The Industry-Wide Mineworkers' Pension Scheme Regulations 1994

• Citation: S.I. 1994/2974
• Sections: 136

Section 1 Citation and Commencement

These Regulations may be cited as the Industry-Wide Mineworkers' Pension Scheme Regulations 1994 and shall come into force on 15th December 1994.

Section 2 Interpretation

In these Regulations

“the 1994 Act ” means the Coal Industry Act 1994;

“ the Scheme ” means the Mineworkers' Pension Scheme which was established under the Coal Industry Nationalisation (Superannuation) Regulations 1950 made under section 37 of the Coal Industry Nationalisation Act 1946 on 1st January 1952 by a resolution of 25th October 1951 of the National Coal Board and which was amended by subsequent resolutions of that Board the name of which was changed to the British Coal Corporation by section 1(1) of the Coal Industry Act 1987 ;

“ the Co-ordinator ” means Industry-Wide Mineworkers' Pension Scheme Co-ordinator Limited.

Section 3 Establishment of new pension scheme

The Co-ordinator shall establish by means of a trust deed entered into between the Co-ordinator and Industry-Wide Mineworkers' Pension Scheme Trustees Limited a pension scheme in which participants in the Scheme, being an existing scheme within the meaning of Schedule 5 to the 1994 Act, are able to participate in accordance with the provisions of paragraph 3 of Schedule 5 to the 1994 Act.

Section 4 Provisions of new pension scheme

The pension scheme required by regulation 3 above to be established shall be in the terms of a trust deed as set out in the Schedule to these Regulations which contains provision as specified in paragraph 3(6) of Schedule 5 to the 1994 Act satisfying the statutory requirements by reference to the Scheme as an existing scheme within the meaning of Schedule 5 to the 1994 Act.

Section 1 ESTABLISHMENT OF SCHEME AND DECLARATION OF TRUST

The Co-ordinator hereby establishes the Scheme under irrevocable trusts with effect on and from [ date to be inserted in manuscript ] (hereinafter called “the Commencement Date”) and appoints the First Trustee to be the first trustee of the Scheme and the Co-ordinator hereby covenants with the First Trustee and successive trustees from time to time of the Scheme to observe and perform the provisions of the Trust Deed and the Rules.

Section 1 ELIGIBILITY AND ADMISSION TO MEMBERSHIP

(1) No person shall be eligible for membership of the Scheme unless he satisfies the conditions set out in either paragraph (2) or paragraph (3) of this Rule.

(2) Persons who become Protected Employees with effect from Transfer Day, who have not subsequently ceased to be Protected Employees and who have not attained Pensionable Age, shall be eligible for membership of the Scheme if they are in Eligible Employment.

(3) On and after the Commencement Date:—

(a) persons who before Transfer Day were members of MPS but did not become Protected Employees with effect on and from Transfer Day; and

(b) persons who became Protected Employees with effect on and from Transfer Day and have subsequently ceased to be Protected Employees; and

(c) persons who had previously been contributing members of the Staff Scheme or of the Scheme,

and who are under Pensionable Age shall if the Employer so determines, be eligible to become (or again to become) members of the Scheme if they are in Eligible Employment.

(4) Every person who, satisfying the eligibility conditions set out in either paragraph (2) or paragraph (3) of this Rule, delivers to the Committee of Management an application for membership of the Scheme in such form and within such period after satisfying the eligibility conditions as the Committee of Management shall prescribe, shall thereupon be admitted to membership of the Scheme and such admission shall have effect from such date as the Committee of Management shall determine.

Section 1 Interpretation

(1.1) Definitions. n this Appendix the following words have the following meanings:—

“1973 Act” means the Social Security Act 1973.

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

“Actuary” means a Fellow of the Institute of Actuaries or a Fellow of the Faculty of Actuaries or a person with other actuarial qualifications who is approved by the Secretary of State for Social Security, at the request of the Trustees, as being a proper person to act in this capacity.

“Contracted-out Employment” of a Member means his contracted-out employment by reference to the Scheme (which expression shall have the same meaning as in the 1975 Act).

“Fixed Rate Revaluation” means the method of revaluing a GMP before State Pension Age described in (C) in Rule 6.2.

“GMP” means the guaranteed minimum pension of a Member, Widow or Widower as defined in the 1975 Act.

“Insurer” means:—

an insurance company authorised under section 3 or 4 of the Insurance Companies Act 1982 to carry on ordinary long-term insurance business and acting through a branch or office in the United Kingdom; or

a friendly society enabled under regulations made under section 71(1) of the 1973 Act as amended by section 4 of the Social Security Amendment Act 1974 or under article 67 of the Social Security Pensions (Northern Ireland) Order 1975 to conduct such business as is described in that section or article.

“Limited Revaluation” means the method of revaluing a GMP before State Pension Age described in (B) in Rule 6.2.

“Member” means a member of the Scheme (including a person who is no longer in the pensionable service of any employer participating in the Scheme but in respect of whom benefits are still immediately or prospectively payable under the Scheme).

“Normal Retiring Date” means the day on which a Member attains his normal pension age (within the meaning of the 1975 Act) under the Scheme.

“Protected Rights” has the same meaning as in Schedule 1 to the Social Security Act 1986.

“Qualifying Service” has the same meaning as in the 1973 Act.

“Rule” followed by a number means the Rule with that number in this Appendix.

“Scheme” means this occupational pension scheme.

“Section 21 Revaluation” means the method of revaluing a GMP before State Pension Age described in (A) in Rule 6.2.

“Section 49 money purchase scheme” means a scheme which was a contracted-out money purchase scheme and which the Occupational Pensions Board are under a duty to supervise under section 49 of the 1975 Act.

“Section 49 salary related scheme” means a scheme which was a contracted-out salary related scheme and which the Occupational Pensions Board are under a duty to supervise under section 49 of the 1975 Act.

“Short Service Benefit” means the benefit to which an early leaver who satisfies the qualifying conditions must be entitled under the preservation requirements.

“State Pension Age” means a man’s 65th birthday and woman’s 60th birthday.

“Trustees” means the trustees or administrators of the Scheme.

“Widow” and “Widower” mean respectively the widow and the widower of a Member. If a Member has married under a law which allows polygamy and, on the day of the Member’s death has more than one spouse, none of them will qualify as a Widow or Widower. However, if only one spouse survives, that survivor will be the Widow or Widower.

(1.2) Legislation. eferences to any piece of legislation include any legislative modification or re-enactment of it, any regulations made under it and any equivalent Northern Ireland legislation.

Section 1

The Member’s Aggregate Retirement Benefit shall not exceed:—

(a) on retirement at any time between attaining age 50 and attaining age 75, except before Normal Retirement Age on grounds of Incapacity, a pension of 1/60th of Final Remuneration for each year of Service (not exceeding 40 years) or such greater amount as will not prejudice Inland Revenue Approval;

(b) on retirement at any time before Normal Retirement Age on grounds of Incapacity a pension of the amount which could have been provided at Normal Retirement Age in accordance with paragraph 1(a) above, Final Remuneration being computed as at the actual date of retirement;

(c) on leaving Pensionable Service before attaining age 75, a pension of 1/60th of Final Remuneration for each year of Service prior to leaving Pensionable Service (not exceeding 40 years) or such greater amount as will not prejudice Inland Revenue Approval. The amount computed may be increased by 5 per cent for each complete year or, if greater, in proportion to any increase in the Index which has occurred between the date of termination of Pensionable Service and the date on which the pension begins to be payable. Any further increase necessary to comply with Social Security legislation is also allowable.

(d) Benefits for a Class A Member are further restricted to ensure that his total retirement benefit from the Scheme and from any Associated Scheme or Connected Scheme does not exceed a pension of 1/30th of the Permitted Maximum for each year of Service, subject to a maximum of 20/30ths. For the purpose of this limit, service is the aggregate of Service and any period of service which gives rise to benefits under a Connected Scheme provided that no period is to be counted more than once.

(e) For the purpose of calculating the Aggregate Retirement Benefit or the total retirement benefit in (a) to (d) above, the pension equivalent of any Lump Sum Retirement Benefit is one-twelfth of its total cash value.

Section 1

The Member’s Aggregate Retirement Benefit shall not exceed:—

(a) on retirement at or before Normal Retirement Age except before Normal Retirement Age on grounds of Incapacity, a pension of 1/60th of Final Remuneration for each year of Service (not exceeding 40 years) or such greater amount as will not prejudice Inland Revenue Approval;

(b) on retirement before Normal Retirement Age on grounds of Incapacity a pension of the amount calculated in accordance with paragraph 1(a) above as if the Member had remained in Service until the Normal Retirement Age, Final Remuneration being computed as at the actual date of retirement;

(c) on retirement after Normal Retirement Age, a pension of the greatest of:—

(i) the amount calculated in accordance with paragraph 1(a) above on the basis that the actual date of retirement was the Member’s Normal Retirement Age;

(ii) the amount which could have been provided at Normal Retirement Age in accordance with paragraph 1(a) above increased either actuarially in respect of the period of deferment or in proportion to any increase in the Index during that period; and

(iii) where the Member’s total Service has exceeded 40 years, the aggregate of 1/60th of Final Remuneration for each year of Service before Normal Retirement Age (not exceeding 40 such years) and of a further 1/60th of Final Remuneration for each year of Service after Normal Retirement Age, with an overall maximum of 45 reckonable years.Final Remuneration being computed in respect of (i) and (iii) above as at the actual date of retirement;

(d) on leaving Pensionable Service before Normal Retirement Age, a pension of 1/60th of Final Remuneration for each year of Service prior to leaving Pensionable Service (not exceeding 40 years) or such greater amount as will not prejudice Inland Revenue Approval. The amount computed may be increased by 5 per cent for each complete year or, if greater, in proportion to any increase in the Index which has occurred between the date of termination of Pensionable Service and the date on which the pension begins to be payable. Any further increase necessary to comply with Social Security legislation is also allowable.

Section 1 MEMBER'S CONTRIBUTIONS

(a) Each Member is required to contribute to the Scheme in accordance with the provisions of Rule 5. The rate of contribution determined in accordance with Rule 5 will not be altered before the expiry of a period of 12 months from the date on which the first payment at the current rate became due without the specific agreement of the Board of Inland Revenue.

(b) In addition the Member may make voluntary contributions to the Scheme to secure additional benefits for himself and/or his Dependants. Any retirement benefits so secured must be in the form of non-commutable pension except to the extent to which the provisions of the Scheme allow commutation of trivial pensions or on the grounds of serious ill health.

(c) The contributions paid to the Scheme by a Member in a year of assessment shall not exceed either:—

(i) when aggregated with the Member’s contributions to any other exempt approved schemes, 15 per cent of the Member’s Remuneration; or

(ii) when aggregated with the Member’s contributions to any schemes which are Associated or Connected Schemes, 15 per cent of the Permitted Maximum.

Section 1 MEMBER'S CONTRIBUTIONS

(a) Each Member is required to contribute to the Scheme in accordance with the provisions of Rule 5. The rate of contribution determined in accordance with Rule 5 will not be altered before the expiry of a period of 12 months from the date on which the first payment at the current rate became due without the specific agreement of the Board of Inland Revenue.

(b) In addition the Member may make voluntary contributions to the Scheme to secure additional benefits for himself and/or his Dependants. Where such contributions commence on or after 8th April 1987 any retirement benefits so secured must be in the form of non-commutable pension except to the extent to which the provisions of the Scheme allow commutation of trivial pensions or on the grounds of serious ill health.

(c) The total contributions paid by the Member in a year of assessment to this and any Associated Scheme shall not exceed 15 per cent of his Remuneration for that year.

Section 1 DEPENDANTS' PENSIONS

Any pension for a Dependant, when aggregated with the pensions, other than those provided by surrender or allocation of the Member’s own pension, payable to that Dependant under all Associated Schemes, shall not exceed an amount equal to 2/3rds of the maximum Aggregate Retirement Benefit payable to the Member immediately before death under Part 1 above. Where the death of the Member occurs whilst in Service before Normal Retirement Age the maximum is that appropriate had the Member retired on grounds of Incapacity on the date of death entitled to no retained benefits from previous employments.If pensions are payable to more than one Dependant of a Member, the aggregate of all Dependants' pensions payable in respect of him under this and all Associated Schemes shall not exceed the full amount of the maximum Aggregate Retirement Benefit described in the previous paragraph of this rule.

Section 1

Where in any provision of the Rules, an amount is specified by reference to an item number in this Schedule relating to that provision, that amount shall in respect of the periods specified in column (2) and any subsequent column of this Schedule, be the weekly amount shown in those columns respectively against such item number and where applicable against the period of Qualifying Service or degree of disablement specified in column (1) of this Schedule of the person in relation to whom such amount falls to be computed.

Section 1

The amount in respect of a refund of the deceased’s contributions and (if and insofar as shall be applicable) of units standing to the deceased’s credit referred to in sub-paragraph (a) of paragraph (3) of Rule 26 shall consist of the aggregate of such of the following amounts as shall be applicable—

(a) The total amount of contributions payable by or in respect of him under Rules 4 and 5 and of any other contributions specified in sub-paragraph (b) of paragraph (4) of Rule 22 (excluding the amount of any contributions previously refunded under paragraph (4) of Rule 22 before any reduction under sub-paragraph (c) of that paragraph).

(b) The total amount of the deceased’s contributions for the period referred to in paragraph (1) of Rule 5 of the rules of MPS as they had effect before 6th April 1975 and for any part of the period beginning on 3rd April 1961 and ending on 5th April 1975 in respect of which he is entitled to a pension under the rules of MPS or would have been or become entitled to a pension under the said rules or the Rules had he retired on the day before the date of his death but on or after 6th April 1975 in such circumstances that a pension was or would had he survived have become payable to him under Rule 10 (whether or not increased under Rule 11) or Rule 12 but under no other Rule; and

(c) If the deceased has units standing to his credit, representing service before 3rd April 1961, the amount of the lump sum specified in column (2) of the Second Schedule, according to the number of units standing to his credit.

Section 2 CONTRIBUTIONS

(1) Every Employer shall pay as Standard Contributions a sum equal to the recommended percentage of the Contribution Earnings paid by him to members employed or deemed to be employed by him in respect of any period during which a member is in Contributing Service. For the purpose of this Clause the “recommended percentage” means in relation to an Employer the percentage (including a nil percentage) recommended from time to time by the Actuary for this purpose under Clause 20 or 21(2)(a)(i).

(2) Every Employer shall pay as Deficiency Contributions after the coming into operation of any determination of Deficiency Contributions made by the Actuary under Clause 21 such payments as may become payable by him thereunder or as may be necessary on the advice of the Actuary.

(3) The total amount of any Standard Contributions or Deficiency Contributions payable by an Employer during any period shall be reduced by an amount equal to the difference between the total amount of any Contributions Equivalent Premiums paid during that period insofar as they relate to periods of service in respect of which a pension would or might otherwise have become payable under Rule 12 to or in respect of members and former members whose last or only period of contracted-out employment by reference to the Scheme was employment with that Employer and the total of the amounts recovered from such members and former members during that period under or by virtue of section 61 of the 1993 Act.

(4)

(a) Every Employer shall pay to the Committee of Management on the last day of every month (or on such other dates as may from time to time be determined by the Committee of Management) the following amounts in respect of the period since the last preceding payment made under this paragraph:

(i) the amount of contributions payable under the Rules by or in respect of members employed or deemed to be employed by such Employer insofar as they are calculated on the basis of Earnings paid or deemed to be paid by that Employer; and

(ii) the amount of all sums payable by that Employer as Standard Contributions and Deficiency Contributions.

(b) Every payment made under sub-paragraph (a) of this paragraph shall be accompanied by a statement in writing of how the amount paid is made up, and if it shall subsequently be discovered that the amount so shown and paid was greater or less than the true amount payable the over-payment or under-payment shall be adjusted by a deduction from or addition to the next succeeding payment required to be made under sub-paragraph (a) of this paragraph insofar in the case of an over-payment as it is sufficient for that purpose, and if in such case that payment is not so sufficient, the excess shall be payable in cash on demand.

(c) The provisions of regulations made under section 56A of the Pensions Act requiring the furnishing of information regarding the failure of an employer to forward sums deducted, or due to be deducted, from a member’s remuneration shall apply to the Scheme as if references in the regulations to sums deducted, or due to be deducted, from a member’s remuneration to meet the member’s liability to contribute to the Scheme included sums payable by an Employer to meet the Employer’s liability to contribute to the Scheme and as if (in relation to an Employer’s contribution) the reference to the date on which the sums were, or were due to be, deducted were a reference to the date on which the Employer’s contribution was due to be paid to the Committee of Management.

(5)

(a) All instalments of Standard Contributions or Deficiency Contributions payable by each Employer to the Scheme shall be paid within one month of the date on which each contribution becomes payable. In the case of Standard Contributions, such contributions shall become payable at such intervals not greater than three months as the Committee of Management shall from time to time determine. The timing of payment of Deficiency Contributions shall be provided for in any determination of Deficiency Contributions made by the Actuary under Clause 21.

(b) In the event of any Standard or Deficiency Contributions payable hereunder not being paid in full by the date determined in accordance with sub-paragraph (a) above the relevant Employer shall pay to the Scheme together with the outstanding contributions such additional supplement as shall be determined by the Committee of Management on the advice of the Actuary having regard to the length of delay and relevant financial factors.

(c) In the event that an Employer shall fail to pay any outstanding Standard or Deficiency Contribution together with any supplement determined in accordance with this paragraph on demand the Trustee shall (without prejudice to its power to deem that an Employer ceases to contribute for the purposes of Clause 41(2)) deliver a demand for payment to the Employer and if such demand is not satisfied within 21 days the Committee of Management shall in the name of the Trustee institute legal proceedings for the recovery of the same as a debt of the Employer due to the Scheme.

(6) Each Employer shall pay to the Co-ordinator such amounts and at such times as the Co-ordinator shall determine and notify to the Employer, as contributions towards the costs and expenses of the Co-ordinator. The amounts so determined in respect of each Employer shall represent an appropriate proportion of the total costs and expenses of the Co-ordinator, on such basis as the Co-ordinator shall determine from time to time.

Section 2 CEASING NORMAL CONTRIBUTIONS

(1) A member who, while remaining in Eligible Employment, wishes to cease to pay Normal Contributions in accordance with the provisions of Rule 5, shall give written notice to the Pensions Officer. The notice required to be given for the purposes of this paragraph shall be in such form as the Committee of Management may from time to time prescribe and may, if the contributing Member is a Protected Person, contain advice as to the consequences of ceasing to be in service in Eligible Employment and Contributing Service. On the giving of such notice his service in Eligible Employment and Contributing Service shall be deemed to terminate pursuant to the provisions of Rule 13 with effect from such date as Normal Contributions to the Scheme cease to be deducted from his Earnings.

(2) A person who has given written notice pursuant to paragraph (1) of this Rule and who has ceased to pay Normal Contributions as required by Rule 5, may if the Employer so requests be permitted to re-commence payment of Normal Contributions from such date and on such terms and subject to such conditions as the Committee of Management, in their absolute discretion, may think fit.

(3) An Employer may at any time by giving not less than three months notice to the Committee of Management terminate the payment of Normal Contributions in accordance with the provisions of Rule 5 by a member who is in Eligible Employment and who is not a Protected Employee. On the expiry of such notice the member’s service in Eligible Employment and Contributing Service shall be deemed to terminate pursuant to the provisions of Rule 13.

Section 2 Application of Appendix

2.1 Application of Appendix. his Appendix shall apply if any Member’s employment becomes Contracted-out Employment by reference to the Scheme and the Scheme is not contracted-out on a money purchase basis.

The Appendix will only apply so long as anyone has a GMP or a prospective right to receive a GMP under the Scheme.

(2.2) Overriding effect of Appendix. his Appendix overrides any inconsistent provisions elsewhere in the Scheme except provisions which are necessary in order that Inland Revenue approval for the purposes of Chapter I Part XIV of the Income and Corporation Taxes Act 1988 is not prejudiced.

Section 2

The Member’s Lump Sum Retirement Benefit shall not exceed:—

(a) on retirement at any time between attaining age 50 and attaining age 75, except before Normal Retirement Age on grounds of Incapacity, 3/80ths of Final Remuneration for each year of Service (not exceeding 40 years) or such greater amount as will not prejudice Inland Revenue Approval;

(b) on retirement at any time before Normal Retirement Age on grounds of Incapacity the amount which could have been provided at Normal Retirement Age in accordance with paragraph 2(a) above, Final Remuneration being computed as at the actual date of retirement;

(c) on leaving Pensionable Service before attaining age 75, a lump sum of 3/80ths of Final Remuneration for each year of Service prior to leaving Pensionable Service (not exceeding 40 years) or such greater amount as will not prejudice Inland Revenue Approval. The amount computed may be increased in proportion to any increase in the Index which has occurred between the date of termination of Pensionable Service and the date on which the benefit is first paid.

Section 2

The Member’s Lump Sum Retirement Benefit shall not exceed:—

(a) on retirement at or before Normal Retirement Age, except before Normal Retirement Age on grounds of Incapacity, 3/80ths of Final Remuneration for each year of Service (not exceeding 40 years) or such greater amount as will not prejudice Inland Revenue Approval;

(b) on retirement before Normal Retirement Age on grounds of Incapacity the amount calculated in accordance with paragraph 2(a) above as if the Member had remained in Service until the Normal Retirement Age, Final Remuneration being computed as at the actual date of retirement;

(c) on retirement after Normal Retirement Age, the greatest of:—

(i) the amount calculated in accordance with paragraph 2(a) above on the basis that the actual date of retirement was the Member’s Normal Retirement Age;

(ii) the amount which could have been provided at Normal Retirement Age in accordance with paragraph 2(a) above together with an amount representing interest thereon; and

(iii) where the Member’s total Service has exceeded 40 years, the aggregate of 3/80ths of Final Remuneration for each year of Service before Normal Retirement Age (not exceeding 40 such years) and of a further 3/80ths of Final Remuneration for each year of Service after Normal Retirement Age, with an overall maximum of 45 reckonable years.Final Remuneration being computed in respect of (i) and (iii) above as at the actual date of retirement;

(d) on leaving Pensionable Service before Normal Retirement Age, a lump sum of 3/80ths of Final Remuneration for each year of Service prior to leaving Pensionable Service (not exceeding 40 years) or such greater amount as will not prejudice Inland Revenue Approval. The amount computed may be increased in proportion to any increase in the Index which has occurred between the date of termination of Pensionable Service and the date on which the benefit is first paid.

Section 2 CONTINUED LIFE COVER

Any provision in the Rules to provide a lump sum benefit on the death of a Member occurring after retirement on pension (other than a payment under a guarantee of pension provision) shall be restricted in respect of a Member who joined the Scheme on or after 1st October 1991 to exclude any provision other than on death occurring before the Normal Retirement Age and after retirement on grounds of Incapacity. The amount of the benefit shall not exceed the amount payable had the Member died immediately before retirement increased in proportion to any increase in the Index between the date of the Member’s retirement and the date of death.

Section 2 TRANSFERS

(a) Any retirement benefits arising by virtue of the receipt by the Scheme of a transfer value (other than from another scheme providing benefits in respect of Service) shall not be capable of commutation unless and then only to the extent that a certificate has been obtained from the administrator of the transferring scheme showing the maximum lump sum payable from the transfer value. The amount so certified may be increased in proportion to any increase in the Index since the date the transfer payment was received.

(b) When, on or after a transfer having been made to another occupational pension scheme, the administrator of that scheme requests such a certificate as is referred to in paragraph 2(a) above the Administrator shall calculate as at the date of the transfer the maximum lump sum payable on retirement from the transfer value and certify that amount to the receiving scheme.

Section 2 INCREASES OF PENSIONS IN PAYMENT

The maximum amount of a pension ascertained in accordance with Part 1 and Part 2 of this rule less any pension which has been commuted for a lump sum or the pension equivalent of any benefits in lump sum form and any pension surrendered to provide a Dependant’s pension may be increased by 3 per cent for each complete year or, if greater, in proportion to any increase in the Index since the pension commenced.

Section 2

The amounts specified in column (2) and any subsequent column by reference to items numbered (1) to (4) inclusive in this Schedule are based on a complete election having been made in accordance with the provisions of paragraph (4) of Rule 14. In the event of such a complete election not being made, the said amounts shall be adjusted in such manner as the Committee of Management may determine on the advice of the Actuary.

Section 2

For the purposes of paragraph 1(b) of this Schedule—

(a) The number of the deceased’s contributions for the period referred to in paragraph (1) of Rule 5 of the rules of MPS as they had effect before 6th April 1975 shall be deemed to be equal to the number of weeks of his service in Eligible Employment during that period, calculated in accordance with Rule 9 of the rules of MPS as they had effect immediately before 6th April 1975.

(b) The number of the deceased’s contributions for any part of the period beginning on 3rd April 1961 and ending on 5th April 1975 in respect of which he is or would had he retired as specified in sub-paragraph (b) of paragraph 1 of this Schedule and if applicable survived have been or become entitled to a pension shall be deemed to be equal to the number of weeks of his service in Eligible Employment by reference to which such pension was or would have been calculated; and

(c) The amount of the deceased’s contributions for the periods referred to in sub-paragraphs (a) and (b) of this paragraph shall not include the amount of any contributions referred to in paragraph (10) of Rule 5 of the rules of MPS as they had effect immediately before 6th April 1975.

Section 3 CONTRIBUTIONS

For the purposes of Clause 2—

(a) a member shall be deemed to be employed by any person or persons (including any body of persons incorporated or unincorporated) who is or are an Employer in relation to him;

(b) such Earnings of a member engaged in Inspection Activities as consist of payments made to him in relation to such Inspection Activities shall be deemed to be paid to him by the persons (including any body of persons incorporated or unincorporated) who are his Employer for the purposes of such Inspection Activities in the same proportions as the proportions of such payments or of the funds from which such payments are made which those persons are respectively responsible for making or providing.

Section 3 RETIREMENT AND TERMINATION OF EMPLOYMENT AND SERVICE

(1)

(a) Where for the purposes of the Rules reference is made to a member’s Retirement, such Retirement shall be deemed to take effect on the termination otherwise than by reason of death of his service in Eligible Employment, and “Retire” shall be construed accordingly.

(b) The service in Eligible Employment of a member who would but for this sub-paragraph be treated as remaining in Eligible Employment after the expiration of a period of five years after he attains Pensionable Age shall for all the purposes of the Rules be deemed to terminate, and (subject to the provisions of sub-paragraph (c) of this paragraph of this Rule) he shall for those purposes be deemed to Retire, upon the expiration of that period.

(c) In the case of a Capped Member, notwithstanding that his service in Eligible Employment is deemed to terminate he shall not be deemed to Retire until either he ceases to be in Eligible Employment (otherwise than by reason of death) or (while remaining in Eligible Employment) he attains the age of 75 years.

(2) For the purposes of awarding or determining the amount of benefits on or subsequent to Retirement or termination of service in Eligible Employment under the Rules in relation to any person and for the purposes of determining whether a person’s service in Eligible Employment or Contributing Service is continuous or comprises consecutive periods within the meaning of the Rules that person’s service in Eligible Employment shall be deemed not to have terminated and his service in Eligible Employment or Contributing Service, as the case may be, shall be deemed to have been continuous and to have comprised consecutive periods if—

(a) Notwithstanding that such service has ceased—

(i) he re-enters Eligible Employment or his Contributing Service re-commences, as the case may be, within not more than one Month after such cessation or pursuant to the exercise of a right to return to work under section 45(1) of the Employment Protection (Consolidation) Act 1978; or

(ii) within not more than six Months (or such longer period as may be allowed in a particular case under regulation 36(1)(e) of the Occupational Pension Schemes (Contracting-out) Regulations 1984) and before attaining Pensionable Age he re-enters Eligible Employment or his Contributing Service recommences, as the case may be, and either no Contributions Equivalent Premium has been paid in respect of him in connection with such cessation or any Contributions Equivalent Premium so paid is refunded; or

(b) Notwithstanding that a person’s period of Contributing Service ceases by reason of any Period of Strike Absence and his Contributing Service recommences more than six months later and immediately after any such Period of Strike Absence,

Provided that no period between such cessation and such re-entry or re-commencement shall be taken into account as a period of Eligible Employment or Contributing Service as the case may be by virtue of this paragraph.

Section 3 Amendment of Appendix

(3.1) Power to alter Appendix. he persons or bodies having the power of alteration in relation to the rest of the Scheme may make in writing any alteration to this Appendix necessary to comply with the contracting-out requirements of the 1975 Act applicable to salary related contracted-out schemes and Section 49 salary related schemes. This power of alteration may be exercised by them without any condition except the one in Rule 3.2.

(3.2) OPB’s consent. o alteration to this Appendix may be made without the consent of the Occupational Pensions Board. This applies whether the alteration is made under Rule 3.1 or under any other power of alteration in the Scheme.

Section 3

The lump sum benefit (exclusive of any refund of the Member’s own contributions and any interest thereon) payable on the death of a Member while in Service or (having left Service with a deferred pension) before the commencement of his pension shall not, when aggregated with all like benefits under Associated Schemes, exceed the greatest of:—

(a) £5,000;

(b) 4 times the annual rate (subject to the Permitted Maximum) of the Member’s basic salary or wages at the date of death or leaving Pensionable Service together with the yearly average of Fluctuating Emoluments received in the 3 years (or the whole period of Service if less) up to the date of death or leaving Pensionable Service; and

(c) 4 times the Member’s Final Remuneration disregarding provisos (i), (ii), (iii) and (vi) of that definition less Retained Death Benefits.

Section 3

The lump sum benefit (exclusive of any refund of the Member’s own contributions and any interest thereon) payable on the death of a Member while in Service or (having left Service with a deferred pension) before the commencement of his pension shall not, when aggregated with all like benefits under Associated Schemes, exceed the greatest of:—

(a) £5,000;

(b) 4 times the annual rate of the Member’s basic salary or wages at the date of death or leaving Pensionable Service together with the yearly average of Fluctuating Emoluments received in the 3 years (or the whole period of Service if less) up to the date of death or leaving Pensionable Service; and

(c) 4 times the Member’s Final Remuneration disregarding provisos (i), (ii), (iii) and (vi) of that definition less Retained Death Benefits.

Section 3 PAYMENT OF RETIREMENT BENEFITS

(a) The payment of a Member’s retirement benefits shall not commence earlier than the Member attaining age 50, except on retirement on grounds of Incapacity, nor later than attaining age 75.

(b) No part of the Member’s retirement benefits is to be paid in advance of actual retirement except as necessary to comply with paragraph 3(a) above or to the extent necessary to comply with the requirements of the Pension Schemes Act 1993.

Section 3 SURPLUS AVCs

Where the application of the limits in this Appendix I requires the quantum of the Aggregate Retirement Benefit to be restricted and the Member has paid additional voluntary contributions to supplement scheme benefits, that restriction shall first be effected on those supplementary benefits so as to permit the repayment of the surplus additional voluntary contributions subject to section 599A of the Taxes Act.

The Administrator of the Scheme shall comply with the requirements of Regulation 5 of The Retirement Benefits Schemes (Restriction on Discretion to Approve) (Additional Voluntary Contributions) Regulations 1993 (SI 1993 No 3016) and where the Scheme is the “leading scheme” in relation to a Member, with the requirements of Regulation 6 of those Regulations so far as they concern main schemes. If those Regulations are amended or replaced by any other Regulations then this rule will have effect as if it had been amended or replaced accordingly.

Section 4 CONTRIBUTIONS

Each member shall contribute such sums as may from time to time be provided under the Rules. Each Employer shall be responsible for the collection of all contributions payable by or in respect of members employed or deemed to be employed by such Employer and for the payment of all such contributions to the Scheme.

Section 4 SPECIAL CONTRIBUTIONS

(1) Any member in Eligible Employment may elect to pay special contributions in respect of any Period of Strike Absence in accordance with the following provisions of this Rule.

(2) A Transferred MPS Member who elected to pay special contributions under MPS in respect of any Period of Strike Absence and who but for Transfer Day would have paid special contributions pursuant to that election on or after Transfer Day shall be deemed to have elected to pay those special contributions to the Scheme.

(3) The Pensions Officer shall determine the total amount of such special contributions by reference to such member’s Estimated Earnings and the Normal Contributions he would have paid pursuant to Rule 5 if his Estimated Earnings had been Earnings. He shall further determine the weekly amounts of special contributions and the number of Weeks over which such weekly amounts shall be payable. Such determinations shall be notified to such member.

(4) Within four weeks of such notification such member may elect to pay such special contributions by notifying the Pensions Officer in writing. Upon the making of such an election he shall pay to the Scheme (subject to Rule 7) the weekly amounts of special contributions over the number of weeks determined by the Pensions Officer under paragraph (2) of this Rule.

(5) When any such person shall make an election in accordance with paragraph (3) of this Rule, then notwithstanding any other provisions of the Scheme and Rules but subject to paragraph (6) of this Rule:—

(a) such Period of Strike Absence shall be deemed to be included in his total period of Contributing Service, and

(b) such Estimated Earnings shall be deemed to be his Earnings during the Period of Strike Absence.

(6) If as a result of the operation of Rule 7 a person actually pays less special contributions than he would otherwise have paid (or he pays no special contributions) the extent (if any) to which the Period of Strike Absence and the Estimated Earnings are deemed respectively to be included in his Contributing Service and to be his Earnings during the period of Strike Absence shall be determined by the Pensions Officer on the advice of the Actuary.

(7) For the purpose of determining the Employer’s obligation to pay Standard Contributions under Clause 2 the amount of special contributions in accordance with this Rule shall not be treated as contributions payable under the Rules by or in respect of the members or persons concerned. Such amounts shall be paid by the Employer at the times the special contributions are paid and the weekly amounts deducted or at the Employer’s option may be paid in capitalised amounts at such times, over such periods and in such manner as may be agreed with the Actuary.

Section 4 Entitlement to GMP

(4.1) Guaranteed Minimum. ule 4 applies to a Member, Widow or Widower where the Member has a guaranteed minimum in relation to the pension provided for the Member under the Scheme in accordance with section 35 of the 1975 Act.

(4.2) Member’s GMP. he Member shall be entitled to a pension for life paid at a rate equivalent to a weekly rate of not less than that guaranteed minimum. The pension will be paid from State Pension Age but commencement of the pension may be postponed for any period during which the Member remains in employment after State Pension Age:—

(1) if the employment is employment to which the Scheme relates and the postponement is not for more than 5 years after State Pension Age, or

(2) if the Member consents to the postponement.

(4.3) Widow’s GMP. here the Member is a man and dies at any time leaving a Widow, she shall be entitled, subject to Rule 4.4, to receive a pension from the Scheme paid at a rate equivalent to a weekly rate of not less than half that guaranteed minimum.

(4.4) The pension shall be paid for life to any Widow.

(4.5) Widower’s GMP. here the Member is a woman and dies at any time on or after 6 April 1989 leaving a Widower, he shall be entitled, subject to Rule 4.6, to receive a pension from the Scheme paid at a rate equivalent to a weekly rate of not less than half of that part of that guaranteed minimum which is attributable to earnings for the tax year 1988/89 and subsequent tax years.

(4.6) The pension shall be paid for life to any Widower.

(4.7) Offsetting pension against GMP. ny pension payable to the Member, Widow or Widower under any other provision of the Scheme may be offset against his or her pension entitlement under Rule 4 except to the extent that:—

(1) any part of the other pension is an equivalent pension benefit within the meaning of the National Insurance Act 1965, or

(2) any part of the other pension is the “appropriate amount” under Part I of Schedule 1A of the 1975 Act, or

(3) offsetting would contravene Rule 7.

Section 4

The preceding provisions of this rule shall be modified in their application to a Member who is a Controlling Director as follows:—

(a) the amount of the maximum Aggregate Retirement Benefit in paragraph 1 and of the maximum Lump Sum Retirement Benefit in paragraph 2 shall be reduced, where necessary for Inland Revenue Approval, to take account of any corresponding benefits under retirement annuity contracts or trust schemes approved under Chapter III Part XIV of the Taxes Act or under personal pension schemes approved under Chapter IV Part XIV of the Taxes Act; and

(b) where retirement takes place after Normal Retirement Age but not later than the Member’s 70th birthday, paragraph 1(c)(ii) and (iii) and paragraph 2(c)(ii) and (iii) shall not apply, and if retirement is later than the attainment of that age the paragraphs shall apply as if the Member’s 70th birthday had been specified in the Rules as his Normal Retirement Age so as not to treat as Service after Normal Retirement Age any Service before the Member reaches the age of 70.

Section 4 TRANSFERS

(a) The benefits arising on retirement from a transfer value shall not be capable of commutation nor shall they be paid in lump sum form if the transfer is accompanied by a certificate from the administrator of the transferring scheme to the effect that the transfer value is not to be used to provide benefits in lump sum form.

(b) When making a transfer to an approved personal pension scheme the Administrator shall provide a certificate of the maximum lump sum payable on retirement from the transfer value if the transferring member:—

(i) was aged 45 or more at the time that the transfer payment was made; or

(ii) has, at any time within the 10 years preceding the date on which the right to the cash equivalent being transferred arose, been, in respect of any employment to which the transfer payment or any part of it relates, either:—

(I) a Controlling Director; or

(II) in receipt of annual remuneration in excess of £60,000 or, if greater, the allowable maximum (ie. the equivalent for personal pension schemes of the Permitted Maximum) for the year of assessment in which the date of transfer falls; or

(iii) is entitled to benefits included in the transfer payment which arise from an occupational pension scheme under which the normal retirement age is 45 or less.

Section 5 ADMISSION OF OTHER EMPLOYERS AND NEW MEMBERS

(1)

(a) With effect on and from each Transfer Day the Committee of Management shall admit to participation in the Scheme any person body of persons or corporate body which on such Transfer Day becomes the employer of any one or more individuals employed in the undertaking to which the restructuring scheme (within the meaning of section 12 of the 1994 Act) relates and the transfer of which takes effect on such Transfer Day (being individuals who immediately before such Transfer Day were Contributors under MPS who had not attained the Pensionable Age under MPS), subject to the provisos to paragraph (3) of this Clause.

(b) With effect on and from each Transfer Day the Committee of Management shall admit to participation in the Scheme any corporate body (being a corporate body which immediately before such Transfer Day employed any one or more individuals who were then contributing members of MPS and who had not then attained the Normal Retiring Age under MPS) which on such Transfer Day ceases to be a subsidiary of the British Coal Corporation, subject to the provisos to paragraph (3) of this Clause.

(2) With effect on and from the First Transfer Day the Committee of Management shall admit to participation in the Scheme any person body of persons Trade Union or corporate body in relation to which such date is the Transfer Day, subject to the provisos to paragraph (3) of this Clause.

(3) The Committee of Management shall admit to participation in the Scheme any person body of persons Trade Union or corporate body which at any time on or after the Commencement Date and other than on and as a result of a Transfer Day occurring becomes the employer of an individual who is a Protected Employee in circumstances in which such individual does not thereupon cease to be a Protected Employee (“the new employer”) Provided that:—

(i) the new employer shall enter into a deed by which it covenants with the Co-ordinator and Committee of Management to comply with and observe the provisions of the Scheme so far as they are applicable to it as an Employer; and

(ii) the participation of the new employer will not prejudice Inland Revenue Approval of the Scheme.

(4)

(a) New employees of Employers (subject to the exceptions mentioned in sub-paragraph (b) of this paragraph) shall not be eligible for membership of the Scheme.

(b) The following categories of new employees shall be excluded from the provisions of sub-paragraph (a) of this paragraph:—

(i) new employees who immediately before entering the employment of the Employer were employed by another Employer, who were Protected Employees by reference to the Scheme while in the employment of that other Employer and who have not ceased to be Protected Employees; and

(ii) new employees (not within (i) above) who at any time before entering the employment of the Employer were members of MPS or the Staff Scheme or BCSSS or members of the Scheme but only if the Employer has requested that they be eligible for membership of the Scheme and if the Committee of Management have approved that request.

Section 5 NORMAL CONTRIBUTIONS

(1) Subject to the provisions of paragraph (1) of Rule 2 and of Rule 7 every member shall pay contributions (in the Rules called “Normal Contributions”) in respect of any period during which he is in Eligible Employment after the date with effect from which he is admitted as a member of the Scheme and not later than whichever is the earlier of the Week in which his period of Contributing Service (including Contributing Service under MPS) totals 40 complete years or the Week in which he attains Pensionable Age at the rate of 5¼% of the amount of the Member’s Contribution Earnings.

(2) References in the Scheme to the amount of a member’s contributions under Rule 4 or 5 include (in relation to a Transferred MPS Member) his contributions (other than additional voluntary contributions) to MPS.

Section 5 Increasing a Member’s GMP after State Pension Age or a Widow’s orWidower’s GMP

Any GMP to which a Member, Widow or Widower is entitled under Rule 4 shall, insofar as it is attributable to earnings in the tax years from and including 1988/89, be increased in accordance with the requirements of section 37A of the 1975 Act.

Section 6 CONSTITUTION OF THE SCHEME

(1) With effect on and from the Commencement Date, the monies of the Scheme shall constitute the Pension Fund.

(2) The First Trustee shall be the first and sole trustee of the Scheme and of the Pension Fund.

(3) In the event of the First Trustee ceasing for any reason to be the trustee of the Scheme and of the Pension Fund, the Co-ordinator shall forthwith procure that a new trustee or trustees of the Scheme is or are appointed which is or are either:—

(a) a new corporate trustee whose Articles of Association would be in a form corresponding as closely as may be possible to those of the First Trustee and would provide for the appointment of a committee of management consisting of ten persons, of whom five would be appointed by and would be subject to removal by the Co-ordinator, and five would be appointed by and would be subject to removal in accordance with rules to be agreed between the Co-ordinator and such organisations as at that time represent substantial proportions of the classes of the employees who are members of the Scheme, Provided that

(i) the five persons appointed by such organisations shall be persons who are or immediately before retirement were Contributors; and

(ii) in the event that it is not possible to agree such rules or there is a dispute as to which organisations represent substantial proportions of the classes of the employees who are members of the Scheme the matter shall be referred to a single Arbitrator to be named by the President for the time being of The Law Society and the Arbitrator so named shall have all the powers conferred on Arbitrators by the Arbitration Acts 1950 and 1979; or

(b) ten individual trustees subject to appointment and removal as aforesaid.

(4) The Co-ordinator shall, in connection with the aforesaid appointments, make pursuant to Clause 38, such amendments to the Scheme and the Rules as may be necessary to give effect to the provisions of paragraph (3) above.

(5) Save insofar as the Pension Fund or any part of it is for the time being vested in any nominee or custodian trustee appointed under Clause 12(3) or in any person appointed under Clause 14(1), the Pension Fund shall be vested in the Trustee. The management and administration of the Scheme, in accordance with the provisions thereof, shall be vested in the Trustee.

(6)

(a) All powers expressed by the Scheme, in whatever terms, to be vested in, conferred on or exercisable or to be exercised by the Committee of Management shall be vested in the Trustee.

(b) Such powers and all other powers vested in, conferred on or exercisable or to be exercised by the Trustee under or by virtue of the Scheme shall be exercised by it and on its behalf by and through the Committee of Management in their capacity as the Committee of Management of the Trustee (within the meaning of the Articles of Association of the Trustee (hereinafter called “the Articles”) in the case of a body corporate which is for the time being the sole trustee of the Scheme) or any other person or body of persons required, authorised or empowered to exercise such powers or any of them by or under any provisions of the Scheme (and by or under the Articles).

(c) Save in relation to Clause 39 and the meanings assigned to “the Committee of Management” by Clause 43(2), any reference in the Scheme, in whatever terms, to the Committee of Management shall be construed as a reference to the Trustee acting by and through the Committee of Management in the capacity specified in sub-paragraph (b) above, or any other person or body of persons required, authorised or empowered to act for it or on its behalf for that purpose by or under any provision of the Scheme (and by or under the Articles).

Section 6 ADDITIONAL VOLUNTARY CONTRIBUTIONS

(1) This Rule sets out the terms upon which a member may elect to make additional voluntary contributions to the AVC Scheme in order to secure additional benefits.

(2) In this Rule

(a) “AVC Scheme” means the scheme embodied in this Rule for the provision of certain additional benefits;

(b) “the AVC Interest” shall mean in relation to a member contributing or who has contributed to the AVC Scheme his interest in the AVC Scheme in respect of his contributions to the AVC Scheme as determined by the Committee of Management where appropriate on such advice as they think fit and shall include in relation to a Transferred MPS Member his interest in the AVC Scheme in respect of his contributions to the AVC Scheme of MPS determined in the same way.

(3) No member may elect in accordance with paragraph (4) of this Rule if he is then subject to notice to terminate his employment.

(4)

(a) Subject to paragraph (3) of this Rule and to Rule 7 a member may elect to pay additional voluntary contributions at any time prior to Pensionable Age.

(b) Additional voluntary contributions will be payable only while the member continues to be in Eligible Employment and will be deducted from the Earnings becoming payable to a member.

(c) A member may, on giving reasonable notice not exceeding 12 months to the Pensions Officer reduce, increase or terminate his additional voluntary contributions provided that a reduction in his additional voluntary contributions must not result in the payment of contributions of less than such amount as the Committee of Management may from time to time determine having regard to paragraph (8) of regulation 2 of the Pension Schemes (Voluntary Contributions Requirements and Voluntary and Compulsory Membership) Regulations 1987.

(5) Additional voluntary contributions shall be payable promptly and the member’s AVC Interest shall be applied by the Committee of Management to provide additional benefits in respect of the member in such form (consistent with Inland Revenue Approval) as the member shall, with the consent of the Committee of Management, determine Provided that no part of the additional benefit shall take the form of a cash payment payable to the member during his lifetime. Such additional benefits must be reasonable having regard to the amount of the additional voluntary contributions and to the value of the other benefits under the Scheme.

(6) On the death of a member before his AVC Interest shall be applied pursuant to paragraph (7) of this Rule the member’s AVC Interest shall be held by the Committee of Management upon trust with power to pay or apply the same within two years from the date of the member’s death to or for the benefit of (or by way of settlement or otherwise to trustees for the benefit of) such one or more of the member’s Dependants or Relatives in such shares and proportions (if more than one) upon such trusts and in such manner (including the provision of annuities) as the Committee of Management shall in their discretion think fit. Any part of the AVC Interest not so paid or applied within such period of two years shall be paid to the legal personal representatives of the member except that if the member’s AVC Interest would vest in the Crown as bona vacantia, the Committee of Management shall hold such AVC Interest under the trusts of the Scheme to apply the same to such of the purposes thereof as they shall decide. The Committee of Management may, but without being in any way bound to do so, have regard to any document signed by the member concerned expressing his wishes relating to the disposal of his AVC Interest.

(7) On a member becoming entitled to benefit under Rule 14 (whether or not increased under Rule 15), Rule 16, Rule 17, Rule 18, Rule 19, Rule 20 or Rule 22 his AVC Interest shall be applied by the Committee of Management in accordance with the wishes of the member expressed to the Committee of Management in writing subject to the proviso to paragraph (5) of this Rule Provided that:—

(a) if the member has not expressed any wishes in writing to the Committee of Management they shall be entitled to apply the AVC Interest in providing such benefits (consistent with Inland Revenue Approval) within the Inland Revenue Limits for the member, his Dependants or Relatives as the Committee of Management in their absolute discretion shall think appropriate subject to the proviso to paragraph (5) of this Rule;

(b) if the wishes of the member expressed pursuant to this paragraph would result in any of the benefits for which the member has elected exceeding the Inland Revenue Limits then the surplus of the money in the AVC Interest shall be applied by the Committee of Management at their discretion in providing such other benefits (consistent with Inland Revenue Approval) within the Inland Revenue Limits for his Dependants or Relatives as the Committee of Management in their absolute discretion shall deem appropriate; and

(c) if the Committee of Management have provided the maximum benefits to or in respect of a member which they may provide under the Inland Revenue Limits then any remaining surplus of the money in the AVC Interest shall be paid to the member (or if the member has died to the personal representatives of the member) after deducting the amount of any tax to which the Scheme’s administrator is charged by section 599A of the Taxes Act by virtue of making the payment.

(8) Any benefit provided pursuant to paragraph (7) of this Rule shall be secured by the Committee of Management by contracts or policies taken out in the United Kingdom with a Recognised Insurance Company.

(9) On a member ceasing to be in Eligible Employment before attaining Pensionable Age without becoming entitled to an immediate pension then:—

(a) the additional voluntary contributions payable by such member shall cease forthwith;

(b) if the member to whom this paragraph applies takes a refund of his Normal Contributions his AVC Interest shall be returned to him subject to deduction of tax pursuant to Rule 47;

(c) if a transfer is made to another retirement benefits fund, scheme or arrangement in respect of part or all of a member’s benefit under the Scheme a like transfer shall be made in respect of the AVC Interest; and

(d) subject to the preceding provisions the AVC Interest shall be applied in providing benefits in accordance with paragraph (7) of this Rule at Pensionable Age or such earlier date on which any benefits under Rule 16, Rule 17, Rule 18, Rule 19 or Rule 20 commence to be payable.

Section 6 Revaluation of GMP

(6.1) After State Pension Age. If the commencement of any Member’s GMP is postponed for any period after State Pension Age, that GMP shall be increased to the extent, if any, specified in sections 35(6), (6A) and (6B) of the 1975 Act.

(6.2) Before State Pension Age. Where a Member ceases to be in Contracted-out Employment before State Pension Age, the Member’s GMP at State Pension Age or at the Member’s earlier death will be calculated by increasing the accrued rights to GMP at cessation of Contracted-out Employment under (A) or (B) or (C) below.

(A) Section 21 Revaluation

The increase will be by the percentage by which earnings factors for the tax year in which Contracted-out Employment ceases are increased by the last order under section 21 of the 1975 Act to come into force before the tax year in which the Member reaches State Pension Age or dies (if earlier).

(B) Limited Revaluation

The increase will be by the lesser of:—

(1) 5 per cent compound for each tax year after that in which Contracted-out Employment ceases up to and including the last complete tax year before the Member reaches State Pension Age or dies (if earlier), and

(2) the percentage by which earnings factors for the tax year in which Contracted-out Employment ceases are increased by the last order under section 21 of the 1975 Act to come into force before the tax year in which the Member reaches State Pension Age or dies (if earlier).

The Trustees must pay a limited revaluation premium in respect of the Member to the Secretary of State.

(C) Fixed Rate Revaluation

The increase will be by such rate as regulations made under section 45(1)(b) of the 1975 Act specify as being relevant at the date Contracted-out Employment ceases, for each tax year after the tax year containing that date up to and including the last complete tax year before the Member reaches State Pension Age or dies (if earlier).

The Trustees and the principal employer participating in the Scheme shall decide whether (A) or (B) or (C) applies to the Scheme. They may at any time decide that one of the other two methods shall be used, instead of the method currently being used, for all Members ceasing to be in Contracted-out Employment after a specified date. They must notify the Occupational Pensions Board whenever the method of revaluation for the Scheme is changed.

(6.3) Transfers in. Where a transfer payment is received in respect of a Member from another scheme (“the transferring scheme”) which includes accrued rights of the Member to a GMP, the earnings factors used in calculating that GMP will normally be revalued using Section 21 Revaluation during the Member’s Contracted-out Employment and Rule 6.2 will apply if that Contracted-out Employment ceases before State Pension Age. The Trustees may, however, decide, if the provisions of the transferring scheme so allow, to use either Fixed Rate Revaluation or Limited Revaluation from the date on which the Member ceased to be in contracted-out employment by reference to the transferring scheme until the Member attains State Pension Age (or dies, if earlier) but:—

(1) Fixed Rate Revaluation may not be used as regards any part of the GMP being transferred which arose from contracted-out employment in relation to a previous scheme and which the transferring scheme is already revaluing by Limited Revaluation (or vice versa), and

(2) the Trustees may not make that decision in respect of any Member if, when he becomes a Member, his contracted-out employment before he became a Member is treated as continuing for the purposes of the 1975 Act.

Where under Rule 6.3 Limited Revaluation is to be used, the Trustees shall have power to pay out of the transfer payment in respect of that Member any limited revaluation premium payable as a result of the Member ceasing to be in contracted-out employment by reference to the transferring scheme.

Where the Scheme accepts the proceeds of or the assignment of an insurance policy which consists of or includes accrued rights to GMP condition (1) above applies unless the Trustees use Section 21 Revaluation.

(6.4) Transfers out. Where a Member’s accrued rights to GMPs are transferred to another contracted-out salary related scheme or to a section 49 salary related scheme, the Trustees may agree with the administrator of that scheme that the Member’s GMP shall, instead of being revalued using the method currently being adopted under Rule 6.2, be revalued using another method which would be permitted if that scheme contained a rule in the same terms as Rule 6.3 but, where Limited Revaluation is to be used, that administrator must make arrangements for the payment of any limited revaluation premium (unless it has already been paid by the Trustees).

Section 7 CONSTITUTION OF THE SCHEME

There shall be paid into or held to the credit of the Pension Fund—

(a) all Standard Contributions and Deficiency Contributions payable by the Employers;

(b) all sums collected by the Employers as members' contributions;

(c) all sums accepted by the Scheme by way of Transfer Payments from any other scheme;

(d) all dividends, interest and benefits arising out of the investment or employment of the Pension Fund or any part thereof;

(e) all other sums received or held by the Committee of Management in connection with or for the purposes of the Scheme.

Section 7 MAXIMUM CONTRIBUTIONS

The total contributions payable by a member when aggregated with contributions (if any) to all Associated Schemes which are Exempt Approved Schemes in any Income Tax Year shall not exceed the amount allowed to be deducted by virtue of section 592(7) to (8E) of the Taxes Act as an expense in that Income Tax Year.

Section 7 Anti-Franking

Except as provided in sections 37A and 41A—41E of the 1975 Act, no part of a Member's, Widow’s or Widower’s pension under the Scheme may be used to frank an increase in the Member's, Widow’s or Widower’s GMP under Rule 5 or Rule 6.

Section 8 CONSTITUTION OF THE SCHEME

There shall be paid by the Committee of Management out of the Pension Fund—

(a) all benefits payable to any person (subject to any deductions to be made therefrom) under the Rules;

(b) all costs and expenses of the administration of the Scheme;

(c) any sums payable under the Rules as they have effect from time to time by way of Transfer Payments or other payments by way of transfer to any other scheme;

(d) all sums payable by law out of the Pension Fund or by the Committee of Management in their capacity as trustees or administrators of the Pension Fund or of the Scheme.

Notwithstanding the foregoing provisions of this Clause the liability of the Committee of Management to make any payment to or in respect of a Relevant Beneficiary (as defined in Clause 9) shall be limited to the value of the Employer’s Fund at the time at which such payment is to be made.

Section 8 PAYMENT OF CONTRIBUTIONS

(1) The amount of any Normal Contributions payable by a member under Rule 5 shall be deducted from any payment of Earnings made to that member.

(2) In assessing the amount of any Normal Contributions payable in relation to any Week any half or greater fraction of a penny shall be treated as a whole penny and any smaller fraction of a penny shall be ignored.

Section 8 Transfers into the Scheme

(8.1) Acceptance of transfers. The Trustees may accept:—

(1) a transfer payment in respect of the Member’s accrued rights to GMPs under a contracted-out salary related scheme, a section 49 salary related scheme or an annuity policy of the type described in section 52C of the 1975 Act,

(2) a transfer of the liability for the payment of GMPs to or in respect of any person who has become entitled to them, or

(3) a transfer of Protected Rights in respect of the Member from another scheme which is, or was, an appropriate personal pension scheme, a scheme contracted-out on a money purchase basis or a section 49 money purchase scheme.

Transfers may be accepted only as provided in the appropriate regulations.

(8.2) Effect of transfers. Where a transfer is accepted under Rule 8.1(1), the Member’s accrued rights to GMPs under the Scheme will be increased accordingly.

Where a transfer is accepted under Rule 8.1(3), the Member's, Widow’s and Widower’s GMPs under the Scheme will be increased by amounts equal to the GMPs to which they would have been treated as entitled by reason of the Member’s membership of the transferring scheme if the transfer payment had not been made.

Section 9 EMPLOYERS' FUNDS

(1) For the purposes of the Scheme there shall be within the Pension Fund an Employer’s Fund in relation to each Employer (including a former Employer in the case of an Employer’s Fund which has not been dealt with in accordance with Clause 41) and the value of Units standing to the credit of an Employer’s Fund together with any net credit or debit balances held by the Committee of Management in an administration account in respect of that Employer for the purposes of paragraphs (4), (7) and (8) of this Clause at any time shall represent the value at that time of the part of the Pension Fund (after excluding the assets of the AVC Scheme referred to in Rule 6) attributable to the participation in the Scheme of the Employer to whom that Employer’s Fund relates.

(2) For the purposes of this Clause all amounts received or payable pursuant to the AVC Scheme referred to in Rule 6 shall be disregarded.

(3) Subject to the provisions of paragraph (4) of this Clause on a Subscription Day the Committee of Management shall credit to an Employer’s Fund the Units referred to in paragraph (6) hereof in respect of all amounts received by the Scheme from or in respect of Relevant Beneficiaries since the immediately preceding Subscription Day.

(4) The Committee of Management may retain out of the amounts received and referred to in paragraph (3) of this Clause such sum as in their opinion is likely to be required before the immediately following Subscription Day for the payment of benefits or Transfer Value Payments in respect of Relevant Beneficiaries or for the payment of premiums under any insurance policy or contract insuring any liability in respect of Relevant Beneficiaries or for the payment of such of the expenses of the Scheme as in the opinion of the Committee of Management should be borne by that Employer’s Fund and any such retention in respect of expenses shall be credited by the Committee of Management to the Expenses Fund referred to in paragraph (19) of this Clause. The Committee of Management may (but are not required to) charge or credit interest in respect of any administration accounts maintained by them for the purposes of this paragraph (4) of this Clause as they shall in their absolute discretion determine from time to time.

(5) Subject to the provisions of paragraphs (7) and (8) of this Clause the amounts referred to in paragraph (3) of this Clause after the deduction of all amounts retained under paragraph (4) of this Clause are referred to in this Clause as the “Subscription Day Credit”.

(6) The number of Units to be credited to an Employer’s Fund on a Subscription Day shall be calculated by dividing the Subscription Day Credit by the Unit Offer Value at that Subscription Day, the resulting figure being adjusted to the nearest second place of decimals.

(7) If during the period which ends on a Subscription Day and which began on the immediately preceding Subscription Day the payments actually made (as referred to in paragraph (4) of this Clause) exceed the amount retained for the purpose on the immediately preceding Subscription Day the Committee of Management may either deduct the excess from the amount which would otherwise be the Subscription Day Credit on the later Subscription Day or debit the Employer’s Fund on the later Subscription Day with the number of Units calculated by dividing the amount of such excess by the Unit Bid Value at that Subscription Day the resulting figure being adjusted to the nearest second place of decimals.

(8) If on a Subscription Day no amount is retained under paragraph (4) of this Clause and during the period which ends on the day immediately following Subscription Day payments (as referred to in paragraph (4) of this Clause) are made the Committee of Management may either deduct the amount of the payments so made from the amount which would otherwise be the Subscription Day Credit on the later Subscription Day or debit the Employer’s Fund on the later Subscription Day with the number of Units calculated by dividing the amount of such payments by the Unit Bid Value at that Subscription Day the resulting figure being adjusted to the nearest second place of decimals.

(9) The Committee of Management shall supply a written statement at least once every twelve months to each Employer giving details of the transactions in Units which have taken place for the Employer’s Fund since the effective date of the last statement and the total number of Units standing to the credit of the Employer’s Fund at the date to which the statement relates.

(10) For the purposes of this Clause a valuation of the Pension Fund shall be made in accordance with the following provisions of this Clause Provided that any amounts of uninvested cash held by the Committee of Management at any Subscription Day (other than in the Expenses Fund) shall be included in the valuation of the Pension Fund at face value if denominated in Sterling.

(11) The following shall be left out of account in valuing the Pension Fund on a Subscription Day:—

(i) all Subscription Day Credits on that Subscription Day and

(ii) all amounts of excess referred to in paragraph (7) of this Clause in respect of which a debit to an Employer’s Fund is to be made on that Subscription Day and

(iii) the amount of all payments referred to in paragraph (8) of this Clause in respect of which a debit to an Employer’s Fund is to be made on that Subscription Day and

(iv) the Expenses Fund.

(12) Where an agreement exists for the unconditional sale or purchase of assets on behalf of the Pension Fund which has not been completed, it is to be assumed that it had been completed.

(13) The Committee of Management may deduct from the Pension Fund their reasonable estimate of any accrued liabilities payable out of the Pension Fund.

(14) The Committee of Management may add to the Pension Fund their reasonable estimate of the amount of any claims for repayment of tax and of income due but not received.

(15) In relation to assets valued in a foreign currency, the Committee of Management shall convert that value into sterling at a rate of exchange which, unless the Committee of Management decide in their reasonable opinion to adopt an alternative method of conversion, represents the mid point between the highest and lowest rates of exchange quoted for conversion of that currency into sterling.

(16) Unless the Committee of Management decide in their reasonable opinion to adopt an alternative method of valuation, any assets traded on a market approved by the Committee of Management shall be valued at an amount which:—

(a) if the valuation is on an offer basis, is the amount which would be payable to buy the assets increased by the Committee of Management’s estimate of the charges which would be payable by a buyer of the assets;

(b) if the valuation is on a bid basis, is the amount which would be received on a sale of the assets, reduced by the Committee of Management’s estimate of the charges which would be payable by a seller of the assets.

In each case it shall be assumed that the transaction would be on the best terms available on the market in what, in the reasonable opinion of the Committee of Management, is a transaction of a standard size except that the Committee of Management may value assets by reference to the terms available in relation to their actual, rather than a standard, size, if in their reasonable opinion it would be more appropriate to do so. If any assets are traded on more than one market approved by the Committee of Management, the market to be used for this purpose shall be selected by the Committee of Management.

(17) Any other assets shall be valued at an amount decided by the Committee of Management in their discretion, which is not greater than the amount which would be payable to buy the assets and not less than the amount which would be received on selling the assets, in each case on the best terms available and in an arm’s length transaction for immediate settlement. The Committee of Management may, however, determine in their reasonable opinion to adopt an alternative method of valuation.

(18) In valuing the Pension Fund for the purposes of this Clause the Committee of Management may rely on advice on any matter relevant to the valuation obtained from a person whom they reasonably believe is qualified to give the advice.

(19) For the purposes of the Scheme there shall be within the Pension Fund an Expenses Fund for the purposes of meeting the costs and expenses of managing and administering the Scheme (as referred to in Clause 15) to which there shall be credited any amounts retained by the Committee of Management in respect of the expenses of the Scheme pursuant to paragraph (4) of this Clause. The Committee of Management may in addition on any Subscription Day and from time to time debit from each Employer’s Fund and credit the same to the Expenses Fund amounts calculated on such basis as the Committee of Management shall from time to time determine. The Committee of Management may in their absolute discretion on any Subscription Day debit from the Expenses Fund and include in an Employer’s Subscription Day Credit amounts as they determine to be appropriate, including (without limitation) in the circumstances of a termination of the Scheme pursuant to Clause 40 or a partial termination of the Scheme pursuant to Clause 41.

(20) In this clause:—

“Relevant Beneficiaries” means in relation to an Employer the members employed by such Employer and all persons entitled or prospectively entitled to benefits under the Scheme claiming under or through such members. For the purpose of this definition “employed” is to be interpreted as including “formerly employed” except in the case of a member formerly employed by an Employer who has subsequently become employed by another Employer and only if (in such a case) and to such extent (if any) as an Internal Transfer Payment has been made in respect of the member in accordance with the provisions of Clause 10.

“Subscription Day” means the last business day in each month. The Committee of Management may change the Subscription Day for a month to any other business day in that month and may select a business day to be an additional Subscription Day in a month.

“Unit” means a unit of the Pension Fund. The Committee of Management shall decide the number of Units into which the Pension Fund is to be divided on the first day on which a sum is received by the Committee of Management for the credit of the Pension Fund.

“Unit Bid Value” means the amount calculated by dividing the value (calculated on the bid basis) of the Pension Fund at the close of business on a Subscription Day by the total number of Units in issue at the opening of business on that Subscription Day. The Unit Bid Value is rounded to the nearest penny.

“Unit Offer Value” means the amount calculated by dividing the value (calculated on the offer basis) of the Pension Fund at the close of business on a Subscription Day by the total number of Units in issue at the opening of business on that Subscription Day. The Unit Offer Value is rounded to the nearest penny.

Section 9 QUALIFYING SERVICE

(1) Subject as hereinafter provided, where under the Rules provision is made for benefits to be awarded by reference to Qualifying Service such service shall be credited to a person as follows—

(a) For any service by him in Eligible Employment on or after Transfer Day and before he attains Pensionable Age (excluding, except on the termination of that period of service, any period of service in respect of which a Contributions Equivalent Premium has been paid and has not been refunded or in respect of which a refund of contributions is, subject to sub-paragraph (c) of paragraph (4) of Rule 22, paid or payable to him under sub-paragraph (b) of that paragraph, or both) he shall be credited with Qualifying Service equal to the length of such service in Eligible Employment;

Provided that if he has given written notice pursuant to paragraph (1) of Rule 2 he shall not be credited with Qualifying Service in respect of any period of service in Eligible Employment after the date on which Normal Contributions ceased to be deducted from his Earnings.

(b) Subject to the exclusion in sub-paragraph (a) of this paragraph (which shall be interpreted as if references to provisions of the Scheme included the corresponding provisions of MPS), a Former MPS Member shall be credited with Qualifying Service of the length notified to the Committee of Management by the administrator of MPS

(i) of any Pre-Transfer Day Contributing Service

(ii) for units under MPS with which he was credited under MPS

(iii) for back service credit with which he was credited under MPS

(iv) for any transfer payment in respect of him from some other scheme to MPS

and for the purposes of this sub-paragraph “Pre-Transfer Day Contributing Service” means service before Transfer Day in employment that was “Contributing Service” as defined in and for the purposes of MPS.

(c) Where a Transfer Payment (other than a Transfer Payment from MPS in respect of a Transferred MPS Member) is made to the Scheme from another Occupational Pension Scheme in respect of the person under Rule 34 he shall be credited in accordance with the terms referred to in that Rule or in accordance with the preservation requirements (within the meaning of section 69(2) of the 1993 Act) with any period of Qualifying Service provided for by those terms or those requirements.

(2) Where the total of the Qualifying Service to be credited to a person in accordance with paragraph (1) of this Rule includes a fraction of a year, the said fraction, if it is equal to one-half or more, shall be deemed to be a complete year, and if it is less than one-half shall be ignored.

(3) For the purposes of paragraph (2) of this Rule a year shall be deemed to consist of exactly 52 weeks.