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Individual transfers in DB occupational pension schemes—checklist

Individual transfers in DB occupational pension schemes—checklist Statutory right to cash equivalent • Members of defined benefit occupational pension schemes have a statutory right to transfer the cash equivalent value of their scheme benefits to certain other pension arrangements. • Since 30 November 2021, this statutory right to transfer is subject to the satisfaction of either of two conditions set out in the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021, SI 2021/1237 (Conditions for Transfer Regs). This is to protect members from transfers into fraudulent schemes • The cash equivalent is guaranteed for a period of three months. • The statutory right overrides any conflicting provisions in the scheme's trust deed and rules. • The statutory right applies when a member's pensionable service ends at least one year before normal pension age and the member has accrued rights to benefits under the scheme. • Members who remain in service after pensionable service ends only acquire a statutory right to transfer the cash equivalent of their...

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Temporary absence and pension accrual

THIS PRACTICE NOTE APPLIES TO OCCUPATIONAL PENSION SCHEMES.There are no statutory requirements governing the treatment of members' pension rights during periods of temporary absence from work, with the following exceptions: •absences due to periods of statutory leave such as maternity leave, paternity leave, adoption leave, parental leave or shared parental leave—for further information, see Practice Note: Maternity and other statutory family leave—the pension requirements•breaks in pensionable service which are disregarded by the preservation legislation for the purposes of calculating whether an early leaver has two years' qualifying service—for further information, see Practice Note: Early leavers—preservation — Breaks in pensionable serviceSubject to these exceptions, employers need to decide how they wish to treat members' pension rights on temporary absence from work and should ensure that their scheme's trust deed and rules contain provisions clearly setting out how members' pension rights are affected during a period of temporary absence.This Practice Note only covers the treatment of pension rights during periods of temporary absence from work in circumstances other than the exceptions mentioned...

Early leavers—preservation

FORTHCOMING DEVELOPMENT: Section 10 of the Finance Act 2022 will increase the normal minimum pension age (NMPA) from 55 to 57 on 6 April 2028 (save for members of the firefighters, police and armed forces public service pension schemes).The Finance Act 2022 will also give members of registered pension schemes a right to take their benefits before age 57, if on or before 4 November 2021 they either had an ‘unqualified right’ to take benefits or were in the process of a substantive transfer to a scheme offering an unqualified right to a protected pension age of less than 57 on or before 4 November 2021. To benefit from this new 2028 protection, the rules of the pension scheme must have included (on 11 February 2021) an unqualified right to take the entitlement to scheme benefits before age 57.For further information, see Practice Note: Increasing the normal minimum pension age (NMPA) to 57—pensions impact.THIS PRACTICE NOTE APPLIES IN RELATION TO OCCUPATIONAL PENSION SCHEMESIn this Practice Note, references to the trustees...

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Business sale agreement—pensions warranties (where buyer participates in seller’s scheme)

Business sale agreement—pensions warranties (where buyer participates in seller’s scheme) This precedent has been prepared on the basis that the drafter is acting for the buyer The following warranties have been drafted for a transaction where the Buyer: 1 decides to replicate pension benefits for transferring Employees in the same pension scheme by entering a deed of substitution to participate and assume responsibility for the scheme, or 2 agrees to accept a transfer of Employees’ past service benefits from the Seller’s pension scheme to its own scheme. You are strongly advised to involve a pensions specialist at the earliest opportunity. 1 Interpretation and definitions For the purposes of paragraphs 2 to 7 inclusive: [ Employee means [define as necessary either by class or named individuals];] Pension Scheme [s] mean[s] [[insert name(s) of scheme(s)] OR an arrangement or practice for the payment of, or contribution towards, an annuity, pension, lump sum, gratuity or similar benefit to be given on retirement, long-term ill-health or death, or pursuant to...

Policy—maternity leave

Policy—maternity leave 1 Introduction 1.1 This maternity policy sets out the rights and responsibilities of employees who are pregnant or have recently given birth. 1.2 This policy [has been agreed in consultation with [the trade union OR staff association OR employees] and] applies to all employees. [The health and safety aspects of this policy also apply to certain qualifying agency workers, as set out in paragraph 4. No other aspects of this policy apply to agency workers. Such workers may, however, have a right to maternity leave and pay etc from their agency and should contact them for further information.] This policy does not apply to consultants or self-employed contractors. 1.3 This policy is for guidance only and does not form part of your contract of employment. The Company may alter the terms of this policy from time to time and details of any alterations or additions will be notified to you. [This policy covers the rights employees are given by law but is...

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No grounds for higher pension increases despite past overpayments as scheme rules specify increases of RPI capped at 3% (Mr N, CAS-102084-N1D3)

Pensions analysis: In the determination of Mr N, CAS-102084-N1D3, the Pensions Ombudsman has rejected a complaint about the indexation level on a pension increase. The Ombudsman found that while the scheme rules specified increases of RPI capped at 3%, there were no grounds for higher increases despite past overpayments. The determination highlights the precedence of scheme’s governing documents and the need for consistent and updated scheme literature. Martin Scott of gunnercooke LLP looks at the decision.