come into operation.

(6) It is hereby declared that an approval of arrangements relating to an occupational pension scheme to which subsection (1) applies may be withdrawn at any time, notwithstanding that the scheme has been wound up.

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Calculation of guaranteed minimum pensions preserved under approved arrangements

47

(1) This section applies where—

(a) an earner’s guaranteed minimum pension rights or accrued rights to guaranteed minimum pensions under a scheme satisfy prescribed conditions, and

(b) one or more of the five tax years ending with the tax year in which the scheme ceased to be contracted-out is a relevant year in relation to the earner.

(2) Where this section applies then, except in such circumstances as may be prescribed, section 12(1) shall have effect, subject to the following provisions, that is to say—

(a) any earnings factor shall be taken to be that factor as increased by the last order under Article 23 of the Social Security Pensions (Northern Ireland) Order 1975 or section 130 of the Social Security Administration (Northern Ireland) Act 1992 to come into operation before those five tax years; and

(b) any relevant earnings factors derived from contributions or earnings in respect of any year (“the relevant contributions year”) shall be treated as increased by 12 per cent. compound for each of those five tax years, other than any of those years which—

(i) constitutes or begins before the relevant contributions year, or

(ii) begins after the final relevant year in relation to the earner.

(3) Subsection (2) shall not apply in any case where its application would result in the amount of the guaranteed minimum being greater than it would have been apart from that subsection.

(4) Regulations may provide that subsections (1) to (3) shall have effect with prescribed modifications in relation to a scheme which, immediately before it ceased to be contracted-out, contained provisions authorised by section 12(2).

(5) In this section “relevant year” and “final relevant year” have the same meanings as in section 12.

Supervision of formerly certified schemes

Supervision of schemes which have ceased to be certified

48

Section 49 shall apply for the purpose of making provision for securing the continued supervision of any scheme that was a salary related contracted-out scheme, other than a public service pension scheme, if any person is entitled to receive or has accrued rights to—

(a) a guaranteed minimum pension under the scheme, or

(b) a pension under the scheme attributable to service on or after the principal appointed day but before the scheme ceased to be contracted-out.

Supervision: former contracted-out schemes

49

(1) The Inland Revenue may direct the trustees or managers of the scheme, or the employer, to take or refrain from taking such steps as the Inland Revenue may specify in writing; and such a direction shall be final and binding on the person directed and any person claiming under him.

(1A) An appeal on a point of law shall lie to the High Court from a direction under subsection (1) at the instance of the trustees or managers or the employer, or any person claiming under them.

(1B) A direction under subsection (1) shall be enforceable as if it were an order of the county court.

(1C) But where a direction under subsection (1) conflicts with a freezing order made by the Regulatory Authority under Article 19 of the Pensions (Northern Ireland) Order 2005 in relation to the scheme then, during the period for which the freezing order has effect, the direction to the extent that it conflicts with the freezing order—

(a) is not binding as described in subsection (1), and

(b) is not enforceable as described in subsection (1B).

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

(3) If a certificate has been issued under subsection (2) of section 46 and has not been cancelled under subsection (3) of that section, any liabilities in respect of such entitlement or rights as are referred to in section 48(2A)(a) ... must, except in prescribed circumstances, be discharged (subject to any directions under subsection (1)) in a prescribed manner and within a prescribed period or such longer period as the Inland Revenue may allow.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supervision: former appropriate personal pension schemes

50

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State scheme premiums

Payment of state scheme premiums on termination of certified status

51

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Where—

(a) an earner is serving in employment which is contracted-out employment by reference to an occupational pension scheme ...,

(b) paragraph (a) ceases to apply, by reason of any of the following circumstances, before the earner attains the scheme’s normal pension age or (if earlier) the end of the tax year preceding that in which the earner attains pensionable age, and

the prescribed person shall, if subsection (2B) applies, pay and otherwise may elect to pay a premium under this subsection (referred to in this Act as a “contributions equivalent premium”).

(2ZA) In this section “prescribed” means prescribed by regulations made by the Secretary of State.

(2A) The circumstances referred to in subsection (2) are that—

(a) the earner’s service in the employment ceases otherwise than on the earner’s death,

(b) the earner ceases to be a member of the scheme otherwise than on the earner’s death,

(d) the scheme is wound up,

(e) the scheme ceases to be a contracted-out occupational pension scheme;

. . .

(2B) Except in prescribed circumstances, this subsection applies in any case where the earner has no accrued right to any benefit under the scheme.

(2C) Where a contributions equivalent premium is required to be paid in respect of an earner by virtue of subsection (2), the prescribed person must notify the Inland Revenue of that fact within the prescribed period and in the prescribed manner.

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

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provisions supplementary to s. 51

52

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) A premium under section 51 shall be paid by the prescribed person to the Inland Revenue within the prescribed period . . ..

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

(4) Where under the rules of the scheme, transfer credits have been allowed—

(a) in respect of the earner’s rights under another scheme, or

(b) in respect of the earner by reference to the payment of a cash transfer sum (within the meaning of Chapter 2 of Part 4ZA ) to the trustees or managers of the scheme by the trustees or managers of another occupational pension scheme,

the reference in section 51(2) to employment which is contracted-out by reference to the scheme shall include references to employment in any period of linked qualifying service which was contracted-out employment by reference to the other scheme.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) Subject to regulations under paragraph 1 of Schedule 1, service in any employment which ceases with the death of the employer shall be treated for the purposes of section 51(2A) as ceasing immediately before the death

(7) In this section “prescribed” means prescribed by regulations made by the Secretary of State.

(8) Where a premium under section 51 is payable by the Board of the Pension Protection Fund by virtue of a transfer under Article 145 of the Pensions (Northern Ireland) Order 2005 (effect of the Board assuming responsibility for an occupational pension scheme), then, subject to subsection (9), sections 51 to 64 apply with such modifications as may be prescribed in relation to that premium.

(9) A premium under section 51 in respect of an earner ceases to be payable if—

(a) the liability to pay the premium is transferred to the Board of the Pension Protection Fund by virtue of Article 145 of the Pensions (Northern Ireland) Order 2005, and

(b) prescribed requirements are met.

Elections to pay contributions equivalent premiums

53

(1) An election under section 51(2) must be made within the prescribed period and in the prescribed manner.

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Pension Schemes (Northern Ireland) Act 1993

Part I — Preliminary

Staying court proceedings where a complaint is made or a dispute is referred.

1

Part II — Administration

Registration of schemes

Registration of occupational and personal pension schemes

2

Part III — Schemes that were contracted-out etc. and Effects on Members’ State Scheme Rights ...

Chapter I — Schemes that were contracted-out: guaranteed minimum pensions and alteration of scheme rules etc.

Preliminary

Issue of contracting-out and appropriate scheme certificates

3

Meaning of “contracted-out employment”, “guaranteed minimum pension” and “minimum payment”

4

General requirements for certification

Requirements for certification of schemes: general

5

Protected rights and money purchase benefits

6

Elections as to employments covered by contracting-out certificates

7

Determination of basis on which scheme is contracted-out

8

Guaranteed minimum pensions

Minimum pensions for earners

9

Earner’s guaranteed minimum

10

Increase of guaranteed minimum where commencement of guaranteed minimum pension postponed

11

Revaluation of earnings factors for purposes of s. 10: early leavers, etc

12

Minimum pensions for widows and widowers

13

Treatment of insignificant amounts

14

Discharge of liability where guaranteed minimum pensions secured by insurance policies or annuity contracts

15

Transfer of accrued rights

16

Commutation, surrender and forfeiture

17

Financing of benefits

18

Securing of benefits

19

Sufficiency of resources

20

Discretionary requirements

Power for Board to impose conditions as to investments and resources

21

Requirements for certification of occupational and personal money purchase schemes

Persons who may establish scheme

22

Identification and valuation of protected rights

23

Ways of giving effect to protected rights

24

The pension and annuity requirements

25

Securing of liability for protected rights

26

Investment and resources of schemes

27

Suspension or forfeiture

28

Tax requirements to prevail over certification requirements

29

Cancellation, variation, surrender and refusal of certificates

Cancellation, variation, surrender and refusal of certificates

30

Surrender and cancellation of contracting-out certificates: issue of further certificates

31

Surrender and cancellation of contracting-out certificates: cancellation of further certificates

32

Alteration of rules by former salary related contracted-out schemes

Alteration of rules of contracted-out schemes

33

Alteration of rules of appropriate schemes