Social Security Act 1973

• Citation: 1973 c. 38
• Sections: 149

Section 1

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

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

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 23

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

Section 51 Recognised pensionable employment.

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

(3) In this Act—

(a) “ occupational pension scheme ” means any scheme or arrangement which is comprised in one or more instruments or agreements and which has, or is capable of having, effect in relation to one or more descriptions or categories of employments so as to provide benefits, in the form of pensions or otherwise, payable on termination of service, or on death or retirement, to or in respect of earners with qualifying service in an employment of any such description or category; and

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

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

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

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

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

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 52

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

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Section 58 Transfer of benefit between schemes: linked qualifying service.

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

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

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

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

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

Section 59 Financing and security of minimum benefits.

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

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

Section 69 Rule against perpetuities.

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

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

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

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

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

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

(7) There shall cease to have effect—

(a) the Superannuation and other Trust Funds (Validation) Act 1927 (power to register superannuation schemes, with consequent exemption from the rule against perpetuities), except section 9 and section 11 so far as it provides for citation and extends section 9 to Northern Ireland; and

(b) the corresponding Northern Ireland enactment, that is to say the Superannuation and other Trust Funds (Validation) Act (Northern Ireland) 1928;

but regulations may provide, in relation to a scheme whose fund was registered under either Act immediately before its repeal took effect, for the scheme to retain the benefit of the Act, subject to prescribed conditions and either indefinitely or for a prescribed period.

(8) The said Acts of 1927 and 1928 shall each, until its repeal by subsection (7) above, have effect with the following modifications—

(a) no new application shall be made under section 3 of the Act for the registration of any fund (without prejudice to the effectiveness of any application previously made or pending); and

(b) the registration of a fund may be cancelled notwithstanding that the fund has not been wound up, if the trustees apply in writing to the registrar stating that they desire its cancellation.

Section 89 Disclosure of information by Inland Revenue.

(1) No obligation as to secrecy imposed by statute or otherwise on persons employed in relation to Inland Revenue shall prevent information obtained in connection with the assessment or collection of income tax under Schedule E from being disclosed to the Secretary of State or the Northern Ireland Ministry or to an officer of either of them authorised to receive such information, in connection with the operation of any enactment relating to the calculation or collection of state scheme premiums .

(2) No such obligation as is referred to in subsection (1) above shall prevent information from being disclosed to any member of the Occupational Pensions Board, or an officer of the Board authorised to receive it, in connection with the exercise by the Board of any of their functions.

(2A) No such obligation as is referred to in subsection (1) above shall prevent information from being disclosed to any person whose duty it is to give advice to the Occupational Pensions Board, in so far as the information—

(a) is required by him solely to enable him to perform that duty adequately; and

(b) is information which the Occupational Pensions Board have power under any enactment or regulations under any enactment to require any person to provide.

(3) Subsections (1), (2) and (2A) above extend only to disclosure by or under the authority of the Inland Revenue; and information which is the subject of disclosure to any person by virtue of either subsection shall not be further disclosed to any other person, except where the further disclosure is made—

(a) to a person to whom disclosure could by virtue of this section have been made by or under the authority of the Inland Revenue; or

(b) for the purposes of any proceedings (civil or criminal) in connection with the operation of any enactment relating to the calculation or collection of state scheme premiums ;

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

or where the further disclosure is made to the trustees or managers of an occupational pension scheme and relates to a member of the scheme and is made with his consent.

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

Section 92

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

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

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 95 Further provisions as to Northern Ireland.

(1) Subject to the following provisions of this section, Parts II . . . of this Act, and this Part, extend to Northern Ireland.

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

(3) The following provisions of this Part of this Act do not extend to Northern Ireland, namely—

(a) sections . . . and 98;

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

(c) so much of section 100 and Schedules 27 and 28 as has effect for the amendment and repeal of enactments not extending to Northern Ireland.

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

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

Section 96 Orders and regulations (general provisions).

(1) Any power under this Act to make regulations or an order . . . . . . . . . shall be exercisable by statutory instrument.

(2) Except in so far as this Act otherwise provides, any power conferred thereby to make . . . regulations or an order may be exercised—

(a) either in relation to all cases to which the power extends, or in relation to those cases subject to specified exceptions, or in relation to any specified cases or classes of case;

(b) so as to make, as respects the cases in relation to which it is exercised—

(i) the full provision to which the power extends or any less provision (whether by way of exception or otherwise),

(ii) the same provision for all cases in relation to which the power is exercised, or different provision for different cases or different classes of case or different provision as respects the same case or class of case for different purposes of this Act,

(iii) any such provision either unconditionally or subject to any specified condition,

and where such a power is expressed to be exercisable for alternative purposes it may be exercised in relation to the same case for any or all of those purposes; and any power to make . . . regulations or an order for the purposes of any one provision of this Act shall be without prejudice to any power to make regulations or an order for the purposes of any other provision.

(3) Without prejudice to any specific provision in this Act, any power conferred by this Act to make . . . , regulations or an order shall include power to make thereby such incidental or supplementary provision as appears to . . . the authority making the regulations or order . . . to be expedient for the purposes of the . . . regulations or order.

(4) Any power conferred by this Act to make . . . an order shall include power to vary or revoke any such . . . order shall include power to vary or revoke any such . . . order by a subsequent . . . order.

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

(6) Any power conferred on the Secretary of State . . . by any provision of this Act . . . to make any regulations or order, where the power is not expressed to be exercisable with the consent of the Treasury, shall if the Treasury so direct be exercisable only in conjunction with them.

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Section 97 Parliamentary control of orders and regulations.

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

(3) All regulations and orders made under this Act by the Secretary of State shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(4) In the case of any regulations laid before Parliament at a time when Parliament is not sitting, the requirements of section . . . 68(2) of this Act shall be deemed to be satisfied as respects either House of Parliament if a copy of the report and the statement referred to in that subsection are laid before that House not later than the second day on which the House sits after the laying of the regulations.

Section 98 Financial provisions.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . There shall be paid out of money provided by Parliament—

(a) any expenses falling on the Secretary of State or other government department under this Act . . . ,

(b) any increase attributable to this Act in the expenses of any Minister of the Crown or government department falling to be paid out of money so provided under any other enactment.

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

Section 99 Interpretation.

(1) In this Act except where the context otherwise requires—

“ appropriate scheme ” shall be construed in accordance with Part I of the Social Security Act 1986;

“ contracted-out employment ” and “ contracting-out certificate ” shall be construed in accordance with section 30 of the Pensions Act and references to a contracted-out scheme and to contracting-out shall be construed in accordance with section 32 of that Act;

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“ earnings ” includes any remuneration or profit derived from an employment, and “ earner ” shall be construed accordingly;

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“ employment ” includes any trade, business, profession, office or vocation and “ employed ” shall be construed accordingly except in the expression “employed earner”;

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“ guaranteed minimum pension ” has the meaning given in section 26 of the Pensions Act;

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“ the Inland Revenue ” means the Commissioners of Inland Revenue;

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“ linked qualifying service ” shall be construed in accordance with section 58(2), (2A) and (2B) ;

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“ the Northern Ireland Ministry ” means the Ministry of Health and Social Services for Northern Ireland;

“ occupational pension scheme ” has the meaning given by section 51(3)(a);

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“ the Pensions Act ” means the Social Security Pensions Act 1975;

“ personal pension scheme ” has the same meaning as in the Social Security Act 1986;

“ prescribed ” means prescribed by regulations;

“ public service pension scheme ” has the meaning given by section 51(3)(b);

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“ resources ”, in relation to an occupational scheme, shall be construed in accordance with section 59(1) of this Act;

“ state scheme premium ” means a state scheme premium under Part III of the Pensions Act or under any corresponding provision in force in Northern Ireland;

“ transfer credits ” has the meaning given by section 58(1)(a);

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(2) Except where the context otherwise requires, references in this Act to any Part of it include references to the Schedules of that Part.

(3) Where any provision of this Act refers to regulations and the authority with power to make them is neither specified nor to be implied from the contest, the reference is to regulations made by the Secretary of State . . .

(4) In any provision of this Act (except section 95(5)) containing a reference to “the appointed day” that expression shall be taken to have whatever meaning may be given by the order under section 101 of this Act which brings that provision into force.

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(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(15) Any reference in this Act to an enactment shall, except in so far as the context otherwise requires, be construed as a reference to that enactment as amended or extended by or under any enactment including an enactment contained in this Act; and “enactment”, in this Act, includes an enactment of the Parliament of Northern Ireland and any reference in this Act to an enactment of that Parliament shall include a reference to an enactment re-enacting it with or without modification.

(16) Any reference in this Act, in relation to any enactment of the Parliament of the United Kingdom, to the corresponding Northern Ireland Legislation is a reference to, or to any provision of, an Act of the Parliament of Northern Ireland, or any order made under or having the same effect as such an Act, for the time being in force corresponding to that enactment.

(17) Any reference in section . . . . . ., 96, or 97 of this Act to . . . an order . . ., under this Act or any Part thereof shall include a reference to . . . , an order . . ., made under any provision of an enactment passed after this Act and directed to be construed as one with this Act or, as the case may be, that Part; but this subsection shall apply only so far as a contrary intention is not expressed in the enactment so passed, and shall be without prejudice to the generality of any such direction.

(18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 100 Transitional provisions; minor and consequential amendments; repeals.

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

(2) Subject to any provision made by or under subsection (1) above—

(a) the enactments and Orders specified in Schedule 27 to this Act shall (without prejudice to any other provision of this Act) have effect subject to the amendments there specified, being minor amendments and amendments consequential on the provisions of this Act;

(b) the enactments and Orders specified in Schedule 28 to this Act (which include certain spent provisions and other provisions which are no longer required or will cease to required on the coming into force of the amendments made by Schedule 27) are hereby repealed to the extent specified in the third column of that Schedule.

(3) Where this Act amends an enactment of the Parliament of Northern Ireland, or an Order made under, or having the same effect as, an enactment of that Parliament, the enactment or Order as amended shall be subject to the Interpretation Act (Northern Ireland) 1954 in the same way as an Act of that Parliament is so subject.

(4) Section 38 of the Interpretation Act 1889 (effect of repeals) shall have the same operation in relation to any repeal by this Act of an enactment of the Parliament of Northern Ireland (or of any provision of an Order made under an enactment of that Parliament) as it has in relation to the repeal of an Act of the Parliament of the United Kingdom, references in that section of the Act of 1889 to Acts and enactments being construed accordingly.

Section 101 Citation and commencement.

(1) This Act may be cited as the Social Security Act 1973.

(2) This Act shall come into force on such day as the Secretary of State may appoint by order; and—

(a) different days may be so appointed for, or for different purposes of, any one or more provisions of this Act (including, in the case of section 100 of this Act, the amendment or repeal of different enactments specified in Schedule 27 or 28 to this Act, or of different provisions of any enactment so specified); and

(b) an order under this subsection appointing a day for the coming into force of any provision (whether for all purposes or for particular purposes specified in the order) shall, if that provision contains a reference to “the appointed day”, specify the day (being a day not earlier than the making of the order nor later than the coming into force of the provision) which is to be the appointed day for any purposes for which the provision is brought into force.

(3) An order under subsection (2) above may make such transitional provision or savings as appear to the Secretary of State to be necessary or expedient in connection with provisions of this Act which are thereby brought (wholly or in part) into force, and may make such adaptations of those provisions or of any provisions of this Act then in force as appear to the Secretary of State to be necessary or expedient in consequence of the partly postponed or postponed operation of any provision of this Act (whether before, on or after the day appointed by the order).

(4) Any statutory instrument containing an order made under this section shall be laid before Parliament after being made.

Section 1

The following 4 paragraphs have effect for the interpretation of this Schedule.

Section 2

“ Scheme ” means an occupational pension scheme; and in relation to a scheme—

(a) “ relevant employment ” means any employment to which the scheme applies;

(b) “ long service benefit ” means the benefits which will be payable under the scheme, in accordance with legal obligation, to or in respect of a member of the scheme on the assumption that he remains in relevant employment , and continues to render service which qualifies him for benefits, until he attains normal pension age;

and in paragraph (b) above “ benefits ” means retirement benefit for the member himself at normal pension age or benefit for the member’s wife or husband, widow or widower , or dependants, or others, on his attaining that age or his death thereafter, or both such descriptions of benefit.

Section 3

(1) “ Pensionable service ”, in relation to a scheme and a member of it, means service in relevant employment which qualifies the member (on the assumption that it continues for the appropriate period) for long service benefit under the scheme, including service before the appointed day.

(2) There shall be taken into account as pensionable service only actual service; that is to say—

(a) service notionally attributable for any purposes of the scheme is not to be regarded as pensionable service; and

(b) no account is to be taken of scheme rules by which a period of service can be treated for any purpose as being longer or shorter than it actually is.

Section 4

(1) In relation to a scheme and a member’s pensionable service under it, “ normal pension age ” is to be construed as follows.

(2) Where the scheme provides for the member only a guaranteed minimum pension , “ normal pension age ” means the earliest age at which the member is entitled to receive the guaranteed minimum pension on retirement from relevant employment.

(3) In any other case, “ normal pension age ” means the earliest age at which the member is entitled to receive benefits (other than a guaranteed minimum pension ) on his retirement from such employment.

(4) For the purposes of this paragraph there is to be disregarded any scheme rule making special provision as to early retirement on grounds of ill-health or otherwise.

Section 5

(1) “ Supplementary credits ”, in relation to a scheme and a member’s entitlement to its benefits, means any increase of benefit or additional benefit to which the member may become entitled—

(a) in consequence of any provision made by or under the scheme after he becomes a member of it (to the extent that it applies to any previous pensionable service of his); or

(b) by reference to previous service of his (whether or not pensionable service); or

(c) in such other circumstances as may be prescribed,

including under paragraph (b) above any transfer credits.

(2) “ Purchased credits ” means supplementary credits for which, under the rules of the scheme, a member may or must make payment in whole or in part (whether by means of additional contributions, or of deduction from benefit, or otherwise, and whether separately for each credit or by one or more payments for one or more credits).

(3) “ Bonus credits ” means supplementary credits other than purchased credits or transfer credits.

Section 6

(1) A scheme must provide so that where a member’s pensionable service is terminated before normal pension age and—

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

(b) he has at least 2 years’ qualifying service, or

(c) a transfer payment in respect of his rights under a personal pension scheme has been made to the scheme,

he is entitled to benefit (calculated in accordance with the following provisions of this Schedule and there referred to as “ short service benefit ”), consisting of or comprising benefit of any description which would have been payable under the scheme as long service benefit, whether for himself or for others.

(2) Subject to the following sub-paragraph, short service benefit must be made payable as from normal pension age or, if in the member’s case that age is earlier than 60, then from the age of 60.

(3) Short service benefit payable on or in respect of the member’s death after normal pension age must be made payable as from his death or within such time thereafter as long service benefit payable on or in respect of his death would be payable.

(4) In applying sub-paragraphs (2) and (3) above, no regard is to be had to the operation of any scheme rule, taking effect at any time after termination of the member’s pensionable service, as to what is normal pension age under the scheme.

(5) A scheme must not provide for payment of short service benefit in the form of a lump sum at any time before normal pension age, except in such circumstances as may be prescribed.

(6) In any case where—

(a) the pensionable service of a member of a scheme terminated during the period beginning with 6th April 1988 and ending immediately before the coming into force of this sub-paragraph, otherwise than on the termination of his service in relevant employment, and

(b) during that period no payments in discharge of his rights under the scheme were made in consequence of that termination,

sub-paragraph (1) above shall be taken at all times on and after 6th April 1988 (the date on which section 15 of the Social Security Act 1986 came into force) to have had effect in relation to that member and his rights under the scheme with the amendment made by paragraph 5(1) of Schedule 4 to the Social Security Act 1990 (which substituted the words “pensionable service” for the words “service in relevant employment”).

Section 7

(1) “ 2 years’ qualifying service ” means 2 years (whether a single period of that duration or two or more periods, continuous or discontinuous, totalling 2 years) in which the member was at all times employed either—

(a) in pensionable service under the scheme; or

(b) in service in contracted-out employment by reference to the scheme; or

(c) in linked qualifying service under another scheme,

no regard being had to whether or not it was the same description of service in the whole of the 2 years.

(2) A period of service previously terminated is not to count towards the 2 years’ qualifying service unless it counts towards qualification for long service benefit, and need then count only to the same extent and in the same way.

Section 8

(1) A scheme must not contain any rule which results, or can result, in a member being treated less favourably for any purpose relating to short service benefit than he is, or is entitled to be, treated for the corresponding purpose relating to long service benefit.

(2) The above does not apply to any rule in its application to members whose pensionable service terminated before the rule came into force, except a rule made after the termination of a member’s pensionable service and resulting, or capable of resulting, for him in any treatment less favourable than that to which he would have been entitled but for the rule; nor does it apply to a rule merely conferring a discretion on the scheme’s trustees or managers, or others, so long as it is not a rule requiring the discretion to be exercised in any discriminatory manner against members in respect of their short service benefit.

Section 9

(1) Subject to the following sub-paragraph, a member’s short service benefit must either be payable (as mentioned in paragraph 6(2) above) directly out of the resources of the scheme or be assured to him by such means as may be prescribed.

(2) Subject to the following sub-paragraphs, a scheme may, instead of providing short service benefit, provide—

(a) for the member’s accrued rights to be transferred to another occupational pension scheme with a view to acquiring transfer credits for the member under the other scheme, or to a personal pension scheme or a self-employed pension arrangement with a view to acquiring rights for the member under the rules of the scheme or arrangement; or

(b) for such alternatives to short service benefit as may be prescribed.

(2A) The option conferred by sub-paragraph (2)(a) above is additional to any obligation imposed by Part II of Schedule 1A to the Social Security Pensions Act 1975.

(3) Either of the alternatives specified in sub-paragraph (2)(a) and (b) above may be by way of complete or partial substitute for short service benefit, but (except in such cases as may be prescribed) only with the member’s consent.

(4) An alternative prescribed under sub-paragraph (2)(b) above must not include any payment by way of return of contributions, except in respect of—

(a) a period of service before the appointed day; or

(b) a period of service of less than 5 years after that day if (and only if) there has been such a payment in respect of a period of service before that day.

Section 10

(1) A scheme must provide for short service benefit to be computed on the same basis as long service benefit.

(2) For this purpose, no account is to be taken of any rule making it (directly or indirectly) a condition of entitlement to benefit that pensionable service shall have been of any minimum duration.

(3) This paragraph does not apply to so much of any benefit as—

(a) accrues at a higher rate, or otherwise more favourably, in the case of members with a period of pensionable service of some specified minimum length, or of those remaining in pensionable service up to some specified minimum age; or

(b) is of an amount, or at a rate, unrelated to length of pensionable service or to the number or amount of contributions paid by or for the member;

nor does it apply to any category of schemes or members, or description of benefit, excluded from this paragraph by regulations.

Section 11

So far as any short service benefit is not required to be computed in accordance with paragraph 10 above, it must be computed on the basis of uniform accrual, bearing the same proportion to long service benefit at the time when pensionable service is terminated as the period of that service bears to the period from the beginning of that service to the time when the member would attain normal pension age or such lower age as may be prescribed.

Section 12

(1) Where long service benefit is related to a member’s earnings at, or in a specified period before, the time when he attains normal pension age, short service benefit must be related, in a corresponding manner, to his earnings at, or in the same period before, the time when his pensionable service is terminated.

(2) A scheme must comply with any regulations relating to the basis of computation of short service benefit, including regulations providing for the avoidance of fractional amounts and otherwise to facilitate computation.

Section 13

(1) If a scheme provides for long service benefit to include supplementary credits, it must provide for such credits to be included in short service benefit, and provide for all credits to be so included, subject to the following sub-paragraphs.

(2) Where purchased credits have not been paid for in full at or before termination of pensionable service—

(a) if they were to be paid for by a fixed amount, the benefit must include so much of the whole of the credits as bears the same proportion to them as the amount which the member has paid bears to the full amount payable by him;

(b) if they were to be paid for otherwise than by a fixed amount, the benefit must include such part of the credits as bears the same proportion to the whole as the period between the time when the first payment became due and the termination of the member’s pensionable service bears to the whole period over which payment was to be made.

(3) If the benefit includes bonus credits, or credits for which payment is to be made by deduction from that or another benefit, the credits to be included in the benefit and (where applicable) the amount of the deduction must be computed on the basis of the following assumptions—

(a) that the credits accrue in full only to a member remaining in pensionable service until normal pension age;

(b) that entitlement to any credit, and also the amount of any relevant deduction, accrues at a uniform rate from the time when the credit was awarded up to the time of his attaining that age.

(4) Where any such deduction from benefit as is referred to in sub-paragraph (3) above is a percentage of benefit, the percentage must be the same for short service as for long service benefit.

(5) A scheme must comply with any regulations made with respect to the manner in which supplementary credits are to be included in short service benefit, including regulations providing for the avoidance of fractional amounts and otherwise to facilitate computation.

Section 14

(1) A scheme which by its rules provides for increases of long service benefit from time to time (whether by way of upwards re-valuation or otherwise) must provide for corresponding increases of short service benefit in the case of members whose pensionable service terminates at any time after the coming into force of any such rule.

(2) Where provision to this effect is made in such a way as to involve the exercise of a discretion in relation to increase of long service benefit, a corresponding discretion must be conferred in relation to short service benefit.

(3) If an increase of long service benefit is to take effect at a specified time after termination of service, the corresponding increase of short service benefit must take effect at the same time after the time when short service benefit becomes payable.

(4) Where provision is made for increase of long service benefit otherwise than at a fixed rate, short service benefit may nevertheless be subject to increase at a fixed rate, so long as the rate is not less than 3 per cent. a year compound.

Section 15

(1) Except as provided by this paragraph, a scheme must contain rules preventing assignment of short service benefit, and must not enable such benefit to be surrendered or commuted.

(1A) In sub-paragraph (1) above, the references to assignment, surrender and commutation of short service benefit do not include references to any assignment, surrender or commutation of a policy of insurance or annuity contract in accordance with conditions prescribed by regulations under section 52C(4)(b) or (c) of the Social Security Pensions Act 1975 (cases where an occupational pension scheme’s liability to provide benefit is discharged).

(2) Provisions enabling assignment are permissible (whether assignment before or after the benefit comes into payment) if it is assignment in favour of the widow or widower or a dependant of the member .

(3) Provisions enabling surrender (at the option of the member) are permissible where it is—

(a) to provide benefit for the widow or widower or a dependant of the member ;

(b) to acquire for the member transfer credits under the rules of another occupational pension scheme or rights under the rules of a personal pension scheme or a self-employed pension arrangement;

(c) to acquire for the member entitlement to further benefits under the same scheme, relating both to a period of pensionable service previously terminated and also to a subsequent period of service in relevant employment.

(4) Provision may be made for a member’s benefit to be commuted, but only—

(a) in a case where he opts (at any time) to commute at or after normal pension age; or

(b) in exceptional circumstances of serious ill-health; or

(c) in such other circumstances as may be prescribed;

and where a scheme provides benefit for a member’s widow or widower or dependant, it may provide for commutation of that benefit in such circumstances as may be prescribed.

(5) In respect of any of the benefits or rights alternative to short service benefit provided in accordance with paragraph 9(2) above, this paragraph shall apply with such modifications as may be prescribed.

(6) In the application of this paragraph to Scotland, for reference to assignment there shall be substituted references to assignation.

Section 16

(1) Except so far as permitted by this paragraph, and subject to paragraph 17 below; a scheme must not contain any provision for forfeiture of short service benefit.

(2) Provision may be made for forfeiture of the whole or part of any short service benefit by reference to an event occurring after the benefit becomes payable, but only an event by reference to which long service benefit would be forfeited; and such a provision must not be in terms which in the opinion of the Occupational Pensions Board appear to discriminate against members entitled to short service benefit.

(3) Provision may be made for forfeiture by reference to—

(a) the assignment or attempted assignment or, in Scotland, the assignation or attempted assignation of the benefit contrary to the provisions of the scheme;

(b) the member’s bankruptcy or, in the case of benefit for a widow or widower or dependant of the member, the beneficiary’s bancruptcy;

and in this case forfeiture may be by reference to an event occurring either before or after the benefit would otherwise be payable, so long as the like provision is made in relation to long service benefit.

(4) Provision for forfeiture may be made—

(a) in a public service pension scheme, by reference to the member being convicted of an offence—

(i) committed by him before the benefit becomes payable and in connection with relevant employment, and

(ii) certified by a Minister of the Crown either to have been gravely injurious to the State or to be liable to lead to serious loss of confidence in the public service;

(b) in any case, by reference to the member having been convicted of any offence committed before the benefit becomes payable, being—

(i) an offence of treason, or

(ii) one or more offences under the Official Secrets Act 1911 to 1989 for which the member has been sentenced on the same occasion to a term of imprisonment of, or to two or more consecutive terms amounting in the aggregate to, at least 10 years.

Section 17

(1) No rule must operate so as to deprive a person of short service benefit (whether a member himself, or a member’s widow or widower or dependant ) by reference to—

(a) failure by him or any other person to make a claim for the benefit or for any payment due as benefit; or

(b) failure by him or any other person, at any time after termination of pensionable service , to give any notice, or comply with any formality, required by the scheme as a condition of entitlement.

(2) Sub-paragraph (1)(a) above is not to prevent reliance on any enactment relating to the limitation of action; and in cases of failure to claim, the scheme may provide for the right to receive any payment to be forfeited in the event of its not being claimed within 6 years of the date on which it became due.

Section 18

(1) A scheme must contain no rule enabling a member’s employer to exercise any description of charge or lien on, or set-off against, short service benefit, to the extent that it includes transfer credits; but a charge or lien on, or set-off against, a member’s short service benefit is permissible (insofar as it does not include transfer credits) for the purpose of enabling the employer to obtain the discharge by the member of some monetary obligation due to the employer and arising out of a criminal, negligent or fraudulent act or omission by the member.

(2) No rule is to permit the employer to recover from, or retain out of, the resources of the scheme any sum in respect of a monetary or other obligation due to him from any member, except an obligation arising as mentioned in sub-paragraph (1); and rules permitting such recovery or retainer must so provide that—

(a) in respect of any such obligation, recovery or retainer is limited to the actuarial value of the member’s actual or prospective benefits at that time, or the amount of the obligation, whichever is the less (subject to any different agreement in writing between the employer and the member); and

(b) the member is entitled to a certificate showing the amount retained or recovered and its effect on his benefits or prospective benefits; and

(c) in the event of any dispute as to the amount to be retained or recovered, the employer is not entitled to enforce the charge, lien or set-off except after the obligation has become enforceable under an order of a competent court or the award of an arbitrator or in Scotland an arbiter to be appointed (failing agreement between the parties) by the sheriff.

Section 19

In respect of any of the benefits or rights alternative to short service benefit provided in accordance with paragraph 9(2) above, paragraphs 16 to 18 shall apply with such modifications as may be prescribed.

Section 20

Regulations may, in respect of any specified provision contained in Part I of this Schedule, provide that a scheme is not to be treated as conforming with the preservation requirements unless it contains express rules to the effect (but not necessarily in the words) of that provision.

Section 21

Regulations may modify Part I of this Schedule in relation to schemes with any overseas element, that is to say, schemes established, or relating to employment, or with parties domiciled, resident or carrying on business, in any part of the world outside the United Kingdom, or otherwise not confined in their operation to the United Kingdom.

Section 22

Regulations may make provision as to the circumstances in which, for the purposes of Part I of this Schedule—

(a) a period of a person’s service in two or more different employments is to be treated as a period of service in one or more of those employments;

(b) a person’s service in any employment is to be treated as terminated or not terminated.

Section 23

Regulations may modify Part I of this Schedule in its application to cases where an earner is for the time being, or has been employed in pensionable service under, or in contracted-out employment by reference to, different schemes applying to the same employment and these regulations may relate to service under or, as the case may be, by reference to different schemes at the same time, or at different times.

Section 24

Regulations may make such provision modifying Part I of this Schedule as the Secretary of State thinks fit for securing that the preservation requirements include requirements for provision to be made in a scheme as to the preservation of a member’s benefit in the event of the scheme being wound up.

Section 25

Regulations may modify Part I of this Schedule in any manner which the Secretary of State thinks appropriate with a view to securing the orderly implementation of the provisions of section 63 of this Act and to obtaining general compliance with that section; and regulations made under this paragraph may include incidental and supplementary provisions, including provisions appearing to the Secretary of State to be required in consequence of different provisions of Part I of this Schedule being brought into force at different times.

Section 26

Without prejudice to any of the foregoing provisions, regulations may provide for the preservation requirements to apply with such modifications and exceptions as the Secretary of State considers to be necessary for particular cases or classes of cases.

Section 1

The Occupational Pensions Board (“the Board”) shall have perpetual succession and a common seal.

Section 2

Subject to the following provisions of this Schedule, a person shall hold and vacate office as chairman, deputy chairman or other member of the Board in accordance with the terms of the instrument appointing him.

Section 3

A person may at any time resign office as chairman, deputy chairman or other member of the Board by giving to the Secretary fo State written notice of resignation signed by that person.

Section 4

(1) If a member of the Board becomes or ceases to be chairman or deputy chairman, the Secretary of State may vary the terms of the instrument appointing him to be a member so as to alter the date on which he is to vacate office.

(2) If the chairman or deputy chairman ceases to be a member, he shall cease to be chairman or deputy chairman, as the case may be.

Section 5

(1) If the Secretary of State is satisfied that a member of the Board—

(a) has been absent from meetings of the Board for a period longer than 3 consecutive months without the Board’s permission; or

(b) has become bankrupt or made an arrangement with his creditors,

the Secretary of State may remove that member.

(2) In the application of sub-paragraph (1) above to Scotland, for the references to a member’s having become bankrupt and to his having made an arrangement with his creditors there shall be substituted respectively references to sequestration of a member’s estate having been awarded and to his having made a trust deed for behoof of his creditors or a composition contract.

(3) Without prejudice to the foregoing provisions, the Secretary of State may remove a member of the Board on the ground of incapacity or misbehaviour.

Section 6

The expenses of the Board, to such an amount as may be approved by the Minister for the Civil Service, shall be paid by the Secretary of State.

Section 7

There may be paid as part of the expenses of the Board—

(a) to all or any of the members of the Board, such salaries or other remuneration and travelling and other allowances;

(b) to persons attending their meetings at the request of the Board, such travelling and other allowances (including compensation for loss of remunerative time); and

(c) to persons from whom the Board may decide to seek advice, as being persons considered by the board to be specially qualified to advise them on particular matters, such fees,

as the Secretary of State may with the consent of the Minister for the Civil Service determine.

Section 8

The Secretary of State may with the consent of the Minister for the Civil Service provide for the payment of pensions, allowances or gratuities to or in respect of such members of the Board as may be so determined.