Citation and commencement

1.  These Regulations may be cited as the Contracting-out (Transfer and Transfer Payment) (Amendment) Regulations 2017 and come into force on 3rd July 2017.

Amendment of the Contracting-out (Transfer and Transfer Payment) Regulations 1996

2.-(1) The Contracting-out (Transfer and Transfer Payment) Regulations 1996(3) are amended as follows.

(2) In regulation 1(2) (interpretation) insert at the appropriate places-

""assessment period" has the meaning given in section 132 of the Pensions Act 2004 (assessment periods)(4);"; and

""regulated apportionment arrangement" has the meaning given in regulation 2(1) of the Occupational Pension Schemes (Employer Debt) Regulations 2005 (interpretation)(5);".

(3) In regulation 2 (general)-

(a)in paragraph (3), for "or 4" substitute ", 4 or 6A";

(b)after paragraph (3) insert-

"(3A) A transfer payment from an occupational pension scheme in respect of the payment of guaranteed minimum pensions to or in respect of a person who has become entitled to them may be made in accordance with regulation 6A and no such transfer payment may be made otherwise.";

(c)in paragraph (4), for "6" substitute "6A" and after "in respect of" insert "the payment of guaranteed minimum pensions or a payment in respect of".

(4) In Part 2, after regulation 6 (transfer payments in respect of guaranteed minimum pensions to overseas schemes), insert-

"Transfers in respect of guaranteed minimum pensions in the case of a regulated apportionment arrangement or where an assessment period has commenced

6A.-(1) This regulation applies in relation to an occupational pension scheme where-

(a)there is an assessment period in relation to the scheme; or

(b)a regulated apportionment arrangement has been entered into in relation to the scheme.

(2) A transfer of liability for, or a transfer payment in respect of, the payment of guaranteed minimum pensions to or in respect of a person who has become entitled to them may be made from an occupational pension scheme to which this regulation applies ("the transferring scheme") to an occupational pension scheme which is not an overseas scheme or overseas arrangement ("the receiving scheme") if the person to whom the pension is payable-

(a)consents to the transfer in writing;

(b)acknowledges in writing to the transferring scheme the receipt of a statement showing the benefits to be awarded in respect of the transfer; and

(c)acknowledges in writing to the transferring scheme the person's acceptance that-

(i)the benefits to be provided by the receiving scheme may be in a different form and of a different amount to those which would have been provided by the transferring scheme; and

(ii)there is no statutory requirement on the receiving scheme to provide for survivor's benefits in relation to the transfer.".

(5) In regulation 7 (general)(6)-

(a)in paragraph (2)(b), after "regulation 9" insert "or a transfer in accordance with regulation 11A";

(b)after paragraph (2) insert-

"(2A) A transfer payment from an occupational pension scheme that was a salary-related contracted-out scheme in respect of the payment of pensions under that occupational pension scheme deriving from section 9(2B) rights to or in respect of a person who has become entitled to them may be made in accordance with regulation 11A and no such transfer payment may be made otherwise.";

(c)in paragraph (3) for "11" substitute "11A" and after "paragraph (1)" insert "or a payment in respect of pensions deriving from section 9(2B) rights such as is referred to in paragraph (2A)".

(6) In Part 3, after regulation 11 (transfer payments to overseas schemes or arrangements in respect of section 9(2B) rights) insert-

"Transfers in respect of section 9(2B) rights in the case of a regulated apportionment arrangement or where an assessment period has commenced

11A.-(1) This regulation applies in relation to an occupational pension scheme that was a salary-related contracted-out scheme where-

(a)there is an assessment period in relation to the scheme; or

(b)a regulated apportionment arrangement has been entered into in relation to the scheme.

(2) A transfer of liability for, or a transfer payment in respect of, the payment of pensions deriving from section 9(2B) rights to or in respect of a person who has become entitled to them may be made from an occupational pension scheme to which this regulation applies ("the transferring scheme") to an occupational pension scheme which is not an overseas scheme or overseas arrangement ("the receiving scheme") if the person to whom the pension is payable-

(a)consents to the transfer in writing;

(b)acknowledges in writing to the transferring scheme the receipt of a statement showing the benefits to be awarded in respect of the transfer; and

(c)acknowledges in writing to the transferring scheme the person's acceptance that-

(i)the benefits to be provided by the receiving scheme may be in a different form and of a different amount to those which would have been provided by the transferring scheme; and

(ii)there is no statutory requirement on the receiving scheme to provide for survivor's benefits in relation to the transfer.".

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Contracting-out (Transfer and Transfer Payment) Regulations 1996 (S.I. 1996/1462) ("the 1996 Regulations") to enable schemes that were contracted-out to make transfers in respect of pensioner members into occupational pension schemes which have not previously been contracted-out.

Regulation 2(4) inserts new regulation 6A into the 1996 Regulations, which applies in relation to transfers of liability for, and transfer payments in respect of, guaranteed minimum pensions. Regulation 2(6) inserts new regulation 11A into the 1996 Regulations, which applies in relation to transfers of liability for, and transfer payments in respect of, section 9(2B) rights.

The new regulations provide that such a transfer can be made from an occupational pension scheme where either the scheme is going through a Pension Protection Fund assessment period or where a regulated apportionment arrangement has been entered into in relation to the scheme. The transfer can only be made where the pensioner member consents in writing. In addition the member must acknowledge in writing receipt of a statement showing the benefits to be awarded in respect of the transfer. The member must also acknowledge in writing the member's acceptance that the benefits to be provided by the receiving scheme may be in a different form and of a different amount to those which would have been payable by the transferring scheme; and that the receiving scheme is not required by statute to provide for survivor's benefits in relation to the transfer.

An impact assessment of the effect that this instrument will have on the costs of business and the voluntary sector is published with the Explanatory Memorandum alongside this instrument on the UK Legislation website and the gov.uk website, and copies can be obtained from the Department for Work and Pensions, First Floor, Caxton House, Tothill Street, London SW1H 9NA.