UK Annuities: FINANCIAL CONDUCT REGULATED SITES • QUALIFIED, TRUSTWORTHY ANNUITY ADVICE

Centralising Your Pension Annuity Search

BUT FIRST, SOME IMPORTANT INFORMATION THAT COULD BOOST YOUR RETIREMENT FINANCES Have you taken out a credit or store card, mortgage, secured loan, unsecured loan or hire purchase agreement in the last 10 years? If you have (or have had) a mortgage, loan or credit card with providers such as Barclaycard, Abbey, Santander, Littlewoods, MBNA, Halifax, HSBC, HBOS, Lloyds, Natwest, RBS or in fact any other credit provider, you may be able to reclaim up to £15,000 if you were sold PPI insurance - in most cases even if you have lost the paperwork. Learn more about PPI Claims now!


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ANNUITIES: Annuities Tax, Annuities Taxation


Pensions and Annuities Tax Research:

Integrated Model Rules (IMR2003PP)

Personal Pension Schemes

Approved Under Chapter IV of Part XIV of the Income And Corporation Taxes Act 1988 (Which are not Stakeholder Pension Schemes and don't permit members to contract out of the State Second Pension) Issued by the Inland Revenue, Savings Pensions and Share Schemes FitzRoy House Castle Meadow Road Nottingham NG2 1BD Tel. 0115 974 1777 Fax. 0845 600 2622 Contents PART 1 : INTRODUCTION 1.1 Tax Approval 1.2 Status of Rules 1.3 Form of Scheme 1.4 Member Deeds 1.5 Contracting Out PART 2 : DEFINITIONS PART 3 : MEMBERS AND ARRANGEMENTS 3.1 to 3.4 Becoming a Member 3.5 to 3.10 Making an Arrangement PART 4 : CONTRIBUTIONS 4.1 to 4.5 Eligibility to Make Contributions 4.6 to 4.8 Permitted Contributions 4.9 to 4.11 Member Contributions 4.12 Use of Contributions 4.13 Simple Contribution Limit 4.14 Aggregate Contributions 4.15 to 4.19 Evidence of Earnings for Higher Contribution Limit 4.20 to 4.24 Continuation of Contributions After Ceasing to Have Relevant Earnings 4.25 to 4.26 Carry Back of Contributions 4.27 Total Contributions Limit 4.28 Method of Payment of Contributions 4.29 to 4.31 Repayment of Contributions Which Exceed Limit (including Eligibility to Pay Contributions) 4.32 to 4.34 Using Contributions to Buy Life Insurance 4.35 to 4.37 Waiver of Contributions PART 5 : DATE MEMBER'S BENEFIT STARTS 5.1 Multiple Arrangements 5.2 Split Arrangements 5.3 Date Member's Benefits Normally Start 5.4 Pension Credit Rights 5.5 to 5.7 Incapacity Below Age 50 5.8 to 5.10 Occupations With a Low Retiring Age PART 6 : BENEFIT FOR MEMBER 6.1 Multiple Arrangements 6.2 Split Arrangements 6.3 to 6.6 Member's Choice of Lump Sum 6.5 to 6.9 Member's Pension 6.10 to 6.12 Member's Right to Choose Insurer : Open Market Option 6.13 to 6.14 Form of Pension 6.15 to 6.16 Minimum Payment Guarantee 6.17 Responsibility of the Scheme Administrator 6.18 to 6.19 Annuity Deferral 6.20 to 6.21 Income Withdrawal 6.22 to 6.24 Income Withdrawal Limits 6.25 to 6.34 Recalculation of Income Withdrawal Limits PART 7 : MEMBER DIES AFTER BENEFIT STARTS 7.1 Member's Choice 7.2 Amount of Pension 7.3 Start of Survivor's Pension 7.4 Duration of Child(ren)'s Pension 7.5 Duration of Other Survivor's Pension 7.6 to 7.7 Minimum Payment Guarantee - Survivor's Pension 7.8 Lump Sum Payable Direct by Insurer 7.9 to 7.19 Death of Member During Annuity Deferral Period PART 8 : MEMBER DIES BEFORE BENEFIT STARTS 8.1 to 8.3 Member's Choice 8.4 to 8.6 Member's or Survivor's Choice of Insurer 8.7 Scheme Administrator's Choice 8.8 Maximum Amount of Pension 8.9 to 8.10 Start of Survivor's Pension 8.11 Duration of Child's Pension 8.12 Duration of Other Survivor's Pension 8.13 to 8.14 Minimum Payment Guarantee 8.15 Lump Sum 8.16 Lump Sum Payable by Scheme Administrator - Time Limit 8.17 to 8.27 Annuity Deferral 8.28 Death of Survivor During Annuity Deferral Period PART 9 : MEMBER DIES BEFORE PENSION STARTS - LIFE INSURANCE 9.1 Lump Sum Payable Under Life Insurance Contract PART 10 : TRANSFER OUT OF THE SCHEME 10.1 Member's Right to a Cash Equivalent 10.2 to 10.7 Transfer Payments 10.8 Transfer to an Overseas Pension Scheme 10.9 Member Withdrawing a Request 10.10 Time of Transfer 10.11 to 10.12 Transfer of Member's Benefits Whilst in Income Withdrawal 10.13 Transfer of Survivor's or Substitute Member's Benefits Whilst in Income Withdrawal 10.14 Pension Credit Rights 10.15 Discharge of Rights 10.16 Multiple Transfers PART 11 : TRANSFER INTO THE SCHEME 11.1 to 11.2 Transferring Scheme 11.3 to 11.9 General Conditions 11.10 Time of Transfer 11.11 to 11.13 Acceptance of Transfers of Income Withdrawal Benefits 11.14 to 11.16 Lump Sum Restriction on Death 11.17 Schemes With a Pensioneer Trustee PART 12 : GENERAL PROVISIONS ABOUT BENEFITS 12.1 Rights Under the Scheme 12.2 to 12.3 Assignment or Surrender 12.4 Information to Members 12.5 Beneficiary Unable to Act 12.6 Whereabouts Unknown 12.7 Evidence 12.8 Notice to Scheme Administrator PART 13 : GENERAL PROVISIONS ABOUT PENSIONS 13.1 Payment Intervals 13.2 Increase in Payment PART 14 : PROVIDER AND SCHEME ADMINISTRATOR 14.1 to 14.2 Provider 14.3 Scheme Administrator 14.4 to 14.5 Trustees 14.6 to 14.10 Pensioneer Trustee PART 15 : CLOSING OR WINDING-UP THE SCHEME 15.1 to 15.2 Closing the Scheme 15.3 to 15.5 Winding-up the Scheme PART 16 : WITHDRAWAL OF REVENUE APPROVAL 16.1 Withdrawal of Approval of Scheme 16.2 Withdrawal of Approval of a Member's Arrangement PART 17 : INVESTMENTS OR DEPOSITS HELD FOR THE PURPOSE OF THE SCHEME 17.1 Employer Related Investments 17.2 to 17.3 All Schemes 17.4 to 17.6 Arrangements That Are Not Self-Invested Personal Pension Schemes 17.7 to 17.13 Self-Invested Personal Pension Schemes 17.14 to 17.18 Connected Transactions 17.19 to 17.27 Schemes With a Pensioneer Trustee PART 18 : ALTERATIONS TO THESE RULES 18.1 Inland Revenue Consent 18.2 Power to Alter These Rules 18.3 Alteration of an Arrangement SCHEDULE TO THE RULES 1. Name of Provider 2. Name of Scheme Administrator Interpretation: References to any legislation or any provision includes references to any previous legislation or provision relating to the same subject matter and to any modification or re-enactment for the time being in force --------------------------------------------------------------------------------------- 1. Introduction TAX APPROVAL 1.1 The scheme is a personal pension scheme designed for approval under Chapter IV of Part XIV of the Act. Its only purpose is to provide income withdrawals, annuities and lump sums as described in the scheme documents (including these rules). If the scheme (or part of it) was previously tax approved under Chapter I of Part XIV of the Act, this will be shown in the schedule to the rules. STATUS OF RULES 1.2 These rules set out the requirements for tax approval which override any inconsistent provisions in the other scheme documents. These rules don't override the law. If any provision conflicts with the law, the law will apply. References to any legislation or any provision includes references to any previous legislation or provision relating to the same subject matter and to any modification or re-enactment for the time being in force. FORM OF SCHEME 1.3 The scheme may (but depending on the type of provider, need not) be set up under trust. If the scheme is to take the form of individual irrevocable trusts for each member, the benefits for each member under the scheme will be held under a trust to be established by the scheme administrator for the benefit of that member in a form approved by the Inland Revenue. The reference to member in this rule should be taken to include a substitute member. MEMBER DEEDS 1.4 In certain circumstances, each member will be required to enter into a formal agreement, by deed. This deed must state that the member won't require the withdrawal of trust funds, or income from those trust funds to be paid to him or her, except for the payment of benefits under the scheme at the time provided by the rules. Unless the scheme administrator or scheme trustees decide otherwise these deeds won't be required if : * all the arrangements to be made under the scheme are in the form of insurance contracts, or * the scheme has been set up by a person as defined in section 632(1) of the Act (a financial institution), and it is known from the outset that the scheme will have at least twelve members, or * the scheme has been set up by a person as defined in section 632(1A) of the Act and is required to appoint a pensioneer trustee (see rule 14.6). If the scheme has been set up by a person as defined in section 632(1A) of the Act but is not required to appoint a pensioneer trustee only the first eleven members of the scheme have to enter into the deed detailed in this rule. The reference to member in this rule should be taken to include a substitute member. CONTRACTING OUT 1.5 It is not possible to contract out of the state second pension through this scheme. 2. Definitions In these Model Rules the following words have the following meanings : Act means the Income and Corporation Taxes Act 1988. Affinity Group means any organisation representing particular trades, professions, industries or other group. Age Related Percentage means the percentages set out in section 640 of the Act. These are set as at the age of the member at the start of a tax year i.e. 6 April, and are: Up to age 35 17.5% 36 to 45 20% 46 to 50 25% 51 to 55 30% 56 to 60 35% 61 to 74 40% Approved Personal Pension Scheme means a personal pension scheme approved under Chapter IV of Part XIV of the Act. Arrangement means an arrangement (as described in rules 3.5 to 3.10) made by a person with the scheme administrator to provide benefits under these rules. If the scheme was previously approved under Chapter I of Part XIV of the Act a member who had rights under the scheme before it became an approved personal pension scheme and continues to do so afterwards will be regarded as having entered into an arrangement on the date the member joined the scheme. For such a member the conditions of the scheme relating to its approval under Chapter IV of Part XIV of the Act (in particular rule 6.3) apply with effect from the date the scheme became an approved personal pension scheme. Prior to that date the former conditions applicable to the scheme's approval under Chapter I of Part XIV of the Act will have applied. Connected is defined by section 839 of the Act. Controlling Director means as defined in section 632B(3) of the Act. Conversion Regulations 2001 means The Personal Pension Schemes (Conversion of Retirement Benefits Schemes) Regulations 2001 (SI 2001/118). CREST means the electronic share settlement system introduced by CRESTCo in July 1996. Dependant means a person who is financially dependent on the member, or dependent on the member because of disability, or was so dependent at the time of the member's death or retirement. An ex-spouse of the member who was in receipt of payments from the member up to his or her death in respect of, for example, a financial provision order under the Matrimonial Causes Act 1973, may be regarded as financially dependent on the member. An adult relative who is not or was not supported by the member is not that member's dependant. Subject to the following paragraphs, a pension paid to an adult dependant who qualifies on grounds of financial dependency or disability, may continue indefinitely. Natural or adopted children of the member may automatically be regarded as dependent on the member if at the time of his or her death they were: (i) under 18; (ii) over 18 but continuing to receive full-time education or vocational training; or (iii) dependent on the member because of disability. Any pension paid by reason of (i) or (ii) should cease when age 18 is reached or full-time education or vocational training ceases, whichever is the later. A pension paid by reason of (iii) may continue indefinitely. Other children (i.e. neither natural nor adopted children of the member) may qualify as dependants only if they were financially dependent on the member, or dependent on the member by reason of disability. Any pension paid to such children on grounds of financial dependence should cease when age 18 is reached or full-time education or vocational training ceases, whichever is the later. This ensures parity of treatment between offspring and other minor dependants. A pension paid because of dependency by reason of disability may continue indefinitely. It is not necessary to show financial dependency for a person dependent on the member because of disability. An unmarried partner, whether of the same or opposite sex, can qualify as a survivor only if he or she was financially dependent on the member. Financial interdependence of the member and his or her partner is an acceptable criterion, for example where the partner relied upon a second income to maintain a standard of living which had depended on joint income prior to the member's death. It is for the scheme administrator to decide whether a person meets this definition. Discharge Regulations means the Pension Sharing (Implementation and Discharge of Liability) Regulations 2000 (SI 2000/1053). DWP means the Department for Work and Pensions. Earnings Cap means the allowable maximum as defined in section 640A of the Act and is as specified by Treasury Orders. Employee Share Scheme means : * an approved profit-sharing scheme under section 186 of the Act, * a 'share incentive plan' being an employee share ownership plan under Schedule 8 Finance Act 2000, or * a savings-related share option scheme under Schedule 9 Finance Act 2000. Employer means the current employer or employers of a member. Ex-spouse means an individual to whom pension credit rights have been or are to be allocated following a pension sharing order, agreement or equivalent provision. Higher Contribution Limit means the figure obtained by multiplying net relevant earnings (limited to the earnings cap) by the age related percentage. Where the limit is being calculated for a tax year on the basis of evidence of earnings produced for an earlier tax year (see rule 4.17) then those earnings will be limited by the earnings cap that applies for the tax year in question and not the earlier tax year . Insurer means an insurance company, an EC company or a friendly society as described in section 659B of the Act. Member means an individual who has made one or more arrangements under the scheme for the provision of benefits. It also includes an individual who : * at the time the arrangement was made was under the age of 16 (or, in England and Wales and Northern Ireland, under the age of 18 if not in employment) and whose legal guardian made the arrangement on the individual's behalf under the scheme, or * has had one or more arrangements made on his or her behalf following the winding-up of another scheme. For the avoidance of doubt, an individual who makes an arrangement under the scheme in order to accept a transfer of income withdrawal benefits from another approved personal pension scheme in accordance with rule 11.12 is a substitute member under the terms of these rules, not a member or survivor (see rule 11.13). Member's Fund means the aggregate, under an arrangement, of the accumulated values of : * the contributions paid to the scheme by or in respect of the member, * any transfer payment accepted by the scheme in respect of the member, * any pension credit rights accepted by the scheme in respect of the member, and * any income or capital gain arising from the investment of such amounts. It excludes: * the value of any contract or part of a contract to which contributions have been applied under the provisions of rules 4.32 or 4.35, * any administrative expenses of the scheme and any payments of commission, and * any pension debit arising as a result of a pension sharing order. Money Purchase Benefits means benefits calculated by reference to payments made by, or in respect of, a member. It does not include benefits calculated by reference to the member's final or average salary. Net Relevant Earnings are defined in section 646 of the Act. Occupational Pension Scheme means a scheme as defined in section 1 of the Pension Schemes Act, or section 176 of The Pension Schemes (Northern Ireland) Act 1993. Opra means the Occupational Pensions Regulatory Authority. Pensionable Age has the meaning given in Schedule 4 of the Pensions Act 1995. Pension Credit Rights means rights to benefits arising from a credit as defined in section 101P of the Pension Schemes Act , as inserted by section 37 of the Welfare Reform and Pensions Act 1993, or under corresponding Northern Ireland legislation. Pension Date is the effective start date of an annuity or income withdrawals under an arrangement. Where an arrangement is split into separate arrangements under rule 3.7 each separate arrangement may have a different pension date. Pension Debit means a debit under section 29(1)(a) Welfare Reform and Pensions Act 1999 or under corresponding Northern Ireland legislation. Pension Schemes Act means the Pension Schemes Act 1993. Pension Sharing Order means any order or provision mentioned in section 28(1) Welfare Reform and Pensions Act 1999 or Article 26 of the Welfare Reform and Pensions (Northern Ireland) Order 1999. Pensioneer Trustee is defined by regulation 2(1) of the Retirement Benefits Schemes (Restriction on Discretion to Approve)(Small Self-administered Schemes) Regulations 1991 (SI 1991/1614), and means a trustee of a scheme who is approved by the Board of the Inland Revenue to act as such, and is not connected (as defined) with a scheme member, any other trustee of the scheme, or a person who is the employer in relation to the scheme. Permitted Investments Regulations 2001 means the Personal Pension Schemes (Restriction on Discretion to Approve) (Permitted Investments) Regulations 2001 (SI 2001/117). Provider means the person who established the scheme or any successor in relation to the provision of benefits as described in section 653A(2)(b) of the Act. Regulated Individual is defined in regulation 8(2) of the Transfer Payments Regulations 2001 and means, in respect of any employment to which a transfer payment or any part of it relates : * an individual who is, or was at any time during the period of ten years prior to the date of transfer, a controlling director, or * an individual - whose annual remuneration is, or was for any year of assessment falling (wholly or partly) during the period of six years prior to the date of transfer, more than the earnings cap for the year of assessment in which the transfer was made, and - who was aged 45 or over at the date of transfer. Regulation is a reference to a regulation of a Statutory Instrument. Relevant Earnings means earnings as defined in section 644 of the Act. It includes earnings from employment (for any time when the member is not accruing rights under a retirement benefits scheme or relevant statutory scheme, other than for death in service benefits only, in respect of that employment) and self-employment. As relevant earnings are gross earnings from a particular job, it is possible to have relevant earnings but no net relevant earnings (because of some tax allowances being set against earnings) but it is not possible to have net relevant earnings with no relevant earnings. Relevant Statutory Scheme means a pension scheme as defined in section 611A of the Act. Resident in the UK means resident and ordinarily resident in the United Kingdom for tax purposes. Retirement Benefits Scheme means a scheme approved under Chapter I, Part XIV of the Act. Rule is a reference to a rule in this document. Rules means these rules of the scheme. Schedule to the Rules is the schedule to these rules. Scheme means this scheme. Scheme Administrator means the person appointed in the establishing document and mentioned in rule 14.3 who is responsible for the management of the scheme for the purposes of section 638(1) of the Act. For some specific requirements of the Welfare Reform and Pensions Act 1999 or the Pension Schemes Act, the references to scheme administrator in the rules may relate more specifically to the manager or trustees of the scheme. The trustees may be different to the scheme administrator. Scheme Documents means the documents that govern the scheme (including these rules). Self-Invested Personal Pension Scheme means arrangements as described in regulation 3 of The Personal Pension Schemes (Restriction on Discretion to Approve) (Permitted Investments) Regulations 2001 (SI 2001/117). Simple Contribution Limit is £3,600 (before deducting basic rate income tax) each tax year or a different figure set by Treasury Order issued under section 630(1A) of the Act. Special Commissioners means the persons defined in section 4 of the Taxes Management Act 1970. Stakeholder Pension Scheme means a scheme for the time being registered as a stakeholder pension scheme with Opra under section 2 of the Welfare Reform and Pensions Act 1999. State Second Pension means the additional state pension. The additional state pension pre-6 April 2002 was commonly known as SERPS (State Earnings-Related Pension Scheme) but since 6 April 2002 has been known as the 'State Second Pension'. Substitute Member means a dependant or widow or widower of a deceased member of another approved personal pension scheme who transfers benefits in payment through income withdrawal into this scheme in accordance with rules 11.12 and 11.13. Substitute Member's Fund means the value from time to time of those funds transferred into an arrangement from another approved personal pension scheme on behalf of a substitute member in accordance with rule 11.12. Survivor means a dependant or widow or widower of a member who has died. For the avoidance of doubt, an individual who makes an arrangement under the scheme in order to accept a transfer of income withdrawal benefits from another approved personal pension scheme in accordance with rule 11.12 is a substitute member under the terms of these rules, not a survivor (see rule 11.13). Survivor's Fund means the value from time to time of those funds deriving from a member's fund which have been set aside for the purchase of a pension for a particular survivor. Tax Year means a period beginning on 6 April and ending on the following 5 April. Transfer Payments Regulations 2001 means The Personal Pension Schemes (Transfer Payments) Regulations 2001 (SI 2001/119). Any reference to legislation (including regulations) includes any amendment or replacement to the legislation. 3. Members And Arrangements BECOMING A MEMBER 3.1 A person who wants to become a member (or the legal guardian acting for a person under the age of 16, or in England, Wales and Northern Ireland 18 if not in employment, who is to be a member) or substitute member must go through an application procedure, as required by the scheme administrator. The application procedure must include the following declarations : (1) The member (or a legal guardian acting for the member) or substitute member agrees to be bound by these rules. (2) The scheme administrator agrees, on behalf of the provider, to administer the scheme as required by these rules. A person can become a member or substitute member only if he or she is under age 75 (except as permitted by rule 3.4) and if the scheme administrator agrees. 3.2 Where the legal guardian is representing a prospective member under the age of 16 (or in England, Wales and Northern Ireland 18 if not in employment), the legal guardian must give an undertaking that he or she understands that any payments to the scheme can only be used to provide benefits to the member under the rules, and won't be repaid except as permitted by the rules. Employer or Affinity Group Provider 3.3 If the scheme has been established by an employer or affinity group then membership of the scheme must be limited to employees of the employer provider, or correspond to the specific employment basis applicable to a group of employers or affinity group. Ex-Spouse 3.4 Subject to the agreement of the scheme administrator an ex-spouse may become a member of the scheme. An ex-spouse becoming a member of the scheme through this rule may do so after he or she has attained age 75, but must draw benefits immediately (see rule 5.4). MAKING AN ARRANGEMENT Single or Multiple Arrangement(s) 3.5 If the scheme administrator permits a member or substitute member may make : * a single arrangement with the scheme administrator in which case these rules will apply to that arrangement. * more than one arrangement with the scheme administrator. If the member or substitute member does so, these rules will apply to each arrangement separately, but the limits described in rule 4.13 to 4.37 for a member will apply to all the arrangements together. The form of arrangements used in the scheme is described in the schedule to the rules. Arrangement Including Rights from Converted Scheme 3.6 An arrangement may include rights to benefits that arose when the scheme was formerly approved under Chapter I of Part XIV of the Act, if applicable. Such rights become subject to the rules as approved under Chapter IV of Part XIV of the Act. Splitting of a Single Arrangement 3.7 An arrangement may later be treated as more than one arrangement if the member chooses for only part of the member's fund to be applied for a pension and (if relevant) a lump sum. Any part of the member's fund for which the member has not yet asked to be applied for benefits will be treated as an arrangement that has not reached pension date. Separate Benefits from Separate Arrangements 3.8 Different arrangements (whether different at the time of being created or whether originating from a single arrangement) may produce separate annuities, income withdrawals or lump sums payable under the rules. Form of Arrangements 3.9 Whether established under trust or not, the arrangements under the scheme will be a contract between the scheme and the member, the legal guardian acting for a person under the age of 16 (or in England, Wales or Northern Ireland 18 if not in employment) where that person is regarded as the member or substitute member. Scheme Rules Override Terms of Arrangements 3.10 Nothing in the terms of an arrangement may conflict with the establishing document of the scheme or these rules unless specifically permitted by the Inland Revenue. 4. Contributions ELIGIBILITY TO MAKE CONTRIBUTIONS Net Relevant Earnings 4.1 A member is eligible to make contributions in a particular tax year if, for any part of the tax year, the member has net relevant earnings. These must be actual earnings. Residency 4.2 If a member does not have net relevant earnings in a tax year, the member is still eligible to make contributions if at any time in the tax year the member was not accruing rights to retirement benefits in an employer's retirement benefits scheme (or relevant statutory scheme) and at least one of the following bullets apply : * The member is resident in the UK at some time in the tax year. * The member has been at some time in the five tax years before the tax year to which the contributions relate resident in the UK, and was so when first making the arrangement. * The member at some time in the tax year performed Crown duties abroad, or was the spouse of an individual who at some time in the tax year performed such Crown duties abroad. These duties are defined in section 132(4)(a) of the Act. 4.3 Rules 4.13 to 4.24 detail the maximum contributions that a member eligible through rule 4.1 or 4.2 may contribute in a given tax year. Concurrency 4.4 An individual who does not qualify to contribute to the scheme under rule 4.1 or 4.2 because he or she is a member throughout the tax year of an employer's retirement benefits scheme or relevant statutory scheme (providing retirement benefits for the individual) is eligible to make contributions to this scheme in that tax year under 'concurrency' rules (section 632B of the Act) if both the following bullets apply : * The member has not been a controlling director of any company in the current tax year or any of the preceding five tax years (disregarding tax years earlier than 2000-01), and * On 5 April of one of the five preceding tax years (disregarding tax years prior to 2000-2001), the member held an office or employment and his or her earnings for that tax year from all employments held on that date did not exceed £30,000, or such other amount as is prescribed, and at least one of the following three bullets applies : * The member is resident in the UK at some time in the tax year. * The member was at some time in the five tax years before the tax year to which the contributions relate resident in the UK, and was so when first making the arrangement. * The member at some time in the tax year performed Crown duties abroad, or was the spouse of an individual who at some time in the tax year performed such Crown duties abroad. These duties are defined in section 132(4)(a) of the Act. For the purpose of this rule earnings means the earnings shown on the member's P60 (that is, the earnings which are subject to PAYE), except that if this figure includes earnings from an employment held on 5 April in a tax year but not held for the full tax year those earnings must be converted to an annual amount. Benefits in kind as entered on form PIID (or its successor) are not included. 4.5 A member eligible to pay contributions in a tax year through rule 4.4 must not contribute in excess of the simple contribution limit in that tax year. This limit applies to the aggregate of any contributions made by the member or on behalf of the member by an employer to this scheme or any other approved personal pension scheme. PERMITTED CONTRIBUTIONS 4.6 The scheme may accept only the following contributions : (1) Contributions by members, including contributions made on behalf of a member paid by another individual (see rule 4.7). (2) Contributions by the member's employer(s) in respect of the member. Contributions under (1) and (2) above may only be made at a time when the member is eligible to make contributions under rules 4.1, 4.2 or 4.4. An employer may only contribute to the scheme in a tax year when the member has been in service with that employer. 4.7 If the scheme administrator so permits payments may be made by an individual other than the member if the payments are being made on behalf of the member and the member (or, if relevant, the member's legal guardian) is aware of the payment. These payments will be treated as a contribution made by the member (see (1) of rule 4.6). 4.8 When a member's benefit under any arrangement becomes payable no further contributions may be paid to that arrangement unless the arrangement has become more than one arrangement under rule 3.7. MEMBER CONTRIBUTIONS 4.9 Contributions made by the member or other individual on his or her behalf (see rule 4.7) may only be paid, as the scheme administrator permits : * in money form (cash, cheque, debit card, credit card, standing order, direct debit, direct transfer or via BACS payments), or * as shares from an employee share scheme. Employee Share Schemes 4.10 Contributions in the form of shares from an employee share scheme are taken by reference to the market value of the shares at the date of payment. Market value will be arrived at using section 272 of the Taxation of Chargeable Gains Act 1992. 4.11 Contributions from an employee share scheme must be made within ninety days of the member : * opting to receive the shares (if from a savings-related share option scheme under Schedule 9 Finance Act 2000), or * directing the trustees of the employee share scheme to transfer ownership to the member or, if earlier, the release date of the relevant shares (if from either an approved profit-sharing scheme under section 186 of the Act or an employee share ownership plan (or 'share incentive plan') under Schedule 8 of Finance Act 2000). USE OF CONTRIBUTIONS 4.12 The contributions and their proceeds under the scheme must be used to provide benefits in accordance with these rules, except so far as they are used to meet administrative expenses of the scheme and to pay commission. SIMPLE CONTRIBUTION LIMIT 4.13 A member eligible to pay contributions under rule 4.1, 4.2 or 4.4 may pay contributions up to the simple contribution limit without the need to have net relevant earnings. There is therefore no need for the scheme administrator to see evidence of earnings from the member for such amounts. AGGREGATE CONTRIBUTIONS 4.14 The simple contribution limit applies to the aggregate of all contributions paid in a tax year by the member and the employer(s) of the member to all pension schemes or contracts approved under Chapter IV of Part XIV of the Act. EVIDENCE OF EARNINGS FOR HIGHER CONTRIBUTION LIMIT 4.15 If the member is eligible to contribute under rule 4.1 and a proposed contribution for that member to this scheme will cause the total contributions for that member for that tax year to exceed the simple contribution limit, then evidence of earnings must be produced by the member or the employer to justify the contribution. 4.16 Where evidence of earnings is produced by the member or the employer to the satisfaction of the scheme administrator, the amount of net relevant earnings which results will be used to calculate the higher contribution limit. Basis Year 4.17 Evidence of earnings for a particular tax year will be acceptable for contributions up to the higher contribution limit in that same tax year. The same evidence may also be acceptable to justify contributions up to the higher contribution limit for the five tax years after that tax year even though earnings in those later tax years may be different. The tax year for which evidence of earnings has been produced is called the 'basis year'. 4.18 Evidence of earnings can be produced for a tax year earlier than the current tax year. Such evidence can then be used, if acceptable to the scheme administrator, to justify future contributions for the next five tax years after the tax year of the evidence, or used to justify 'carry back' in accordance with rule 4.25 (i.e. where the evidence is for a tax year to which the contribution is to be carried back). 4.19 The evidence of earnings must be in the form allowed by Inland Revenue Personal Pension Schemes (Relief at Source) Regulations 1988 (SI 1988/1013) as amended by the Personal Pension Schemes (Relief at Source)(Amendment) Regulations 2000 (SI 2000/2315) and satisfy the conditions of those Regulations. CONTINUATION OF CONTRIBUTIONS AFTER CEASING TO HAVE RELEVANT EARNINGS 4.20 Where a member is contributing up to the simple contribution limit only, and does not produce evidence of earnings to justify higher contributions, any continuation of contributions after the member ceases to have actual relevant earnings will be up to the simple contribution limit only. The member or his or her employer may continue to pay contributions so long as he or she continues to be eligible to pay contributions under rule 4.1, 4.2, or 4.4 (and rule 4.6 for the employer). 4.21 But where a member qualifies to pay up to the higher contribution limit and the member ceases to have relevant earnings, the member or employer may still continue to pay or begin to pay contributions up to the higher contribution limit. They may do this for up to five tax years after the tax year during which the member's actual relevant earnings ceased, provided : * the member continues to be eligible to contribute in each tax year through rule 4.2, and * the first tax year where the member has no relevant earnings is either the tax year ending 5 April 2002 or a later tax year. But as stated in rule 4.6 an employer may only contribute to the scheme in a tax year when the member has been in service with that employer. Eligibility to continue contributing up to the higher contribution limit through this rule ceases in any of those five tax years if : * in that tax year the member has relevant earnings again, or * throughout that tax year the member is accruing rights (other than death in service benefits) under a retirement benefits scheme or a relevant statutory scheme. If eligibility through this rule ceases see rule 4.24. 4.22 The higher contribution limit used for the continuation of contributions will be calculated from earlier net relevant earnings as evidenced. New evidence to replace earlier evidence (but still for a tax year up to and including the one during which relevant earnings ceased) may be produced to justify an increased contribution within the higher contribution limit. 4.23 It may be that evidence of earnings has been produced for more than one tax year in the six tax year period ending with (and including) the tax year during which the member's relevant earnings ceased. If so, the member may tell the scheme administrator in writing which year of evidence will apply for the later tax years. 4.24 If eligibility through rule 4.21 to continue contributing in a tax year up to the higher contribution limit ceases an alternative form of eligibility must apply for contributions to continue. Contributions may only be made in that and later tax years on the basis of rule 4.1, 4.2 and 4.4, as applicable. Unless rules 4.20 and 4.21 are applicable the maximum contribution that may be made in that and subsequent tax years is calculated under rules 4.13 to 4.19 and 4.25 to 4.27. CARRY BACK OF CONTRIBUTIONS 4.25 Under section 641A of the Act a member who pays a contribution by 31 January in a tax year may elect to have the contribution treated as if paid in the preceding tax year. The member must give notice to the scheme administrator no later than the date the contribution is paid. The member may 'carry back' a whole contribution or part of a contribution. Once actioned, an election cannot be withdrawn. 4.26 'Carry back' under rule 4.25 does not apply to contributions paid by the employer. TOTAL CONTRIBUTIONS LIMIT 4.27 The total contributions paid in a tax year in respect of that member to all approved personal pension schemes and to all retirement annuity contracts and schemes approved under Chapter III of Part XIV of the Act must be within the limit set by the Act. For tax years from 6 April 2001 this limit is for contributing to an approved personal pension scheme, the simple contribution limit or, if greater, any higher contribution limit justified by the member or the employer having produced evidence of earnings to the satisfaction of the scheme administrator and within Inland Revenue Regulations. METHOD OF PAYMENT OF CONTRIBUTIONS 4.28 All contributions made by a member to the scheme are amounts net of basic rate income tax. Therefore when the member makes a contribution to the scheme, the member must reduce the intended amount of the contribution by a figure equal to the amount of basic rate income tax due as relief on the intended amount of contribution. The scheme administrator will recover this figure from the Inland Revenue in accordance with the Personal Pension Schemes (Relief at Source) Regulations 1988 (SI 1988/1013), and add the recovered amount to the member's fund in accordance with these rules. This applies even where the member is not a taxpayer. All contributions paid to this scheme by an employer are treated by the scheme administrator as being gross amounts. Employer contributions must therefore represent the full contribution. REPAYMENT OF CONTRIBUTIONS WHICH EXCEED LIMIT (INCLUDING INELIGIBILITY TO PAY CONTRIBUTIONS) 4.29 The scheme administrator must be reasonably satisfied that the total contributions paid in that tax year in respect of the member are within the limits described in rules 4.13 to 4.28. In applying the limits in these rules, any contribution paid by the member or an employer, calculated by reference to net relevant earnings, will be by reference to the earnings cap. If the scheme administrator discovers that the limit has been exceeded (or if in any case the Inland Revenue tell the scheme administrator that the limit has been exceeded) the scheme administrator must arrange for the contributions which exceed the limit to be repaid to the member and, if applicable, the member's employer(s) as follows : (1) the contributions that exceed the limit will be repaid from the scheme unless the member proves to the scheme administrator that they have been repaid from another scheme or schemes; BUT (2) if the employer has contributed, the employer's contributions won't be repaid unless the member's contributions paid to all approved personal pension schemes in that tax year have been repaid and there are still contributions which exceed the limit remaining. 4.30 Any amount repayable to the member will be the gross contribution before deduction of basic rate income tax, from which the scheme administrator will deduct tax at the same rate as was deducted from the contributions when paid, or deemed to be paid for contributions carried back under section 641A of the Act (see rule 4.25). 4.31 The scheme administrator may use discretion to adjust a repayment of contributions to take account of expenses and interest and of any change in the value of the underlying assets during the intervening period. USING CONTRIBUTIONS TO BUY LIFE INSURANCE 4.32 A member may, if allowed to do so under the scheme, choose (subject to the remainder of this rule and rules 4.33 and 4.34) for all or part of the contributions in respect of him or her to be used by the scheme administrator as premiums on a life insurance contract with an insurer. Such contributions are limited as follows : * For arrangements made on or before 5 April 2001 that included at 5 April 2001 an option to apply for life insurance, the limit is 5% of net relevant earnings in the tax year to which the contribution relates. This limit applies for such arrangements whether the option is exercised before or after 5 April 2001. * For all other arrangements the limit is an amount equal to 10% of the total of all other contributions made to approved personal pension schemes that tax year other than for life insurance (as defined in section 640(3A) of the Act). Within this overall limit, it will be possible, if the scheme administrator agrees, for contributions to this scheme to be for life insurance only, with the other non-life assurance contributions paid to another scheme for the same tax year. For the avoidance of doubt the limits set by this rule are part of (and not in addition to) the overall contribution limit set by the rest of Part 4 of these rules. 4.33 The contract must provide a lump sum to be paid only if the member dies before a specified age (not later than age 75). This lump sum shall be payable in accordance with rule 10, provided that rights to benefits under such a life insurance contract may not be assigned, and (3) of rule 10.1 shall not apply unless this proviso is deleted in the contract documentation in respect of specific arrangements or parts of arrangements. 4.34 In any tax year the total contributions to all approved personal pension schemes and to all contracts and schemes approved under Chapter III of Part XIV of the Act used to purchase life insurance as described in rule 4.32 and 4.33 must be within the limit set by the Act. WAIVER OF CONTRIBUTIONS 4.35 For arrangements made on or before 5 April 2001, a member may, provided such a contract was already in existence at this date, choose for not more than 25% (one quarter) of the contributions paid to the scheme in any tax year for his or her behalf to be paid as premiums to an insurance contract that : (1) enables the contributions that would otherwise have been paid by the member and the employer to be waived if the member becomes unable to follow his or her occupation by reason of incapacity, and for the member's fund to be increased as if the contributions had been paid (and, where appropriate, will allow any insurance contract bought under rule 4.32 to be similarly continued); and / or (2) provides that, if the member's incapacity causes the benefit to start earlier than would otherwise be the case (under rules 5.5 to 5.6), the benefit may be enhanced in a manner and to an extent acceptable to the Inland Revenue. Provided the option is exercisable by the member, not the scheme, this rule also applies to pension contracts in existence on 6 April 2001 that included an option to take out waiver of contribution insurance but where that option had not been exercised at that date. 4.36 Arrangements made on or after 6 April 2001, or any arrangements set up prior to this date not covered by rule 4.35, must not contain the provisions described above in (1) of rule 4.35 but may, if the scheme administrator permits, provide for the provision described in (2) of rule 4.35. 4.37 The schedule to the rules will show whether the provisions in rules 4.35 to 4.36 are available. 5. Date Member's Benefit Starts MULTIPLE ARRANGEMENTS 5.1 Where the member has made more than one arrangement rules 5.3 to 5.10 apply to each arrangement separately. This means that benefits may start separately from each arrangement. SPLIT ARRANGEMENTS 5.2 Where the member has an arrangement that is to being 'split' into two arrangements in accordance with rule 3.7 because only part of the member's fund is to be applied for ongoing benefits, rules 5.3 to 5.10 will apply separately to each arrangement. This means that benefits (lump sums, annuities or pensions paid by income withdrawals) may start at different times from each arrangement. 5.3 Subject to rules 5.4 to 5.10, payment of benefit derived from the member's fund commences on such a date as chosen by the member, but cannot be earlier than his or her 50th birthday nor later than his or her 75th birthday. PENSION CREDIT RIGHTS 5.4 Pension credit rights must come into payment in accordance with rule 5.3 unless : * the scheme is an occupational pension scheme under DWP law, in which case benefits cannot be drawn by the member till his or her 65th birthday, or * an ex-spouse with pension credit rights becomes a member of the scheme in accordance with rule 3.4 after his or her 75th birthday, in which case benefits must be drawn immediately. INCAPACITY BELOW AGE 50 5.5 A member's benefit may start earlier than age 50 if the member becomes incapable through infirmity of body or mind of carrying on his or her own occupation or any occupation of a similar nature for which he or she is trained or fitted. 5.6 The scheme administrator must consider suitable medical evidence and must be satisfied that rule 5.5 applies. If the Inland Revenue ask to see such medical evidence, the scheme administrator must produce it for them. 5.7 Pension credit rights of an ex-spouse may not be paid early in accordance with rules 5.5 and 5.6. OCCUPATIONS WITH A LOW RETIRING AGE 5.8 There are certain occupations for which the Inland Revenue recognise an age lower than 50 as being the age at which people in that particular occupation retire. A member in one of these occupations may start to receive benefits at any time after he or she reaches the accepted age. But the following conditions apply : (1) The occupation and the age must either be acceptable to the Inland Revenue in accordance with the list published by them for this purpose, or be specifically approved by them. (2) Contributions made to the scheme by reference to the member's net relevant earnings from the specific occupation in question or the simple contribution limit, and the benefits provided by those contributions, will be treated as a separate arrangement from any other contributions made to the scheme by the member or on his or her behalf. 5.9 If a member to whom rule 5.8 applies stops being in the relevant occupation before the benefit becomes payable, he or she must immediately tell the scheme administrator. All contributions to arrangements set up with the low retiring age must then stop. Rules 4.20 to 4.24 won't apply to such arrangements. 5.10 Rules 5.8 to 5.9 don't apply to a member in respect of pension credit rights. 6. Benefit for Member MULTIPLE ARRANGEMENTS 6.1 Where the member has made more than one arrangement under the scheme in accordance with rule 3.5, the rest of Part 6 of these rules applies to each arrangement separately, unless otherwise stated. SPLIT ARRANGEMENTS 6.2 Where the member has an arrangement that is 'split' into two arrangements in accordance with rule 3.7 because only part of the member's fund is to be applied to purchase an annuity or provide income withdrawals then the rest of Part 6 of these rules applies to each separate arrangement, as in rule 6.1. This means that a lump sum may be taken from the newly created arrangement in accordance with rule 6.3, with a further lump sum being drawn from the original arrangement at a later date in accordance with the same rule. MEMBER'S CHOICE OF LUMP SUM 6.3 The member may choose to receive a lump sum on pension date. Where a lump sum is to be paid the following conditions apply : (1) If the arrangement was made before 27 July 1989 the lump sum cannot (subject to (3) of this rule) be more than 25% (one quarter) of the amount, at the time the lump sum is paid, of the member's fund being used to provide benefits for the member under Part 6 of these rules (i.e. excluding any part of the member's fund being used to provide a survivor's pension under Part 7 of these rules); (2) If the arrangement was made on or after 27 July 1989 the lump sum cannot (subject to (3) of this rule) be more than 25% (one quarter) of the amount, at the time the lump sum is paid, of the member's fund held within that arrangement. (3) If a certificate as described in (4) of this rule is held by the scheme administrator in respect of a transfer payment which had its origins wholly or partly in a source described in (2), (3) and (5) of rule 11.1 then for the purposes of (1) and (2) of this rule there shall be excluded from the member's fund the accumulated value of that part of any transfer payment. If no such certificate was required at the point of transfer then the accumulated value of the transfer payment should be included for the purposes of (1) and (2) of this rule. (4) If on receipt of a transfer from a source described in (2), (3) and (5) of rule 11.1 a lump sum certificate was provided to the scheme administrator the member may only receive as a lump sum so much of the accumulated value of that transfer payment as has been certified as payable in that form. If the total amount of such a transfer is certified as non-commutable then no lump sum may be paid from the accumulated value of the transfer payment. Any amount specified on a certificate may be enhanced in line with the increase in the Retail Prices Index between the date of transfer from that source to the date that benefits are paid from the member's fund. If the certificate relates to benefits transferred from another approved personal pension scheme that were previously transferred to that scheme from a source as described in (2), (3) and (5) of rule 11.1, and that original transfer took place before 6 April 2001, then account should be taken of any enhancement by the Retail Prices Index already built in to the figure quoted on the certificate for the period that transfer payment was held in that other approved personal pension scheme. In no circumstances, however, may the lump sum paid under this rule 6.3 exceed the 25% limit set under section 635 of the Act. (5) Where the scheme was previously a retirement benefits scheme the member's lump sum must be restricted where required by regulation 11 of the Conversion Regulations 2001. Second Lump Sum 6.4 Exceptionally, where the Inland Revenue permit, a second lump sum may be paid from an arrangement to supplement the lump sum paid on pension date. The only circumstances where the Inland Revenue will permit such a payment are where : * there has been misselling of an approved personal pension scheme within the former Securities & Investments Board review and benefits are already in payment, or * following a court ruling a court orders the scheme administrator to recalculate benefits. This may also apply to rulings by Employment Tribunals or the Pension Ombudsman that benefits were calculated illegally. Pension Sharing Order 6.5 Where a pension sharing order is made against a member already subject to a lump sum certificate detailed in (4) of rule 6.3 then the scheme administrator shall re-calculate the amount shown on the certificate to take into account any pension debit that arises as a result of that order or provision, as required by regulation 13(1) of the Transfer Payments Regulations 2001. The scheme administrator shall do the same where a lump sum certificate as detailed in (5) of rule 6.3 is held. Pension Credit Rights 6.6 Where the original transfer payment has been certified as non-commutable then the scheme administrator must similarly certify any pension credit arising from that transfer payment due to a pension sharing order, as required by regulation 13(2) of the Transfer Payments Regulations 2001. MEMBER'S PENSION 6.7 Except for any lump sum paid as described in rule 6.3 the member's fund will be used to secure a pension for the life of the member through the purchase of an annuity from an insurer. That pension must start on the date chosen in accordance with (or required by) Part 5 of these rules (pension date). If the scheme permits, the purchase of such an annuity may be deferred in accordance with rules 6.18 to 6.31. 6.8 An annuity must be purchased no later than the member's 75th birthday. 6.9 The annuity must pay an income for the life of the member not less frequently than annually and must conform with the requirements laid down in section 634 of the Act. The annuity contract may also provide benefits to any survivor on the death of the member in accordance with rule 7.1. If so the annuity to the survivor must also conform with the requirements of section 636 of the Act. MEMBER'S RIGHT TO CHOOSE INSURER : OPEN MARKET OPTION Open Market Option 6.10 The member has the right to choose the insurer from which an annuity is to be purchased. Once the member has chosen the insurer, he or she must write to tell the scheme administrator which insurer he or she has chosen. 6.11 If the member has chosen the insurer to provide the pension from the member's fund then he or she should notify the scheme administrator within the time limits set under the scheme. Scheme Administrator's Choice 6.12 If the member does not choose an insurer by writing to tell the scheme administrator by the latest date permitted under rule 6.11 or rule 6.18 the scheme administrator will choose an insurer from whom the annuity will be bought. FORM OF PENSION 6.13 Rules 6.15 to 6.16 and also Part 7 of these rules set out benefits which may, if available under the scheme, be paid by an annuity on the member's death. Where these rules allow alternatives, a member who opts under rule 6.10 to choose the insurer from which the annuity is to be purchased may at the same time choose which of the alternatives detailed in the aforementioned rules apply under the terms of the annuity. If the insurer is chosen by the scheme administrator through rule 6.12, the scheme administrator may still allow the member to choose what benefits the annuity will provide on his or her death. Alternatively the scheme administrator may choose the alternatives. 6.14 Any survivor's pension will be secured through an annuity at the same time as the member's pension bought with the member's fund. If the scheme administrator permits, the survivor's pension may be secured from a different insurer than the one providing the member's annuity, chosen either by the member or by the wife or husband or dependant for whom the survivor's pension is being bought. MINIMUM PAYMENT GUARANTEE 6.15 The member's pension may (but need not) be guaranteed under the terms of the annuity for a period not exceeding ten years. If the member dies during the guarantee period, it may be paid for the rest of the period to another individual, or to the estate of the member or of another individual who dies after the member (and the recipient may vary from time to time). 6.16 Where the pension continues and is payable to another individual it may either continue for the full guarantee period in any event, or be arranged so as to stop if at any time the individual to whom it is being paid marries, reaches age 18 or leaves full-time educational or vocational training after reaching age 18. RESPONSIBILITY OF THE SCHEME ADMINISTRATOR 6.17 It is the responsibility of the scheme administrator to ensure that any annuity purchased by the scheme conforms with these rules and the requirements laid down by the Act. Where a pensioneer trustee has been appointed in accordance with rule 14.6 the scheme administrator should not purchase an annuity without the agreement of that pensioneer trustee. ANNUITY DEFERRAL 6.18 At the scheme administrator's discretion, the member may choose under an arrangement to defer securing his or her pension benefit through the purchase of an annuity as specified in rule 6.7 and draw his or her pension direct from the member's fund at pension date in accordance with rules 6.20 to 6.31. If the member chooses this option he or she must notify the scheme administrator in writing no later than one month before the date benefit is to start. The member shall also notify the scheme administrator in writing when he or she wishes the deferral to end and an annuity to be purchased, again providing at least one month's notice. 6.19 Where the member chooses to defer annuity purchase in accordance with rule 6.18 the whole of the member's fund must still be used to secure pension benefits through an annuity contract before the member's 75th birthday, as detailed in rule 6.8. Rules 6.9 and 6.10 to 6.17 still apply to the annuity purchased. INCOME WITHDRAWAL 6.20 Where the member chooses to defer annuity purchase through rule 6.18 he or she must draw from the member's fund (excluding any lump sum paid under rule 6.3) a yearly pension as income withdrawals in accordance with rules 6.22 to 6.31. No income withdrawals shall be made after the member attains the age of 75. Once income withdrawals stop, the pension must continue through an annuity under rule 6.7 (see rule 6.18). 6.21 If the scheme administrator permits, the member may, whilst drawing income withdrawals from an arrangement, use part of the member's fund to secure a pension through annuity purchase whilst continuing to draw income withdrawals from the remainder of the member's fund in accordance with rule 6.20. If this option is taken rules 6.28 and 6.29 must be adhered to. INCOME WITHDRAWAL LIMITS 6.22 The (aggregate) amount of income withdrawal(s) drawn from an arrangement in each of the three successive periods of twelve months beginning with pension date shall not exceed the amount of pension purchasable on that date calculated by reference to : * the amount of the member's fund (excluding any lump sum paid under rule 6.3), and * the current published tables of annuity rates prepared for this purpose by the Government Actuary's Department. Such income withdrawals shall not be less than 35% of the pension so calculated. This minimum limit shall not apply for the twelve month period during which all of the member's fund is used to secure an annuity or the member dies. These limits will be reviewed in accordance with rules 6.25 to 6.29. This rule equally applies to an arrangement created through the splitting of an existing arrangement as permitted through rule 3.7. 6.23 Where the member is drawing income withdrawals through rule 6.18 from more than one arrangement under the scheme (whether through rule 3.7 or not) the conditions detailed in rule 6.22 will still apply. However, if arrangements are grouped for review purposes as described in rule 6.26, the result may be that a recalculation under that rule is due in one or more of the arrangements in the group before the expiry of a period of twelve months for the purpose of this rule. Where this happens, the same maximum and minimum limits of income withdrawals will still apply to the shortened period as if it had been twelve months. Purchase of an Annuity with Part of the Member's Fund - Limits 6.24 Where part of the member's fund is used to purchase an annuity in accordance with rule 6.21 the minimum and maximum income withdrawal limits applying to the twelve month period in which the purchase took place (as required by rule 6.22) are not altered. However, the purchase of such an annuity may lead to an additional review of those limits for any subsequent twelve month period(s) which fall prior to the next review as prescribed by rule 6.25 or 6.26 (see rules 6.28 and 6.29). RECALCULATION OF INCOME WITHDRAWAL LIMITS 6.25 The maximum and minimum annual income withdrawals for each period of three years succeeding the first such period starting from pension date shall be calculated by reference to the amount of the member's fund remaining on the first day of each period and the Government Actuary's Department's annuity rate tables current at that date. Grouping of Review Dates Where the Member has Multiple Arrangements 6.26 Where the member is drawing income withdrawals from more than one arrangement under the scheme and the date for review of the income withdrawal minimum and maximum limits under rule 6.25 are different, those review dates may be grouped if the scheme administrator so permits. Under this option : * instead of a three year period as described in rule 6.25 the maximum and minimum income withdrawals for arrangements within the group can be re-calculated (except for the initial review for each arrangement on its respective pension date) by reference to the next review date for the arrangement within the group with the earliest pension date (i.e. the arrangement where income withdrawals commenced first). Any part twelve month period created at the end of a review period due to the operation of this rule should be treated in accordance with rule 6.23. * the next recalculation will then take place three years after that date and at the end of each succeeding three year period thereafter until all of the member's fund has been used to purchase an annuity. These review dates will continue even if income withdrawal payments cease due to annuity purchase from the arrangement to which the other arrangements in the group are linked to for the purpose of this rule. * any grouping of arrangements as described in this rule should only take place with the agreement of the member. Sixty Day Window for Review 6.27 If the member wishes and the scheme administrator allows, the limit calculation made in accordance with rules 6.25 and 6.26 may be made at any time within sixty days ending on the date the calculation is due to be made in accordance with the requirements of those two rules. But the calculation made will be applied as if it had taken place on the due date. The next recalculation will then be due to take place at the end of the next three year period. This rule does not apply to the calculation due on pension date as detailed in rule 6.22, nor any re-calculation that occurs due to the operation of rules 6.28 and 6.29. Purchase of an Annuity With Part of the Member's Fund - Recalculation 6.28 Where a member chooses under rule 6.21 to use part of the member's fund to purchase an annuity there will be no effect on the review process as detailed in rules 6.22 to 6.26 unless that purchase comes within the definition of a 'qualifying annuitisation' as defined in section 634A of the Act. Such a purchase will meet that definition if it occurs in a twelve month period for the purposes of rule 6.22, 6.23, 6.25 or 6.26 that is not immediately followed by a review of minimum and maximum income withdrawal limits upon application of those rules. 6.29 Where the purchase is a 'qualifying annuitisation' for the purposes of section 634A of the Act then on the same day of purchase a new review of the minimum and maximum income withdrawal limits must be undertaken by the scheme administrator. The current annuity rate as taken from the tables detailed in rule 6.22 should be used by reference to the remaining part of the member's fund immediately following the annuity purchase. This review has no effect on the timing of the next twelve month periods or subsequent review dates as detailed in rules 6.22 to 6.26. However, the limits calculated by the scheme administrator must be applied for the next one or two twelve month periods due before the next formal review, as required through rule 6.22, 6.25 or 6.26, in replacement of the earlier limits calculated at the last formal review or initial calculation at pension date. Pension Credit Rights 6.30 Where a member is in receipt of income withdrawals from an arrangement (or arrangements) and a pension sharing order is subsequently made against that member then the scheme administrator must prepare and sign a certificate in respect of any pension credit arising from the arrangement (or arrangements) in question showing that no amount may be paid out of the pension credit by way of lump sum to the ex-spouse, as required by regulation 13(3) of the Transfer Payment Regulations 2001. 6.31 The limits imposed through the operation of the rest of Part 6 of these rules on the level of income withdrawal payable from the arrangement (or arrangements) in question are not altered by the reduction of the member's fund(s) concerned due to the pension sharing order. Nor is a review of those limits triggered. The income withdrawal limits will next be reviewed as prescribed by rules 6.25 to 6.29. Application of Scheme Choices 6.32 If the scheme was approved on or after 1 October 2000, the scheme administrator may offer the following choices to members : * a three year review system for each arrangement, in accordance with rule 6.25, or * a grouping facility where the review dates under an arrangement are linked to the review date of the earliest arrangement paying income withdrawals to the member under the scheme, in accordance with rule 6.26, and also * the option of making the income withdrawal limit calculation within the sixty day period detailed in rule 6.27. 6.33 If the scheme was approved before 1 October 2000, the scheme administrator may have opted to use the grouping facility and sixty day period described in the second and third bullets in rule 6.32. Where the scheme administrator chooses to include these options, they may be applied to all arrangements, whether set up before, on or after 1 October 2000. If the scheme administrator chooses not to include these options, rule 6.25 will apply to the scheme. 6.34 For all schemes, whether approved before, on or after 1 October 2000, the exact options open to a member in each individual case will be prescribed by the terms of each arrangement as agreed by the scheme administrator. 7. Member Dies After Benefit Starts MEMBER'S CHOICE 7.1 Subject to rules 7.2 to 7.7 a member may elect when an annuity is purchased that, in addition to the pension being provided for the member, the annuity contract will also provide for a pension after the member's death for : * the widow or widower; and / or * one or more dependants. AMOUNT OF PENSION 7.2 Pensions can be of any amount so long as the aggregate annual amount of all annuities paid to any survivors under an arrangement (excluding any annuity paid to a survivor as a result of a guarantee on the member's annuity) is no more than the annual amount of the annuity actually being paid to the member at the date of death, after deducting any pension debit (where relevant). START OF SURVIVOR'S PENSION 7.3 Subject to rule 7.9, a survivor's annuity will start as soon as practicable after the member dies, except that a widow or widower who is under age 60 when the member dies may choose, if the scheme administrator permits, for the annuity to start at any later time up to his or her 60th birthday (or, if he or she is receiving continued payments of the member's annuity for a guarantee period ending after his or her 60th birthday, at the end of the guarantee period). Where the survivor's annuity is not being deferred in accordance with this rule the annuity payments should be backdated to the date of death of the member. DURATION OF CHILD(REN)'S PENSION 7.4 Any pension payable to a person who is a dependant solely because that person is under age 18 when the member dies must also stop when the dependant reaches age 18, except that it may (but need not) continue after that age for so long as the dependant stays in full-time educational or vocational training. DURATION OF OTHER SURVIVOR'S PENSION 7.5 A survivor's annuity that is not covered by rule 7.4 may be paid for the survivor's life or may stop if the survivor marries. MINIMUM PAYMENT GUARANTEE - SURVIVOR'S PENSION 7.6 A survivor's annuity may (but need not) be on terms that it will in any event be paid for a guarantee period not exceeding ten years. Then, if the annuity would have stopped in accordance with rules 7.4 to 7.5, it may be paid for the rest of the guarantee period to another individual, or to the estate of the member or of another individual who dies after the member (and the recipient may vary from time to time). 7.7 Where the annuity continues and is payable to another individual it may either : * continue for the full guarantee period in any event, or * be arranged so as to stop if at any time the individual to whom it is being paid marries, reaches age 18 or leaves full-time educational or vocational training after reaching age 18. LUMP SUM PAYABLE DIRECT BY INSURER 7.8 If any lump sum is payable under a life insurance contract as described in rules 4.32 and 4.33, it will be paid direct by the insurer to the scheme administrator. It won't form part of the member's fund, but it will be applied separately by the scheme administrator as described in Part 9 of these rules. DEATH OF MEMBER DURING ANNUITY DEFERRAL PERIOD 7.9 A member may choose that, in the event of his or her death after electing to defer the purchase of his or her annuity under rule 6.18 but before all the member's fund has been used to buy an annuity, the member's fund should be applied to or for the benefit of one or more survivors. If the member does not choose the scheme administrator may (but need not) choose that the member's fund should be applied to or for the benefit of one or more survivors. Each survivor so chosen may choose to receive his or her survivor's fund by : (1) the securing of a pension through annuity purchase either immediately, or following a period of deferral during which income withdrawals shall be made from the arrangement(s) in accordance with rules 8.18 to 8.27, or (2) payment of the survivor's fund as a lump sum. Pension payments under (1) above should come into payment as soon as possible after the member's death. Where an annuity is being provided annuity payments should be backdated to the date of death of the member. Where income withdrawals are being provided income withdrawal payments must start with effect from the date of death of the member (see rule 8.23). Any decision to defer annuity purchase and take income withdrawals under (1) above must therefore be taken within a year of the member's death to ensure that the limits in rule 8.23 are adhered to. If there is more than one : * survivor then benefits may be paid to each survivor in different forms under this rule, whether within the same arrangement or not. * arrangement within the scheme from which a survivor is entitled to benefits then, if the scheme permits, different forms of benefits may be paid to the survivor from each arrangement. 7.10 The total of all survivors' pensions paid immediately through an annuity must not be more than the highest amount of pension that the member could have purchased the day before he died, as required by section 636(3) of the Act. Any restriction of a survivor's pension required by section 636(3) will be deemed to have been achieved by a corresponding reduction of the survivor's fund in the event that the survivor chooses a period of deferral during which income withdrawals are made (in accordance with option (1) under rule 7.9). Any part of the member's fund that cannot be used to buy survivor annuities will be used by the scheme administrator to meet general administration expenses of the scheme. Income Withdrawal 7.11 The option to defer annuity purchase under option (1) of rule 7.9 and take income withdrawals shall not be available to any survivor who chooses under rule 7.3 to defer receiving a pension or who has already attained the age of 75. 7.12 Where a survivor draws income withdrawals from an arrangement under option (1) of rule 7.9 the pension must be secured through the purchase of an annuity by the earlier of : * the survivor's 75th birthday, or * the date the member would have reached his or her 75th birthday. If the survivor is already over age 75 an annuity must be purchased immediately. 7.13 Any survivor in receipt of income withdrawals under option (1) of rule 7.9 may nevertheless choose option (2) at any time within the two years following the death of the member. 7.14 No survivor may be paid any income withdrawals after ceasing to be entitled to a pension under rules 7.4 or 7.5. Subject to rules 7.13 and 7.18, any survivor's fund remaining at the date of such cessation will be used to meet general administrative expenses of the scheme. Annuity Purchase 7.15 Where the survivor's fund is to be used to purchase an annuity under option (1) of rule 7.9, whether immediately or after a period of deferral, then the survivor may choose which insurer the annuity is purchased from as stated in rules 8.4 to 8.6. 7.16 Where the survivor is receiving income withdrawals from an arrangement in accordance with option (1) of rule 7.9 he or she may, if the scheme administrator permits, choose to purchase an annuity with only part of the survivor's fund held in that arrangement as in rule 8.21. Lump Sum 7.17 Where the member's fund is not to be applied to or for the benefit of one or more survivors in accordance with rule 7.9, it shall be paid as a lump sum in accordance with rule 8.15. Death of Survivor During Annuity Deferral Period 7.18 If a survivor who has chosen under option (1) of rule 7.9 to draw a pension through income withdrawals dies before an annuity is purchased, the survivor's fund held in the arrangement shall be paid as a lump sum in accordance with rule 8.15. For the purposes of this rule 7.18 the word 'member' in rule 8.15 shall be read as 'survivor'. Deduction of Tax 7.19 Payment of a lump sum under rules 7.9 or 7.18 shall be made after deduction of tax at the rate specified in section 648B(2) of the Act. 8. Member Dies Before Benefit Starts MEMBER'S CHOICE 8.1 If allowed to do so under the scheme a member may choose that, if he or she dies before pension date, the member's fund will be used to either : (1) secure a survivor's pension through the purchase of an annuity from an insurer (that is a pension for the widow or widower, and / or one or more dependants), or (2) pay a lump sum under rule 8.15. If the member does not make a choice under this rule and there is a survivor then the scheme administrator may decide how the member's fund should be used in accordance with this rule. Annuity payments under (1) above should come into payment as soon as possible following the member's death. Annuity payments should be backdated to the date of death of the member. 8.2 Alternatively the scheme administrator may allow any survivor to defer any annuity purchase as detailed in rule 9.1 and draw a pension from their survivor's fund through income withdrawals, as specified in rules 8.17 to 8.27. Income withdrawal payments must start with effect from the date of death of the member (see rule 8.23). Any decision to defer annuity purchase and draw income withdrawals under this rule must therefore be taken within a year of the member's death to ensure that the limits detailed in rule 8.23 are met. 8.3 Where the member's fund includes funds derived from a transfer payment from a source described in (2), (3) or (5) of rule 11.1 then, if the scheme administrator permits, the benefits paid from those funds don't need to be in the same form as the benefits paid from the rest of the member's fund. Any lump sum paid from such funds must be restricted if rule 11.14 or 11.16 is relevant. MEMBER'S OR SURVIVOR'S CHOICE OF INSURER 8.4 If the provider is not an insurer and the member has notified the scheme administrator that he or she wishes the pension to be secured from a particular insurer, then the scheme administrator must buy the annuity from that insurer. 8.5 In any other case where the provider is not an insurer, the scheme administrator must write and tell the survivor that he or she has the right to choose an insurer. The survivor then has three months from the date of notification to write back and tell the scheme administrator which insurer he or she has chosen. If the survivor chooses an insurer, he or she may at the same time decide whether any of the options in rules 8.13 to 8.14 will apply to the pension provided by the annuity. 8.6 Where the provider is an insurer, the provider may either provide the annuity themselves but the member or survivor may choose which insurer the annuity is purchased from, as detailed above in rules 8.4 and 8.5. SCHEME ADMINISTRATOR'S CHOICE 8.7 Subject to rule 8.17, if a member or survivor does not choose which insurer the annuity is purchased from by writing to tell the scheme administrator by the latest date permitted under rules 8.5 and 8.6 then the scheme administrator will choose the insurer and will decide which of the alternatives in rules 8.11 to 8.14 will apply to the pension. MAXIMUM AMOUNT OF PENSION 8.8 The total of all survivors' pensions under Part 8 of these rules must not be more than the highest amount of pension that the member could have purchased the day before he died (assuming that he or she would not have taken any lump sum under rule 6.3), as required by section 636(3) of the Act. Any restriction of a survivor's pension required by section 636(3) will be deemed to have been achieved by a corresponding reduction of the survivor's fund in the event that the survivor chooses to defer annuity purchase in accordance with rule 8.2. Any part of the member's fund that cannot be used to buy survivors' pensions will be used by the scheme administrator to meet general administration expenses of the scheme. START OF SURVIVOR'S PENSION 8.9 The purchase of a survivor's annuity must occur as soon as practicable after the member dies, unless the survivor is : * deferring annuity purchase under rule 8.17, or * a widow or widower who is under the age of 60 when the member dies and chooses to defer the annuity as permitted by rule 8.10. As explained in rule 8.1 where the survivor's annuity is not being deferred the annuity payments should be backdated to the date of death of the member. 8.10 A widow or widower who is under the age of 60 when the member dies may choose to defer all pension benefits to any later time up to his or her 60th birthday. DURATION OF CHILD'S PENSION 8.11 A pension payable to a person who is a dependant solely because that person is under age 18 when the member dies must stop when the dependant reaches age 18, except that it may (but need not) continue after that age for so long as the dependant stays in full-time educational or vocational training. DURATION OF OTHER SURVIVOR'S PENSION 8.12 A survivor's pension that is not covered by rule 8.11 must be paid for the survivor's life, although it may stop if the survivor remarries / marries. MINIMUM PAYMENT GUARANTEE 8.13 A survivor's pension bought with a member's fund may (but need not) be on terms that it will in any event be paid for a guarantee period not exceeding ten years. Then, if the pension would have stopped in accordance with rule 8.11 or 8.12, it will be paid for the rest of the guarantee period to another individual, or to the estate of the member or of another individual who dies after the member (and the recipient may vary from time to time). 8.14 Where the pension continues and is payable to another individual it may either continue to be payable for the full guarantee period in any event, or be arranged so as to stop if at any time the individual to whom it is being paid marries, reaches age 18 or leaves full-time educational or vocational training after reaching age 18. LUMP SUM 8.15 If a member dies and no survivor's pension has become payable under rules 8.1 or 8.2 then the scheme administrator may, as soon as practicable and subject to rule 8.16, pay out the member's fund as a lump sum : (1) in accordance with any specific provision regarding payment of such sums under the contract(s) applying to the arrangements in question; or (2) if (1) is not applicable and at the time of the member's death the scheme administrator is satisfied that the contract is subject to a valid trust under which no beneficial interest in a benefit can be payable to the member, the member's estate or the member's legal personal representatives, to the trustees of the trust; or (3) if (1) and (2) are not applicable, at the discretion of the scheme administrator, to or for the benefit of any one or more of the following in such proportions as the scheme administrator decides : (a) any person, charity, association, club, society or other body (including trustees of any trust whether discretionary or otherwise) whose names the member has notified to the scheme administrator in writing prior to the date of the member's death; (b) the member's surviving spouse; (c) the parents and grandparents of the member or the member's surviving spouse and any children and remoter issue of any of them; (d) the member's dependants; (e) any person, charity, association, club, society or other body entitled under the member's will to any interest in the member's estate; (f) the member's legal personal representatives. For this purpose a relationship acquired by legal adoption is as valid as a blood relationship. LUMP SUM PAYABLE BY SCHEME ADMINISTRATOR - TIME LIMIT 8.16 The scheme administrator will pay any lump sum within two years of the member's death. If this is not practicable then, at the end of two years, it will be transferred to a separate account outside the scheme until it can be paid. ANNUITY DEFERRAL 8.17 If the scheme administrator permits, the purchase of any survivor's annuity under rule 8.1 may be deferred under an arrangement at the written option of the survivor. The option to defer annuity purchase under rule 8.2 and take income withdrawals shall not be available to any survivor who chooses under rule 8.10 to defer receiving a pension until he or she reaches his or her 60th birthday or who has already attained the age of 75. Where annuity purchase has been deferred in accordance with this rule then the survivor must take income withdrawals from the survivor's fund held in the arrangement(s) in accordance with rules 8.23 to 8.27, following any reduction of the survivor's fund required in accordance with rule 8.8. INCOME WITHDRAWAL 8.18 The survivor shall notify the scheme administrator in writing when he or she wishes the deferral to end and an annuity to be purchased, providing at least one month's notice. 8.19 Where a survivor ceases to be eligible to a pension in accordance with rules 8.11 or 8.12 then income withdrawals must cease. Subject to rule 8.28 any survivor's fund remaining in the arrangement at the date of such cessation will be used to meet general administrative expenses of the scheme. 8.20 Where a survivor draws income withdrawals from an arrangement under rule 8.17 the pension must be secured through the purchase of an annuity by the earlier of : * the survivor's 75th birthday, or * the date the member would have reached his or her 75th birthday. Annuity Purchase 8.21 If the scheme permits the survivor may, whilst making income withdrawals from an arrangement in accordance with rule 8.17, use part of the survivor's fund held in the arrangement to secure a pension through annuity purchase, whilst continuing to make income withdrawals from the remainder of the survivor's fund in the arrangement in accordance with rule 8.17. If this option is taken rules 8.26 and 8.27 must be followed. 8.22 Where an annuity is being purchased in accordance with rules 8.18, 8.20 or 8.21 then the survivor has the option of choosing which insurer the annuity is purchased from as in rules 8.4 to 8.6. INCOME WITHDRAWAL LIMITS 8.23 The (aggregate) amount of income withdrawal(s) in each of the three successive periods of twelve months beginning with the date of the member's death shall not exceed the amount of pension purchasable on that date calculated by reference to : * the amount of the survivor's fund held in the arrangement on that date, and * the current published tables of annuity rates prepared for this purpose by the Government Actuary's Department. Such income withdrawals shall not be less than 35% of the pension so calculated. This minimum limit shall not apply for the twelve month period during which all of the survivor's fund is used to secure an annuity or the survivor dies, or ceases to be entitled to a pension under rules 8.11 or 8.12. Recalculation of Income Withdrawal Limits 8.24 The scheme administrator must review the maximum and minimum annual income withdrawal limits three years after the date of death of the member, and every three years thereafter, until all of the survivor's fund held under the arrangement has been used to purchase an annuity. These limits should be calculated in the same way as detailed under rule 8.23 but by reference to the value of the survivor's fund held in the arrangement at the date of review, and the Government Actuary's Department's annuity rate tables current at that date. Sixty Day Window for Review 8.25 But if the scheme administrator so chooses, the recalculation detailed in rule 8.24 may be made at any time within sixty days ending on the due date of review. But the calculation made will be applied as if it had taken place on the due date for review. The next recalculation will then take place at the due date of review (ignoring the use of the sixty day window) at the end of the next three year period, as specified under rule 8.24. Purchase of an Annuity With Part of the Survivor's Fund 8.26 Where a survivor chooses under rule 8.21 to use only part of the survivor's fund held in an arrangement to purchase an annuity there will be no effect on the review process as described in rule 8.24 unless that purchase comes within the definition of a 'qualifying annuitisation' as defined in section 636A of the Act. Such a purchase will meet that definition if it occurs in a twelve month period for the purposes of rule 8.23 or 8.24 that is not immediately followed by a review of minimum and maximum income withdrawal limits upon application of those rules. 8.27 Where the purchase is a 'qualifying annuitisation' for the purposes of section 636A of the Act then on the same day of purchase a new review of the minimum and maximum income withdrawal limits must be undertaken by the scheme administrator. The current annuity rate as taken from the tables detailed in rule 8.23 should be used by reference to the remaining part of the survivor's fund held in the arrangement immediately following the annuity purchase. This review has no effect on the timing of the next twelve month periods or subsequent review dates in rule 8.24. However, the limits calculated by the scheme administrator must be applied for the next one or two twelve month periods due before the next formal review, as required through rule 8.24, in replacement of the earlier limits calculated at the last review or initial calculation. DEATH OF SURVIVOR DURING ANNUITY DEFERRAL PERIOD 8.28 If a survivor dies after electing to defer his or her pension under rule 8.17, but before the whole of the survivor's fund has been used to purchase an annuity, the survivor's fund held in the arrangement shall be paid as a lump sum in accordance with rule 8.15. For the purposes of this rule 8.28, the word 'member' in rule 8.15 shall be read as 'survivor'. 9. Member Dies Before Pension Starts - Life Insurance LUMP SUM PAYABLE UNDER LIFE INSURANCE CONTRACT 9.1 If some of the contributions in respect of a member have been used to pay premiums under a life insurance contract as described in rules 4.32 to 4.33, the scheme administrator will, as soon as practicable and subject to rule 8.16, pay the lump sum benefit from the contract : (1) in accordance with any specific provision regarding payment of such sums under the contract; or (2) if (1) is not applicable and at the time of the member's death the scheme administrator is satisfied that the contract is subject to a valid trust under which no beneficial interest in a benefit can be payable to the member, the member's estate or the member's legal personal representatives, to the trustees of the trust; or (3) subject to the proviso to rule 4.33 if (1) and (2) are not applicable and at the time of the member's death the contract is vested in an assignee, other than the member's estate or the member's legal personal representatives, to the assignee; or (4) if (1), (2) and (3) are not applicable, at the discretion of the scheme administrator, to or for the benefit of any one or more of the following in such proportions as the scheme administrator decides : (a) any person, charity, association, club, society or other body (including trustees of any trust whether discretionary or otherwise) whose names the member has notified to the scheme administrator in writing prior to the date of the member's death; (b) the member's surviving spouse; (c) the parents and grandparents of the member or the member's surviving spouse and any children and remoter issue of any of them; (d) the member's dependants; (e) any person, charity, association, club, society or other body entitled under the member's will to any interest in the member's estate; (f) the member's legal personal representatives. For this purpose a relationship acquired by legal adoption is as valid as a blood relationship. 10. Transfer Out of the Scheme MEMBER'S RIGHT TO A CASH EQUIVALENT 10.1 A member has a right to a 'cash equivalent' under the provisions of Part IV or Part IVA of Chapter IV of the Pension Schemes Act. If a member elects to apply for a 'cash equivalent', which by definition relates to the whole of the member's interest in the scheme, then all the member's accrued rights in all arrangements under the scheme must be transferred. TRANSFER PAYMENTS 10.2 In the absence of an election to apply for a statutory right to transfer a 'cash equivalent' under rule 10.1, the scheme administrator may, nevertheless, at the written request of a member transfer the member's fund to another scheme of which he or she has become a member. Receiving Scheme 10.3 The member's fund may be transferred to: (1) another approved personal pension scheme, including a stakeholder pension scheme; (2) a retirement benefits scheme, including a Free-standing Additional Voluntary Contribution Scheme; (3) a relevant statutory scheme; or (4) any other scheme approved for the purpose of this rule by the Inland Revenue. 10.4 The transfer must be made by a direct payment between the scheme administrator and the administrator or trustee of the other scheme. The transfer may not be paid or passed through a financial intermediary or broker. If the scheme has appointed a pensioneer trustee as required in rule 14.6 then the pensioneer trustee must be a party to the transaction. 10.5 The scheme administrator must comply generally with all Inland Revenue requirements and specifically with any certification or other requirements imposed by the Transfer Payments Regulations 2001. Converted Schemes 10.6 Where the scheme was previously a retirement benefits scheme and the member's benefits are restricted in accordance with regulation 10 or 11 of the Conversion Regulations 2001 then, where the transfer is to another approved personal pension scheme, the scheme administrator must provide the receiving scheme's administrator with a certificate stating the amount that may be paid as a lump sum, either on pension date or in the event of the member's death, from those benefits accrued when the scheme was a retirement benefits scheme. Where the scheme administrator received such a certificate with an earlier transfer into this scheme that certificate must be passed on to the receiving scheme's administrator. Pension Credit Rights 10.7 In the event of pension credit rights arising, these must be implemented by a transfer to a scheme of the type listed in rule 10.3 or, where the scheme administrator permits, to a new arrangement for the ex-spouse within the scheme. TRANSFER TO AN OVERSEAS PENSION SCHEME 10.8 If the scheme permits, a member's fund held within an arrangement may be transferred to an overseas pension scheme, provided : * all conditions for such transfers as laid down by the Inland Revenue are satisfied, and * the prior consent of the Inland Revenue has been obtained, where necessary. MEMBER WITHDRAWING A REQUEST 10.9 The member may withdraw a request by giving the scheme administrator notice in writing to that effect but may not withdraw a request after the scheme administrator has entered into a binding agreement with a third party to make the transfer to the other scheme. A member who has withdrawn a request may make another. TIME OF TRANSFER 10.10 Except as described in rules 10.11, 10.13 and 10.14, the transfer must be completed before pension date. TRANSFER OF MEMBER'S BENEFITS WHILST IN INCOME WITHDRAWAL 10.11 Where the member is taking income withdrawals from an arrangement in accordance with rule 6.18, and has not yet purchased an annuity, or been required under rule 6.19 to purchase an annuity, then if the scheme administrator so permits a transfer may be made to an 'arrangement' under another approved personal pension scheme provided : * the payment consists of the whole of the member's fund under the transferring arrangement, * the member's fund concerned was not the subject of an earlier transfer into the scheme under rule 11.11 that occurred in the twelve month period immediately preceding the date the transfer payment is to be made, and * the receiving 'arrangement' conforms with the requirements of the Transfer Payments Regulations 2001, as described in rule 11.13. The schedule to the rules will specify whether the member has the option detailed in this rule. 10.12 Where a transfer is to be made from an arrangement in accordance with rule 10.11 and the proposed transfer date occurs in the first twelve month period following pension date then the member must actually have received income withdrawal benefits from the arrangement before the transfer can proceed. Up to the point of transfer the member must have drawn, on a pro rata basis by reference to the time elapsed, the minimum level of income withdrawal as calculated on pension date in accordance with rule 6.22. TRANSFER OF SURVIVOR'S OR SUBSTITUTE MEMBER'S BENEFITS WHILST IN INCOME WITHDRAWAL 10.13 Where a survivor or substitute member is taking income withdrawals from an arrangement in accordance with rules 7.9, 8.17 or 11.13, and has not yet purchased an annuity, or been required to purchase an annuity under either rule 7.12, 8.20 or 11.13, then if the scheme so permits a transfer may be made to an 'arrangement' in another approved personal pension scheme provided: * the payment consists of the whole of the survivor's fund or substitute member's fund under the arrangement in question, * the substitute member's fund was not the subject of an earlier transfer into the scheme under rule 11.12 that occurred in the twelve month period immediately preceding the date the transfer payment is to be made, and * the receiving 'arrangement' conforms with the requirements of the Transfer Payments Regulations 2001, as described in rule 11.13. The schedule to the rules will specify whether the survivor or substitute member has the option detailed in this rule. PENSION CREDIT RIGHTS 10.14 Where a pension sharing order is made before the member's pension date under an arrangement, but is not implemented by that date, then a transfer of pension credit rights may still be made subject to the requirements of the Transfer Payments Regulations 2001 and the Discharge Regulations. DISCHARGE OF RIGHTS 10.15 Entitlement to benefit under the scheme for or in respect of the member or survivor will cease in respect of any rights transferred in accordance with Part 12 of these rules and the scheme will be discharged from any obligation to provide benefits in respect of those rights. MULTIPLE TRANSFERS 10.16 Except where the transfer is in accordance with rule 10.11 a member may elect under this rule for different parts of the member's fund(s) to be transferred as described above to different schemes, provided all the member's fund is being transferred from the arrangement. 11. Transfer Into the Scheme TRANSFERRING SCHEME 11.1 The scheme administrator may, at the written request of a member, accept a transfer payment representing the value of the member's rights (including any pension credit rights) under: (1) another approved personal pension scheme including one established for the purpose of accepting a transfer, and a stakeholder pension scheme; (2) a retirement benefits scheme, including a Free-standing Additional Voluntary Contribution Scheme; (3) a deferred annuity contract providing benefits arising from previous membership of a retirement benefits scheme (i.e. a "buy-out policy" or "section 32 policy" as described in section 591(2)(g) of the Act, or a policy assigned to the member in the terms of section 431B(2)(e) of the Act), or rights attributable under section 32A of the Pension Schemes Act; (4) a retirement annuity contract or trust scheme approved under Chapter III of Part XIV of the Act; (5) a relevant statutory scheme; or (6) any other source permitted by the Inland Revenue. The scheme administrator may accept a transfer without the member's written request where the transfer originates from a scheme that is being wound-up and the rules of that scheme don't require the member's consent to that transfer. Transfer In With Pension Debit 11.2 Where the scheme administrator accepts a transfer payment into the scheme and is informed by the transferring scheme of a pension debit relating to the transfer payment then the scheme administrator must retain details of this pension debit. Where those transferred benefits need valuing for maximum Inland Revenue benefit purposes in relation to benefits held by the member in other schemes then the scheme administrator should take account of the pension debit when providing details of the member's benefits held in the scheme. If those benefits are transferred from the scheme in accordance with Part 10 of these rules then the scheme administrator must give full details of the pension debit to the receiving scheme's administrator. GENERAL CONDITIONS 11.3 The transfer must be made by a direct payment between the administrator or trustee of the other scheme and the scheme administrator (or, in the case of a transfer of the type described in (3) or (4) of rule 11.1, between the insurance company or friendly society concerned and the scheme administrator). The transfer may not be paid or passed through a financial intermediary or broker. 11.4 A transfer payment is not a contribution for the purpose of section 639(1) of the Act (tax relief). It may not be used for the purpose of rules 4.32 to 4.33 (buying life insurance) or rules 4.35 to 4.36 (waiver of contributions). Certification Requirements 11.5 Before accepting a transfer payment from another approved personal pension scheme the scheme administrator must find out from the administrator of the transferring scheme how much of the transfer payment (if any) is derived from funds which have been held for the provision of benefits for the member by a scheme or schemes of the kind described in (2), (3) or (5) of rule 11.1. 11.6 If the transfer is from any of the sources detailed in (2), (3) or (5) of rule 11.1 and the member is a regulated individual in relation to that transfer payment : * the scheme administrator must obtain from the administrator of the transferring scheme any certificates required by Part III of the Transfer Payments Regulations 2001, and * the amount derived from this transfer payment will be subject to the restriction in rule 11.14. Where the benefits paid under the transferring scheme are subject to regulation 11 of the Conversion Regulations 2001 the transferring scheme must provide the scheme administrator with a certificate showing what level of lump sum benefit may be paid at the member's pension date from the transfer payment. Where the benefits paid under the transferring scheme are subject to regulation 10 of the Conversion Regulations 2001 the scheme administrator must comply with any restrictions in the way that benefits are paid on death before pension date. 11.7 If a transfer payment is later made from the scheme to another approved personal pension scheme, the scheme administrator must pass on to the administrator of the receiving scheme : * any lump sum or other certificate required by the Transfer Payments Regulations 2001, * details of any part of the transfer that is subject to the restriction in rule 11.14, and * any certificate received where the transferred benefits are restricted in accordance with regulation 11 of the Conversion Regulations 2001 (as well as regulation 10). 11.8 The scheme administrator must comply generally with all Inland Revenue requirements for the acceptance of transfers and provision of benefits from transfer payments and specifically with any certification requirements of the Transfer Payments Regulations 2001. Transfers Received Prior To 6 April 2001 11.9 If the scheme received transfer payments prior to 6 April 2001, any certificate obtained under a provision of the Personal Pension Schemes (Transfer Payments) Regulations 1988 (SI 1988/ 1014) that restricts the member's lump sum entitlement at pension date shall be treated for the purpose of these rules as if obtained under the corresponding provision of the Transfer Payments Regulations 2001. TIME OF TRANSFER 11.10 The transfer must be completed before the member's pension from the member's fund is due to start, unless rules 3.4 or 11.11 apply. ACCEPTANCE OF TRANSFERS OF INCOME WITHDRAWAL BENEFITS 11.11 If the scheme so permits, and all the conditions in rule 11.13 are met, a member may transfer into the scheme benefits from an 'arrangement' held under another approved personal pension scheme where 'pension date' has been reached and benefits are in payment through income withdrawal. 11.12 Benefits in payment through income withdrawal under another approved personal pension scheme in respect of a substitute member may also be transferred to the scheme if the scheme so permits, and all the conditions in rule 11.13 are met. 11.13 The conditions that must be met in rules 11.11 and 11.12 are : (1) The payment must consist of the whole of the 'member's fund' or 'substitute member's fund' held under each of the 'arrangements' being transferred. (2) The receiving arrangement(s) must have been set up by the scheme specifically to accept the transfer or an earlier or simultaneous transfer of the same nature and must prohibit the acceptance of : - contributions under Part 4 of these rules, and - further transfer payments which don't fall within rule 11.11 (if a member) or 11.12 (if a substitute member). Any subsequent transfers must be treated as a new arrangement entering income withdrawal for the purposes of rules 6.20 to 6.29 (whether a member or substitute member, see (4) of this rule). (3) Member and substitute member benefits may not be transferred into the same arrangement, even if the member and the substitute member are the same person. (4) The member or substitute member must have elected as part of the process of setting up the new arrangement(s) to defer the purchase of an annuity and commence income withdrawals with effect from the date of transfer in accordance with rule 6.18 (or as described in rule 6.18 if a substitute member). For a member, rules 6.20 to 6.34 will apply to the new arrangement(s), with the date of transfer being substituted for pension date. For a substitute member rules 6.21 to 6.34 will apply to the new arrangement(s) with : - the date of transfer being substituted for the date of the member's death, - 'substitute member' being substituted for 'member', and - 'substitute member's fund' being substituted for 'member's fund'. For the avoidance of doubt, where a substitute member is also a member of the scheme in their own right then if the scheme administrator permits the review dates for income withdrawal purposes of all arrangements held in the scheme by that individual may be grouped as permitted by rule 6.26. (5) No tax-free lump sum may be paid from the new arrangement(s), whether immediately following transfer or subsequently if the member or substitute member dies before an annuity has been purchased. The exception is detailed in (9) of this rule. (6) Following the transfer into the scheme the member or substitute member may not transfer those benefits held in the new arrangement(s) as permitted by rules 10.11 or 10.13 until at least a year has expired from the date of transfer. (7) An annuity must be purchased in the new arrangement(s) no later than required by rule 6.19 (if a member) or rule 7.12 (if a substitute member). For the purpose of this rule the reference to 'member' in rule 7.12 should be read by reference to the member of the transferring approved personal pension scheme whose death originally gave rise to the substitute member's benefits under that scheme. When purchasing an annuity the substitute member has the same options as a survivor would have as detailed in rules 7.6, 7.7 and 8.22. (8) Any income withdrawals paid from the substitute member's fund must cease if at any point the substitute member would have stopped being eligible to a pension if they were still subject to the rules of the original approved personal pension scheme benefits were transferred from. Similarly when an annuity is purchased the annuity contract must also provide for the annuity to cease in the same circumstances. Otherwise the annuity should be payable as detailed for a survivor in rule 7.5. (9) If a substitute member dies before an annuity is purchased benefits will be paid out in accordance with rule 8.15 (with 'member' and 'member's fund' being substituted by 'substitute member' and 'substitute member's fund'). Tax will be due on the lump sum in accordance with rule 7.19 unless the substitute member's benefit entitlement arose in the other approved personal pension scheme due to the death of a scheme member before 'pension date' was reached, and as such section 648B of the Act does not apply to any lump sum paid. In such circumstances the lump sum may be paid out without tax being deducted under section 648B of the Act. (10) The scheme administrator must comply generally with any requirements laid down by the Inland Revenue, including the Transfer Payments Regulations 2001. LUMP SUM RESTRICTION ON DEATH 11.14 If the member is a regulated individual and dies before any benefits have been paid to him or her under an arrangement leaving : * a surviving spouse, or * a dependant for whom benefits are specifically provided under the arrangement, the scheme administrator must use any part of the member's fund that derives from a related transfer payment from a source of the sort described in (2), (3), or (5) of rule 11.1 either : (1) wholly to buy survivors' annuities or provide survivors' income withdrawals as described in Part 8 of these rules; or (2) to pay up to 25% (one quarter) as a lump sum in the way described in rule 8.15, and to buy survivors' annuities or provide survivors' income withdrawals as described in Part 8 of these rules with the balance. If there is no surviving spouse and the arrangement does not specifically provide for dependant benefits then the member's fund derived from that transfer payment may be paid as a lump sum in the way described in rule 8.15. 11.15 If the member is not a regulated individual in relation to a transfer payment then rule 11.14 does not apply and benefits shall be paid on the death of the member in accordance with Part 8 of these rules. 11.16 Lump sum benefits must also be restricted in accordance with any requirements of regulation 10 of the Conversion Regulations 2001, where relevant. SCHEMES WITH A PENSIONEER TRUSTEE 11.17 If the scheme has appointed a pensioneer trustee as required by rule 14.6 then any transfer payments made to the scheme in cash must be paid into a scheme bank or building society account of which the pensioneer trustee is a mandatory co-signatory (see rules 17.20 to 17.21). If assets are being transferred into the scheme in specie then rules 17.22 to 17.27 are relevant. 12. General Provisions About Benefits RIGHTS UNDER THE SCHEME 12.1 A person's rights under the scheme are only those given under the scheme documents or by any insurance or pension contract bought with the member's fund (or substitute member's fund, where relevant). The scheme must provide money purchase benefits within section 181 of the Pension Schemes Act. ASSIGNMENT OR SURRENDER 12.2 Rights to a lump sum retirement benefit under the scheme may not be assigned or surrendered, except to the extent necessary to give effect to comply with a pension sharing order. 12.3 No pension secured with a member's fund (or substitute member's fund, where relevant) may be assigned or surrendered except in the following circumstances : (1) A pension which continues under a guarantee to a person's estate after his or her death may be assigned by his or her will, or by his or her personal representatives in distributing his or her estate, for any of the following reasons : * to give effect to his or her will; or * to give effect to the rights of those entitled on his or her intestacy; or * to appropriate it to a legacy or to a share or interest in the estate. (2) To the extent necessary to comply with a pension sharing order. (3) As permitted by sections 342A to 342C of the Insolvency Act 1986 and sections 36A to 36C of the Bankruptcy (Scotland) Act 1985, as amended by sections 15 to 16 of the Welfare Reform and Pensions Act 1999. (4) As permitted by section 273 to 278 of the Proceeds of Crime Act 2002. INFORMATION TO MEMBERS 12.4 The scheme administrator will issue an annual statement to members and others as required through section 113 of the Pension Schemes Act. BENEFICIARY UNABLE TO ACT 12.5 If the scheme administrator believes that a person entitled to payments is unable to act for any reason, the scheme administrator may arrange that payments, instead of being made to that person, will be made for the maintenance of that person and / or any of that person's dependants. If any payments are not so made, they (and any proceeds) must be held for the person concerned until that person is again able to act. If that person dies without becoming able to act, payment must be made to that person's estate. Any payment made in accordance with this provision will discharge the scheme from any obligation to provide the benefits to which it relates. WHEREABOUTS UNKNOWN 12.6 The scheme administrator may use discretion to decide that any person who is entitled to a payment under the scheme shall cease to have any claim to the payment if at least six years have passed from the date the payment became due and the address of the person is not known to the scheme administrator. The scheme administrator must, however, first take all reasonable steps to ascertain the address. EVIDENCE 12.7 The scheme administrator may require any member or any other person to whom a pension or lump sum is payable under the scheme to produce any evidence or information which the scheme administrator may from time to time reasonably require. If the member or the other person does not produce the evidence or information, the scheme administrator may withhold payment of any benefit to which it is relevant until it is produced. NOTICE TO SCHEME ADMINISTRATOR 12.8 Where these rules give a member or other person any choice, the scheme administrator may impose any requirements as to the period or form of the notice to be given by the member or other person, so long as these don't conflict with any requirements specified in these rules. 13. General Provisions About Pensions PAYMENT INTERVALS 13.1 Any pension paid as an annuity from a member's fund (or substitute member's fund, where relevant) may be paid in advance or arrears. It must be paid at least once a year. INCREASE IN PAYMENT 13.2 A pension under the scheme may be of a level amount, a variable amount or may increase in payment. 14. Provider and Scheme Administrator PROVIDER 14.1 The name of the provider is set out in the schedule to the rules. The provider is a person permitted by section 632 of the Act to establish an approved personal pension. If the provider ceases to be such a person, the scheme administrator must immediately inform the Inland Revenue. 14.2 Where the scheme is established by an employer or affinity group then the scheme must be established under trust. Membership of the scheme should also be limited in accordance with rule 3.3. SCHEME ADMINISTRATOR 14.3 The scheme administrator is the person named in the schedule to the rules. The provider may by notice remove the scheme administrator provided that at the same time it appoints another, or assumes the role itself. The scheme administrator is responsible for discharging the duties imposed by these rules and by the Act. The scheme administrator must be a person resident in the United Kingdom. If the provider is resident in the United Kingdom, the provider may be appointed as the scheme administrator. TRUSTEES 14.4 If the scheme is a money purchase occupational pension scheme, any trustees of the scheme will be subject to any prohibition orders or civil penalties under section 3 and 10 of the Pensions Act 1995. 14.5 Where the scheme is required to appoint a pensioneer trustee (see rule 14.6) the other trustees must adhere to the requirements of rules 14.6 to 14.10, and 17.19 to 17.27. No asset should be realised for cash without the agreement of the pensioneer trustee. PENSIONEER TRUSTEE 14.6 If required by the Personal Pension Schemes (Restriction on Discretion to Approve) (Establishment of Schemes under Trusts) Regulations 2000 (SI 2000/2314) one of the trustees of the scheme must be a pensioneer trustee. The appointment must be stated within a trust document of the scheme. Termination and Appointment : 14.7 The pensioneer trustee's appointment and obligation to act as such shall not be capable of termination at any time, unless the pensioneer trustee : (1) has died, (2) is removed by an order of the court, (3) is disqualified, suspended or prohibited under the Pensions Act 1995 or Article 3,4 or 29 of the Pensions (Northern Ireland) Order 1995, (4) has committed a fraudulent breach of trust in relation to the scheme and that is the reason for the termination, (5) has had their approval to act as a pensioneer trustee withdrawn by the Inland Revenue, or (6) is replaced by another pensioneer trustee and the appointment of the other pensioneer trustee takes effect at the same time as the termination. 14.8 The appointment of a successor to the former pensioneer trustee shall, except where (6) of rule 14.7 applies, be made no more than thirty days after the termination. The remaining trustees are entitled to make such an appointment to the extent necessary to ensure the scheme complies with the need to have a pensioneer trustee and any person otherwise having the power to appoint one has failed to do so. Pensioneer Trustee Undertaking : 14.9 Upon appointment the pensioneer trustee must undertake to inform the Inland Revenue promptly if their appointment as pensioneer trustee is terminated. They must also undertake that they won't : (1) consent to any action that they consider infringes the terms of the trust deed and rules of the scheme, the Act and associated Regulations or published Inland Revenue practice in relation to the tax approval and continued approval of the scheme. (2) agree to the termination of the scheme otherwise than in accordance with the terms of the approved winding-up provisions contained in the trust deed of the scheme and Part 15 of these rules. (3) delegate any powers to any other trustee of the scheme (or to any person or body acting on behalf of those trustees) where they consider such delegation is being made for the purpose of infringing the terms of the trust deed and rules of the scheme, the Act and associated Regulations or published Inland Revenue practice in relation to the tax approval and continued approval of the scheme. (4) make any delegation unless : - the terms of this rule are brought to the attention of the delegate, and - they make all reasonable efforts to ensure that the delegate gives to the trustees an undertaking corresponding to that set out in (1) above. 14.10 Where the scheme is required to appoint a pensioneer trustee through rule 14.6 then rules 17.19 to 17.27 apply. Rules 6.17, 10.4 and 11.17 are also relevant. 15. Closing or Winding-Up the Scheme CLOSING THE SCHEME 15.1 The provider may at any time : (1) stop admitting new members (or substitute members where relevant) to the scheme, but continue to accept contributions from, and in respect of, existing members; or (2) stop admitting new members (or substitute members, where relevant) to the scheme and stop accepting contributions from, and in respect of, existing members. 15.2 If the scheme is closed, the scheme administrator will continue to operate the scheme under the scheme documents, unless the provider is winding-up the scheme. Where (2) of rule 15.1 applies, the scheme administrator must notify each member or other beneficiary of his or her rights and options under the Personal Pension Schemes (Disclosure of Information) Regulations 1987 (SI 1987/1110), or the Pension Schemes Act or Pensions Act 1995 (where relevant). WINDING-UP THE SCHEME 15.3 The provider may wind-up the scheme by giving notice to the scheme administrator. The scheme administrator will then notify each member of his or her rights and options under the Personal Pension Schemes (Disclosure of Information) Regulations 1987 (SI 1987/1110). This notification will include notice of the member's rights to a transfer under Part 10 of these rules. 15.4 When a member does not make a choice under Part 10 of these rules, the scheme administrator will transfer the member's fund to another approved personal pension scheme of the scheme administrator's choice. The member's consent won't be necessary. Money Purchase Occupational Pension Schemes 15.5 Where the scheme is a money purchase occupational pension scheme for the purposes of DWP legislation then rule 15.3 and 15.4 don't apply. Such schemes must comply with the requirements of the Pension Schemes Act and The Pensions Act 1995. 16. Withdrawal of Inland Revenue Approval WITHDRAWAL OF APPROVAL OF SCHEME 16.1 If the Inland Revenue withdraw the tax approval of the scheme through section 650 of the Act, the scheme administrator will inform the members (and other beneficiaries, as appropriate) within three months of the date of receipt of the notice of withdrawal unless the scheme administrator appeals. If an appeal is made, the scheme administrator will inform the members and other beneficiaries within three months of the date of receipt of the notice that the special commissioners have dismissed the appeal or have ruled that the decision is to have effect from a different date. The scheme administrator will then wind-up the scheme as described in rules Part 15 of these rules. WITHDRAWAL OF APPROVAL OF A MEMBER'S ARRANGEMENT 16.2 If the Inland Revenue inform the scheme administrator that they are withdrawing the tax approval of an arrangement made for a member under the scheme through section 650 of the Act, the Inland Revenue will inform the scheme administrator and member within three months of the date on which the notice of withdrawal is issued by the Inland Revenue unless the scheme administrator or member appeals. If an appeal is made, the scheme administrator will inform the member within three months of the date of receipt of any notice that the special commissioners have dismissed the appeal or have ruled that the decision is to have effect from a different date. For the purpose of this rule 'member' should be read to include a survivor or substitute member, where relevant. 17. Investments or Deposits Held For the Purpose of the Scheme EMPLOYER RELATED INVESTMENTS 17.1 If the scheme is an occupational pension scheme, the scheme must comply with the restrictions on employer related investments imposed through section 40 of the Pensions Act 1995. ALL SCHEMES 17.2 It is a decision for the scheme administrator as to how scheme funds are invested and the degree of investment choice open to a member. It is the responsibility of the scheme administrator to ensure that any investments made conform with the requirements of these rules. 17.3 The investment of any assets of the scheme is subject to the restrictions and requirements of the Permitted Investments Regulations 2001 and section 638A of the Act. ARRANGEMENTS THAT ARE NOT SELF-INVESTED PERSONAL PENSION SCHEMES 17.4 An arrangement that is not a self-invested personal pension scheme shall not directly or indirectly hold as an investment : * residential property, or * personal chattels other than choses in action (or, in Scotland, any moveable property other than incorporeal moveable property), except as permitted by regulation 7 of the Permitted Investments Regulations 2001. Loans 17.5 An arrangement that is not a self-invested personal pension scheme may not be used to lend money to a member of the scheme or any person connected with such a member. For the purpose of this rule lending includes the circumstances detailed in rule 17.6. 17.6 For the purposes of rule 17.5 (and rule 17.9) an arrangement shall be regarded as lending money to a member or any person connected with him or her in circumstances where : * the arrangement holds as an investment, whether directly or indirectly, assets of a person, * that person lends money to the member concerned or a person connected with him or her, and * the loan has the effect of limiting or reducing in any way the return on the investment. SELF-INVESTED PERSONAL PENSION SCHEMES 17.7 If the scheme administrator so permits, a member may choose or direct how contributions and any transfer payment accepted by the scheme in respect of the member should be invested. If the arrangements concerned fall within the definition of a self-invested personal pension scheme then this facility must, however, be restricted to investments listed in the Schedule to the Permitted Investments Regulations 2001. 17.8 The arrangement may retain any investments acquired prior to 6 April 2001 which don't comply with the Permitted Investments Regulations 2001 provided they conformed to Inland Revenue guidelines on such investments which existed prior to that date. Loans 17.9 A self-invested personal pension scheme may not lend money to any person, whether or not that person is a member of the scheme. For the purpose of this rule lending includes the circumstances detailed in rule 17.6. Borrowing 17.10 A self-invested personal pension scheme may borrow money in order to purchase or develop commercial property held as an investment for the purposes of the scheme, or to replace such borrowing at a future date. Such borrowing must be : * within the limits and conditions prescribed by regulation 6 of the Permitted Investments Regulations 2001, * on commercial terms, and * repaid in full upon the completion of the sale of the property in question. 17.11 Once a member has reached pension date under an arrangement a self-invested personal pension scheme may not set up a borrowing arrangement for that member in relation to that arrangement. Where a serialised borrowing arrangement is in existence at pension date no further instalments of the loan may be drawn under that arrangement. Property 17.12 A self-invested personal pension scheme may not acquire commercial property in respect of a member's arrangement where the member has attained the age of 65 or, if pension date has not been reached at that date, pension date. 17.13 Where, in accordance with regulation 9(5) of the Permitted Investments Regulations 2001, property held by a self-invested personal pension scheme is leased to : * a member for the purposes of a trade or profession carried on by him or her, whether or not in partnership with another person or persons, or * a company which is connected with a member for the purposes of a business carried on by that company, then the lease must be granted on normal commercial terms and the rent payable under the lease must be at a commercial rate supported by an independent professional valuation. For the purposes of this rule 'business' is defined in regulation 9(8) of the Permitted Investments Regulations 2001. CONNECTED TRANSACTIONS 17.14 The scheme administrator shall not enter directly or indirectly into any investment transactions with a member or any person connected with that member (except as allowed through rules 17.15 to 17.18). For the purposes of this rule : * the acquisition of an asset is deemed to be an indirect transaction with a member or a person connected with a member if that asset has been held by that party at any time in the three years prior to the acquisition of that asset by the scheme. * the sale of an asset is deemed to be an indirect transaction with a member or a person connected with a member if within three years of the sale of the asset by the scheme a member or person connected with a member acquires that asset. 17.15 Rule 17.14 does not apply to contributions accepted from an employee share scheme as permitted by rule 4.9. 17.16 A self-invested personal pension scheme may enter into a transaction within rule 17.14 provided it is within the exceptions detailed in regulation 9 of the Permitted Investments Regulations 2001. 17.17 The scheme administrator shall take all reasonable steps to ensure and continue to monitor that any transaction falling within the provisions of these rules is not one with a connected person, save where permitted by the Permitted Investments Regulations 2001. 17.18 A transaction entered into as part of the normal investment management by the scheme need not be regarded as giving rise to a connection between the member or a connected person if it relates to a 'pooled fund' as defined in regulation 2 of the Permitted Investments Regulations 2001. SCHEMES WITH A PENSIONEER TRUSTEE 17.19 If the scheme has appointed a pensioneer trustee as required in rule 14.6 then rules 17.20 to 17.27 apply. Co-Signatory to Scheme Bank Accounts 17.20 Any pensioneer trustee appointed by the scheme must be a mandatory co-signatory to all scheme bank or building society accounts. However, it is acceptable for the trustees to make regular payments from a scheme bank account without specific agreement in every case from the pensioneer trustee, provided the payments : * have been previously authorised in principle by the pensioneer trustee; and * are covered by a standing order or direct debit arrangement. Such payments may include, for example, pension payments being paid through income withdrawal (rules 6.18 to 6.29 refer), premiums paid on insurance policies, ground rents, mortgage repayments and bank charges. 17.21 All cash contributions paid into the scheme should be paid into a scheme bank account to which the pensioneer trustee is a mandatory co-signatory. See rule 11.17 in relation to transfers received by the scheme. Registered Owner of Scheme Assets 17.22 The pensioneer trustee must be a registered owner (along with the other trustees) of all scheme assets. Where legally possible the pensioneer trustee's name should be on the document of title, but if this is not possible and the land / property is in England or Wales then there should be a legally enforceable restriction in place to prevent the assets being realised for cash without the written authority of the pensioneer trustee. Such a restriction should be registered at HM Land Registry. 17.23 Rule 17.22 applies to all assets owned by the scheme. Where necessary existing assets should be re-registered to show that the pensioneer trustee is co-owner of the assets where appropriate. 17.24 The pensioneer trustee must be a party to any insurance policy entered into. The wording of these policies must reflect that any proceeds of the policy may only be paid if the pensioneer trustee agrees in writing to the insurance company. They must also be a party to any new borrowings entered into in accordance with rules 17.10 and 17.11. 17.25 Any proceeds from the sale or disposal of any assets owned by the scheme must be paid to a scheme bank or building society account of which the pensioneer trustee is a mandatory co-signatory. The exception is detailed in rules 17.26 and 17.27. Portfolio of Securities / Investment Management Arrangements 17.26 The pensioneer trustee must be signatory to any management arrangement between the trustees and any fund manager or broker. This arrangement is to ensure that any proceeds paid from the portfolio to the trustees will be paid only into a scheme bank or building society account of which the pensioneer trustee is a mandatory co-signatory. The pensioneer trustee does not have to be co-signatory to any nominee account that is set up by the fund manager or broker as part of the management of the portfolio unless that account can be accessed by the trustees. 17.27 The requirements in rule 17.26 also apply for other management arrangements where shares are held on behalf of the trustees by a nominee and any share transactions undertaken on non-UK stock exchanges that might require the share certificate to be registered in the name of a recognised nominee. Where shares are registered in the name of CREST it will be acceptable if written arrangements are in place such that they cannot be transferred out of the control of the duly appointed fund manager (other than in the normal course of managing investments) without the written consent of the pensioneer trustee. 18. Alterations to These Rules INLAND REVENUE CONSENT 18.1 No alteration may be made to any of these rules without the consent of the Inland Revenue. This applies whether the alteration is made under rule 18.2 or under any other power of alteration in the scheme documents. POWER TO ALTER THESE RULES 18.2 The scheme administrator may at any time, in writing, make any alteration to these rules. This power of alteration may be exercised by the scheme administrator alone, and without any conditions except rules 18.1 and 18.3. It is additional to, and independent of, any other power of alteration in relation to the scheme. ALTERATION OF AN ARRANGEMENT 18.3 No arrangement may be amended in a way that could prejudice the Inland Revenue approval of the scheme or of the arrangement. Schedule to the Rules The provider is : The provider is / is not an employer or affinity group The scheme administrator is : The scheme is / is not required to appoint a pensioneer trustee (rule 14.6) If so the pensioneer trustee is : Rule 1.1 scheme status : * The scheme is tax approved under Chapter IV Part XIV of the Act. * The scheme was / was not previously tax approved as a retirement benefits scheme Part 3 of the rules - making arrangements : * Member's arrangements set up on or after 6 April 2001 are established as (delete as appropriate) : - a single arrangement - more than one arrangement * The scheme allows / does not allow adults to make arrangements for individuals under the age of 16, or in England, Wales and Northern Ireland 18 if not in employment, as members. * The scheme allows / does not allow employed individuals in England, Wales or Northern Ireland who are over the age of 16 but under the age of 18 to make their own arrangements as members. * Arrangements may / may not be split in accordance with rule 3.7. Part 4 of the rules - Contributions : * Rule 4.9 - The scheme will / won't permit contributions paid in the form of shares. * Rules 4.32 and 4.33 - The scheme offers / does not offer life insurance. If it does, the terms will be described in the member's arrangement. * (1) of rule 4.35 : The scheme offers / does not offer a waiver of contribution facility for arrangements made on or before 5 April 2001. * (2) of rule 4.35 : The scheme offers / does not offer an enhanced annuity on incapacity through risk insurance for arrangements made on or before 5 April 2001. Part 6 to 10 - Annuity deferral through income withdrawal : * The scheme permits / does not permit annuity purchase to be deferred through income withdrawal If so : - Rules 6.26 and 11.13 : The review dates where a member, survivor or substitute member (where relevant) has multiple arrangements may / may not be grouped. - Rules 6.27 and 8.25 : The actual review may / may not take place within a sixty day window prior to the specified review date. - Rules 6.21, 8.21 and 11.13 : The member, survivor and substitute member (where relevant) may / may not purchase an annuity with part of the member's fund, survivor's fund or substitute member's fund held in that arrangement whilst taking income withdrawals. - Rules 10.11 to 10.13 and 11.11 to 11.13 : An arrangement may / may not be transferred from or to the scheme where benefits are in payment from that arrangement through income withdrawal. Rule 8.4, 8.6 and 11.13 - Member's, survivor's and substitute member's (where relevant) choice of insurer : * The provider is / is not an insurer. Rule 8.15 : * Distribution of any death benefit will be subject to the terms of the member's arrangement. Rule 9.1 Life Insurance : Life insurance is / is not offered by the scheme. Part 17 - Investments : * The scheme does / does not have arrangements that are self-invested personal pension schemes. * Investments are in the form of insurance contracts / directly held assets / mixture (delete as appropriate). ?©Crown Copyright Keywords: Pension, Annuities, Annuity, Pensions, Annuities Tax, Taxation Please note that the annuities and income drawdown information contained within the articles and general text on Annuities Central may not be intended for annuity consumer use, may no longer be current and should not be used by consumers to make financial decisions. It is very important that you don't use this annuity information in isolation to decide which annuity or annuity alternative to buy. Annuity comparisons and pensions information or opinions expressed are made as at the date of this publication and are subject to change without notice. Always seek the help of an annuity broker before you buy an annuity.

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Visit Simple Annuities Financial Services Register Number 483817


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1000's of women retire every week in the UK. Compare annuities for women and their alternatives.
Visit The Female Annuity Financial Services Register Number 460094


annuity comparisons Visit Annuity Pathway

Your simple pension annuity journey. How you might take the wrong annuity route and lose the annuity income that is rightfully yours.
Visit Annuity Pathway Financial Services Register Number 460094


annuity comparisons Visit Just One Bite Annuities

How a pension annuity will affect your life. You will only get one bite of the annuity apple. Once you buy an annuity, there's no going back.
Visit Just One Bite Annuities Financial Services Register Number 460094


annuity comparisons Visit Pension Annuities Plus

Your annuity income may increase if you have had certain conditions such as high blood pressure, asthma or high cholesterol. This is also true for smokers and for those who have worked in certain occupations. Get pension annuity comparisons now.
Visit Pension Annuities Plus Financial Services Register Number 483817


annuity comparisons Visit Annuity Answers

Why should the pension annuity buyer beware and why do so many retirees ignore a much bigger annuity income? Compare annuities now.
Visit Annuity Answers Financial Services Register Number 483817


annuity comparisons Visit Smokers Annuities

Your lifespan as a smoker and your annuity options. We're sorry to be blunt, but you most likely already know that smokers, in general, have shorter lifespans than non-smokers. Of course annuity providers are well aware of this unfortunate fact of life. Increase your annuity now.
Visit Smokers Annuities Financial Services Register Number 483817


annuity comparisons Visit Annuity Key

Unlike some companies, all fund sizes are accepted. The Retirement Income Customer Hotline Limited may be able to boost your pension income by more than 40% compared with your current pension provider's offering.
Visit Annuity Key Financial Services Register Number 460094


annuity comparisons Visit Buy an Annuity

Buying an annuity from your pension provider isn't always necessarily the best option! You might be able to secure several thousand pounds more over your retirement from annuity providers than your current pension provider.
Visit Buy an Annuity Financial Services Register Number 154622


annuity office Visit Annuity Office

We recognise our annuity clients as individuals, which is why we deal with every case on a one-to-one individual basis. Did you know for instance that your income may increase if you have had certain health problems such as high blood pressure, high cholesterol or asthma? This is also true for smokers and for those who have worked in certain occupations.
Visit Annuity Office Financial Services Register Number 483817