The Transport Act 2000 (Civil Aviation Authority Pension Scheme) Order 2001

• Citation: S.I. 2001/853
• Sections: 533

Section 1 Citation and commencement

This Order may be cited as the Transport Act 2000 (Civil Aviation Authority Pension Scheme) Order 2001 and shall come into force on 31st March 2001.

Section 2 Interpretation

(1) In this Order—

“the new provisions” means the provisions set out in Schedule 1 to this Order;

“the relevant allocation” means the allocation of assets, rights, liabilities and obligations between different sections of the Scheme in accordance with the new provisions;

“the date of the relevant disposal” means the date of disposal by the Civil Aviation Authority to National Air Traffic Services (No.2) Limited of the shares it holds in National Air Traffic Services Limited;

“the Scheme” means the Civil Aviation Authority Pension Scheme; and

“the trust deed of the Scheme” means the trust deed dated 18th March 1998 and made between the Civil Aviation Authority and Anthony Leonard Cowell, Anthony George Marx, David Reginald Hobday, Robert Brian Page, Leslie William Priestley, Rupert John Britton, Graham Paul Lee, Frederick Anthony Michael Motture, Barry Robert Gibbs and Anthony Gavin Herron as amended by the deeds referred to in Schedule 2 to this Order.

(2) The date of the relevant disposal shall be published by the Civil Aviation Authority in its Official Record.

Section 3 Allocation

The trustees of the Scheme shall make the relevant allocation on the date of the relevant disposal.

Section 4 Amendment of the Scheme

The new provisions shall be substituted for the provisions of the trust deed of the Scheme on the date of the relevant disposal.

S1 Applicability of Schedule

The Rules set out in this Schedule 1 apply in respect of S Category Members and override other Rules of the CAA Section as stated herein except those rules set out in Schedule 2 to the CAA Rules. Any provisions of the CAA Section which are not stated herein to be overridden shall apply to S Category Members.

S2 Interpretation of Schedule

In this Schedule the expression defined in Appendix 1 shall have the meanings therein ascribed to them except for any such expressions which are defined in this Rule, the expressions Current Member and Member shall be taken to refer respectively to Current Members and Members who are S Category Members at the relevant time and the following expressions shall have the following meanings:

Final Pensionable Salary means in respect of each Member at any date his highest Fund Salary for any period of twelve consecutive calendar months as a Current Member within the three years ending on the day before that date disregarding in respect of a Class A Member any part of the amount so calculated which exceeds the Permitted Maximum at that date.

Fund Salary means in respect of each Member at any date his basic annual salary from the Employers at that date with the addition of any pay supplements from the Employers for the time being in payment excluding bonuses, commissions and other fluctuating emoluments.

Normal Pension Date means in respect of each Member the 1st day of the month which is coincident with or if not coincident with which next follows the attainment of age 65 and not as defined in Appendix 1.

Pensions Increase Act means the Pensions (Increase) Act 1971 and Orders made under section 59 and 59A of the 1975 Act in relation to official pensions as though the pensions under the CAA Section were official pensions as defined in the Pensions (Increase) Act 1971 and the Sponsoring Section Employer and the Trustees were the pension authority as defined in the Pensions (Increase) Act 1971 so that on each occasion on which the Minister for the Civil Service shall make an order under section 59 of the 1975 Act (with or without giving directions under section 59A of the 1975 Act) containing provisions for increasing the annual rate of an official pension then the corresponding pensions payable under the CAA Section shall be increased in accordance with such order and any direction made.

Spouse means Spouse as defined in Appendix 1 except that:

the words “the widow or widower (if any) of his or her last or only marriage” are replaced by the words “the widow or widower (if any) of his or her last or only marriage which took place prior to his or her ceasing to be a Current Member or prior to the date (if any) of his or her making a repayment to the Trustees as described in the penultimate paragraph of Rule S14”, and

proviso (2) to the definition of “Spouse” in Appendix 1 shall not apply.

S3 Option to cease S category membership

(a) An S Category Member who is a Current Member may, by written notice to the Trustees in a form specified by the Trustees, opt to cease to be an S Category member whilst remaining a Current Member. Such notice must be given before the Member attains the age of 59.75 years and shall specify the effective date of such cessation which must not be later than the date of attainment by the Member of age 59.75 years. With effect from the specified date the Member shall become a Reclassified Member for the purposes of the CAA Section on and after that date and this Schedule shall cease to apply to such Member in respect of any of his Pensionable Service.

(b) An S Category Member who elected an option similar to the option described in paragraph (a) of this Rule in accordance with the Previous Scheme Provisions shall be deemed to have elected the option described in this Rule and have become a Reclassified Member with effect from the date specified in his notice to the Trustees.

S4 Member’s contributions

(a) On or after 1 April 1997 the contributions payable by each Current Member under Rule 23.1 and the equivalent provisions of the Previous Scheme Provisions shall be at the rate of 4.5% of Fund Salary or 2.5% in the case of Members who were contributing at the rate of 4% immediately prior to 1st April 1997 and not as stated in Rule 23.1, disregarding in respect of Class A Members any part of such Fund Salary which exceeds the Permitted Maximum; provided that prior to 1 April 1997 the corresponding rates were 6% and 4% respectively.

(b) A Member shall cease to pay contributions under Rule 23.1 on ceasing to be a Current Member or, if earlier, at Normal Pension Date and not as stated in Rule 23.5.

(c) With effect from 1 April 1995 Rule 23.8 shall apply to all S Category Members who are Current Members on that date except that compound interest shall not be charged on arrears of contributions as described in Rule 23.8(b) and:

(i) the phrase “7.5%” shall be replaced with “6%”.

(ii) the phrase “6%” shall be replaced with “4%”,

(iii) the phrase “1.5%” shall be replaced with “2%”, and

with effect from 1 April 1997 the reduced rate of 4% applicable (as described above) under paragraph (a) of Rule 23.8 to an S Category Member shall be 2.5% and the rate of 6% applicable (as described above) under paragraph (b) or Rule 23.8 shall be 4.5%.

S5 Amount of members' pensions at normal pension date

(a) The amount of pension payable under Rule 24.1 to a Member who ceases to be a Current Member at Normal Pension Date shall be 1/59th of Final Pensionable Salary for each complete year of Pensionable Service with a proportionate amount for each complete month where such Pensionable Service is not an integral number of years subject to a maximum of two-thirds of Final Pensionable Salary.

(b) Rule 24.2 is modified so that the reference to Final Pensionable Earnings is read as “Final Pensionable Salary”.

(c) Rule 24.2 is further modified so that the increases described in the second paragraph thereof shall be equal to the increases at the same annual rate as is provided by the Pensions Increase Act in respect of official pensions (as defined in that Act) of the same amount as the pensions under Rule 24.2.

S6 Amount of death benefits

(a) Rule 25.1 is modified so that the lump sum death benefit in respect of S Category members who are Current Members shall be whichever of the following is applicable:-

(i) in the case of a married Member who is not a Lower Rate Contributor and who joined the A D Scheme on or before 26 February 1970, the amount by which five times his Fund Salary at the date of death exceeds the capital cost (determined by the Trustees with the advice of the Actuary) of providing the pension described in sub-paragraph (a)(ii) or (a)(iii) in paragraph 2.3 in Section B of Appendix 5 (Contracting-out); or

(ii) in the case of a married Member who is not a Lower Rate Contributor and who joined the A D Scheme after 26 February 1970, the amount by which four times his Fund Salary at the date of death is greater than the amount by which the capital cost (determined by the Trustees with the advice of the Actuary,) of providing the pension described in sub-paragraph (a)(ii) or (a)(iii) in paragraph 2.3 in Section B of Appendix 5 (Contracting-out) exceeds his Fund Salary at the date of death; or

(iii) in the case of a married Member who is a Lower Rate Contributor the amount by which three time his Fund Salary, at the date of death exceeds the capital cost (determined by the Trustees with the advice of the Actuary) of providing the pension described in subparagraph (a)(ii) or (a)(iii) in paragraph 2.3 in Section B of Appendix 5 (Contracting-out); or

(iv) in the case of all unmarried Members an amount equal to three times Fund Salary at the date of death;

disregarding for the above purpose in respect of a Class A Member any part of his Fund Salary, which exceeds the Permitted Maximum at the date of the Member’s death.

(b) Proviso (ii) to Rule 25.2 shall not apply and the following shall be substituted for that proviso in respect of S Category Members:-

(ii) if the Member’s Spouse was born more than ten years after him the pension payable to such Spouse under Rule 28 shall be reduced by not more than 2.5% for each complete year of age disparity in excess of ten.

(c) Rule 25.3 shall not apply.

(d) Rule 25.4 is modified so that only sub-paragraph (c) thereof applies.

S7 Death before payment of retirement benefit

(a) For S Category Members Rule 26.2 is replaced by the following provisions of this paragraph.

If a Member dies before Normal Pension Date and before any pension has become payable to him from the CAA Section, the Trustees shall, subject as hereinafter provided, pay in accordance with Rule 37 an amount equal to the total of the contributions paid by him to the CAA Section under Rule 23.1 (and under the Previous Scheme Provisions) and his Transferred Contributions (if any);

provided that where there has been an increase to the benefit in respect of a Member as described in the second paragraph in Rule S7(b) the amount described above in this Rule shall be reduced by the capital cost (determined by the Trustees with the advice of the Actuary) of the relevant increase.

(b) Rule 26.4 is modified to provide that the benefit payable under that Rule to a Member’s Spouse shall be equal to the Spouse’s Guaranteed Minimum Pension in respect of him at the date of his death or if greater, but in respect only of a married Current Member who joined the A D Scheme after 26 February 1970 and who is not a Lower Rate Contributor, a Spouse’s pension determined by the Trustees with the advice of the Actuary to be the pension equivalent of a sum equal to the Member’s Fund Salary at the date of his death, disregarding in the case of a Class A Member any part of such Fund Salary which exceeds the Permitted Maximum at that date.

Where the benefit payable under Rule 26.4 in respect of an S Category Member, modified as described above in this Rule S7(b), would be less than the amount (if any) payable in respect of the Member under paragraph 1.3 in Section A of Appendix 5 (contracting-out) on the assumption that the benefits of all such Members are equal to those which would be provided by a reference scheme as described in section 12B of the Pension Schemes Act 1993 that benefit shall be increased so as to be equal to such amount.

(c) Rules 26.5, 26.6, 26.7, 26.8 and 26.9 shall not apply.

S8 Commencement of member’s pension

(a) For S Category Members sub-paragraph (a) in Rule 27.1 is replaced by the following provisions of this paragraph.

A Current Member of the CAA Section who attains Normal Pension Date shall be entitled to receive a pension from the Scheme at Normal Pension Date calculated in accordance with Rule 24.1.

(b) Rule 27.2 shall not apply except for sub-paragraph (a) thereof.

(c) For S Category Members Rule 27.2(a) is amended so that the reduction to a Member’s pension under that Rule which commences before Normal Pension Date shall not apply to a pension which commences after 17 May 1990 on or after attainment by the Member of age 60 and shall, at the discretion of the Employer and with the consent of the Member, instead of being calculated as described in the second paragraph of Rule 27.2(a) be at the rate of 0.25 per cent for each complete month by which the date of commencement of the pension precedes the Member’s 60th birthday.

(d) Rule 27.3 shall not apply.

S9 Death after commencement of pension

(a) Rules 28.1 and 28.2 shall not apply.

(b) For S Category Members Rule 28.3 is replaced by the following provisions of this paragraph.

If a Member dies after a pension has become payable to him under these Rules and is survived by a Spouse, the pension described in Rule 25.2 shall become payable to the Spouse from the date of death. Such pension shall

(i) for the balance (if any) of the period of five years beginning at the commencement of payment of the Member’s pension from the CAA Section be equal to one-twelfth of the Member’s Relevant Pension for each month in the said period, and

(ii) thereafter or from the date of the Member’s death if it occurred more than five years from the commencement of payment of his pension, be equal to 60 per cent of the Member’s Relevant Pension;

provided always that notwithstanding the provisions of the proviso to Rule 25.4 the Member’s Relevant Pension for the purpose of sub-paragraph (i) above shall not include any amount surrendered or commuted under Rule 29.2 or Rule 29.3.

Where the benefit payable under Rule 28.3 in respect of an S Category Member, modified as described above in this Rule S9(b), would be less than the amount (if any) payable in respect of the Member under paragraph 1.3 in Section A of Appendix 5 (Contracting-out) on the assumption that the benefits of all such Members are equal to those which would be provided by a reference scheme as described in section 12B of the Pension Schemes Act 1993 that benefit shall be increased so as to be equal to such amount.

(c) Rule 28.4 shall not apply.

For S Category Members Rule 28.5 is replaced by the following provisions of this paragraph.

If a Member dies after a pension has become payable to him under these Rules and is survived by one or more Qualifying Children (but not by a Spouse), a pension equal to the pension which would have become payable from the CAA Section to the Member’s Spouse shall become payable from the date of the Member’s death and shall be paid or applied by the Trustees to or for the benefit of such one or more of the Qualifying Children in such manner and in such shares as the Trustees shall decide.

(e) Rules 28.7 and 28.8 shall not apply.

S10 Cash sum in lieu of pension

(a) In respect of S Category Members Rule 29.2 is modified so that no more than one-quarter of the Member’s pension from the CAA Section may be surrendered for a cash sum in accordance with that Rule.

(b) the amount of cash sum provided in respect of an S Category Member in accordance with Rule 29.2 shall be at the rate of £10.40 for each £1 per annum pension surrendered and not as described in Rule 29.4.

S11 Application of death benefits

For S Category Members any benefit which is expressed to be payable in accordance with Rule 37 shall not be payable on the basis described in that Rule but shall be payable as described below in this Rule.

A Member may nominate a beneficiary to receive such benefit and may revoke such nomination and may make subsequent nominations in accordance with the detailed provisions set out in Regulation 9 in the Regulations attached to the Deed of Consolidation. In the absence of such nomination such benefit shall become payable in accordance with Rule 37.

S12 Payment of Spouse’s Pension and Variable Pension Option

(a) In respect of S Category Members Rule 38.3 is modified so that a pension payable from the Scheme to a Member’s Spouse (other than a pension provided by surrender of pension under Rule 30) shall cease with the last instalment falling due before the date of death of the Spouse except that if there is a Qualifying Child of the Member living at such date such pension shall continue to be paid to the Qualifying Child until the date described in Rule 38.4 as modified by paragraph (b) of this Rule.

(b) In respect of S Category Members Rule 38.4 is modified so that the words “age 25” are replaced by “age 21”.

(c) Paragraph (b) of Rule 38.5 shall not apply.

S13 Increases in pensions in payment

(a) Rule 39 is modified so that pensions in course of payment from the CAA Section to or in respect of S Category Members which are to be increased in accordance with that Rule shall be increased at the same rate as is provided in the Pensions Increase Act and not at the rate stated in Rule 39.

(b) In respect of S Category Members Rule 39 shall not apply in respect of that proportion of a Member’s pension from the CAA Section which results from the payment of additional voluntary contributions to the AD Scheme and that proportion of such pensions shall not be increased hereunder.

S14 Repayments to members

For S Category Members Rule 48 is replaced by this Rule S14.

If a Current Member is unmarried at the date on which his pension from the CAA Section commences to be paid there shall be payable to such Member, subject to any deduction in accordance with Rule 43 and subject as provided below to this Rule, the cash sum described in the next following paragraph.

The said cash sum in respect of such a Member shall be an amount equal to the aggregate of:

(i) that proportion of such Member’s contributions to the CAA Section (and under the Previous Scheme Provisions) which the Trustees with the advice of the Actuary consider to have been contributions to secure a Spouse’s pension, and

(ii) an amount equal to one-third of the contributions (if any) paid by the Member to the A D Scheme while such Member was unmarried and had no child who might have qualified for benefit under the A D Scheme if the Member had died as a pensioner thereunder, such contributions being contributions paid at the full rate applicable under that scheme to married contributors.

Alternatively and in lieu of such amount, if the Member so requests and the Trustees agree, there may be payable an additional amount of pension determined by the trustees on the advice of the Actuary as the equivalent of the said amount, subject always to the provisions of Appendix 4 (Inland Revenue Limits).

Except where the Trustees agree otherwise, if a Member who has received a refund or an additional amount of pension as described above subsequently marries such Member shall inform the Trustees and shall repay to the Trustees the amount so received (or in the case of an additional pension, the total of the instalments thereof so received) together with compound interest thereon as determined by the Trustees with the advice of the Actuary.

In consideration of such repayment the CAA Section shall accept a liability to provide such pension for the Member’s Spouse as shall be notified by the Trustees to the Member.

Section 1.1

With effect from the Effective Date, the Trustees shall hold and manage the Fund under irrevocable trusts and shall administer the Scheme as provided in this Trust Deed and the Rules, and the main purpose of the Scheme is hereby confirmed as being the provision of retirement benefits for the Members, such benefits being relevant benefits as defined in Chapter I of Part XIV of the Taxes Act .

Section 1.2

The benefits, rights and options of Members who were in Service on the Effective Date (other than any such Member whose current membership of the Scheme had ceased for any reason on or before the Effective Date) and persons who become Members after that date shall be in accordance with this Trust Deed and the Rules.

Section 1.3

Subject to the allocation of individuals to the CAA Section and the NATS Section under Clause 3, the benefits, rights and options of Members who ceased to be in Service or whose current membership of the Scheme ceased for any other reason before the Effective Date shall be in accordance with the Previous Scheme Provisions at the date of such cessation or other appropriate date but any other provision of the Trust Deed and Rules determined by the Principal Employer with the consent of the Trustees shall apply to any Member or group of Members to the extent notified to such Members, and in respect of such Members the Previous Scheme Provisions shall be deemed to have been amended to such extent but subject always to the provisions of Clause 16 of the Previous Definitive Deed.

Section 1.1

The provisions relating to the appointment, removal and resignation of Trustees are set out in Clause 5.

Section 1 Application of schedule

This Schedule overrides all provisions of the CAA Rules. It applies only to the CAA Section.

Section 1

The provisions relating to the appointment, removal and resignation of Trustees are set out in Clause 5.

Section 1 Application of Schedule

This Schedule overrides all provisions of the NATS Rules. It applies only to the NATS Section.

Section 1 Overriding rule

This Appendix 4 overrides all provisions of the Trust Deed and Rules. It applies separately to each Section of the Scheme.

Section 1.1 Section A: Reference Scheme Test

This Section of this Appendix 5 shall apply if any Member’s employment becomes contracted-out employment by reference to the relevant Section on or after 6 April 1997.

Section 1.2 Section A: Reference Scheme Test

The words and expressions used in this Section of this Appendix shall have the same meaning as in the Pension Schemes Act 1993 .

Section 1.3 Section A: Reference Scheme Test

In relation to any period of contracting-out employment on or after 6 April 1997 the relevant Section must satisfy the provisions of section 9(2B) of the Pension Schemes Act 1993 and of such of the Contracting-out Regulations as are appropriate.

Section 1.4 Section A: Reference Scheme Test

In complying with paragraph 1.3 above, the Trustees must ensure, among other things, that the relevant Section:

(a) satisfies the statutory standard as described in section 12A of the Pension Schemes Act 1993;

(b) complies with the restriction on employer-related investments imposed under section 40 of the Pensions Act 1995;

(c) satisfies the prescribed requirements as to the amount of the resources of the relevant Section; and

(d) complies with any prohibition or restriction in relation to the transfer of liabilities or the payment of a lump sum instead of a pension.

Section 1

Introduction

Section 1.1

The calculations required to place an actuarial value on the assets and liabilities of the Scheme (and consequential allocation of such assets and liabilities between the CAA Section and the NATS Section) will be made by the Actuary as at the Effective Date.

Section 1.2

Words and expressions in this Appendix (and the Schedule to it) shall have the meanings set out in Appendix 1 of this Deed unless otherwise indicated in this Appendix 6.

Section 1

The derivation of the price inflation assumption is as follows:

where

annualised gross redemption yield on the FTSE Actuaries Government Securities 20 year index.

the annualised read redemption yield on the FTSE Actuaries Government Securities Index-Linked over 5 years (0% inflation) Index.

the annualised real redemption yield on the FTSE Actuaries Government Securities Index-Linked over 5 years (5% inflation) Index.

and

Section 2.1

In this Trust Deed and the Rules, the expressions this Deed and the Rules mean respectively this amended trust deed and the rules of the CAA Section, the rules of the NATS Section or the rules of any other Section established pursuant to Clause 19 scheduled to it, together with any variation of or additions to or substitutions for the same duly made.

Section 2.2

The provisions of any Appendices (and any Schedules to such Appendices) to this Deed including the provisions of the Rules shall be deemed to be incorporated in and to form part of this Deed, which shall be read and construed accordingly.

Section 2.3

Notwithstanding the provisions of Clause 1 of the Previous Definitive Deed, in the event of any inconsistency between the provisions of the Trust Deed and the provisions of the Existing Trust Deeds the provisions of the Trust Deed shall prevail.

Section 2.4

For the avoidance of doubt it is stated that the Scheme is subject to the law of England and Wales and that the interpretation of the Trust Deed and Rules is subject to the law of England and Wales.

Section 2.5

In this Trust Deed and Rules:

(a) unless the context requires otherwise the singular shall include the plural (and vice versa) and the masculine shall include the feminine (and vice versa);

(b) reference to any Act of Parliament or to any part or section thereof shall be deemed to include any statutory regulations made under it and shall also include any statutory provisions in force in Northern Ireland corresponding to the provisions of the said Act and any statutory modification or re-enactment of any of the aforementioned for the time being in force;

(c) reference to any particular Clause or Rule of or within a Section shall be a reference to a Clause or Rule of the Trust Deed and the Rules (of the Section) respectively unless otherwise stated, and the letter S prefixed to a Rule number shall indicate a reference to a Rule in Schedule 1 to the CAA Rules;

(d) the Rules shall consist of the CAA Rules and the NATS Rules together with the rules adopted for any new Section established under Clause 19 and any Schedules thereto and any addition or alteration to the Rules duly made;

(e) the application of the CAA Rules to S Category Members shall be as described in Rule S1 in Schedule 1 to the CAA Rules;

(f) the definitions applying to this Trust Deed and the Rules are set out in Appendix 1 and such definitions apply separately to each of the CAA Rules, the NATS Rules and any rules adopted for any new Section established under Clause 19;

(g) any amendment to the definitions may apply if so stated to the Rules in relation to one Section only; and

(h) in the interpretation of any particular Clause or Rule the heading to that Clause or Rule shall be disregarded.

Section 2.1

The provisions relating to the general powers of the Trustees are set out in Clause 8. Without prejudice to the powers in connection with the Scheme referred to in Clause 8, the Trustees shall have all powers rights and privileges in connection with the CAA Section requisite or proper to enable them to carry out or execute or do any transaction act deed or thing arising under or in connection with the CAA Section.

Section 2 Definitions

For the purposes of this Schedule:

Ex-Spouse means an individual to whom Pension Credit Rights have been or are to be allocated following a Pension Sharing Order;

Ex-Spouse Participant means an Ex-Spouse who is entitled to a Pension Credit Benefit in addition to any benefits to which he or she is entitled as a Member of the CAA Section or as a Dependant of a Member of the CAA Section;

Deferred Pension Reduction means the amount by which the Member’s pension or deferred pension under the CAA Section which arises from Service is reduced at the Relevant Date in accordance with the provisions of section 31 of the Welfare Act following a Pension Sharing Order;

Pension Credit means a credit under section 29(1)(b) of the Welfare Act and is equal to the Pension Debit;

Pension Credit Benefit means the benefit payable from the CAA Section to or in respect of an Ex-Spouse Participant by virtue of rights under the CAA Section attributable either directly or indirectly to a Pension Credit. The value of such benefit (calculated as required by the Welfare Act) shall not be less than the Pension Credit;

Pension Credit Rights means rights to future benefits under the CAA Rules which are attributable either directly or indirectly to a Pension Credit;

Pension Debit means a debit under section 29(1)(a) of the Welfare Act and is calculated in accordance with section 29 and 30 of the Welfare Act;

Pension Debit Member means a Member of the CAA Section who on the date of his or her marriage is dissolved or annulled is or was either.

a Controlling Director or would be a Controlling Director if he or she left Service on that date; or

in receipt of Earnings in excess of one quarter of the Permitted Maximum on that date,

and whose benefits have been permanently reduced by a Pension Debit in accordance with section 31 of the Welfare Act. For the purpose of this definition Earnings means the total emoluments (from which tax has been deducted in accordance with the Income Tax (Employment) Regulations 1993) received by the member from the Employers during the year of assessment immediately before the year of assessment in which the marriage of the Member was dissolved or annulled;

Pension Sharing Order means an order or provision as mentioned in section 28(1) of the Welfare Act or an agreement or equivalent provision;

Welfare Act means the Welfare Reform and Pensions Act 1999 and any reference to the Welfare Act or to a section of that Act shall include (where necessary) the corresponding provision applicable in Northern Ireland.

Section 2

The provisions relating to the general powers of the Trustees are set out in Clause 8. Without prejudice to the powers in connection with the Scheme referred to in Clause 8, the Trustees shall have all powers rights and privileges in connection with the NATS Section requisite or proper to enable them to carry out or execute or do any transaction act deed or thing arising under or in connection with the NATS Section.

Section 2 Definitions

For the purposes of this Schedule:

Ex-Spouse means an individual to whom Pension Credit Rights have been or are to be allocated following a Pension Sharing Order;

Ex-Spouse Participant means an Ex-Spouse who is entitled to a Pension Credit Benefit in addition to any benefits to which he or she is entitled as a Member of the NATS Section or as a Dependant of a Member of the NATS Section;

Deferred Pension Reduction means the amount by which the Member’s pension or deferred pension under the NATS Section which arises from Service is reduced at the Relevant Date in accordance with the provisions of section 31 of the Welfare Act following a Pension Sharing Order;

Pension Credit means a credit under section 29(1)(b) of the Welfare Act and is equal to the Pension Debit;

Pension Credit Benefit means the benefit payable from the NATS Section to or in respect of an Ex-Spouse Participant by virtue of rights under the NATS Section attributable either directly or indirectly to a Pension Credit. The value of such benefit (calculated as required by the Welfare Act) shall not be less than the Pension Credit;

Pension Credit Rights means rights to future benefits under the NATS Rules which are attributable either directly or indirectly to a Pension Credit;

Pension Debit means a debit under section 29(1)(a) of the Welfare Act and is calculated in accordance with sections 29 and 30 of the Welfare Act;

Pension Debit Member means a Member of the NATS Section who on the date of his or her marriage is dissolved or annulled is or was either:

a Controlling Director or would be a Controlling Director if he or she left Service on that date; or

in receipt of Earnings in excess of one quarter of the Permitted Maximum on that date,

and whose benefits have been permanently reduced by a Pension Debit in accordance with section 31 of the Welfare Act. For the purpose of this definition Earnings means the total emoluments (from which tax has been deducted in accordance with the Income Tax (Employment) Regulations 1993 ) received by the Member from the Employers during the year of assessment immediately before the year of assessment in which the marriage of the Member was dissolved or annulled;

Pension Sharing Order means an order or provision as mentioned in section 28(1) of the Welfare Act or an agreement or equivalent provision;

Welfare Act means the Welfare Reform and Pensions Act 1999 and any reference to the Welfare Act or to a section of that Act shall include (where necessary) the corresponding provision applicable in Northern Ireland.

Section 2.1 Section A (Applicable to Class A Members)

Any pension (before the exercise of any options available under the relevant Section) payable to a Member from any Section on retirement at any time between attaining age 50 and attaining age 75 (other than on retirement before Normal Pension Date on grounds of incapacity) shall not be such that the aggregate of such pension and of the pension equivalent of all other retirement benefits payable in respect of that Member’s Service including such benefit (if any) payable under Associated Schemes would exceed 1/60th of his Final Remuneration for each year of Service up to a maximum of forty, or such greater amount as will not prejudice the approval of the Scheme under Chapter I of Part XIV of the Taxes Act. For the purposes of this paragraph 2.1, the pension equivalent of all retirement benefits payable other than in the form of a non-commutable pension shall be 1/12th of its total cash value.

Section 2.2 Section A (Applicable to Class A Members)

Any pension (before the exercise of any options available under the relevant Section) payable to a Member from any Section on retirement before Normal Pension Date on grounds of incapacity shall not exceed the amount which could have been provided in respect of him at Normal Pension Date under paragraph 2.1 above taking Final Remuneration as at the actual date of retirement but including in Service the period between the actual date of retirement and Normal Pension Date.

Section 2.3 Section A (Applicable to Class A Members)

Notwithstanding paragraph 2.1 above, the pension which can be calculated under that paragraph in respect of a Member who ceases to be a Current Member before attaining age 75 may be increased by 5% compound for each complete year or in proportion to any increase in the Index which has occurred between the date of such cessation and the date on which the pension begins to be payable. Such amount may be further increased to comply with the preservation requirements of the Pension Schemes Act 1993 and, where appropriate, with the requirements of that Act relating to increases in Guaranteed Minimum Pensions.

Section 2.1 Section B: Guaranteed Minimum Pensions

This Section of this Appendix 5 shall apply if any Member’s employment became contracted-out employment by reference to the relevant Section before 6 April 1997 and it shall then override any other provisions of the relevant Section except any which are required for approval of the Scheme under Chapter I of Part XIV of the Taxes Act and any person’s entitlement under this Rule shall be included in that person’s entitlement arising from Service prior to that date under any other provisions of the relevant Section.

Section 2.2 Section B: Guaranteed Minimum Pensions

The words and expressions used in this Section of this Appendix shall have the same meaning as in the Pension Schemes Act 1993.

Section 2.3 Section B: Guaranteed Minimum Pensions

(a) If a Member has a guaranteed minimum in relation to the pension provided for him or her under the relevant Section in accordance with section 14 of the Pension Schemes Act 1993 , he or she shall be entitled to receive from the relevant Section a pension payable for life as follows:

(i) the weekly rate of the pension provided under the relevant Section from age 65 for a male Member and age 60 for a female Member shall not be less than the said guaranteed minimum;

(ii) if a male Member dies leaving a widow, the weekly rate of the pension provided for her under the relevant Section shall not be less than half of the Member’s Guaranteed Minimum Pension;

(iii) if a female Member dies leaving a widower, the weekly rate of the pension provided for him under the relevant Section shall not be less than half of the Member’s Guaranteed Minimum Pension which is attributable to earnings for the tax year 1988/89 and subsequent tax years up to and including the tax year 1996/97.

The Guaranteed Minimum Pension in respect of a Member shall, in so far as it is attributable to earnings in the tax years from (and including) 1988/89, be increased in accordance with the requirements of section 109 of the Pension Schemes Act 1993 and to the extent of any orders made thereunder.

(b) If the commencement of any Member’s Guaranteed Minimum Pension is postponed for any period his Guaranteed Minimum Pension shall be increased to the extent, if any, specified in section 15 of the Pension Schemes Act 1993.

(c) The pension to which any person is entitled under this paragraph may be commuted in accordance with the provisions of Rule 29 provided that the aggregate of such pension and the annuity equivalent of all other retirement benefits to which such person is entitled from the Employers' Scheme does not exceed £260 per annum (or such higher amount as may have been prescribed by regulations made under section 21(1) of the Pension Schemes Act 1993 and is acceptable to the Board of Inland Revenue).

Section 2.4 Section B: Guaranteed Minimum Pensions

Any period or part of a period of a Member’s service in an employment which was contracted-out employment by reference to another retirement benefits arrangement shall, in relation to any rights or benefits conferred upon a transfer in to the relevant Section in substitution for such Member’s accrued rights to guaranteed minimum pension benefits or Protected Rights under such other arrangement, be treated as a period or part of a period in Service during Contracted-out Membership under the relevant Section such that the part of his Guaranteed Minimum Pension in respect of such (if any) of his Contracted-out Membership which related to Protected Rights as aforesaid shall be equal to the guaranteed minimum to which he would have been treated as entitled by reason of his membership of the transferring arrangement if the transfer payment had not been made.