(This note is not part of the Regulations)
These Regulations amend the Registered Pension Schemes (Transfer of Sums and Assets) Regulations 2006 (SI 2006/499; “the Transfer Regulations”).
Regulation 1 provides for the citation, commencement and effect of the Regulations. The Regulations have retrospective effect from 6th April 2010 pursuant to the power contained in section 282(A1) of the Finance Act 2004 (“FA 2004”).
The remainder of the Regulations makes amendments resulting from the increase in the normal minimum pension age (“the NMPA”) from 50 to 55 with effect from 6 April 2010 as provided for in section 279 of FA 04. Pension rule 1 of section 165(1) of FA 04 (“Pension Rule 1”) provides that no payment of pension should be made prior to the day the person reaches the NMPA.
Regulation 3 inserts a new entry into Table 1 of regulation 4 of the Transfer Regulations. Regulation 4 of the Transfer Regulations provides that where there is a recognised transfer of pension sums and assets in relation to a scheme pension to which a member is entitled, and those funds are applied towards the provision of a new scheme pension, that new pension is to be treated as the original scheme pension for the purposes prescribed in Table 1. The amendment to Table 1 will enable payment of the new pension to comply with Pension Rule 1 where the member had reached the NMPA at the time the original pension was first paid.
Regulation 4 amends Table 2 of regulation 6 of the Transfer Regulations which deals with lifetime annuities. A new entry is inserted into Table 2 enabling a payment of a new lifetime annuity to comply with Pension Rule 1 where there has been a transfer of the sums and assets representing the original lifetime annuity, providing the member had reached the NMPA at the time the first payment of the original lifetime annuity was made.
Regulation 5 makes similar provision with respect to short-term annuities. It first restates regulation 7 of the Transfer Regulations. It then provides that where a new short-term annuity becomes payable after the transfer of sums and assets representing the original short-term annuity, the new short-term annuity is to be treated as if it were the original short-term annuity for the purposes of Pension Rule 1.
Regulation 6 makes similar provision with respect to income withdrawal from an unsecured pension fund. It amends regulation 12 of the Transfer Regulations by inserting a new entry into Table 3. The new entry will enable payment of an unsecured pension to comply with Pension Rule 1 where there has been a recognised transfer in relation to that unsecured pension and the member had reached the NMPA at the time the original unsecured pension was first paid.
A full and final Impact Assessment has not been prepared for this instrument as no impact on the private or voluntary sectors is anticipated.