Document:

EX-10.16.1

 

Exhibit 10.16.1

DATED 1st APRIL 2003

FIFTH DEFINITIVE TRUST DEED AND RULES

Biwater Retirement and Security Scheme

Ex-WCAPS Edition

File no.: 104585:0001

Doc. No.: 20513726:01

C/M/S Cameron McKenna

CERTIFIED
TO BE A TRUE AND 
COMPLETE COPY OF THE ORIGINAL

CMS
CAMERON MCKENNA
DATE 7/4/2003
CMS Cameron McKenna

Mitre House 
160 Aldersgate street
London EC1A 400

 

 

INDEX TO TRUST DEED

	 	 	 	 	 
	Clause No.	 	Page	 
	TRUST DEED
	 	 	1	 
	 
	 	 	 	 
	PARTIES
	 	 	1	 
	 
	 	 	 	 
	RECITALS
	 	 	1	 
	 
	 	 	 	 
	OPERATIVE PROVISIONS
	 	 	2	 
	 
	 	 	 	 
	1. GENERAL
	 	 	2	 
	1.1 Application
	 	 	2	 
	1.2 Purpose
	 	 	3	 
	1.3 Context
	 	 	3	 
	1.4 GMP Provisions
	 	 	3	 
	1.5 Contracting out on and after 6th April 1997
	 	 	3	 
	1.6 Safeguarded Rights
	 	 	3	 
	 
	2. CONSTITUTION OF THE FUND
	 	 	4	 
	 
	 	 	 	 
	3. ADMINISTRATOR
	 	 	4	 
	 
	 	 	 	 
	4. OBLIGATIONS OF EMPLOYERS
	 	 	5	 
	 
	 	 	 	 
	5. VESTING OF TRUST PROPERTY
	 	 	5	 
	 
	 	 	 	 
	6. ACTUARIAL REVIEWS
	 	 	5	 
	6.1 Valuations
	 	 	5	 
	6.2 Deficiency
	 	 	5	 
	6.3 Surplus
	 	 	5	 
	 
	7. DETERMINATION OF QUESTIONS BY THE TRUSTEES
	 	 	5	 
	 
	 	 	 	 
	8. INVESTMENTS AND BORROWING
	 	 	6	 
	8.1 Right to invest
	 	 	6	 
	8.2 Land etc.
	 	 	6	 
	8.3 Borrowing
	 	 	6	 
	8.4 Deposits etc.
	 	 	6	 
	8.5 Nominee
	 	 	6	 
	8.6 Underwriting
	 	 	6	 
	8.7 Joint ventures
	 	 	6	 
	8.8 Futures and traded options
	 	 	7	 
	8.9 Restrictions on “self-investment”
	 	 	7	 
	8.10 Appointment of investment manager
	 	 	7	 
	8.11 Statement of investment principles
	 	 	7	 

  

 

	 	 	 	 	 
	Clause No.	 	Page	 
	9. RECEIPTS AND PAYMENTS
	 	 	8	 
	 
	 	 	 	 
	10. APPOINTMENT, REMOVAL, AND NUMBER OF TRUSTEES
	 	 	8	 
	10.1 Appointment, removal and retirement
	 	 	8	 
	10.2 Members’ trustees
	 	 	9	 
	10.3 Alternative arrangements
	 	 	9	 
	10.4 Remuneration
	 	 	9	 
	 
	 	 	 	 
	11. ADMINISTRATIVE POWERS OF TRUSTEES
	 	 	9	 
	 
	 	 	 	 
	12. POWERS OF TRUSTEES AS TO EVIDENCE
	 	 	10	 
	 
	 	 	 	 
	13. POWER OF DELEGATION
	 	 	10	 
	 
	 	 	 	 
	14. POWER TO INSURE
	 	 	11	 
	14.1 Insurance of assets
	 	 	11	 
	14.2 Trustees Insurance
	 	 	11	 
	 
	 	 	 	 
	15. APPOINTMENT OF OFFICERS
	 	 	11	 
	 
	 	 	 	 
	16. PROCEEDINGS OF TRUSTEES
	 	 	11	 
	 
	 	 	 	 
	17. RECORDS TO BE KEPT BY THE TRUSTEES
	 	 	11	 
	 
	 	 	 	 
	18. EXPENSES OF ADMINISTRATION
	 	 	12	 
	 
	 	 	 	 
	19. PROFESSIONAL ADVICE
	 	 	12	 
	 
	 	 	 	 
	20. EXERCISE OF POWERS ETC.
	 	 	12	 
	 
	 	 	 	 
	21. EXERCISE OF DISCRETION
	 	 	13	 
	 
	 	 	 	 
	22. PROTECTION OF PERSONS DEALING WITH THE TRUSTEES
	 	 	13	 
	 
	 	 	 	 
	23. GENERAL INDEMNITY
	 	 	13	 
	 
	 	 	 	 
	24. POWER OF ALTERATION
	 	 	14	 
	 
	 	 	 	 
	25. ASSOCIATED EMPLOYERS
	 	 	14	 
	 
	 	 	 	 
	26. NEW PRINCIPAL EMPLOYER
	 	 	14	 
	 
	 	 	 	 
	27. DISPUTE RESOLUTION
	 	 	14	 

 

 

INDEX TO RULES

	 	 	 	 	 
	PART I
	 	 	18	 
	 
	 	 	 	 
	1. DEFINITIONS
	 	 	18	 
	 
	 	 	 	 
	PART II MEMBERSHIP
	 	 	25	 
	 
	 	 	 	 
	2. ELIGIBILITY
	 	 	25	 
	 
	 	 	 	 
	3. FAILURE TO JOIN AT THE FIRST OPPORTUNITY
	 	 	25	 
	 
	 	 	 	 
	PART III
	 	 	26	 
	 
	 	 	 	 
	4. CONTRIBUTIONS
	 	 	26	 
	 
	 	 	 	 
	4.1 Member’s contributions
	 	 	26	 
	4.2 Employers’ contributions
	 	 	26	 
	4.3 Payment of contributions
	 	 	27	 
	 
	PART IV
	 	 	28	 
	 
	 	 	 	 
	5. BENEFITS
	 	 	28	 
	5.1 Benefits on or after Normal Retiring Date
	 	 	28	 
	5.2Benefit on withdrawal from Pensionable Service before the Normal Retiring
Date
	 	 	28	 
	5.3 Benefits on early retirement
	 	 	30	 
	5.4 Benefits on death in Pensionable Service
	 	 	32	 
	5.5 Spouse’s and children’s post-retirement pensions
	 	 	33	 
	5.6 Increases to pensions in payment
	 	 	34	 
	5.7 Special provisions
	 	 	34	 
	5.8 Options of exchanging cash for pension and vice-versa
	 	 	34	 
	5.9 Part-time Service
	 	 	36	 
	5.10 Pension Sharing Order
	 	 	36	 
	5.11 Death of Former Spouse before implementation of Pension Sharing Order
	 	 	37	 
	 
	 	 	 	 
	6. OPTION TO SURRENDER PENSION TO PROVIDE AN ANNUITY FOR A DEPENDANT
	 	 	37	 
	 
	 	 	 	 
	7. PAYMENT OF PENSION
	 	 	37	 
	7.1 Pensions payable for life
	 	 	37	 
	7.2 Spouse’s Pensions under Rule 5.4
	 	 	38	 
	7.3 Children’s Pensions
	 	 	38	 
	 
	 	 	 	 
	PART V
	 	 	39	 
	 
	 	 	 	 
	GENERAL PROVISIONS ABOUT BENEFITS
	 	 	39	 

 

 

	 	 	 	 	 
	8. MATERNITY LEAVE AND FAMILY LEAVE
	 	 	39	 
	 
	 	 	 	 
	9. SECURING BENEFITS
	 	 	40	 
	9.1 Power to secure benefits
	 	 	40	 
	9.2 Requirements for issue of policy
	 	 	40	 
	 
	 	 	 	 
	10. DEDUCTIONS ETC.
	 	 	41	 
	10.1 Deduction of tax
	 	 	41	 
	10.2 Lien on benefits
	 	 	41	 
	 
	 	 	 	 
	11. UNCLAIMED BENEFITS
	 	 	42	 
	 
	 	 	 	 
	12. ATTEMPTED ASSIGNMENT ETC.
	 	 	42	 
	 
	 	 	 	 
	13. CLAIMANTS UNABLE TO ACT
	 	 	42	 
	 
	 	 	 	 
	14. DIFFERENT BENEFITS
	 	 	42	 
	14.1 Discretionary Terms
	 	 	42	 
	14.2 Additional Voluntary Contributions
	 	 	42	 
	 
	 	 	 	 
	15. TRANSFERS TO THE SCHEME
	 	 	43	 
	 
	 	 	 	 
	16. TRANSFERS FROM THE SCHEME
	 	 	45	 
	16.1 Member’s right to a transfer
	 	 	45	 
	16.2 Transfer values from the Scheme
	 	 	45	 
	16.3 Special provisions for transfer to a “Buy-out” policy
	 	 	46	 
	16.4 Special provisions for transfer to a personal pension scheme
	 	 	46	 
	 
	 	 	 	 
	17. DISCRETIONARY TRUSTS
	 	 	47	 
	17.1 Payment to individuals etc.
	 	 	47	 
	17.2 Payment to other trusts
	 	 	48	 
	 
	 	 	 	 
	18. ADJUSTMENTS TO COMPLY WITH INLAND REVENUE APPROVAL ETC.
	 	 	48	 
	18.1 Inland Revenue Approval
	 	 	48	 
	18.2 Equivalent Pension Benefits
	 	 	49	 
	 
	 	 	 	 
	PART VI
	 	 	50	 
	 
	 	 	 	 
	19. TERMINATION OR PARTIAL TERMINATION OF THE SCHEME
	 	 	50	 
	19.1 Termination of liability by the employers
	 	 	50	 
	19.2 Events leading to winding-up
	 	 	50	 
	19.3 Winding-up
	 	 	50	 
	19.4 Policies of assurance on winding-up
	 	 	53	 
	19.5 Partial winding-up
	 	 	53	 
	19.6 Transfer to a Receiving Scheme
	 	 	54	 
	19.7 Continuation as a “closed fund”
	 	 	54	 

 

	 	 	 	 	 
	PART VII
	 	 	56	 
	 
	 	 	 	 
	REVENUE LIMITATIONS
	 	 	56	 
	 
	 	 	 	 
	PART VIII OVERSEAS EMPLOYER AND EMPLOYMENT
	 	 	70	 
	 
	 	 	 	 
	OVERSEAS EMPLOY AND EMPLOYMENT
	 	 	70	 
	 
	 	 	 	 
	APPENDIX 1 - GMP PROVISIONS
	 	 	72	 
	 
	 	 	 	 
	APPENDIX 2 - PROTECTED RIGHTS RULES
	 	 	78	 
	 
	 	 	 	 
	APPENDIX 3 - ACTUARIAL CERTIFICATE
	 	 	89	 

 

 

FIFTH
DEFINITIVE TRUST
DEED                                                 [SEAL]

DATED: 1st APRIL 2003

PARTIES

	1.	 	BIWATER plc of Biwater House Station Approach Dorking Surrey RH4 1TZ
	 
	 	 	(“The Principal Employer”)
	 
	2.	 	TERENCE WILLIAM ALBERT BARKER of “the Willows”, 20 Holme Park, Upper Newbold, Chesterfield,
Derbyshire S41 8XB NORMAN ERIC DODD of 5 Ashworth Avenue, Urmston, Manchester M41 8TH JOHN
ERNEST ALFRED KERSLAKE of Ivy House, Stack Hills Road, Todmorden, OL14 5QW ANTHONY JOHN READ
of 4 Hazlemere Drive, St Leonards, Ringwood, Hants and BARRY SHORT of 15 Rimbury Way,
Christchurch, Dorset BH23 2RQ
	 
	 	 	(“the Trustees”)

RECITALS

	A.	 	This Deed is supplemental (inter alia) to two editions of a Fourth Definitive Trust Deed
called the “Main Edition” and the “Water Companies Edition” respectively (together called “the
Old Trust Deed”), both with Rules attached (together called “the Old Rules”) and made on 5th
May 1998, as subsequently altered by Deeds of Amendment made on 18th April 2000 (to the Main
Edition) and on 14th May 2001 to both editions.
	 
	B.	 	The Old Trust Deed and the Old Rules, as subsequently altered, sets out the current
provisions of the retirement benefits scheme now known as the Biwater Retirement and Security
Scheme (“the Scheme”).
	 
	C.	 	The Trustees may with the consent of the Principal Employer alter all or any of the
provisions of the Old Trust Deed and the Old Rules in accordance with Clause 24 of the Old
Trust Deed. In particular the Trustees wish to amend the terms of the Scheme in relation to
Members in Service whose Normal Retiring Dates have not yet occurred so that with effect on
and from 1st April 2003:

	 	(i)	 	For members other than Special Water Members and ex-WCAPS Members, accrual of
benefits in respect of Pensionable Service on and from that date is on a money purchase
basis, although benefits in respect of Pensionable Service before that date will
continue to be based upon the Member’s Final Pensionable Salary at the date on which
Pensionable Service ceases; and
	 
	 	(ii)	 	Employments to which the Scheme relates will cease to be contracted-out
employments on and from that date other than the Water Company (and then only in
relation to ex-WCAPS Members and Special Water Members)

1

 

	 	 	 	 	 
	D.

	 	(i)
	 	Rule 19.3 of the Old Rules contained the statutory order of priority required by the 1995
Act (in the event of the Scheme’s winding up) in relation to such assets as relate to the
minimum funding requirement,
	 
	 

	 	(ii)
	 	However, the Scheme’s own priority order (as appeared in the two editions of
the Third Definitive Trust Deed and Rules dated 9th March 1992) which should apply to
the assets (if any) remaining after the operation of the said statutory priority order
was not included in the Old Rules
	 
	 

	 	(iii)
	 	In the opinion of the Scheme’s legal advisers, in the absence of a certificate
from the Actuary, the change described in (ii) above is void in accordance with Section
67 of the 1995 Act, and to the extent that it is not overridden by the statutory
priority order, the Scheme’s priority order shall be restored.

	E.	 	Except in relation to the change described in D above, the Actuary to the Scheme has provided
a certificate under Section 67 of the 1995 Act stating that in his opinion the modifications
made to the Scheme by this Deed and Rules do not adversely affect any Member in respect of his
entitlement or accrued rights. This certificate is contained in Appendix 3.

OPERATIVE PROVISIONS

	1.	 	GENERAL
	 
	1.1	 	Application

	 	(a)	 	In accordance with their powers recited under C above and subject to paragraphs
(b) and (c) below the Trustees and the Principal Employer hereby cancel the provisions
of both the Old Trust Deed and the Old Rules (as previously varied) with effect from
1st April 2003 and replace them from that date with this Trust Deed as described in (b)
and (c) below and the revised Rules attached hereto in respect of all Members, except
that where a person ceased to be a Member before that date the Member’s benefits shall
be determined in accordance with the Old Rules (as amended).
	 
	 	(b)	 	This is one of two editions constituting the Trust Deed and the Rules for the
Scheme. It relates only to ex-WCAPS Members. It is intended to execute a further
edition of this Deed and the Rules at the same time as this Deed is executed which will
set out the definitions, membership requirements, contributions, benefits and other
provisions relating to Members other than ex-WCAPS Members, but will otherwise be the
same and will be called the “Main Edition”.
	 
	 	(c)	 	The Main Edition and this Edition (which will be called the “ex-WCAPS Edition”)
will together constitute the Trust Deed and the Rules of the Scheme.

2

 

	 	(d)	 	Nothing in this Trust Deed or the Rules shall operate so as to invalidate or
affect any act or the exercise of any power, discretion or right before the date of
this Deed by any of the Employers and the Trustees.

	1.2	 	Purpose
	 
	 	 	The purpose of the Scheme is for the provision of relevant benefits as defined in Section
612(1) of the 1988 Act.
	 
	1.3	 	Context
	 
	 	 	The definitions used in Rule 1 of the Rules shall also apply to this Trust Deed.
	 
	 	 	Reference to a particular Act or Order includes any amendment or replacement to that Act or
Order and includes any regulations made under it.
	 
	1.4	 	GMP Provisions
	 
	 	 	While there are any GMPs in respect of a Member under the Scheme the GMP Provisions will
form part of the Rules and will have effect in accordance with Rule 2 of the GMP Provisions,
but only in respect of Pensionable Service whilst a member of the Scheme from 6th April 1978
to 5th April 1997 (inclusive).
	 
	1.5	 	Contracting out on and after 6th April 1997
	 
	 	 	In respect of Pensionable Service from 6th April 1997 the Scheme shall, where the 1993 Act
and the 1995 Act requires, provide benefits at least equal to the Member’s protected rights
in accordance with the 1993 Act.
	 
	 	 	While there are any Protected Rights in respect of a Member, the Protected Rights Provisions
of Appendix 2 will have effect in accordance with Rule 3 of the Protected Rights Rules.
	 
	 	 	For the avoidance of doubt the Protected Rights Rules shall only apply in respect of the
Member’s Protected Rights except for Rules 1 and 9 therein.
	 
	1.6	 	Safeguarded Rights
	 
	 	 	Where the Trustees have granted benefits under the Plan arising from a Pension Sharing Order

	 	(a)	 	in accordance with Rule 5.10, or
	 
	 	(b)	 	in respect of a transfer under Rule 15
	 
	 	the Member or Former Spouse will be entitled to safeguarded rights (as defined in Section
68A of the 1993 Act) under the Scheme in so far as such benefits are derived from
contracted-out rights (as defined in Section 68A(5)). The Trustees shall comply with all
legislation dealing with such safeguarded rights (and may exercise any options

3

 

	 	 	allowed under such legislation) and the Trust Deed and the Rules shall be deemed to be
modified accordingly.
	 
	 	 	This sub-rule overrides any inconsistent provisions elsewhere in the Scheme except
provisions which are necessary in order that Inland Revenue approval is not prejudiced.
	 
	 	 	This sub-rule overrides any inconsistent provisions elsewhere in the Scheme except
provisions which are necessary in order that Inland Revenue approval is not prejudiced.

	2.	 	CONSTITUTION OF THE FUND
	 
	2.1	 	The Fund is divided into two sections; the Water Company Sub-Fund and the Main Fund;
	 
	2.2	 	all additional voluntary contributions made on a money purchase basis by ex-WCAPS Members
under Rule 14.2 are held in the AVC Sector of the Water Company’s Sub Fund.
	 
	2.3	 	in addition to the Appropriate Assets, the Water Company Sub-Fund shall also comprise the
contributions made by the relevant Water Company and the ex-WCAPS Members and Special Water
Members they employ (together with any further assets transferred thereto from any Approved
Arrangements other than WCAPS under Rule 15) and any income and gains arising from the
Appropriate Assets and the said contributions and further assets
	 
	2.4	 	 

	 	(i)	 	all liabilities in respect of each Water Beneficiary and the
ex-WCAPS Members and Special Water Members shall be met from the Water
Company’s Sub-Fund (other than additional voluntary contributions made by the
Member on a money purchase basis), and
	 
	 	(ii)	 	all liabilities to other beneficiaries under the Scheme shall
be met from the Main Fund

	 	 	although for the avoidance of doubt the terms of admission to membership, contributions and
benefits of Members employed by the Water Company will be those applicable to them under the
Main Edition.
	 
	2.5	 	At the end of the Guarantee Period or at any time afterwards the Trustees may merge the Water
Company Sub-Fund with the Main Fund, with the consent of the Principal Employer.
	 
	3.	 	ADMINISTRATOR

Unless the Trustees decide otherwise in accordance with Clause 8, the Trustees shall be the
administrator of the Scheme for the purposes of the 1988 Act.

4

 

4. OBLIGATIONS OF EMPLOYERS

The Principal Employer and the Associated Employers shall at all times until the determination of
the trusts of the Scheme observe all the terms of the Scheme and will punctually pay or arrange to
be punctually paid to the Trustees (or as the Trustees shall direct) all contributions and other
moneys which under the Scheme are due to be paid by the Employers respectively.

5. VESTING OF TRUST PROPERTY

All property belonging to the Fund shall vest in the Trustees and the general management and
administration of the Scheme shall vest in the Trustees.

6. ACTUARIAL REVIEWS

	6.1	 	Valuations
	 
	 	 	The Trustees will obtain valuations of the Scheme from the Scheme Actuary in accordance with
the 1995 Act. In particular:

	 	(a)	 	the effective date of each valuation shall not be later than 3 years after the
effective date of the previous one, or at such shorter intervals at which they may be
required to do so by the 1995 Act; and
	 
	 	(b)	 	each valuation shall be obtained not more than 1 year after its effective date.

	6.2	 	Deficiency
	 
	 	 	Subject always to the relevant provisions of the 1995 Act, if the valuation reveals a
deficiency each Employer shall in respect of Members in its Service make such payments as
the Principal Employer in consultation with the Trustees shall decide (having obtained
Actuarial Advice) are necessary to ensure that the Scheme is solvent.
	 
	6.3	 	Surplus
	 
	 	 	Where the valuation reveals a surplus which in terms of the 1988 Act would need to be
reduced, the Principal Employer in consultation with the Trustees shall submit proposals to
the Inland Revenue to reduce the surplus within a time scale acceptable to the Inland
Revenue.

7. DETERMINATION OF QUESTIONS BY THE TRUSTEES

Subject to the powers conferred by the Scheme on the Employers the Trustees may determine, as they
consider just, all questions and matters of doubt arising under the Scheme. Any such determination
whether (i) made upon a question actually raised or (ii) implied in the acts or proceedings of the
Trustees, shall so far as the law permits be conclusive and neither the Trustees nor any of the
Employers shall be liable for (or for the consequences of) any act, payment or omission arising
from any such determination, even though it is subsequently found to have been a mistake.

5

 

	8.	 	INVESTMENTS AND BORROWING
	 
	8.1	 	Right to invest
	 
	 	 	The Trustees may invest any of the Fund in or upon the security of any property anywhere,
whether or not income producing, or involving liability, or with any Authorised Insurer with
the same unrestricted powers of investment and of varying and transposing investments in all
respects as if they were entitled to the Fund beneficially.
	 
	8.2	 	Land etc.
	 
	 	 	Any land or buildings or any interest in land or buildings acquired shall if and so far as
the local law allows and unless the Trustees otherwise decide be held upon trust for sale
with power at their discretion to postpone the sale.
	 
	8.3	 	Borrowing
	 
	 	 	The Trustees may borrow money on any terms and conditions and charge the whole or any part
of the Fund.
	 
	8.4	 	Deposits etc.
	 
	 	 	The Trustees may retain or place any moneys on deposit or current account with any bank or
with any corporation or society of good standing for any period as they think fit, and shall
not be chargeable in respect of any interest on any such moneys in excess of the interest
(if any) actually paid or credited thereon.
	 
	8.5	 	Nominee
	 
	 	 	Any investments of the Fund may be held in the name of the Trustees or of any body corporate
appointed by the Trustees for the purpose and any such appointment may be upon such terms as
to remuneration and other matters as the Trustees determine and the Trustees may vary or
revoke any such appointment.
	 
	8.6	 	Underwriting
	 
	 	 	The Trustees may underwrite or sub-underwrite and enter into any agreement for underwriting
or sub-underwriting any investments or securities.
	 
	8.7	 	Joint ventures
	 
	 	 	The Trustees may participate in any investment or venture jointly with any other party or
parties (including the commingling of all or part of the Fund with the funds of any other
scheme of the Employers subject to the consent of the Inland Revenue) whether the interest
of the Trustees is that of partner or of trustee holding the same upon trust for sale or
otherwise. The interest of the Trustees in the investment or venture may be a minority or a
majority interest.

6

 

	8.8	 	Futures and traded options
	 
	 	 	The Trustees may enter into contracts in the course of dealing in financial futures quoted
on any recognised futures exchange (as defined in Section 155(3A) of the Capital Gains Tax
Act 1979) or options. For this purpose an option means a share, stock, debenture, or index
option in terms of which there is a right exerciseable within a specified period, at the
option of the holder of the right, to acquire and dispose of the share, stock, debenture or
index at a specified price. Debentures include debentures, stocks and bonds, whether
constituting a charge on assets or not, and loan stocks or notes.
	 
	8.9	 	Restrictions on “self-investment”
	 
	 	 	The Trustees shall not invest any part of the Fund directly or via a nominee in any of the
following investments:

	 	(i)	 	investments in or connected with shares or other securities of any of the
Employers or any person, firm or company connected with or an associate of any of the
Employers
	 
	 	(ii)	 	loans to Members, any of the Employers or any person, firm or company connected
with or an associate of any of the Employers

	 	 	For the avoidance of doubt “direct investments” shall include investment of a segregated
portfolio by an investment manager but shall exclude investments in pooled managed funds.

	8.10	 	Appointment of investment manager
	 
	 	 	The Trustees may

	 	(a)	 	appoint an investment manager or managers and shall do so where the Fund
includes “investments” for the purposes of the Financial Services Act 1986; and
	 
	 	(b)	 	delegate such powers and duties to them under the terms of Clause 8 as they
consider proper;

	 	 	The Trustees shall take all reasonable steps to satisfy themselves that

	 	(i)	 	the investment manager has the appropriate knowledge and experience for
managing the investments of the Scheme; and
	 
	 	(ii)	 	the management of the investments is being carried out competently and in
accordance with the requirements of the 1995 Act.

	8.11	 	Statement of investment principles
	 
	 	 	In consultation with the Principal Employer, the Trustees shall prepare, maintain and revise
from time to time a statement of investment principles governing their decisions in

7

 

	 	 	relation to the Fund, and in relation thereto shall obtain written advice from a person who
is reasonably believed by the Trustees to be qualified by his ability in and practical
experience of financial matters and to have the appropriate knowledge and experience of the
management of the investments of such schemes.
	 
	 	 	The statement shall contain the following details:

	 	(a)	 	the type of investments to be held
	 
	 	(b)	 	the balance between the different types of investments
	 
	 	(c)	 	the expected return on the investments
	 
	 	(d)	 	the realisation of investments
	 
	 	(e)	 	such other matters as may be required by the 1995 Act.

9. RECEIPTS AND PAYMENTS

The Trustees may make such arrangements as they think fit for dealing with receipts and discharges
under the Scheme and may give vary and revoke instructions as to the custody and disposal of any
securities and as to the giving of receipts and discharges for payment in connection with the
Scheme.

	10.	 	APPOINTMENT, REMOVAL, AND NUMBER OF TRUSTEES
	 
	 	 	For the purpose of the whole of this Clause 10, “Trustee” shall either mean an individual,
or a director of a corporate body, where such body is the sole trustee of the Scheme.
	 
	10.1	 	Appointment, removal and retirement

	 	(a)	 	The statutory power of appointment and removal of trustees shall be exercisable
by deed and except to the extent provided in Clause 10.2 below shall be vested in the
Principal Employer.
	 
	 	(b)	 	The number of Trustees shall not except in the case of a body corporate acting
as a sole trustee be less than three. If the number of Trustees falls below three, the
surviving or continuing Trustee or Trustees may act as the trustees in cases of
emergency pending the appointment of the additional Trustees.
	 
	 	(c)	 	Any trustee may retire at any time by giving notice in writing to the Principal
Employer.
	 
	 	(d)	 	On appointment, removal, or retirement of a trustee (or where a person
automatically ceases to be a member-nominated trustee under The Occupational Pension
Schemes (Member-nominated Trustees and Directors) Regulations 1996 (“the MNT
Regulations”) in relation to Clause 10.2), the Principal Employer and

8

 

	 	 	 	the other Trustees shall execute such documents as are necessary to reflect such
appointment, removal, retirement or automatic cessation.

	10.2	 	Members’ trustees
	 
	 	 	So far as is possible in accordance with the following provisions, and subject always to the
provisions of the 1995 Act and the MNT Regulations then unless

	 	(a)	 	the Scheme falls within any of the categories set out in Regulation 4 of the
MNT Regulations; or
	 
	 	(b)	 	the Trustees have implemented alternative arrangements in accordance with
Clause 10.3 below

	 	 	then where the 1995 Act so requires, a minimum number of the Trustees shall be selected to
serve as Member-nominated Trustees from time to time, and for such period, in accordance
with the MNT Regulations.

	10.3	 	Alternative arrangements
	 
	 	 	If the Principal Employer wishes to implement arrangements in relation to the trusteeship of
the Scheme other than under Rule 10.2, they may do so in accordance with either Section 17
or Section 19 of the 1995 Act, and the MNT Regulations, subject to the consultation
procedures and approval by the Members, as detailed therein.
	 
	10.4	 	Remuneration
	 
	 	 	Any professional trustee may receive remuneration for acting as a trustee and for services
to the Scheme as may be agreed upon between the trustee and the Principal Employer. Any
trustee or director of a corporate trustee may be reimbursed from the Fund for expenses
incurred in the course of carrying out their duties.
	 
	11.	 	ADMINISTRATIVE POWERS OF TRUSTEES
	 
	11.1	 	The Trustees may make regulations, other provisions or decisions (not being inconsistent with
the Trust Deed or the Rules) as they think fit relating to any matter or thing not provided
for under the Trust Deed or the Rules. The Trustees may also vary or revoke any regulation,
provision, or decision and any regulation, provision, or decision shall have effect according
to its terms.
	 
	11.2	 	In particular and without prejudice to the generality of sub-clause 11.1 above the Trustees
may exercise the powers conferred on them by it for all or any of the following purposes:

	 	(a)	 	to make special provision for Members all or any part of whose Service is or
has been in substance performed outside the United Kingdom including:

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	 	(i)	 	such provision as is in the opinion of the Trustees necessary
for compliance with or approval or recognition for any purpose under the laws
of the place where such Service is or has been performed
	 
	 	(ii)	 	provision that a period of Pensionable Service which is or has
been so performed shall be deemed to be a period of Pensionable Service of
longer duration than it actually is or that any such period which is or may be
pensionable under another retirement benefits scheme shall be deemed not to be
a period of Pensionable Service or to be a period of Pensionable Service of
shorter duration than it actually is and
	 
	 	(iii)	 	the variation in relation to any such Member of the definition
of Normal Retiring Date and his total or partial relief from liability to
contribute to the Fund with or without reduction of benefits.

	 	(b)	 	to require evidence of the truth of any statement and the notification of any
information relevant to the Scheme; and
	 
	 	(c)	 	if any person does not comply with any such requirement or a requirement of or
made pursuant to the Rules to forfeit reduce or withhold all or any part of the benefit
payable to or in respect of that person, subject to the GMP Provisions and the
Protected Rights Provisions.

	12.	 	POWERS OF TRUSTEES AS TO EVIDENCE
	 
	12.1	 	The Trustees may accept any information supplied them by any of the Employers with respect to
any matter relevant to the Scheme and which they reasonably suppose to be within the knowledge
(either directly or as a result of any enquiry) of such Employer as conclusive evidence of the
matter to which it relates.
	 
	12.2	 	The Trustees may assume without requiring any evidence thereof that a person is or was
ordinarily resident at any material time with his or her spouse or that a person is or was
dependent at any material time on another for the provision of all or any of the ordinary
necessaries of life.

13. POWER OF DELEGATION

The Trustees may delegate (by power of attorney or otherwise) to any person or persons or
fluctuating body of persons (whether or not a Trustee hereof) all or any of the powers duties
discretions vested in them hereunder and any such delegation may be on such terms and conditions as
the Trustees think fit (including the power to sub-delegate) and the Trustees shall not be bound to
supervise the proceedings of or be in any way responsible for any loss incurred as a result of any
default of any delegate or sub-delegate.

Any delegation by the Trustees of their powers under Clause 8 of this Deed among the Trustees may
only be made to two or more of their number.

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	14.	 	POWER TO INSURE
	 
	14.1	 	Insurance of assets
	 
	 	 	The Trustees may insure any assets of the Fund against damage or depreciation or any other
insurable risk.
	 
	14.2	 	Trustees Insurance
	 
	 	 	The Trustees may insure the Fund against any loss caused by the Trustees or any of their
delegates. They may also insure themselves and any delegates against liability for breach
of trust not involving (a) their own personal conscious wrongdoing, or (b) fines imposed for
criminal offences or as civil penalties under the 1995 Act. To the extent that they have
obtained settlement of an insurance claim, Clause 23 shall not apply to the Trustees or the
person concerned and the Trustees will not be reimbursed either by the Employers or from the
Fund under Clause 18.
	 
	15.	 	APPOINTMENT OF OFFICERS

The Trustees shall appoint the Scheme Actuary and an auditor to the Scheme from time to time.

The Trustees may appoint other professional advisers, agents, and staff on such basis as they think
fit.

The Trustees shall also have power to revoke or vary the appointment.

	16.	 	PROCEEDINGS OF TRUSTEES
	 
	16.1	 	A majority of the Trustees surviving and resident in the United Kingdom and capable of acting
at the time shall be capable of acting and binding the Trustees whether acting at a meeting of
the Trustees or otherwise.
	 
	16.2	 	The Trustees shall cause minutes of all proceedings and of all resolutions of the Trustees to
be entered in books to be kept for the purpose and any such minute if purporting to be signed
by the person who presided over the meeting at which the proceedings took place or who
presides over the next following meeting shall be sufficient evidence of the matters to which
it relates. At every such meeting two trustees shall form a quorum. However, where there are
less than three present any decision must be unanimous.
	 
	17.	 	RECORDS TO BE KEPT BY THE TRUSTEES

The Trustees shall keep or cause to be kept a complete record of all matters essential for the
working of the Scheme and to satisfy the requirements of the 1995 Act and shall also keep accounts
to show the position of and dealings with the Fund and the amounts contributed to it. The records
and accounts shall be available for inspection by or on behalf of the Principal Employer at any
time.

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18. EXPENSES OF ADMINISTRATION

18.1 There shall be payable out of the Fund (subject to the approval of the Trustees) stamp
duties, fees and other expenses of or incurred in connection with the investment or management
or realisation of the investments of the Fund together with fees and expenses of the Trustees
which properly relate to the administration and running of the Scheme (including the
reasonable traveling expenses of the Trustees attending meetings of the Trustees and the
reasonable expenses of the Trustees attending courses which are relevant to their obligations
under the Scheme).

18.2 Subject to Clause 18.1, the Employers shall pay in such proportions as are determined from
time to time by the Trustees to be appropriate (having regard to the Members employed by each
of them) the amount of all expenses incurred in connection with the execution or variation of
the Trust Deed and the administration of the Scheme and the Fund and a certificate by the
Trustees as to the amounts of the expenses incurred and as to the proportions in which they
are payable by the Employers shall be conclusive evidence as to the liability of the Employers
to pay the expenses in the same proportions.

18.3 Unless the Trustees and the Principal Company decide otherwise Clauses 18.1 and 18.2 shall be
read and construed as if they applied separately to the Water Company Sub-Fund or the Water
Company (as the case may be) except where any particular fee cost charge or expense which is
not borne by the Employers relates to the whole of the Scheme, in which case it shall be borne
by the Water Company Sub-Fund in the proportion which the number of Members employed by the
Water Company bears to the total number of Members.

18.4 Where permitted by law, the Trustees may recover any expenses arising from a Pension Sharing
Order from a Member or a Former Spouse (whether by a reduction in benefits under the Scheme or
otherwise).

19. PROFESSIONAL ADVICE

The Trustees may in relation to this trust deed and the Rules act on the advice or opinion (whether
or not obtained by them) of any lawyer broker Actuary accountant medical practitioner or other
professional person and shall not be responsible for any loss occasioned by so acting.

20. EXERCISE OF POWERS ETC.

20.1 No decision of or exercise of a power by the Trustees shall be invalidated or questioned on
the ground that the Trustees or any of them or any director or officer of any body corporate
being a trustee hereof had a direct or indirect interest in such decision or in the exercise
of such power

20.2 A Trustee or any director or officer of a body corporate being a trustee hereof who is or has
been a Member shall be entitled to retain for himself any benefit to which he is entitled by
virtue of such membership.

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21. EXERCISE OF DISCRETION

Every discretion or power hereby conferred on the Trustees shall be an absolute and uncontrolled
discretion or power and no trustee shall be held liable for any loss or damage occurring as a
result of his concurring or refusing or failing to concur in an exercise of any such discretion or
power.

22. PROTECTION OF PERSONS DEALING WITH THE TRUSTEES

No person dealing with the Trustees shall be concerned to enquire whether any power purported to be
exercised by the Trustees is exercisable or as to the necessity or expediency of any term of such
dealing or as the propriety or regularity thereof or to see to the application of any moneys paid
to the Trustees and in the absence of fraud on the part of such persons such dealing shall so far
as regards the safety and protection of such person be deemed to be within the powers of the
Trustees and to be valid and effectual accordingly.

	23.	 	GENERAL INDEMNITY
	 
	23.1	 	No Trustee shall as a trustee of the Scheme or in respect of the exercise of his rights or
powers hereunder incur any personal responsibilities or be liable for anything whatever except
for either of the following:

	 	(a)	 	breach of trust knowingly and intentionally committed by the trustee; or
	 
	 	(b)	 	where negligence is proven against a professional trustee.

	 	 	Except as described in (a) and (b) above, the Principal Employer shall indemnify the
Trustees and each of them against any claims costs loss damages and expenses which they or
he may pay or incur which may be made against them or him in connection with the carrying
out of the trusts hereof or anything herein contained. To the extent that indemnification
is not received from the Employers the Trustees shall be indemnified from the Fund to the
extent that the 1995 Act will allow.
	 
	 	 	The indemnity shall include the liability of the Trustees for the remuneration of, and all
or any claims costs loss damages and expenses which they may incur by action of any
Secretary or other person lawfully appointed by them for the carrying out of the purposes of
the Trust Deed and the Rules. Each Associated Employer shall indemnify the Principal
Employer for the same proportion of the liability as the Associated Employer’s contributions
to the Scheme bear to the total contributions paid by the Employers to the Scheme.

	23.2	 	The Trustees shall not be liable if the assets of the Scheme are insufficient to pay the
benefits specified therein whether by reason of the contributions payable being insufficient
or by reason of a failure to pay contributions or by reason of any loss or depreciation of the
assets of the Scheme and the Trustees shall not be under any obligation to institute (but
shall not be precluded from instituting) proceedings against the Employers for failure to pay
any amounts due hereunder.

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	24.	 	POWER OF ALTERATION

Subject to the GMP Provisions and the Protected Rights Provisions, the Trustees may with the
consent of the Principal Employer at any time (a) by deed alter any of the provisions of this Deed
or (b) by deed or by any resolution effected under hand by the Trustees and the Principal Employer
alter all or any of the provisions of the Rules. However, the alteration may not be made if.

	(i)	 	it would operate so as to prejudice materially without his written consent the rights or
interests of any person already a Member or any person receiving benefit by virtue of any
deceased Member insofar as they concern benefits secured in respect of Service prior to the
date of such alteration or
	 
	(ii)	 	it would result or be capable of resulting in a Member whose Pensionable Service is
terminated before the date of the alteration being treated less favourably than would have
been the case had there been no such alteration.

Notice in writing of any such alteration shall be given to every Member who will be affected.

	25.	 	ASSOCIATED EMPLOYERS

The Trustees shall at the request of the Principal Employer admit to participation in the Scheme as
an Associated Employer any employer who becomes directly or indirectly controlled by or otherwise
associated with the Principal Employer.

The said employer shall execute a Deed of Adherence with the Trustees and the Principal Employer
and shall covenant, among other things, to observe the provisions of the Scheme from time to time.
The consent of the Board of Inland Revenue to the employer’s participation shall be obtained.

	26.	 	NEW PRINCIPAL EMPLOYER

Any of the Employers or holding company may agree with the Trustees to take the place of the
Principal Employer for all the purposes of the Scheme unless this would prejudice Inland Revenue
approval. The consent of the Principal Employer will be necessary unless it has been dissolved.

	27.	 	DISPUTE RESOLUTION

The Trustees shall institute and operate procedures for the resolution of disputes in accordance
with section 50 of the 1995 Act between the Trustees and other “prescribed persons” as defined in
the 1995 Act. In particular:

	(a)	 	an application by a complainant for a decision by the Trustees in accordance with the 1995
Act shall be accompanied by particulars laid down by Regulation 4 of The Occupational Pensions
Schemes (Internal Dispute Resolution Procedures) Regulations 1996 (“the Dispute Regulations").
For the purposes of this Clause reference to a complainant shall also include the
complainant’s representative, if applicable.

14

 

	(b)	 	notice of a decision shall be issued in writing to the complainant by the Trustees within 2
months of the date on which the particulars under (a) above were received. The notice shall
include such information required by Regulation 5(2) of the Dispute Regulations
	 
	(c)	 	the complainant may make a further application to the Trustees for the reconsideration of the
decision under (b) above within 6 months of the date of that decision, accompanied by the
particulars laid down by Regulation 6(2) of the Dispute Regulations
	 
	(d)	 	notice of a further decision shall be issued to the complainant in writing by the Trustees
within 2 months of the date on which the particulars under (c) above were received. The
notice shall include such information required by Regulation 7(2) of the Dispute Regulations
	 
	(e)	 	If under (b) or (d) above written notice is not issued to the complainant within the
prescribed period, an interim reply must immediately be sent by the Trustees to the
complainant setting out the reasons for the delay and an expected date for issue of the
decision.

15

 

EXECUTED as a deed on behalf of

BIWATER PLC by

Director
/s/ D. L. Magor

Secretary
/s/ Martin Robert Anthony Duffy

SIGNED AND
DELIVERED as a Deed by 

TERENCE WILLIAM ALBERT BARKER /s/ T. Barker

in the presence of

Witness
D. Barker
             

Address
The willows
                20
Holme Park Ave

               Chesterfield S41 8XB

SIGNED AND
DELIVERED as a Deed by 

NORMAN ERIC DODD /s/ Norman Eric Dodd

in the presence of

Witness
Anthony V. Williams

              

Address
Lyneroft, Greenfields Lane
              Rowton,
Chester, Chesitire CH3 GA4

SIGNED AND
DELIVERED as a Deed by 

JOHN ERNEST ALFRED KERSLAKE /s/ John Ernest Alfred Kerslake

in the presence of

Witness
Anthony V. Williams

Address
Lyncroft, Greenfields Lane

              Rowton,
Chester, Chesitire CH3 GA4

16

 

SIGNED AND
DELIVERED as a Deed by 

ANTHONY JOHN READ /s/Anthony John Read

in the presence of

Witness
Sarah Snow

Address  9 Delton

                29
Wellington Rd Bournemouth

                Dorset BH8 8JH

SIGNED AND
DELIVERED as a Deed by  

BARRY SHORT in the presence of /s/ Barry Short

Witness
Christina Rose

Address
4 Yaglemere Drive

               St. Leonards

               N. Ringwood

               Hunts
PO424 2 NB

17

 

RULES

PART I

	1.	 	DEFINITIONS

“Actuarial Advice” means whichever is appropriate of

	(i)	 	advice given by the Scheme Actuary in relation to the Scheme Actuary’s duties in accordance
with the 1995 Act; or
	 
	(ii)	 	advice given by any Actuary in circumstances other than those under (i) above.

“Actuary” means the Scheme Actuary, or any other Fellow or a firm of Fellows of the Institute of
Actuaries or of the Faculty of Actuaries in Scotland.

“Appropriate Assets” means the assets equal in value to the value of the sub-funds under WCAPS
which were transferred to the Scheme.

“Associated Employer” means any employer who executes a deed of adherence in accordance with Clause
25 of the Trust Deed.

“Authorised Insurer” means:

	(a)	 	any insurance company to which Part II of the Insurance Companies Act 1982 applies and which
is authorised by or under Section 3 or 4 of that Act to carry on ordinary long-term insurance
business as defined in that Act, or
	 
	(b)	 	an EC company as defined in Section 2(6) of the Insurance Companies Act 1982 which satisfies
the requirements of Section 659B of the 1988 Act.

“the AVC Sector” means a segregated part of the Main Fund in which monies arising from additional
voluntary contributions made by ex-WCAPS Members and Special Water Members on a money purchase
basis under Rule 14.2 are held.

“BDWC” means Bournemouth & District Water Company.

“BWHW” means Bournemouth and West Hampshire Water Company PLC.

“Calculation Year” means the year ending on the day on which the Member ceases to be in Pensionable
Service or dies (or the total of 365 days before the day on which the Member ceases to be in
Pensionable Service or dies in which contributions were made, or deemed to be made by or for the
Member if the Member was absent from work without pay not through injury or illness).

“Cash Death Benefit” means a sum of three times the Member’s Pensionable Earnings at the date of
death.

18

 

“Child” means a Member’s child (including an adopted child or step-child or illegitimate child, and
a child “en ventre sa mere”) under age 17 or who has been in full-time education or vocational
training for at least two years, or any child of the Member aged 17 or over who became permanently
ill or disabled either before reaching that age or whilst in full-time education or vocational
training. A child who is married or in a relationship which in the opinion of the Trustees closely
resembles marriage shall not be a Child.

“Death Benefit” means any one or more of the Cash Death Benefit, or the spouse’s and children’s
benefits payable on a Member’s death in Pensionable Service under Rule 5.4.

“Dependant” means a Member’s spouse or any other person who in the opinion of the Trustees was
financially dependent on the Member or dependent on the Member because of disability, at the date
of the Member’s death or retirement; subject to the following:

	(a)	 	a Member’s child (including an adopted child) shall initially be classed as a Dependant until
reaching age 1$ or later if dependent on the Member due to disability, or continuing to
receive full-time educational or vocational training after that age; any other child may be
treated as a Dependant in the same way except that initially the child must be also be
financially dependent on the Member or dependent on the grounds of disability; and
	 
	(b)	 	an unmarried partner of the Member or other person, whether of the same or opposite sex, may
qualify as a Dependant if the person relied upon the Member’s income to maintain their
standard of living, including a person whose standard of living was dependent upon the joint
income of themselves and the Member prior to the Member’s death.

“the Employers” means the Principal Employer and any one or more Associated Employers as the
context decides, and for any person is the Employers with whom he is in Service.

“Final Pensionable Earnings” means the aggregate of

	(i)	 	a Member’s Pensionable Earnings for the Calculation Year; and
	 
	(ii)	 	the amount (if any) by which the Member’s Pensionable Earnings in either twelve month period
of the two twelve-month periods during the 2 years before the Calculation Year (whichever
gives the greater amount) exceeds the amount described in (i) above.

If a Member was not in Pensionable Service for the whole Calculation Year the Trustees will
calculate Final Pensionable Earnings in a manner which they consider equitable and which is
consistent with Inland Revenue approval.

If the Employers certify to a Member within 12 months of a reduction in his Pensionable Earnings
that the reduction is due to a material change in circumstances then:

	(a)	 	if the reduction occurred during the 5 years ending on the last day of the Calculation Year,
the Member may give notice in writing not later than one month after being notified of his
entitlement to a benefit under the Scheme that Pensionable Earnings will be the amount
received in any 1 of the last 5 years; or

19

 

	(b)	 	if the reduction occurred during the 13 years ending on the last day of the Calculation Year,
the Member may give notice in writing not later than one month after being notified of his
entitlement to a benefit under the Scheme that (or his Employer may, if the Member is dead,
determine that) Pensionable Earnings will be the average of the Member’s Pensionable Earnings
during any 3 consecutive years in that 13-year period.

Where a Member’s Final Pensionable Earnings is calculated by reference to any year other than the
Calculation Year, Pensionable Earnings for any year will be increased in line with increases in
pensions under the Pensions (Increase) Act 1971 from the last day of that year up to the last day
of the Calculation Year.

“Former BDWC Member” means an ex-WCAPS Member who was employed by BDWC on 30th June 1994 and by
BWHW on 1st July 1994, and was in Pensionable Service on both dates.

“Former Spouse” means an individual to whom a pension credit has been allocated following a Pension
Sharing Order in accordance with Chapter I of Part IV of the 1999 Act.

“Former WHWC Member” means an ex-WCAPS Member who was employed by WHWC on 30th June 1994 and by
BWI-IW on 1st July 1994, and was in Pensionable Service on both dates.

“the Fund” means all contributions paid to the Trustees and the assets, and any income arising from
the assets, representing the contributions as described in Clause 2 of the Trust Deed.

“GMP” means guaranteed minimum pensions as described in the GMP Provisions.

“GMP Provisions” means the GMP Provisions contained in Appendix 1 to the Rules, as amended from
time to time.

“Guarantee Period” in relation to the Water Company Sub-Fund means the period commencing on 1st
June 1991 and ending on 31st July 2025.

“Incapacity” means physical or mental deterioration of health to a degree which in the opinion of
the Employers prevents the Member from following his normal employment or severely impairs his
earning capacity.

“Index” means the Government’s Index of Retail Prices.

“Inland Revenue approval” means treatment of the Scheme as an exempt approved scheme within the
meaning of the 1988 Act.

“Main Fund” means the part of the Fund excluding the Water Company Sub-Funds.

“Maximum Trivial Amount” means a pension from the Scheme to a Member or Dependant which when added
to the pension value of all benefits (before any commutation) under Associated Schemes (as defined
in Part VII) does not exceed £260 or any other amount applicable under the 1993 Act.

20

 

“Member” means a person who has joined the Scheme, subject to the following:

	(i)	 	a Member is no longer a Member when he leaves Pensionable Service, although he is called a
Member in relation to any benefit payable in respect of him, and
	 
	(ii)	 	a person who has never been a Member but whose benefits have been transferred to the Scheme
under Rule 15 is nevertheless called a Member in relation to any benefit payable in respect of
him.

“Member’s Ill-Health Pension” means the ill-health pension which would have been provided under
Rule 5.3(ii) if the Member had retired through ill-health or infirmity immediately before death
based on the Member’s Pensionable Service (as increased under that Rule) at the date of death.

“Normal Retiring Date” means

	(i)	 	the 60th birthday where a Member can complete 25 years’ Qualifying Service on or before that
date, or
	 
	(ii)	 	the date after the 60th birthday (not being later than the 65th birthday) when the Member can
complete 25 years’ Qualifying Service, or
	 
	(iii)	 	where the Member cannot complete 25 years’ Qualifying Service before the 65th birthday, the
65th birthday.

“Old Trust Deed” and “Old Rules” are as defined in the recitals to the Trust Deed.

“Pensionable Earnings” means the amount of a Member’s earnings from the Employers in the
Calculation Year, subject to the following:

	(i)	 	non-contractual overtime, travel subsistence allowance or other expenses incurred by the
Member for the purposes of employment, payments on cessation of employment in respect of loss
of holiday or in lieu of notice shall not be included in Pensionable Earnings, and
	 
	(ii)	 	where a Member’s annual rate of fixed salary or wages is reduced or ceases on account of
Incapacity the Employers may take no account or only partial account of it if they so decide
and the Member agrees, and
	 
	(iii)	 	director’s remuneration is excluded if the Member is not beneficially entitled to it and is
under an obligation to account for them to another employer, or if the remuneration is being
treated for tax purposes under Schedule D.

“Pensionable Service” means Service whilst a Member of the Scheme and WCAPS, together with such
additional period (if any) before 1 April 1974 which has been notified to him in writing by his
Employer.

21

 

but excluding any period

	(a)	 	for a Member who became a member of WCAPS after 31st May 1989 in excess of 40 years credited
or performed before age 65.
	 
	(b)	 	for any other Member in excess of 40 years credited or performed before age 60, or in excess
of 45 years credited or performed before age 65.

Pensionable Service also includes maternity leave and family leave in accordance with Rule 9.2.

The Employers may decide that Pensionable Service may be deemed to continue for up to ten years
except that if interruption is due to illness, or to secondment to a United Kingdom Government
Department (or other work of national importance of a like nature), it may continue for such
further period as the Employers decide. There must be a definite expectation by the Employers of
his return to Service. Any such decision shall be consistent with Inland Revenue approval and in
particular if a Member shall during interruption of Service become a member of another retirement
benefits scheme no such decision shall be made in respect of any period during which he is a member
of the other scheme except with the prior specific agreement of the Board of Inland Revenue.

“Pension Credit” means a credit under section 29(1)(b) of the 1999 Act.

“Pension Credit Benefit” in relation to a scheme means the benefits payable under the Scheme to or
in respect of a person by virtue of rights under the Scheme attributable (directly or indirectly)
to a Pension Credit.

“Pension Debit” means a debit under section 29(1)(a) of the 1999 Act.

“Pension Sharing Order” means any order or provision as referred to in Section 28(1) of the 1999
Act or Article 25(1) of the Welfare Reform and Pensions (Northern Ireland) Order 1999.

“Personal Retirement Fund” means the same as is defined in the Main Edition of the Trust deed and
Rules.

“Principal Employer” means Biwater plc, subject to Clause 26 of the Trust Deed.

“Prospective Pension” means the annual amount of pension calculated at the date of the Member’s
death, which would have been paid to a Member on retirement on the Normal Retiring Date, (excluding
any pension attributable to Rules 14 or 15) if he had remained in Pensionable Service, based on his
Final Pensionable Earnings calculated at the date of death.

“Protected Rights” means the Member’s protected rights as described in Appendix 2 to the Rules
under the Member’s Protected Rights Account.

“Protected Rights Account” means an identifiable part of the Fund containing the amount which is
secured in respect of a Member under the Scheme by contributions under Rules 4.1(b) and 4.2(b),
having regard to any interest, investment growth, or other accumulation thereon, and any other
payments made thereto.

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“Qualifying Service” means the aggregate of

	(i)	 	Service after reaching age 18, and
	 
	(ii)	 	service whilst a member of another retirement benefits scheme where benefits have been
transferred to the Scheme

“Receiving Administrators” means the managers of a Receiving Scheme.

“Receiving Scheme” means (subject to the GMP Provisions and the Protected Rights Provisions) in
relation to the transfer of benefits from the Plan a retirement benefits scheme or personal pension
scheme approved or submitted for approval under the 1988 Act or any other arrangement approved for
the purposes of the particular transfer by the Board of Inland Revenue or a “buy-out” policy as set
out in Rule 16.3.

“Revenue Limitations” means the relevant limitations in Part VII of the Rules.

“the Scheme” means the Scheme set out in the Trust Deed and Rules including any alterations in
force.

“Scheme Actuary” is a person who is qualified in accordance with the 1995 Act or any other relevant
statutory provision (being a Fellow of the Institute of Actuaries or of the Faculty of Actuaries in
Scotland) and appointed by the Trustees for the purposes of the Scheme under Clause 15 of the Trust
Deed.

“Service” means service with the Employers.

“Special Director” means a Member who, at any time on or after 17th March 1987 and in the last ten
years before retirement has been a director within the definition of sections 417(5)(b) and 612(1)
of the 1988 Act.

“Special Water Member” means a Member who is employed by a Water Company, other than an ex-WCAPS
Member. No new Members shall enter this category on and after 17th February 2003.

“the Trust Deed” means the deed to which these Rules are attached.

“the Trustees” means the trustees or trustee for the time being of the Scheme.

“WCAPS” means the Water Companies Association Pension Scheme.

“ex-WCAPS Member” means a person who was a member of WCAPS on 31st May 1991 and became a Member of
the Scheme with effect from 1st June 1991.

“WHWC” means West Hampshire Water Company.

“Water Beneficiaries” means ex-WCAPS Members and other persons entitled or prospectively or
contingently entitled to benefits from the Water Company Sub-Funds.

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“Water Company” means BWHW and Cascal Services Limited, or their respective successor or successors
in accordance with Rule 19.5, or such other named Employer as may be so classified from time to
time at the request of the Principal Employer for this purpose.

“Water Company Sub-Fund” means during the Guarantee Period the separate and segregated sub-fund
relating to the Water Company.

“Water Undertaker” means

	(i)	 	the Water Company
	 
	(ii)	 	any company the main object of which is the provision of goods and services to the water
industry (or any part of it) and which participates in the Scheme.

“1999 Act” means the Welfare Reform and Pensions Act 1999 or any corresponding Northern Ireland
legislation.

“the 1995 Act” means the Pensions Act 1995.

“the 1993 Act” means the Pension Schemes Act 1993.

“1989 Member” means a Member who is not a pre-1989 Member.

“pre-1989 Member” means an ex-WCAPS Member who became a Member of WCAPS before 1st June 1989 and
who has not opted to become a 1989 Member.

A pre-1989 Member may opt to be treated as a 1989 Member at any time before benefits commence, are
bought out or otherwise transferred from the Scheme or the attainment of age 75 whichever first
occurs.

“the 1988 Act” means the Income and Corporation Taxes Act 1988.

“pre-1987 Member” means a pre-1989 Member who became a Member of WCAPS before 17th March 1987 and
who has not opted to become a 1989 Member.

24

 

PART II

MEMBERSHIP

	2.	 	ELIGIBILITY

A person who was employed by a Water Company on 31st May 1991 and on that date was a member of
WCAPS may join the Scheme on the basis set out in the Trust Deed and these Rules on 1st June 1991
or with effect from such later date as the Principal Employer shall agree.

Other persons employed by a Water Company may join on the basis applicable under the Main Edition.

	3.	 	FAILURE TO JOIN AT THE FIRST OPPORTUNITY

A person described in Rule 2 who does not become a Member on the first occasion on which he is
eligible or who has voluntarily ceased to be a Member whilst in Service shall be subsequently
admitted or (as the case may be) readmitted as a Member only if the Principal Employer and the
Trustees agree and subject to such special conditions or modifications of the terms of the Scheme
as the Trustees determine and notify to him.

25

 

PART III

	4.	 	CONTRIBUTIONS
	 
	4.1	 	Member’s contributions

	 	(a)	 	While he is in Pensionable Service a Member will contribute to the Fund at an
annual rate as follows:

	 	(i)	 	for a Former BDWC Member or a manual employee who is a Former
WHWC Member, 5% of the Member’s Pensionable Earnings, or
	 
	 	(ii)	 	for a non-manual employee who is a Former WHWC Member, 6% of
the Member’s Pensionable Earnings.

	 	 	 	The Member’s contributions shall cease when a Member has completed 45 years’
Pensionable Service. For this purpose any excess of Pensionable Service over 40
years completed by the Member before reaching age 60 is disregarded.
	 
	 	 	 	The Employers may at any time because of the illness of a Member consent to
temporary suspension of the Member’s contributions.
	 
	 	 	 	During absence from work not regarded as termination of employment, contributions
will continue to be payable during the first thirty days and during that period a
Member may elect to continue payment of contributions during continued absence after
the first 30 days.

	 	(b)	 	the part of the Member’s contributions which, after 5th April 1997, represents
the amount by which the National Insurance contributions on the Member’s earnings from
the Employers are less than would have been the case if the Member’s employment was not
contracted-out shall be held in the Member’s Protected Rights Account.

	4.2	 	Employers’ contributions

	 	(a)	 	The Employers will contribute to the Fund (or during the Guarantee Period in
the case of the Water Company, the Water Company Sub-Fund) as the Trustees having
regard (inter alia) to Actuarial Advice may from time to time requite.
	 
	 	(b)	 	The part of the Employer’s contributions under (a) above which, after 5th April
1997, represents the amount by which the Employer’s National Insurance contributions in
respect of the Member are less than would have been the case if the Member’s employment
was not contracted-out shall be held in the Member’s Protected Rights Account.

26

 

	4.3	 	Payment of contributions
	 
	 	 	The Members’ contributions shall be collected from the Members by the Employers, and the Members’
and Employers contributions will be paid to the Trustees (or as the Trustees direct) in accordance
with the Schedule of Contributions as required by the 1995 Act.

27

 

PART IV

	5.	 	BENEFITS

Subject where appropriate to the GMP Provisions and the Protected Rights Provisions and Revenue
Limitations, the following benefits are available from the Scheme:

	5.1	 	Benefits on or after Normal Retiring Date
	 
	 	 	A Member who ceases to be in Pensionable Service on or after Normal Retiring Date will when
he leaves Service receive the following benefits:

	 	(i)	 	an annual pension of 1/80th of Final Pensionable Earnings for each complete
year of Pensionable Service, plus an additional proportionate amount for each
additional complete day, payable in accordance with Rule 7.1; together with
	 
	 	(ii)	 	a lump sum equal to 3/80th of Final Pensionable Earnings for each complete year
of Pensionable Service together with a proportionate amount for each additional
complete day.

	 	 	The pension may be reduced as the Trustees decide in respect of any period during which the
Member’s contributions are not fully paid.
	 
	 	 	A Member who stays in Pensionable Service after Normal Retiring Date may elect to take the
lump sum benefit at Normal Retiring Date under (ii) above as if he had left at that date.
	 
	 	 	The amount of the pension shall not be less than the total of:

	 	(a)	 	in respect of Pensionable Service before from 6th April 1978 to 5th April 1997
(inclusive) , the Member’s GMP; and
	 
	 	(b)	 	in respect of Pensionable Service after 5th April 1997, the amount which on
Actuarial Advice could be purchased by his Protected Rights Account.

	5.2	 	Benefit on withdrawal from Pensionable Service before the Normal Retiring Date
	 
	 	 	When a Member leaves Pensionable Service before the Normal Retiring Date then he shall be
entitled to a deferred pension calculated as set out in Rule 5.1.
	 
	 	 	The benefits will be increased in the period between leaving Pensionable Service and Normal
Retiring Date by the same increase as would apply to a pension subject to the Pensions
(Increase) Act 1971 during that period.
	 
	 	 	Unless the Trustees otherwise decide the increases will not apply to any pension arising
from Rules 14 or 15.

28

 

	 	 	The deferred benefits become payable from the Normal Retiring Date (if the Member is alive)
and those arising in pension form are payable to the Member as shown in Rule 7.1. However,

	 	(i)	 	if the Member is unable to work before reaching the Normal Retiring Date
because of ill-health or infirmity which is certified and accepted as permanent by a
doctor appointed by the Employers he may opt to take the benefits immediately subject
to the agreement of the Trustees, or
	 
	 	(ii)	 	in other circumstances the Member may opt to take the benefits at any time
after age 50 with the consent of the Trustees. If this option is exercised the amount
of the pension will be reduced as the Trustees decide to allow for the Member’s age
when the benefits become payable.

	 	 	subject to the part of the pension which constitutes his Protected Rights being payable no
earlier than the Member’s 60th birthday.
	 
	 	 	The amount of the Member’s pension shall not be less than the total of:

	 	(I)	 	in respect of Pensionable Service from 6th April 1978 to 5th April 1997
(inclusive), the Member’s GMP; and
	 
	 	(II)	 	in respect of Pensionable Service after 5th April 1997, the amount purchased by
his Protected Rights Account.

	 	 	The option shall not apply where the operation of the reduction would result in the Member’s
pension being less than the minimum applicable under (I) and (II) above. However, if the
Member asks the Trustees, they shall provide him with a pension of equal value to the
pension under this Rule, (but initially of a lower annual amount calculated on Actuarial
Advice) so long as the provisions of (I) above are satisfied at state pensionable age, and
the provisions of (II) are satisfied when the Member reaches 60 (or the later date of
retirement).
	 
	 	 	If a Member who is entitled to a deferred pension dies before the pension starts, the
following benefits shall be payable:

	 	(A)	 	subject to Rule 5.7 the Member’s spouse shall be entitled to a pension equal to
half the Member’s benefits (including increases) calculated in this sub-rule at the
date of death. However, if either

	 	(1)	 	the Member’s marriage took place after he ceased to be in
Pensionable Service or
	 
	 	(2)	 	at the date of the Member’s death or at the date of ceasing to
be in Pensionable Service the Member was judicially separated from the spouse,
or

29

 

	 	(3)	 	at the date of the Member’s death the spouse is co-habiting
with another partner in a relationship closely resembling marriage
	 
	 	the spouse’s pension shall be limited to whichever is appropriate of the widow’s or
the widower’s GMP.

	 	(B)	 	there shall be payable by the Trustees in accordance with Rule 17 a lump sum
equal to 3/80th of Final Pensionable Earnings for each complete year of Pensionable
Service together with a proportionate amount for each complete day, calculated at the
date of ceasing to be in Pensionable Service, but increased in the period between
ceasing to be in Pensionable Service and the date of death by the same increase as
would have applied to a pension subject to the Pensions (Increase) Act 1971 during that
period.

	5.3	 	Benefits on early retirement

     Subject to the provisions of paragraph (iii) below:

	 	(i)	 	On grounds other than ill-health or infirmity
	 
	 	 	 	On retirement of a Member from Service before the Normal Retiring Date either at age
50 or over (and with the consent of the Employers if under age 60) having completed
2 years’ Qualifying Service, the Member may (by notice in writing to the Trustees
before the proposed date of retirement) opt to receive immediate benefits calculated
as described in Rule 5.1, reduced as the Trustees decide to allow for the Member’s
age when the pension starts. This option shall not apply where the operation of the
reduction would result in the Member’s pension being less than the minimum set out
in (iii) below.
	 
	 	 	 	However, if retirement is through either

	 	(a)	 	redundancy, or
	 
	 	(b)	 	in the interests of efficiency, or
	 
	 	(c)	 	in the case of a joint appointment because the other person has
left employment,
	 
	 	the benefits will not be reduced as described in the previous paragraph.
	 
	 	The pension will start on the day of retirement and be paid as shown in Rule 7.1.

	 	(ii)	 	On account of ill-health or infirmity
	 
	 	 	 	A Member who leaves Pensionable Service with at least 2 years’ Qualifying Service
before Normal Retiring Date on account of ill-health or infirmity certified and
accepted as permanent by a doctor appointed by the Employers, will receive

30

 

	 	 	 	immediate benefits calculated as described in Rule 5.1 but on the basis that a
Member’s Pensionable Service is increased as set out in the table below:

	 	 	 	 	 
	Actual Pensionable Service	 	 	 	 
	          at retirement	 	Increase	 	 
	2 years — 4 years 364 days

	 	No increase for Former BDWC Members

Doubled for Former WHWC Members
	 
	 	 	 	 
	5 — 9 years, 364 days

	 	Doubled
	 
	 	 	 	 
	10 — 13 years, 121 days

	 	Increased to 20 years
	 
	 	 	 	 
	13 years 122 days or more

	 	Additional 6 years, 243 days

          subject to the following:

	 	(a)	 	Pensionable Service in the above Table excludes additional
Pensionable Service secured under Rule 14 or Rule 15.
	 
	 	(b)	 	Pensionable Service increased as described above cannot exceed
the maximum Pensionable Service (including the increase) the Member would have
completed had he stayed in Pensionable Service until age 65 or completion of 40
years’ actual Pensionable Service, whichever would have occurred first.
	 
	 	 	 	Until Normal Retiring Date the Employers may from time to time require
evidence of continued ill-health or infirmity and, if not satisfied, may
suspend the pension for any period or periods before Normal Retiring Date or
reduce it to not less than would have been paid if the first paragraph of
Rule 5.3(i) had applied (but accordingly reduced if the Member has given up
pension for a Dependant’s pension, and disregarding the usual age limit of
50). Subject to the above, and a minimum benefit of the amount set out in
(iii) below, the pension will start on the date of retirement and be payable
as shown in Rule 7.1.

	 	(iii)	 	Minimum benefit payable under (i) and (ii) above
	 
	 	 	 	The provision of benefits under (i) and (u) above shall be subject to the following:

	 	(a)	 	the part of the Member’s pension which constitutes his
Protected Rights shall be payable no earlier than the Member’s 60th birthday;
and
	 
	 	(b)	 	the amount of the Member’s pension shall not be less than the
total of:

	 	(I)	 	in respect of Pensionable Service from 6th
April 1978 to 5th April 1997 (inclusive), the Member’s GMP; and

31

 

	 	(II)	 	in respect of Pensionable Service after 5th
April 1997, the amount purchased by his Protected Rights Account.

	 	 	 	The option to retire early shall not apply where the operation of the reduction
would result in the Member’s pension being less than the minimum applicable under
(I) and (II) above.
	 
	 	 	 	However, if the Member asks the Trustees, they shall provide him with a pension of
equal value to the pension under (i) and (ii) above, (but initially of a lower
annual amount calculated on Actuarial Advice) so long as the provisions of (I) above
are satisfied at state pensionable age, and the provisions of (II) are satisfied
when the Member reaches 60 (or the later date of retirement).

	5.4	 	Benefits on death in Pensionable Service

	 	(a)	 	The part of the Cash Death Benefit which Revenue Limitations allow to be paid
as a cash benefit will be payable by the Trustees in accordance with Rule 17 and any
balance will if the Trustees so decide be applied to purchase non-commutable and
non-assignable pensions payable as provided in Rule 7 for any of the Member’s
Dependants
	 
	 	(b)	 	Where the Member is survived by a spouse, then subject to Rule 5.7 a spouse’s
pension will be payable as follows:

	 	(i)	 	a short-term pension starting on the date of death of the
Member and payable for 3 months, equal to the Member’s Final Pensionable
Earnings at the date of death
	 
	 	(ii)	 	a long-term pension, starting on cessation of the short-term
pension, equal (where death occurs before the Normal Retiring Date) to half of
the greater of the Member’s Prospective Pension or the Member’s Ill-Health
Pension. Where death occurs after Normal Retiring Date the pension the Member
‘would have received under Rule 5.1 if he had retired immediately before his
death based on his Final Pensionable Earnings at the date of death.
	 
	 	 	 	The long term pension will be payable to the spouse as in Rule 7.2.

	 	However, if at the date of death either

	 	(A)	 	the Member was judicially separated from the spouse, or
	 
	 	(B)	 	the spouse is co-habiting with another partner in a
relationship (in the opinion of the Trustees) closely resembling marriage

	 	the spouse’s pension shall be limited to whichever is appropriate of the widow’s or
the widower’s GMP and the pension which may be purchased by the Member’s Protected
Rights Account.

32

 

	 	(c)	 	where the Member is survived by Children, then subject to Rule 5.7(i) a pension
will be payable for the benefit of the Children, in proportions decided from time to
time by the Trustees, as follows:

	 	(i)	 	where no spouse’s pension is payable under (b) above, a
short-term pension starting on the date of death of the Member and payable for
3 months, equal to the Member’s Final Pensionable Earnings at the date of death
	 
	 	(ii)	 	where the Member has completed two years’ Qualifying Service a
long term pension, (starting on cessation of the short term pension or on the
date of death of the spouse, as the case may be), equal to one-quarter of the
Member’s Ill-Health Pension for each Child up to a maximum of two. If no
spouse’s pension is being paid, the children’s long-term pension will be
calculated using a fraction of one-third rather than one-quarter.
	 
	 	 	 	The children’s long-term pension will start on the date of the cessation of
the spouse’s or children’s short-term pension (as the case may be) and will
be payable as provided in Rule 7.3.

	5.5	 	Spouse’s and children’s post-retirement pensions

	 	(a)	 	Where a Member dies while receiving a pension under Rule 5.1, 5.2, or 5.3 and
the Member is survived by a spouse, then subject to Rule 5.7 a spouse’s pension will be
payable as follows:

	 	(i)	 	a short-term pension starting on the date of death of the
Member and payable for 3 months, equal to the Member’s pension at the date of
death
	 
	 	(ii)	 	a long-term pension, starting on cessation of the short-term
pension, equal to half the Member’s pension at the date of death.
	 
	 	 	 	The long-term pension will be payable to the spouse as in Rule 7.1.

	 	(b)	 	where the Member is survived by Children, a pension will be payable for the
benefit of the Children, in proportions decided from time to time by the Trustees, as
follows:

	 	(i)	 	where no spouse’s pension is payable under (a) above, a
short-term pension starting on the date of death of the Member and payable for
3 months, equal to the Member’s pension at the date of death
	 
	 	(ii)	 	a long-term pension, (starting on cessation of the short-term
pension or on the date of death of the spouse, as the case may be), equal to
one-quarter of the Member’s pension for each Child up to a maximum of two. If
no spouse’s pension is being paid, the children’s long-term pension will be
calculated using a fraction of one-third rather than one-quarter.

33

 

	 	 	 	The children’s long-term pension will start on the date of cessation of the
spouse’s or children’s short-term pension (as the case may be) and will be
payable as provided in Rule 7.3.

	5.6	 	Increases to pensions in payment
	 
	 	 	Each pension in payment in excess of any GMP will increase by the appropriate percentage
under the Pensions (Increases) Act 1971 as if those provisions applied to the pension.
	 
	 	 	The part of the GMP that is attributable to earnings for the Tax Year 1988-89 and subsequent
tax years will increase in each year by the percentage specified in any order made by the
Secretary of State under the 1993 Act (which is approximately equal to the percentage rise
in the cost of living in each year, with a maximum of 3% per year compound).
	 
	5.7	 	Special provisions

	 	(i)	 	Any benefit under Rule 5 or Rule 14 may be subject to any limitations in amount
or special conditions as may be imposed under any policy held in the Fund by which the
benefit is provided.
	 
	 	(ii)	 	The Trustees may on the death of a Member pay all or part of any of the
spouse’s benefits under Rule 5, in excess of the widow’s or widower’s GMP and the
Member’s Protected Rights, to any Dependant or Dependants as they think fit.
	 
	 	(iii)	 	the spouse’s pensions will not be less than the total of

	 	(a)	 	half the Member’s GMP in respect of Pensionable Service from
6th April 1978 to 5th April 1997 (inclusive), and
	 
	 	(b)	 	the amount described in 6.1 of Appendix 2 to the Rules.

	5.8	 	Options of exchanging cash for pension and vice-versa

	 	(i)	 	Exchange of cash for pension
	 
	 	 	 	A Member may, by notice in writing to the Trustees, elect to give up part or all of
his retirement benefits which would otherwise be payable as a lump sum under Rule
5.1(ii) to provide additional pension payable when his pension is due to start.
	 
	 	(ii)	 	Commutation of Member’s pension
	 
	 	 	 	Where a Member becomes entitled to a pension under Rule 5 or as a result of a
winding-up under Rule 19:

	 	(a)	 	if the Trustees are satisfied that the Member is in exceptional
circumstances of serious ill-health, or the pension (when added to the

34

 

	 	 	 	pension value of the lump sum) does not exceed the Maximum Trivial Amount,
the Member may exchange the pension for a cash payment, payable on the day
on which the pension was due to start or, for a deferred pension and lump
sum which together do not exceed the Maximum Trivial Amount, on the winding
up of the Scheme. Where the Member is receiving a pension that does not
exceed the Maximum Trivial Amount (i.e., because of an increase in the
Maximum Trivial Amount), the Member may exchange the pension for an
immediate cash payment.
	 
	 	 	 	The commutation of a pension not exceeding the Maximum Trivial Amount shall
be subject to the GMP Provisions and the Protected Rights Provisions.

	 	(b)	 	in other circumstances the Member may, by notice in writing
before retirement, subject to Revenue Limitations exchange pension for an
additional cash payment payable on the day on which the pension was due to
start.
	 
	 	 	 	A Member who stays in Service after the Normal Retiring Date may at any time
between that date and actual retirement take the cash payment which would
have been payable if his pension had started on the date on which the cash
payment is being taken. No further benefits may be paid in the form of a
cash payment unless the Trustees are satisfied that the Member is in
exceptional circumstances of serious ill-health. The Trustees, if the
Member so requests, may then commute the whole of any pension then payable
for a cash payment.

	 	(iii)	 	Commutation of Dependant’s Pension
	 
	 	 	 	When either

	 	(A)	 	a Member commutes a pension on the grounds of triviality under
(ii)(a) above, and any pensions which would otherwise be payable on his death
in respect of him to a Dependant would not exceed the Maximum Trivial Amount,
or
	 
	 	(B)	 	a Dependant becomes entitled to pensions under the Scheme which
do not exceed the Maximum Trivial Amount,

	 	 	 	the Trustees may commute the pensions for a cash payment payable to the
Dependant when the pension (or the Member’s pension) was due to start. Where
the Dependant is receiving a pension that does not exceed the Maximum Trivial
Amount (i.e. because of an increase in the Maximum Trivial Amount), the
Trustees may commute the Member’s pension for an immediate cash
payment.

35

 

The amount of any cash payment payable under this Rule (or pension exchanged for cash)
shall be decided by the Trustees, in accordance with factors acceptable to the Board of
Inland Revenue. The Trustees may deduct any tax to which they may be chargeable.

	5.9	 	Part-time Service

For the purpose of calculating the pension entitlement in respect of Final Salary Service of
Members under Rules 5.1, 5.2 and 5.3 who are or have been in part-time Service, the
following shall apply:

	 	 	 	 	 	 	 
	(a)	 	Final Pensionable Earnings is:
	 
	 	 	 	 	 	 
	 

	 	the appropriate amount of
part-time earnings
calculated in the definition
of Final Pensionable Earnings in
Rule 1
	 	X
	 	standard weekly full-time hours

weekly part-time hours
	 
	 	 	 	 	 	 
	(b)	 	Pensionable Service is the aggregate of

	 	 	 	 	 	 	 
	(i)	 	Pensionable Service which is full-time Service (if any), and
	 
	 	 	 	 	 	 
	(ii)

	 	Pensionable Service
which is part-time
Service
	 	X
	 	 weekly part-time hours

standard weekly full-time hours

For the purposes of this Rule, “part-time Service” is that part of Pensionable Service
completed by a Member whilst his standard contractual working week is less than the standard
contractual working week appropriate to the Member’s employment from time to time.

	5.10	 	Pension Sharing Order
	 
	 	 	Where the benefits of a Member are subject to the provisions of a Pension Sharing Order the
following shall apply -

	 	(a)	 	The benefits payable to the Member in accordance with these Rules shall be
reduced by the debit applicable in accordance with Section 29(1)(a) of the 1999 Act.
	 
	 	(b)	 	Any Pension Credit or Pension Credit Benefit may be discharged in any manner
consistent with the 1999 Act, as determined by the Trustees. Any benefits consequently
provided under the Scheme shall be treated as provided separately from any benefits
provided under the Scheme for the same individual as an employee or as a spouse or
Dependant of an employee. The Former Spouse shall be regarded as a Member for the
purposes of the Rules to the extent considered appropriate by the Trustees.

36

 

	5.11	 	Death of Former Spouse before implementation of Pension Sharing Order
	 
	 	 	If the Former Spouse of a Member dies before the Trustees have implemented the relevant
Pension Sharing Order then subject to Revenue Limitations the Trustees shall use the cash
equivalent of the Former Spouse’s benefits under the Pension Sharing Order (calculated in
accordance with The Pension Sharing (Pension Credit Benefit) Regulations 2000) to provide
such lump sum benefits payable in accordance with Rule 17 and pensions for the spouse or
Dependants of the Former Spouse as they shall decide. For the purposes of this Rule,
references to “Member” in the definition of “Dependant” shall be replaced by references to
the “Former Spouse”. Any pension so payable shall be paid for life or in the case of a
child of the Former Spouse may be payable for so long as the child remains a Dependant.
	 
	6.	 	OPTION TO SURRENDER PENSION TO PROVIDE AN ANNUITY FOR A DEPENDANT

A Member who becomes entitled to a pension under Rule 5 may surrender any part of the pension which
has not been commuted under Rule 5.8(ii) to provide an annuity for a Dependant (including a
spouse). The annuity must not be greater than the pension remaining payable to the Member.

The annuity will be payable as provided in Rule 7.1, starting on the day next following the date of
death of the Member. The amount of the annuity shall be decided by the Trustees having regard to
the amount of the pension surrendered and the ages of the Member and the Dependant.

The option is exercised by notice in writing to the Trustees, not more than two months before nor
after the starting date for the Member’s pension. If before that date either the Member or the
Dependant dies the notice will be cancelled. The notice must specify the amount of pension to be
surrendered.

	7.	 	PAYMENT OF PENSION
	 
	7.1	 	Pensions payable for life
	 
	 	 	Except for any pensions payable to Children, or the spouse’s pensions under Rule 5.4, a
pension under Rule 5 or Rule 6 will be payable for life by equal monthly payments in advance
(or as the Trustees decide but not less frequently than annually). The final payment will
not be apportionable to the date of death.
	 
	 	 	A pension under Rule 5 or Rule 6 payable to a Dependant under age 18 will not continue after
that age unless the Trustees decide and in their opinion the Dependant was in full-time
education or vocational training or suffering from some disability which would have made him
permanently dependent upon the Member if the Member survived; in that case the pension may
continue for life.
	 
	 	 	If a Member dies before his pension has been paid for five years the Trustees shall pay a
sum equal to the amount of pension which would have been payable during the remainder of the
five years at the rate applicable at the date of death, in accordance with Rule 17.

37

 

	7.2	 	Spouse’s Pensions under Rule 5.4
	 
	 	 	The spouse’s pensions under Rule 5.4 will be payable by equal monthly payments in advance
(or as the Trustees decide but not less frequently than annually) during the widowhood of
the person entitled to it and the final payment shall be non-apportionable to the date of
death or earlier remarriage.
	 
	7.3	 	Children’s Pensions
	 
	 	 	Any pension payable to a Child under Rule 5 will be payable by equal monthly payments in
advance (or as the Trustees decide but not less frequently than annually) until the last
date for making a payment before the 17th birthday (or later if in full-time education or
vocational training), or the earlier death of the last surviving Child. The final payment
will not be apportionable. A Child who is or becomes wholly incapacitated will remain a
Child for so long as he remains wholly incapacitated. A Child who marries or becomes
involved in a relationship which in the opinion of the Trustees closely resembles marriage
will not be treated as a Child.

38

 

PART V

GENERAL PROVISIONS ABOUT BENEFITS

	8.	 	MATERNITY LEAVE AND FAMILY LEAVE

	 	(a)	 	Paid maternity absence

	 	(i)	 	Any paid maternity absence shall be treated as Pensionable
Service and as if it is a period throughout which the Member works normally and
receives the remuneration likely to be paid for doing so.
	 
	 	(ii)	 	Paid maternity absence is any period throughout which a Member
is absent from work due to pregnancy or confinement and for which the Employer
pays any contractual remuneration or statutory maternity pay.
	 
	 	(iii)	 	During paid maternity absence a Member shall only be required
to pay contributions on the amount of contractual remuneration or statutory
maternity pay actually paid for that period.

	 	(b)	 	Protected unpaid maternity leave

	 	(i)	 	Any protected unpaid maternity leave shall be treated as
Pensionable Service and as if it is a period throughout which the Member works
normally and receives the remuneration likely to be paid for doing so so long
as she pays contributions based on that remuneration.
	 
	 	(ii)	 	Protected unpaid maternity leave is any period throughout which
a Member is absent from work due to pregnancy or confinement, for which the
Employer does not pay any contractual remuneration or statutory maternity pay
but during which the Member exercises her right to maternity leave under
Section 71 of the Employment Rights Act 1996 (Ordinary Maternity Leave).

	 	(c)	 	Family leave

	 	(i)	 	Any paid family leave shall be treated as Pensionable Service
and as if it is a period throughout which the Member works normally but only
receives the remuneration in fact paid for that period.
	 
	 	(ii)	 	Paid family leave is any period throughout which a Member is
absent from work for family reasons and for which the Employer pays any
contractual remuneration.
	 
	 	(iii)	 	During paid family leave a Member shall only be required to
pay contributions on the amount of contractual remuneration actually paid for
that period.

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	 	(d)	 	General

     A Member to whom this Rule applies:

	 	(i)	 	shall be treated as remaining in Pensionable Service for the
purpose of entitlement to the Cash Death Benefit during the continuance of any
such paid maternity absence, protected unpaid maternity leave or paid family
leave and any extension of it allowed by the Employer.
	 
	 	(ii)	 	who fails to return to work in accordance with the conditions
of any legal right shall be treated as having left Pensionable Service on the
later of the date when any remuneration or maternity pay stops being payable
and the end of her protected unpaid maternity leave, and Rule 5.2 shall then
apply.

	9.	 	SECURING BENEFITS
	 
	9.1	 	Power to secure benefits
	 
	 	 	Where benefits (whether immediate, deferred or contingent) are payable under the Scheme in
respect of a person (“the Beneficiary”) the Trustees may, at their discretion, either

	 	(a)	 	pay the benefits directly from the Fund to or for the benefit of the
Beneficiary, or
	 
	 	(b)	 	purchase or provide in the name of the Beneficiary, or in the name of a trustee
for the benefit of the Beneficiary, or may assign to the Beneficiary or to the trustee,
a policy with an Authorised Insurer providing benefits (whether immediate, contingent
or deferred) in substitution for those benefits. The Trustees may purchase an annuity
in respect of the Beneficiary from an Authorised Insurer of the Member’s choice, or if
the Member does not make such a choice, from such Insurance Company as the Trustees
shall nominate.

	9.2	 	Requirements for issue of policy
	 
	 	 	The purchase or provision of the policy referred to in Rule 9.1 shall be subject to the
following requirements:

	 	(a)	 	The consent of the Beneficiary shall first be obtained where it is necessary so
to do in order to comply with the requirements of the 1993 Act, or Inland Revenue
approval.
	 
	 	 	 	For this purpose the consent of a Member shall be deemed to include the consent of
any other person contingently entitled to benefits under the Scheme in respect of
his membership.
	 
	 	(b)	 	Where a Member has completed less than 5 years’ Qualifying Service, the
Trustees may at their discretion and without the Member’s consent after a period of 12
months has elapsed since the Member ceased to be in Pensionable Service,

40

 

secure his benefits by buying an insurance policy or annuity contract from an
Authorised Insurer. Before doing so, the Trustees must give the Member at least 30
days’ prior notice and comply in all other respects with the 1993 Act. The policy
shall satisfy the conditions of Rule 16.3.

Where the Trustees have purchased, provided or assigned a policy under this Rule, they shall
be discharged from any obligation to provide the benefits under the Scheme for which the
benefits under the policy are in substitution.

	10.	 	DEDUCTIONS ETC.
	 
	10.1	 	Deduction of tax
	 
	 	 	Tax is deducted from pensions as required by the 1988 Act and when contributions (including
interest) are repaid to a Member during his lifetime, or a cash payment is made instead of
any pension the Trustees may deduct the amount of any tax to which they may be chargeable.

	10.2	 	Lien on benefits
	 
	 	 	If any or both of the following apply, namely:

	 	(a)	 	the Member has caused a monetary loss to the Scheme as a result of a criminal
or fraudulent act or omission; or
	 
	 	(b)	 	the Member has a monetary obligation to the Employers arising out of his
criminal, negligent or fraudulent act or omission,

then if the Trustees (in relation to (a)) or the Principal Employer (in relation to (b)) so
require, the Member’s benefits under the Scheme (including those payable or prospectively
payable in respect of him to a Dependant) which are attributable to his Pensionable Service
or to a transfer to the Scheme arising from another scheme of the Employers, shall be
reduced by an amount that the Trustees decide on Actuarial Advice is equivalent to the
obligation. This amount will not exceed the amount of the benefits payable or prospectively
payable to or in respect of the Member under the Scheme.

If the Employers request, the Trustees will pay to the Employers the amount of the
obligation under (b) above, or, if less, the value of the reduction in benefits. The Member
will be given a certificate specifying the amount of the obligation and of the reduction. If
the amount of the obligation is disputed, no reduction will be made until the obligation has
become enforceable under the order of a court or arbitrator.

No reduction will be made against any benefit attributable to a transfer to the Scheme under
Rule 15, or any GMP, widow’s GMP or widower’s GMP or Protected Rights in respect of a
Member.

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	11.	 	UNCLAIMED BENEFITS

Any lump sum benefit, or instalment of pension payable to or in respect of a person entitled to a
pension under the Scheme, shall be forfeited if not claimed within six years after the date on
which the benefit or instalment first becomes due. However, the Trustees may at their discretion
pay all or part of such benefits notwithstanding that they may have been forfeited.

	12.	 	ATTEMPTED ASSIGNMENT ETC.

Subject to the 1999 Act and the 1995 Act if a person attempts to assign or charge his benefit or if
any event occurs by which his benefit would otherwise become payable in whole or in part to some
other person, his entitlement to the benefit shall cease. However, the Trustees may apply the
benefit for the maintenance and personal support of the first mentioned person and his Dependants
as the Trustees think fit.

	13.	 	CLAIMANTS UNABLE TO ACT

If the Trustees consider that a beneficiary is incapable of acting (by reason of illness, mental
disorder, minority or otherwise) it may apply any amounts due to him for his benefit or may pay
them to some other person or persons to do so. The receipt of the person to whom it pays will be a
discharge. The Trustees may also make for the beneficiary any choice which he has under the
Scheme.

	14.	 	DIFFERENT BENEFITS
	 
	14.1	 	Discretionary Terms

At the request of the Employers and subject to the agreement of the Principal Employer the
Trustees may provide

	 	(i)	 	additional benefits under the Scheme for any Member
	 
	 	(ii)	 	terms for any Member or Members different from those set out in these Rules or
	 
	 	(iii)	 	benefits in respect of any other person or persons.

No increases may be made under this Rule to any short-term spouse’s or children’s pensions
as described in Rules 5.4(b)(i) or (c)(i) or Rules 5.5(a)(i) or (b)(i).

The benefits will be consistent with Inland Revenue approval, and in order to provide them
or (subject to the provisions of Schedule 22 of the 1988 Act) to improve the solvency of the
Fund the Employers may increase their contributions under Rule 4.2.

	14.2	 	Additional Voluntary Contributions

	 	(a)	 	Subject to Revenue Limitations a Member may elect to pay additional voluntary
contributions (AVCs). AVCs may be payable at such intervals which the

42

 

Trustees will allow and will be used by the Trustees to provide additional benefits
as the Member decides with the consent of the Trustees, either

	 	(i)	 	on a money purchase basis from the AVC Sector, or
	 
	 	(ii)	 	where the Member so elected whilst a member of WCAPS, on the
basis that additional years of Pensionable Service are purchased. For the
avoidance of doubt, any such benefits shall only count as Pensionable Service
for the purpose of calculating the amount of the Member’s benefits payable
under this paragraph.

	 	(b)	 	Unless a Member started to pay AVCs under WCAPS before 8th April 1987 the
benefits provided by them must be non-commutable.
	 
	 	(c)	 	If a Member dies and no application of his additional voluntary contributions
has been made, the accumulated value of the contributions will be payable in accordance
with Rule 17.
	 
	 	(d)	 	Where entitlement to any benefits under the Scheme arises and the amount
exceeds any relevant Revenue Limitations and any of it is attributable to AVCs, the
AVCs (together with any interest on them) which relate to the excess will be refunded
to the Member (or failing the Member will paid to his legal personal representatives)
subject first to the deduction of any tax payable by the Trustees.
	 
	 	(e)	 	The Trustees shall comply with the requirements of Regulation 5 of The
Retirement Benefits Schemes (Restriction on Discretion to Approve) (Additional
Voluntary Contributions) Regulations 1993 or any amendment or replacement thereof (“the
AVC Regulations”) and where the Scheme is the “leading scheme” as defined in the AVC
Regulations, with the requirements of Regulation 6 of the AVC Regulations so far as
they concern “main schemes” as defined by the AVC Regulations.
	 
	 	(f)	 	If a Member ceases to be in Pensionable Service in accordance with Rule 5.2,
the accumulated value of his AVCs shall be returned to him subject to any tax to which
the Trustees are chargeable.
	 
	 	(g)	 	Any additional benefit payable in the same form as Death Benefit under this
Rule is subject to Rule 5.7(i).

	15.	 	TRANSFERS TO THE SCHEME

Subject to the following paragraphs the Trustees shall have power to accept as additions to the
Fund any transfer of money, policies, investments or other assets from any Approved Arrangement (as
defined below), subject in the case of a bulk transfer to the consent of the Principal Company and
to Inland Revenue approval not being prejudiced. The transfer may include the whole or a specified
part of the assets of the Approved Arrangements.

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The transfer may be accepted by the Trustees on the basis that the Scheme will pay or provide for
the payment of benefits in respect of any person who is a beneficiary or contingent beneficiary
under the Approved Arrangement.

                     a Member has benefits in an Approved Arrangement which relate to a Pension Credit, the
Trustees may at the request of the Member and with the consent of the Principal Employer ___
transfer of those benefits from the Approved Arrangement.

                     and nature of the benefits, and the conditions on which they shall be paid or
provided, such may be determined by the Trustees after considering Actuarial Advice and                     
with Inland Revenue approval.

The Trustees may give any undertakings which may be required by the Inland Revenue or which may
reasonably be required by the trustees or administrators of the Approved Arrangement in relation to
any such transfer.

The Trustees shall, as a condition of accepting such a transfer, obtain from the trustees or
administrators of the Approved Arrangement a written certificate as to all information affecting
the amount or nature of any benefit to be provided under the Scheme in consequence of the transfer
(including the period of Qualifying Service and amount of commutation lump sum on retirement under
the Approved Arrangement). The Trustees may accept any such written certificate as conclusive. In
particular:

	(i)	 	the benefits arising on retirement from a transfer value shall not be capable of commutation
nor shall they be paid in lump sum form if the transfer is accompanied by a certificate from
the administrator of the Approved Arrangement to the effect that the transfer value is not to
be used to provide benefits in lump sum form, and
	 
	(ii)	 	for Members other than 1989 Members, pension benefits on retirement arising from a transfer
value (other than from another scheme of the Employers) may be commuted only if and to the
extent that a certificate has been obtained from the administrator of the transferring scheme
showing the maximum lump sum payable from the transfer value. The amount so certified may be
increased in proportion to any increase in the Index since the date the transfer payment was
received, and
	 
	(iii)	 	where the Trustees accept a transfer payment from an Approved Arrangement and the trustees
or managers of the arrangement provide details of a Pension Debit applicable to the
transferring Member, the Trustees shall where appropriate take account of that Pension Debit
when calculating any limit on the benefits of that Member in the Scheme unless the Trustees
with the consent of the Member decide otherwise. Any such transfer and the benefits relating
to it shall be provided in the Scheme in addition to and entirely separately from the benefits
to which the Member is otherwise entitled to receive under the provisions of the Scheme.
Where the benefits are kept separate the benefits relating to such transfer shall not be
included in the calculation of the maximum benefits of the Member in accordance with Revenue
Limitations.

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The amount so certified as to represent Member’s contributions for the purpose of the Approved
Arrangement (and no more) shall remain subject to any restriction on refund of contributions which
is necessary or Inland Revenue approval.

The purposes of this Rule, “Approved Arrangement” means any retirement benefits scheme, ___
pension scheme, annuity policy which is appropriate for the purposes of the 1993 Act and which
satisfies the requirements of section 591(2)(g) of the 1988 Act, or a retirement annuity ___
or trust scheme which is approved or seeking approval under Part XIV of the 1988 Act.

	16.	 	TRANSFERS FROM THE SCHEME
	 
	16.1	 	Member’s right to a transfer

Subject to Rules 16.2, 16.3, and 16.4 a Member otherwise entitled to deferred benefits who
withdraws from Pensionable Service at least a year before Normal Retiring Date (or within
six months of leaving Pensionable Service if this is later) has a right to require the
Trustees to use the cash equivalent of his deferred pension to acquire benefits under a
Receiving Scheme.

The Trustees shall comply with the requirements of the 1995 Act, and in particular

	 	(a)	 	where a Member asks for a quotation of the cash equivalent,
this shall be provided by the Trustees within two months of receiving the
request; and
	 
	 	(b)	 	where the Member accepts the quotation within three months of
the Trustees’ advice to him under (a) above, the transfer payment shall not be
less than the amount specified in the quotation.

	16.2	 	Transfer values from the Scheme

The Trustees may transfer to the Receiving Administrators such assets representing benefits
applicable to the persons being transferred as is decided on Actuarial Advice in accordance
with the current laws under the 1993 Act relating to transfer values or such greater amount
as the Principal Employer may direct not exceeding the part of the Fund (excluding the
Personal Retirement Accounts) which the Trustees decide on Actuarial Advice to be
attributable to the relevant Members, to the intent that they shall be entitled to such
rights and benefits under the Receiving Scheme (consistent with Inland Revenue approval) as
the Trustees may arrange with the Receiving Administrators.

No transfer may be made without the consent in writing of the relevant Members unless the
Trustees are satisfied that consent is not required under the preservation requirements of
the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991. In particular,
the Actuary (the Scheme Actuary after 5th April 1997) shall certify to the Trustees that the
rights and benefits to be acquired under the Receiving Scheme are at least equal in value to
the rights and benefits transferred.

45

 

If the benefits of the Member are subject to a debit in accordance with the terms of a
Pension Sharing Order, the Trustees must provide full details of that debit to the trustees
or managers of the Receiving Scheme.

When on or after a transfer having been made to another occupational pension scheme the
Receiving Administrators request such a certificate as is referred to in (ii) of Rule 15,
the Trustees shall calculate as at the date of transfer and supply the Receiving
Administrators with a certificate of, the maximum lump sum payable on retirement from the
transfer value.

Where the Trustees have used the assets relating to the Member’s deferred pension described
in this Rule, they will be discharged from any obligation to provide the benefits to which
the transfer payment related.

	16.3	 	Special provisions for transfer to a “Buy-out” policy

The policy (the “Buy-Out Policy”) shall be purchased from the United Kingdom office of an
Authorised Insurer, subject to the following:

	 	(i)	 	the terms of the Buy-Out Policy will satisfy Inland Revenue requirements and in
particular must fall within limits laid down by the Board of Inland Revenue relating to
relevant benefits approvable under the 1988 Act based upon the Member’s Service, and
Final Remuneration at the date of withdrawal and will also show that the benefits are
non-assignable and commutable only as shown in the Buy-Out Policy
	 
	 	(ii)	 	the Authorised Insurer must assume a liability to the Member (or to trustees of
a trust for the benefit of the Member and, if appropriate, Dependants of his) to pay
the benefit secured by the contract to him or Dependants of his or to the trustees of
the trust.

Subject to the same conditions as in the previous paragraphs of this rule the Trustees may
also purchase a Buy-Out policy in the Member’s name in lieu of any benefits under the
Scheme.

Except when the Scheme is being wound-up, or the Member has completed less than five years’
Qualifying Service, the Trustees must obtain the consent of the Member, or if the Member is
dead and benefit is payable to another person, the other person.

	16.4	 	Special provisions for transfer to a personal pension scheme

A transfer chosen by the Member (to which the Member must consent) must satisfy the
following conditions:

	 	(a)	 	the Trustees shall provide a certificate of the maximum lump sum payable on
retirement from the transfer value if the Member.

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

46

 

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

	 	(A)	 	a Special Director, or
	 
	 	(B)	 	in receipt of annual remuneration in excess of
the allowable maximum (i.e. the equivalent for personal pension schemes
of the Permitted Maximum as defined in Part VII of the Rules) for the
year of assessment in which the date of transfer falls, or

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

	 	(b)	 	the cash equivalent of the Member’s preserved pension must be used to provide
benefits of a money purchase nature.

	17.	 	DISCRETIONARY TRUSTS
	 
	17.1	 	Payment to individuals etc.

Where the Rules state that sums arising on the death of a Member are payable in accordance
with this Rule, they will be paid at the discretion of the Trustees to any one or more of
the classes listed below in any form as the Trustees decide, in relation to the deceased
Member:

	 	(a)	 	the then widow or widows or the then widower
	 
	 	(b)	 	the former spouse
	 
	 	(c)	 	a legitimate child
	 
	 	(d)	 	an unborn child of his marriage
	 
	 	(e)	 	a stepchild
	 
	 	(f)	 	a legally adopted child
	 
	 	(g)	 	an illegitimate child
	 
	 	(h)	 	a brother or sister of the whole or half blood
	 
	 	(i)	 	any other person being an ascendant or descendant and his spouse
	 
	 	(j)	 	a nephew or niece
	 
	 	(k)	 	the legal personal representatives

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	 	(l)	 	any other persons who in the opinion of the Trustees were dependent to any
extent upon the Member at any time for any of the necessities of life or whom the
deceased regularly financially assisted
	 
	 	(m)	 	any person described in and entitled to benefit under the Member’s Will
	 
	 	(n)	 	any person validly indicated in writing to the Trustees by the Member during
his lifetime
	 
	 	(o)	 	any person with whom the Trustees were aware that a friendship or relationship
with the Member (other than marriage or dependency) existed at the date of the Member’s
death, such relationship not necessarily being one resembling marriage
	 
	 	(p)	 	any charity, religious or philanthropic institution or club nominated in
writing to the Trustees by the Member

relationships being decided through a ceremony of marriage performed in accordance with the
laws or customs of the country where the ceremony took place.

If the Trustees do not exercise the discretion within two years after the Member dies the
sums will be paid to his legal personal representatives.

If the sums would otherwise be payable to the Crown or the Duchy of Lancaster or the Duke of
Cornwall, the Trustees will not pay them (or any part) to those parties but will place them
for the general purposes of the Scheme.

	17.2	 	Payment to other trusts

Without prejudice to the generality of the power described in sub-rule 17.1 above then so
long as no one other than the prospective beneficiaries listed from time to time in sub-rule
17.1 above can become entitled the Trustees may:

	 	(a)	 	direct that all or part of the lump sum will be held by themselves or other
trustees on such trusts (including discretionary trusts and with such powers and
provisions (including powers of selection and variation) as the Trustees see fit; or
	 
	 	(b)	 	pay all or part of the lump sum to the trustees of any other existing trust.

	18.	 	ADJUSTMENTS TO COMPLY WITH INLAND REVENUE APPROVAL ETC.
	 
	18.1	 	Inland Revenue Approval

The Trustees will adjust the benefits and contributions of any person under the Scheme to
give effect to any restrictions which unless complied with would affect Inland Revenue
approval.

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	18.2	 	Equivalent Pension Benefits
	 
	 	 	A Member shall be absolutely entitled under the Scheme to equivalent pension benefits if he
has been in non-participating employment in relation to the Scheme or in relation to any
other retirement benefits arrangement from which the liability for the payment of equivalent
pension benefits has been transferred to the Scheme.

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PART VI

	19.	 	TERMINATION OR PARTIAL TERMINATION OF THE SCHEME
	 
	19.1	 	Termination of liability by the employers
	 
	 	 	The liability of all or any of the Employers to pay contributions may be terminated at any
time by notice in writing given to the Trustees and the remainder of this Part then applies.
	 
	19.2	 	Events leading to winding-up
	 
	 	 	If any of the following events take place, namely

	 	(a)	 	an effective order or resolution is passed for the winding-up of the Principal
Employer, or
	 
	 	(b)	 	the Principal Employer stops paying contributions under Rule 19.1 (other than
by a contributions holiday)

the Scheme will (subject to Rule 19.7) be wound up as mentioned below unless contrary
arrangements are made to the satisfaction of the Trustees in accordance with Clause 26 of
the Trust Deed to continue it.

	19.3	 	Winding-up
	 
	 	 	When winding-up starts, Death Benefit (other than those to which there was an entitlement
before contributions terminated) will cease and the Fund including the Water Company
Sub-Fund (other than moneys held by the Trustees under Rule 17) will be applied after the
payment of any debts or taxes so far as its resources permit in the order stated below,
subject to Section 73 of the 1995 Act. Benefits in pension form must be secured through
contracts or policies with an Authorised Insurer.

	 	1.	 	The Members’ Personal Retirement Funds shall be used

	 	(a)	 	firstly, to pay such costs and expenses which cannot be
recovered from the Employers as the Trustees determine to be appropriate, and
each Member’s Personal Retirement Fund shall be reduced in the proportion that
such costs and expenses bear to the total of the Members’ Personal Retirement
Funds
	 
	 	(b)	 	secondly, to provide benefits in accordance with this Rule for
each Member.

	 	2.	 	After the payment of expenses relating to the administration and winding-up of
the Scheme which cannot be recovered from the Employers or are not paid from the
Member’s Personal Retirement Funds in 1(a) above, the remainder of the Fund will be
applied so far as its resources permit, and subject always to the

50

 

priorities set out in Section 73 of the 1995 Act being satisfied, in securing
benefits in the order stated in (a) to (j) below.

During the Guarantee Period any benefits arising from the Water Company Sub-Fund
after the application of (b) below shall be treated for this purpose as if the
provisions of this sub-rule applied to it subject to the appropriate changes except
as is necessary to give effect to the provisions of (k)(ii) below:

	 	(a)	 	any expenses relating to the administration and winding-up of
the Scheme which cannot be recovered from the Employers
	 
	 	(b)	 	(i) Subject to Inland Revenue approval such additional pensions
and other benefits provided by additional voluntary contributions which are
calculated on a money purchase basis (other than those arising under (ii)
below), and
	 
	 		 	(ii) during the Guarantee Period benefits arising from or
attributable to the Appropriate Assets and the assets derived therefrom
	 
	 	(c)	 	Benefits in respect of which entitlement to payment had arisen
before the date of the winding-up
	 
	 	(d)	 	Benefits in respect of Members in Service whose Normal Retiring
Dates had occurred on the basis that the Members had retired from Service on
the day before the winding-up started
	 
	 	(e)	 	Pensions payable to Dependants on the death of Members who have
already reached Normal Retiring Date or are already entitled to payment of
pension or other benefits
	 
	 	(f)	 	equivalent pension benefits
	 
	 	(g)	 	(i) guaranteed minimum pensions and accrued rights to
guaranteed minimum pensions and

	 	(ii)	 	that part of any pension (including any benefits
transferred into the Scheme from another retirement benefits scheme) as the
Trustees determine to be applicable to Service before 1st January 1978 (“the
Pre-1978 Proportion”) to which, on the date on which the winding-up started,
there was an entitlement or contingent entitlement which had not come into
payment, or where entitlement or contingent entitlement would have arisen if
all Members in Pensionable Service immediately before the winding-up started
had retired or withdrawn from Pensionable Service.
	 
	 	 	 	The Pre-1978 Proportion shall be calculated

	 	(A)	 	by reference to the scales of benefit in force
on the previous day and

51

 

	 	(B)	 	on the assumption that the Basic Salary of the
Member concerned remained unchanged after that date

	 	(h)	 	State scheme premiums
	 
	 	(i)	 	Subject to Inland Revenue approval such additional pensions and
other benefits provided by additional voluntary contributions which are not
attributable to the Appropriate Assets and which are not calculated on a money
purchase basis
	 
	 	(j)	 	Any other benefits
	 
	 	(k)	 	(i) Subject to (ii) below any increases to benefits provided
from the Fund as the Trustees in any particular case decide consistent with
Inland Revenue approval.

	 	(ii)	 	If the Scheme is wound-up within the Guarantee Period,
the assets of the Water Company Sub-Fund which are certified by the Actuary
to be attributable to the Appropriate Assets as adjusted for:

	 	(1)	 	contributions made by employees present or
future of any Water Undertaker
	 
	 	(2)	 	investment income and gains and investment
losses
	 
	 	(3)	 	benefits paid and transfer payments made in
each case to or in relation to Water Beneficiaries or any employees
present or future of any Water Undertakers
	 
	 	(4)	 	costs and expenses
	 
	 	(5)	 	any other adjustment that the Actuary considers
to be equitable

and which exceed the liabilities under (b) to (j) above to and in respect of
Water Beneficiaries and any other employees present or future of any Water
Undertakers which participate or have participated in the Scheme shall (to
the extent that the Trustees as at the date of winding-up shall decide) be
applied to augment the benefits under the Scheme of, or providing additional
benefits for, Water Beneficiaries or employees or former employees and their
respective Dependants of Water Undertakers which participate or which have
participated in the Scheme subject always to Revenue Limitations. If after
acting in accordance with the previous sentence any such balance then
remains unexpended the Trustees shall refund the balance to the Employers in
such proportions as the Trustees may direct or otherwise apply that balance
to provide benefits under the Scheme.

52

 

Any balance remaining in the hands of the Trustees will be paid to the Employers in
such proportions as the Trustees consider to be just and equitable.

If on the winding-up of the Scheme the Scheme’s liabilities exceed its assets, an
amount equal to the excess shall be treated as a debt due from each Employer to the
Trustees, in accordance with and subject to the provisions of the 1995 Act.

For the purposes of this Rule 19.3:

	 	(I)	 	“Benefits” includes any Dependant’s pensions payable on the
death of the Member
	 
	 	(II)	 	Before any contracts or policies are taken out commutation may
be made within the terms stated in Rule 5.8.
	 
	 	(III)	 	Every one or more of the contracts or policies taken out:

	 	(a)	 	must provide that every benefit secured is
non-assignable and if not already in payment will be payable on the
Normal Retiring Date
	 
	 	(b)	 	must provide that pensions may only be
commutable in accordance with Revenue Limitations and will state the
maximum lump sum in monetary terms which may be payable at the Normal
Retiring Date

	 	(IV)	 	With the consent of the Trustees in each case the provisions of
Rule 16.3 and 16.4 will also apply to any benefits which arise under this
sub-rule.

	19.4	 	Policies of assurance on winding-up
	 
	 	 	In relation to any contracts or policies with any Authorised Insurer in the Fund at the date
of winding-up the Trustees may:

	 	(i)	 	arrange with the Authorised Insurer to transfer the contracts or policies to
the person whose benefits are covered under it. The contracts or policies will contain
the same restrictions as in paragraph (iii) of Rule 19.3.
	 
	 	(ii)	 	assign any of the contracts or policies which have not matured to the trustees
of any Receiving Scheme of which Members subject to the Trustees complying with the
same requirements of Rule 16.2.

	19.5	 	Partial winding-up
	 
	 	 	If before a winding-up of the Scheme under Rule 19.3 either

	 	(i)	 	an Associated Employer shall have terminated its liability to pay contributions
under the Scheme; or

53

 

	 	(ii)	 	the continued inclusion of an Associated Employer in the Scheme would affect
Inland Revenue approval

the part of the Fund which is decided on Actuarial Advice in accordance with the current
laws under the 1993 Act relating to transfer values or such greater amount as the Principal
Employer may direct not exceeding the part of the Fund which the Trustees decide on
Actuarial Advice to be attributable to the relevant Members, will be wound-up in accordance
with Rule 19.3.

If during the Guarantee Period the above provisions shall apply to the Water Company then
(notwithstanding those provisions) the Water Company Sub-Fund shall be wound up in
accordance with this Rule in respect of all the Water Beneficiaries in relation to the Water
Company in the same manner as if the Scheme as a whole were being wound-up in accordance
with Rule 19.3.

However, such winding-up shall not take place if the business and/or the employees of the
Associated Employer is or are transferred to another employer who is either an Associated
Employer or is eligible to become an Associated Employer in terms of Clause 25 of the Trust
Deed (“the New Employer”) and the New Employer shall be the successor to the relevant part
of the Fund.

If one of the Employers goes into liquidation, the value (immediately before such
liquidation) equal to any excess of the Scheme’s liabilities over the Scheme’s assets in
relation to the relevant part of the Fund shall be treated as a debt due from the Employer
to the Trustees in accordance with and subject to the provisions of the 1995 Act.

	19.6	 	Transfer to a Receiving Scheme
	 
	 	 	Subject to the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991, the
Trustees, with the agreement of the Employers may transfer (subject to the consent of the
Inland Revenue) all or any (as appropriate) of the assets of the Fund to one or more
Receiving Schemes, subject to the conditions of Rule 16.2 to provide benefits in
substitution for the benefits described in Rule 19.3; any such transfer may include the
transfer of any surplus under Rule 19.3, on the basis that it is not allocated to provide
benefits in respect of the transferring Members.
	 
	 	 	Following the transfer the transferring Members will no longer be entitled to benefits under
the Scheme in respect of the rights transferred to the Receiving Scheme.
	 
	19.7	 	Continuation as a “closed fund”
	 
	 	 	Where the Rules provide for a winding-up of the Scheme (total or partial) the Trustees may
continue the Fund (or the part of it) and administer it as a paid-up fund without Death
Benefit (other than any Death Benefit to which entitlement has arisen before the winding-up
began) until whichever is the first of the following:

54

 

	(a)	 	the Trustees decide to wind up the Fund (or part thereof), or
	 
	(b)	 	its resources are exhausted.

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PART VII

REVENUE LIMITATIONS

In addition to the definitions in Rule 1, the following definitions apply to this Part:

“Aggregate Retirement Benefit” means the total of

	 	(i)	 	a Member’s pension arising from the Scheme and any Associated Scheme. For a
Special Director who is a 1989 Member, Aggregate Retirement Benefit also includes any
benefits from either a retirement annuity contract approved under Chapter III of Part
XIV of the 1988 Act or a personal pension scheme approved under Chapter IV of Part XIV
of the 1988 Act insofar as those benefits are secured in respect of Service; and
	 
	 	(ii)	 	the pension value of a Member’s Lump Sum Retirement Benefit. In calculating
the amount of the Aggregate Retirement Benefit of a 1989 Member the pension equivalent
of the Member’s Lump Sum Retirement Benefit is one twelfth of its total cash value.

“Associated Employment” shall mean two or more concurrent employments held by the Member which are
associated, i.e., where

	 	(i)	 	there is a period where the Member has held all of them,
	 
	 	(ii)	 	the period counts under the Scheme in the case of all of them as a period in
respect of which benefits are payable,
	 
	 	(iii)	 	during the period all the Employers in question are associated

“Associated Scheme” means

	 	(i)	 	for a 1989 Member any Relevant Scheme which is a Connected Scheme or which
provides benefits in respect of Service, or
	 
	 	(ii)	 	for a pre-1989 Member any Relevant Scheme providing benefits in respect of
Service.

“Connected Scheme” means any Relevant Scheme which is connected to the Scheme in relation to a
Member, i.e., if

	 	(i)	 	there is a period during which the Member has been employed by two of the
Employers
	 
	 	(ii)	 	the period counts under both schemes as a period in respect of which benefits
are payable

56

 

	 	(iii)	 	the period counts under one scheme for Service with one of the Employers and
under the other scheme for Service with the other Employer.

“Dependant” means, for the purposes of this Part VII only, any individual falling within the
definition of the term Dependant in Rule 1 and, in the case of a Former Spouse Participant, as if
the references to “Member” in the definition were replaced with references to the “Former spouse”.
In addition, the term shall include the Former Spouse’s spouse.

“Final Remuneration” is the greater of

	 	(i)	 	the Member’s fixed remuneration from the Employers for any one of the five
years before Pensionable Service ends, plus the yearly average of fluctuating earnings
for the three years (or other period decided by the Trustees as would not affect Inland
Revenue approval) before the end of that year and
	 
	 	(ii)	 	the average of the Member’s total earnings from the Employers for any three or
more consecutive years in the ten years before Pensionable Service ends

subject to the following:

	 	(a)	 	for a Member whose remuneration has been substantially reduced due to
Incapacity for a period of more than ten years before Pensionable Service ends, Final
Remuneration may be calculated at the date when the Member’s remuneration was first
reduced
	 
	 	(b)	 	where Final Remuneration is calculated using a year other than the twelve
months before Pensionable Service ends, the Member’s actual remuneration for that year
may be increased in proportion to any rise in the Index from the last day of that year
up to the end of Pensionable Service.
	 
	 	 	 	Except for a pre-1987 Member, this method may only apply to the calculation of the
maximum amount of the cash payment for the purposes of Revenue Limitations if it is
also used to increase the Member’s pension benefits in the same proportions.
	 
	 	(c)	 	an early retirement pension from the Employers may not be included in Final
Remuneration
	 
	 	(d)	 	No account will be taken of any earnings connected with shares or the right to
acquire shares or anything where tax is chargeable under Section 148 of the 1988 Act
except where the shares or rights had been acquired before 17th March 1987
	 
	 	(e)	 	for a Special Director, or any other Member whose remuneration in any Tax Year
after 5th April 1987 has exceeded £100,000 (or other figure prescribed in a Treasury
order), Final Remuneration is calculated as in (ii) above and
	 
	 	(f)	 	for a pre-1989 Member in calculating the maximum amount of the Lump Sum
Retirement Benefit the maximum Final Remuneration is £100,000 (or other figure

57

 

prescribed in a Treasury order). This restriction shall not apply to a pre-1987
Member.

	 	(g)	 	For a 1989 Member the maximum Final Remuneration shall not exceed the Permitted
Maximum
	 
	 	(h)	 	the total amount of any profit-related pay (whether relieved from income tax or
not), and benefits in kind assessed for tax under Schedule E (or in other circumstances
agreed with the Inland Revenue), may be included under (i) and Cu) above and treated as
fluctuating earnings.

“Former Spouse Participant” is a Former Spouse who participates in the Scheme. For this purpose
the Former Spouse Participant must participate in the Scheme either,

	 	(i)	 	solely for the provision of a Pension Credit Benefit, or
	 
	 	(ii)	 	for the wholly separate provision of a Pension Credit Benefit, where benefits
accrue or have accrued to that individual under the Scheme for any other reason.

“FSAVCS” means a freestanding additional voluntary contribution arrangement outside the terms of
the Scheme to which the Member has contributed.

“Index” means the Government’s Index of Retail Prices.

“Lump Sum Retirement Benefit” means the total value of all retirement benefits payable in any form
other than non-commutable pension arising from the Scheme and any Associated Scheme. For a Special
Director who is a 1989 Member, Lump Sum Retirement Benefit also includes any benefits from either a
retirement annuity contract approved under Chapter III of Part XIV of the 1988 Act or a personal
pension scheme approved under Chapter IV of Part XIV of the 1988 Act insofar as those benefits are
secured in respect of Service.

“Negative Deferred Pension” means the amount by which the Member’s pension or deferred pension
under the Scheme is reduced at the date of the Member’s retirement, leaving Pensionable Service or
death as the case may be, by a Pension Sharing Order in accordance with the 1999 Act. For this
purpose, Service includes all periods of service with other Employers which have been treated as if
they were service with the Employer where a transfer payment has been made to the Scheme in respect
of that other service.

“Pension Credit Rights” means rights to future benefits under a scheme which are attributable
(directly or indirectly) to a Pension Credit.

“Pension Debit Member” means a Member whose benefits have been permanently reduced by a Pension
Debit. Such a Member will either be

	 	(i)	 	a Member who is a controlling director of a company which is his employer if he
is a director of the company to whom paragraph (b) of section 417(5) of the 1988 Act
applies either at the date on which the marriage was dissolved or annulled, or at any
time within the period of 10 years before that date or,

58

 

	 	(ii)	 	a Member whose earnings at the date at which his marriage was dissolved or
annulled exceeded 1/4 of the Permitted Maximum for the year of assessment in which the
dissolution or annulment occurred. Earnings for these purposes shall be taken to be
the total emoluments

	 	(a)	 	which were paid to the Member in consequence of pensionable
service to which the Scheme relates during the year of assessment before the
year of assessment in which the marriage was dissolved or annulled, and
	 
	 	(b)	 	from which tax was deducted in accordance with the Income Tax
(Employments) Regulations 1993.

“Permitted Maximum” means the permitted maximum as defined in Section 590C(2) of the 1988 Act.

“Relevant Scheme” means any other scheme approved or seeking approval under the 1988 Act.

“Remuneration” in relation to any year means

	(i)	 	for a 1989 Member the aggregate of the total earnings for the year in question

	 	(a)	 	from the Employer
	 
	 	(b)	 	in respect of any Associated Employment or any Connected Scheme

which are assessable to Income Tax under Schedule E but excluding any earnings connected
with shares or the right to acquire shares or anything where tax is chargeable under Section
148 of the 1988 Act. No earnings in excess of the Permitted Maximum are included.

for a pre-1989 Member total earnings from the Employers in the year in question which are
assessable to Income Tax under Schedule E but excluding any earnings connected with shares
or the right to acquire shares or anything where tax is chargeable under Section 148 of the
1988 Act.

“Service” for the purposes only of this Part VII of the Rules means:

for a 1989 Member the aggregate of

	 	(a)	 	all periods of service with the Employers
	 
	 	(b)	 	all other periods which count in respect of any Associated Employment or any
Connected Scheme

For a Special Director who is a 1989 Member, unless the Board of Inland Revenue otherwise
agree this definition shall not include a period of service for an employer who is
associated with the Principal Company by virtue of a permanent community of interest rather
than because one employer is controlled by the other or both are controlled by a

59

 

third party. Where both such employers are participating in the Scheme separate
calculations of maximum benefits are required in respect of the separate periods of Service.
For the purpose of this paragraph, “control” has the meaning in section 840 of the 1988 Act
or, in the case of a close company, section 416 of the 1988 Act.

For a pre-1989 Member service with the Employers.

	A.	 	BENEFITS OF 1989 MEMBERS
	 
	1.	 	A 1989 Member’s Aggregate Retirement Benefit shall not exceed:

	 	(a)	 	on retirement at any time between age 50 and age 75, except before Normal
Retiring Date on grounds of Incapacity, a pension of 1/60th of Final Remuneration for
each year of Service (not exceeding 40 years) or such greater amount as will not
prejudice Inland Revenue approval; or
	 
	 	(b)	 	on retirement at any time before Normal Retiring Date on grounds of Incapacity,
a pension of the amount which could have been provided at Normal Retiring Date in
accordance with 1(a) above; Final Remuneration being computed as at the actual date of
retirement; or
	 
	 	(c)	 	on leaving Pensionable Service before attaining age 75, a pension of 1/60th of
Final Remuneration for each year of Service (not exceeding 40 years) or such greater
amount as will not prejudice Inland Revenue approval. The amount computed as aforesaid
may be increased by 5% for each complete year or, if greater, in proportion to any
increase in the Index which has occurred between the date of termination of Pensionable
Service and the date on which the pension begins to be payable. Any further increase
necessary to comply with DSS requirements is also allowable.

	2.	 	Subject always to the provisions of Rule 14.2 (relating to the provision of non-commutable
pensions by Members’ voluntary contributions) a 1989 Member’s Lump Sum Retirement Benefit
shall not exceed:

	 	(a)	 	on retirement at any time between attaining age 50 and attaining age 75, except
before Normal Retiring Date on grounds of Incapacity, 3/80ths of Final Remuneration for
each year of Service (not exceeding 40 years) or such greater amount as will not
prejudice Inland Revenue approval; or
	 
	 	(b)	 	on retirement at any time before Normal Retiring Date on grounds of Incapacity,
the amount which could have been provided at Normal Retiring Date in accordance with
2(a) above; Final Remuneration being computed as at the actual date of retirement; or
	 
	 	(c)	 	on leaving Pensionable Service before attaining age 75, a lump sum of 3/80ths
of Final Remuneration for each year of Service (not exceeding 40 years) or such greater
amount as will not prejudice Inland Revenue approval. The amount computed as aforesaid
may be increased in proportion to any increase in the Index

60

 

which has occurred between the date of termination of Pensionable Service and the
date on which the pension begins to be payable but only if and to the same extent as
the total benefits have been increased under 1(c) above. Provided always that the
provisions of this paragraph 2. shall not apply to a pension commuted on the grounds
of triviality.

	3.	 	The lump sum benefit (exclusive of any refund of a Member’s own contributions and any
interest thereon), payable on the death of a Member while in service or having left
Pensionable Service dies before the commencement of pension shall not, when aggregated with
all like benefits under Associated Schemes, exceed 4 times Final Remuneration (excluding
anything under paragraph (d) of the definition of Final Remuneration) or, if greater, £5,000,
less

	 	(i)	 	any lump sum (other than a refund of a Member’s own contributions) payable on
the death of the Member under all Relevant Schemes in respect of service with previous
employers, and
	 
	 	(ii)	 	any lump sum life assurance benefit payable (other than a refund of
contributions or premiums paid by the Member) on the death of the Member under a
retirement annuity contract or trust scheme approved under Chapter III of Part XIV of
the 1988 Act or a personal pension scheme approved under Chapter IV of Part XIV of the
1988 Act if the aggregate of such lump sums exceeds £2,500.

	4.	 	Any pension for a spouse or a Dependant of a 1989 Member, when aggregated with the pensions,
other than those provided by surrender of a Member’s own pension, payable to that spouse or
Dependant under or arising from all Associated Schemes, shall not exceed an amount equal to
2/3rds of the Aggregate Retirement Benefit:

	 	(a)	 	being paid to the Member at the date of death (including any pension
increases), or
	 
	 	(b)	 	being a deferred benefit payable to the Member under Rule 5.2 at any time
between attaining age 50 and attaining age 75, or
	 
	 	(c)	 	prospectively payable to a Member, if the Member dies in Service, if the Member
remained in Service up to Normal Retiring Date at the rate of pay in force immediately
before the Member’s death, or
	 
	 	(d)	 	prospectively payable to the Member on death in Service after Normal Retiring
Date on the basis that retirement took place on the day before the date of death,

or such greater amount as will not prejudice Inland Revenue approval.

	5.	 	If pensions are payable to more than one Dependant of a Member, the aggregate of all spouse’s
pensions and Dependants’ pensions so payable under or arising from this and all Associated
Schemes shall not exceed the full amount of whichever is the appropriate Aggregate Retirement
Benefit under (a), (b), (c) or (d) above or such greater sum as will not prejudice Inland
Revenue approval.

61

 

	6.	 	The maximum amount of a pension ascertained in accordance with this section A, less any
pension which has been commuted for a lump sum or given up in order to provide an annuity for
a Dependant, may be increased by 3% for each complete year or, if greater, in proportion to
the increase in the Index which has occurred, since the pension commenced to be paid.
	 
	7.	 	The preceding provisions of this section A shall be modified in their application to a Member
who is or has been during membership of the Scheme a Special Director so that the amount of
the maximum Aggregate Retirement Benefit in 1. and of the maximum Lump Sum Retirement Benefit
in 2. shall be reduced, where necessary for continuance of Inland Revenue approval, so as to
take account of any corresponding benefits under either a retirement annuity contract or trust
scheme approved under Chapter III of Part XIV of the 1988 Act or a personal pension scheme
approved under Chapter IV of Part XIV of the 1988 Act.
	 
	 	 	Where, in addition to being a Member, a 1989 Member is also a member of a FSAVCS, the
provisions of the following sentence shall apply in relation to any augmentation of the
benefits provided for the Member by the Scheme after withdrawal from the Scheme. Any
provisions in the Scheme imposing a limit on the amount of a benefit provided for the Member
shall have effect (notwithstanding anything in them to the contrary) as if they provided for
the limit to be reduced by the amount of any like benefit provided for the Member by the
FSAVCS.
	 
	8.	 	For a 1989 Member, the Scheme provisions shall have effect (notwithstanding anything in them
to the contrary) as if they provided:

	 	(a)	 	that a Member’s retirement benefit shall be paid no later than the date on
which he attains age 75, and
	 
	 	(b)	 	subject to a. above that no part of a Member’s retirement benefit shall be paid
in advance of actual retirement or leaving service except to the extent necessary to
comply with Department of Social Security requirements.

	9.	 	If a 1989 Member elects to take any part of the benefits under the Scheme in advance of
actual retirement, the limits set out in (1) and (2) above shall apply as if the Member had
retired at the effective date of the election as aforesaid, no account being taken of
subsequent Service, save that the maximum amount of any uncommuted pension not commencing
immediately may be increased either actuarially in respect of the period of deferment or in
proportion to any increase in the Index during that period.

	B.	 	BENEFITS OF PRE-1989 MEMBERS
	 
	(1)	 	A pre-1989 Member’s Aggregate Retirement Benefit shall not exceed:

	 	(a)	 	on retirement from Pensionable Service at (or on retirement before) Normal
Retiring Date, a pension of 1/60th of Final Remuneration for each year of Service (not
exceeding 40 years) or such greater amount as will not prejudice Inland Revenue
approval; or

62

 

	 	(b)	 	on retirement (or, when applicable, deemed retirement in accordance with (6)
below) after Normal Retiring Date, a pension of the greatest of:

	 	(i)	 	the amount calculated in accordance with whichever is
applicable of (1)(a) above and (1)(c) below on the basis that the actual date
of retirement (or, when applicable, deemed retirement as aforesaid) was the
Member’s Normal Retiring Date; or
	 
	 	(ii)	 	the amount which could have been provided at Normal Retiring
Date in accordance with whichever is applicable of (l)(a) above and (1)(c)
below increased either actuarially in respect of the period of deferment or in
proportion to any increase in the Index during that period; or
	 
	 	(iii)	 	where the Member’s total Service has exceeded 40 years, the
aggregate of 1/60th of Final Remuneration for each year of Service before
Normal Retiring Date (not exceeding 40 such years) and of a further 1/60th of
Final Remuneration for each year of Service after Normal Retiring Date, with an
overall maximum of 45 reckonable years,

Final Remuneration being computed, in the case of (i) and (iii) above, as at the actual date of
retirement, but subject always to (6) below; or

	 	(c)	 	on leaving Pensionable Service before Normal Retiring Date, a pension of 1/60th
of Final Remuneration for each year of Service (not exceeding 40 years) or such greater
amount as will not prejudice Inland Revenue approval. The amount computed as aforesaid
may be increased by 5% for each complete year or, if greater, in proportion to any
increase in the Index which has occurred, between the date of termination of
Pensionable Service and the Member’s Normal Retiring Date or (if earlier) the date on
which the pension begins to be payable. Any further increase necessary to comply with
DSS requirements is also allowable.

	(2)	 	Subject always to the provisions of Rule 14.2 relating to the provision of non-commutable
pensions by Members’ voluntary contributions a pre-1989 Member’s Lump Sum Retirement Benefit
shall not exceed:

	 	(a)	 	on retirement from Pensionable Service at (or on retirement before) Normal
Retiring Date, 3/80ths of Final Remuneration for each year of Service (not exceeding 40
years) or such greater amount as will not prejudice Inland Revenue approval; or
	 
	 	(b)	 	on retirement (or, when applicable, deemed retirement in accordance with (6)
below) after Normal Retiring Date, the greatest of:

	 	(i)	 	the amount calculated in accordance with whichever is
applicable of (2)(a) above and (2)(c) below on the basis that the actual date
of retirement (or, when applicable, deemed retirement as aforesaid) was the
Member’s Normal Retiring Date, or

63

 

	 	(ii)	 	the amount which could have been provided at Normal Retiring
Date in accordance with whichever is applicable of (2)(a) above and (2)(c)
below together with an amount representing interest thereon, or
	 
	 	(iii)	 	where the Member’s total Service has exceeded 40 years, the
aggregate of 3/80ths of Final Remuneration for each year of Service before
Normal Retiring Date (not exceeding 40 such years) and of a further 3/80ths of
Final Remuneration for each year of Service after Normal Retiring Date, with an
overall maximum of 45 reckonable years,

Final Remuneration being computed, in the case of (i) and (iii) above, as at the actual date of
retirement, but subject always to (6) below; or

	 	(c)	 	on leaving Pensionable Service before Normal Retiring Date, a lump sum of
3/80ths of Final Remuneration for each year of Service (not exceeding 40 years) or such
greater amount as will not prejudice Inland Revenue approval.

The amount computed as aforesaid may be increased in proportion to any increase in the Index
which has occurred between the date of termination of Pensionable Service and the Member’s
Normal Retiring Date or (if earlier) the date on which the Member’s pension begins to be
payable, but only if and to the same extent as the total benefits have been increased under
(1)(c) above. Provided always that the provisions of this paragraph (2) shall not apply to
a pension commuted on the grounds of triviality.

	(3)	 	The lump sum benefit (exclusive of any refund of a Member’s own contributions and any
interest thereon), payable on the death of a Member while in Pensionable Service or having
withdrawn from Pensionable Service before the commencement of the Member’s pension, shall not,
when aggregated with all like benefits under Associated Schemes exceed 4 times the Member’s
Final Remuneration (excluding any amounts under (d) of that definition, or, if greater,
£5,000, less

	 	(a)	 	any lump sum (other than a refund of the Member’s own contributions) payable on
the death of the Member under all Relevant Schemes in respect of service with previous
employers, and
	 
	 	(b)	 	any lump sum life assurance benefit (other than a refund of contributions or
premiums paid by the Member) payable on the death of the Member under a retirement
annuity contract or trust scheme approved under Chapter III of Part XIV of the 1988 Act
or a personal pension scheme approved under Chapter IV of Part XIV of the 1988 Act,

if the aggregate of such lump sum exceeds £2,500.

	(4)	 	Any pension for a spouse or a Dependant of a pre-1989 Member, when aggregated with the
pensions, other than those provided by surrender of the Member’s own pension, payable to a
spouse or Dependant under or arising from all Associated Schemes, shall not exceed an amount
equal to 2/3rds of the Aggregate Retirement Benefit -

64

 

	 	(a)	 	being paid to the Member at the date of death (including any pension
increases), or
	 
	 	(b)	 	being a deferred benefit payable to the Member under Rule 5.2 at Normal
Retiring Date, or
	 
	 	(c)	 	prospectively payable to the Member, on death in Service, if the Member had
remained in Service up to Normal Retiring Date at the rate of pay in force immediately
before the Member’s death (and assuming that contributions by and in respect of the
Member to the Scheme, and if applicable to any Associated Scheme, had continued up to
Normal Retiring Date at the same rate as they were being paid on the date of death), or
	 
	 	(d)	 	prospectively payable to the Member on death in Service after Normal Retiring
Date on the basis that retirement took place on the day before the date of death, or
such greater amount as will not prejudice Inland Revenue approval.

If pensions are payable to more than one spouse and Dependant aforesaid, the aggregate of
all spouse’s pensions and Dependants’ pensions so payable under or arising from this and all
Associated Schemes shall not exceed the full amount of whichever is the appropriate
Aggregate Retirement Benefit under (a), (b), (c) or (d) above or such greater sum as will
not prejudice Inland Revenue approval.

	(5)	 	The maximum amount of a pension ascertained in accordance with this section, less any pension
which has been commuted for a lump sum (except where Inland Revenue practice otherwise
permits) or given up in order to provide an annuity for a Dependant, may be increased by 3%
for each complete year or, if greater, in proportion to the increase in the Index which has
occurred since the pension commenced to be paid.
	 
	(6)	 	If a pre-1989 Member elects to take any part of the benefits under the Scheme in advance of
actual retirement, the limits set out in (1) and (2) above shall apply as if the Member had
retired at the effective date of the election as aforesaid, no account being taken of
subsequent Service, save that the maximum amount of any uncommuted pension not commencing
immediately may be increased either actuarially in respect of the period of deferment or in
proportion to any increase in the Index during that period.
	 
	(7)	 	The preceding provisions of this section shall be modified in their application to a Member
who is or has been during membership of the Scheme a Special Director so that the amount of
the maximum Aggregate Retirement Benefit in (1) above and of the maximum Lump Sum Retirement
Benefit in (2) above shall be reduced, where necessary for continuance of Inland Revenue
Approval, so as to take account of any corresponding benefits under either a retirement
annuity contract or trust scheme approved under Chapter III of Part XIV of the 1988 Act or a
personal pension scheme approved under Chapter IV of Part XI V of the 1988 Act and in relation
to a Member who is a Special Director at the Normal Retiring Date, as follows:

	 	(a)	 	where the Member’s pension commences after Normal Retiring Date but not later
than the 70th birthday, (l)(b)(ii), (l)(b)(iii), (2)(b)(ii) and (2)(b)(iii) shall not
apply,

65

 

and if it commences later than the attainment of that age, the said paragraphs shall
apply as if the 70th birthday had been specified in the Rules as the Member’s Normal
Retiring Date, so as not to treat as Service after Normal Retiring Date any Service
before the Member reaches age 70

	 	(b)	 	where (6) above applies to the Member, the rate of the actuarial increase,
referred to therein in relation to any period of deferment prior to the Member reaching
age 70, shall not exceed the percentage increase in the Index during that period.

	C.	 	The total contributions to be paid by the Member in a year of assessment to this and any
Relevant Scheme providing benefits in respect of Service shall not exceed 15% of the Member’s
Remuneration for that year in respect of that Service.
	 
	D.	 	This Part VII of the Rules is subject to any undertakings which the Trustees have given to
the Board of Inland Revenue.
	 
	E.	 	PENSION DEBIT MEMBER

          Notwithstanding any other provision of the Trust Deed or the Rules, the benefits of Pension
Debit Member are subject to the following additional limits subject to compliance with Social
Security legislation:

	 	(a)	 	The pension payable to the Member shall not exceed his Aggregate Retirement
Benefit less the value of his Negative Deferred Pension in the Scheme, in any
Associated Scheme and, in the case of a 1989 Member, in any Connected Scheme.
	 
	 	(b)	 	The lump sum payable from the Scheme and from any Associated Scheme (other than
on death) shall not exceed:

	 	(i)	 	for Pension Debit Members (other than pre-1987 Members) an
amount determined by 2.25 x the initial annual pension payable
	 
	 	(ii)	 	for Pension Debit Members who are pre-1987 Members the greater
of an amount determined in accordance with Rule 8 less 2.25 x the Negative
Deferred Pension, or 2.25 x the initial annual pension payable

          For the purposes of the calculation of the initial annual pension it should be assumed
that the Pension Debit Member will survive for a year from retirement, that his initial rate
of pension will remain constant for the first year and the effect of commutation should be
ignored.

	 	(c)	 	On the death of a Pension Debit Member, any pension payable to the Dependant of
the Member shall not exceed 2/3rds of the maximum Aggregate Retirement Benefit to which
the Member was entitled at his death less the value of his Negative Deferred Pension in
this Scheme, in any Associated Scheme and, in the case of a 1989 Member, in any
Connected Scheme. Where more than one pension is to be paid to the Dependants of the
Member, the total of all such

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pensions shall not exceed 100% of the maximum Aggregate Retirement Benefit to which
the Member was entitled at his death less the value of his Negative Deferred Pension
in this Scheme, in any Associated Scheme and, in the case of a 1989 Member, in any
Connected Scheme.

	F.	 	BENEFITS OF FORMER SPOUSE PARTICIPANT

          Notwithstanding any other provision of the Rules, the Pension Credit Benefits of a Former
Spouse Participant are subject to the following limits, subject to compliance with Social Security
legislation:

	 	(a)	 	A pension shall not commence earlier than the Former Spouse Participant
attaining age 50 nor later than her attaining age 75, except that a pension may
commence earlier on grounds of incapacity where she is simultaneously taking benefits
on incapacity grounds arising from service as an employee under the Scheme in which the
Pension Credit Benefits are held. Additionally a pension not yet in payment may be
fully commuted, at any age, on the grounds of exceptional circumstances of serious
ill-health. If she is aged 75 or over at the date the Pension Sharing Order is
implemented, the pension must come into payment immediately. There is no limit on the
amount of the pension. Such a pension should not be commuted, surrendered or assigned
except in accordance with the Rules. Such a pension must be payable for life unless it
is fully commuted under paragraph (d) below and may be guaranteed.
	 
	 	(b)	 	No lump sum may be paid to the Former Spouse Participant where the Member who
was formerly married to the Former Spouse Participant has already received a Lump Sum
Retirement Benefit from the Scheme before the date of the implementation by the Scheme
of the Pension Sharing Order.

No lump sum may be paid to the Former Spouse Participant where all of the Pension Credit
Rights under the Scheme have been transferred into the Scheme with a lump sum nil
certificate.

Any lump sum paid to the Former Spouse Participant in commutation for part of her pension
must be taken at the time the pension first becomes payable and shall not exceed 2.25 x the
initial annual pension. For this purpose, the initial annual pension should be calculated
on the following bases;

	 	(i)	 	if the pension payable for the year changes, the initial
pension payable should be taken;
	 
	 	(ii)	 	it should be assumed that the Former Spouse Participant will
survive for a year;
	 
	 	(iii)	 	the effect of commutation should be ignored.

	 	(c)	 	Where the Former Spouse Participant dies before benefits come into payment any
lump sum death benefit shall not exceed 25% of what would have been the cash

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equivalent of the Pension Credit Rights at the Former Spouse Participant’s date of
death.

Where the balance of the cash equivalent is used to provide a pension to a Dependant of the
Former Spouse Participant, the amount of such pension shall not exceed a maximum of 2/3rds
of the amount of the pension that could have been paid to the Former Spouse Participant at
the date of death had the whole of the cash equivalent of the Pension Credit Rights been
used to purchase an annuity at an available market rate. For the purpose of determining the
pension which could have been paid to the Former Spouse Participant, it should be assumed
that she was aged 50 at the date of death, where she died at an earlier age. Where more
than one pension is to be paid, the total of all the pensions cannot exceed the amount of
the pension that could have been paid to the Former Spouse Participant.

Such pensions must be payable for life, except that pensions paid to children must cease on
the attainment of age 18 or, if later, on the cessation of full time education.

	 	(d)	 	Where the Former Spouse Participant dies after pension has come into payment,
any pension payable to a Dependant of the Former Spouse Participant shall not exceed
2/3rds of the initial annual pension which was paid to the Former Spouse Participant as
increased by any rise in the Index since the commencement of the Former Spouse
Participant’s pension. Where more than one pension is to be paid, the total of all the
pensions shall not exceed the amount of the initial annual pension which was paid to
the Former Spouse Participant, as increased by any rise in the Index since the
commencement of the Former Spouse Participant’s pension. For these purposes initial
annual pension should be calculated on the same basis under paragraph (b) above.

Such pensions must be payable for life, except that pensions paid to children must cease on
the attainment of age 18 or, if later, on the cessation of full time education.

Where the Former Spouse Participant has a guarantee not exceeding 5 years and the guarantee
period has not expired, any lump sum paid to any person shall not exceed the remaining
balance of the pension instalments. Where the Former Spouse Participant has a guarantee
exceeding 5 years and the guarantee period has not expired, the remaining balance of the
pension instalments must not be paid in lump sum form and may only be paid in pension form
to an individual or individuals at the discretion of the Trustees.

	(e)	 	Where part of the Former Spouse Participant’s pension is surrendered on the
date the pension becomes payable for the provision, on the death of the Former Spouse
Participant, of a pension payable to a Dependant of the Former Spouse Participant, the
amount of pension surrendered shall not exceed the reduced pension that the Former
Spouse Participant retains.
	 
	(f)	 	Where the Former Spouse Participant is entitled to benefits under the Scheme
arising from Service as an employee, for the purposes of determining the aggregate
value of the total benefits payable to the Member is an amount

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consistent with Revenue Limitations, benefits from Pension Credit Rights must be
included. Where the Former Spouse Participant is also entitled to benefits under
the Scheme arising from Service as an employee, full commutation of the Pension
Credit Rights on the grounds of triviality will not be permitted unless benefits
arising from Service as an employee are simultaneously commuted.

	 	(g)	 	The Former Spouse Participant may request that the Trustees arrange a transfer
of her Pension Credit Rights to any other scheme if the Inland Revenue’s requirements
are satisfied in relation to a transfer to that scheme. When making a transfer of
Pension Credit Rights, the Trustees must confirm to the Receiving Scheme that the
transfer value consists wholly or partly of Pension Credit Rights for the benefit of a
Former Spouse Participant.

	G.	 	DEATH OF FORMER SPOUSE BEFORE TRUSTEES IMPLEMENT PENSION SHARING ORDER

Where a lump sum death benefit is payable if the Former Spouse dies after a Pension Sharing Order
is made but before it is acted upon by the Trustees, such lump sum shall not exceed 25% of what
would have been the cash equivalent of the fund which would have provided the Pension Credit Rights
for the Former Spouse.

The balance of the fund is used to provide a non-commutable pension to a Dependant of the former
Spouse the amount of such pension shall not exceed 2/3rds of the amount of the pension that could
have been paid to the Former Spouse at the date of death if the whole of the ___ which would
have provided the Pension Credit Rights had been used to purchase an annuity at an available market
rate. Where more than one pension is to be paid the total of all the pensions shall not exceed the
amount of the pension that could have been paid to the Former Spouse.

Such pensions must be payable for life, except that pensions paid to children must cease on the
attainment of age 18 or, if later, on the cessation of full-time education. Such pensions may be
fully commuted, however, for a lump sum on the grounds of triviality at the time such a pension
becomes payable.

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PART VIII

OVERSEAS EMPLOYER AND EMPLOYMENT

A        General

	1.	 	Subject to B.1 below a Member in Pensionable Service who is transferred to service overseas
prior to 15th November 1995 may remain in Pensionable Service in the circumstances and for the
relevant period referred to below. The circumstances are that the Member:

	 	(a)	 	is seconded by the Employer (the “UK Employer”) to work abroad for an employer
which is not resident in the United Kingdom (an “Overseas Employer”) for a fixed period
not exceeding 3 years and there is a definite expectation that the Member will return
to Service with the UK Employer, or
	 
	 	(b)	 	is in Service overseas with a subsidiary of the UK Employer or a company which
is controlled by the UK Employer or within the same group of companies (which may have
a non-resident parent company) and:

	 	(i)	 	the UK Employer retains control over where and for whom the
Member will work,
	 
	 	(ii)	 	the Member has been sent abroad, i.e., has had previous Service
in the United Kingdom for the UK Employer,
	 
	 	(iii)	 	the expected period of Service abroad does not exceed 10
years, and
	 
	 	(iv)	 	there is a definite expectation of return to the United Kingdom
either to resume employment with the UK Employer or, if the period in (iii) is
up to the Normal Retiring Date, to retire; or

	 	(c)	 	his earnings remain effectively chargeable to United Kingdom tax under Case I
or II of Schedule E of the 1988 Act because he only works overseas for periods which
total less than 365 days in any year.

Subject to B.2 below a Member who is transferred to Service with an Overseas Employer on or
after 15th November 1995 or an employee who is recruited initially on or after that date to
work abroad for an Overseas Employer may remain in Pensionable Service or may be admitted to
membership of the Scheme (as the case may be) in the circumstances referred to below. The
circumstances are that:

	 	(a)	 	there is a definite expectation that he will return to, or (as the case may be)
come to the United Kingdom either to enter Service with a UK Employer (such expectation
being evidenced in writing) or to retire or

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	 	(b)	 	his earnings remain effectively chargeable to United Kingdom tax under Case I
or II of Schedule E of the 1988 Act because he only works overseas for periods which
total less than 365 days in any year.

B        Conditions

	1.	 	The operation of Rule A.1 above is subject to the following conditions:

	 	(a)	 	the Overseas Employer shall reimburse the UK Employer for the Employer’s
contributions paid by it to the Scheme, unless the Inland Revenue have specifically
agreed otherwise, and
	 
	 	(b)	 	any pension in respect of the overseas Service shall be calculated and funded
by reference to the rate of remuneration appropriate for similar Service in the United
Kingdom.

	2.	 	The operation of Rule A.2 is subject to the following conditions:

	 	(a)	 	the UK Employer should continue to pay any Employer’s contributions due but
must be reimbursed by the Overseas Employer for the Employer’s contributions paid by it
to the Scheme, unless the Inland Revenue have specifically agreed otherwise, and
	 
	 	(b)	 	any pension in respect of the overseas Service shall be calculated and funded
by reference to the rate of remuneration appropriate for similar employment in the
United Kingdom, and
	 
	 	(c)	 	the period of Service abroad should not exceed 10 years. If there has been a
previous period or periods of Service abroad (but disregarding any such period during
which the Member has been performing duties abroad for a UK Employer) continuation of
Scheme membership must be limited to an aggregate of 10 years. For the purposes of the
aggregation calculation any period of Service abroad should be ignored where it is
separated from a subsequent period of Service abroad by at least one year’s employment
in the United Kingdom.

C        Special provisions

Retention in Pensionable Service in any circumstances other than those described in A and B
above shall be subject to Inland Revenue approval.

A Member who falls to be dealt with under A.1 above may be treated as if A.2 above applied
to the extent that such treatment may be advantageous to him.

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APPENDIX 1- GMP PROVISIONS

(referred to herein as “this Appendix”)

SECTION A

	1.	 	DEFINITIONS
	 
	 	 	In this Appendix, the following words have the following meanings in addition to those
defined in Rule I of the Rules:
	 
	 	 	“Contracted-out Employment” means a Member’s contracted-out employment by reference to the
Scheme (as in section 8(1)(a)(i) and 8(1)(b) of the 1993 Act) before 6th April 1997.
	 
	 	 	“Fixed Rate Revaluation” means the method of revaluing a GMP before state pensionable age
described in 6.1 (B) below.
	 
	 	 	“Provision” means the Provision (with that number) in this Appendix.
	 
	 	 	“Section 53 salary related scheme” means a scheme which was a contracted-out scheme,
providing GMPs and satisfying the provisions of the 1993 Act.
	 
	 	 	“Section 148 Revaluation” means the method of revaluing a GMP before state pensionable age
described in Provision 6.1(A) below.
	 
	 	 	“Short Service Benefit” means the benefit to which an early leaver who satisfies the
qualifying conditions must be entitled under the preservation requirements.
	 
	 	 	“Widow” and “Widower” means respectively the widow and the widower of a Member. If a Member
has married under a law which allows polygamy and, on the day of the Member’s death, has
more than one spouse, the Trustees must decide which, if any, survivor is the Widow or
Widower. In reaching that decision, the Trustees must have regard to the practice of the
Department of Social Security and any relevant provisions of existing Social Security
legislation, in particular section 17(5) of the 1993 Act and regulation 2 of the Social
Security and Family Allowance (Polygamous Marriages) Regulations 1975 (SI 1975/561).
	 
	 	 	OVERRIDING EFFECT OF THIS APPENDIX
	 
	 	 	This Appendix shall apply for so long as anyone has a GMP or a prospective right to receive
a GMP under the Scheme.
	 
	 	 	This Appendix overrides any inconsistent provisions elsewhere in the Scheme except
provisions which are necessary in order that Revenue Approval is not prejudiced.

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ALTERATIONS TO THIS APPENDIX

The power of alteration under the Trust Deed shall not be exercised so as to prevent the
Scheme from satisfying any legislative requirements as to the provision of GMPs.

SECURING GMPs

GMPs may be secured through the Scheme provided it has been established under an irrevocable
trust subject to the laws of any part of the United Kingdom. Otherwise, a GMP must be
secured by means of an insurance policy or annuity contract with an Authorised Insurer.

	5.	 	ENTITLEMENT TO GMP
	 
	5.1	 	Guaranteed Minimum. This Provision 5 applies to a Member, Widow or Widower where the Member
has a guaranteed minimum in relation to the pension provided for the Member under the Scheme
in accordance with the 1993 Act.
	 
	5.2	 	Member’s GMP. The Member shall be entitled to a pension for life paid at a rate equivalent
to a weekly rate of not less than that guaranteed minimum. The pension will be paid from
state pensionable age but commencement of the pension may be postponed for any period during
which the Member remains in employment after state pensionable age:

	 	(1)	 	if the employment is employment to which the Scheme relates and the
postponement is not for more than 5 years after state pensionable age or
	 
	 	(2)	 	if the Member consents to the postponement.

	5.3	 	Widow’s GMP. Where the Member is a man and dies at any time leaving a Widow, she shall be
entitled, subject to 5.4 below, to receive a pension from the Scheme paid at a rate equivalent
to a weekly rate of not less than half that guaranteed minimum.
	 
	5.4	 	Payment of Widow’s GMP. The pension shall be paid for life to any widow.
	 
	5.5	 	Widower’s GMP. Where the Member is a woman and dies at any time on or after 6 April 1989
leaving a Widower, he shall be entitled, subject to 5.6 below, to receive a pension from the
Scheme paid at a rate equivalent to a weekly rate of not less than half of that part of that
guaranteed minimum which is attributable to earnings for the tax year 1988/89 and subsequent
tax years.
	 
	5.6	 	Payment of Widower’s GMP. The pension shall be payable for life to any widower.

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	5.7	 	Offsetting pension against GMP. Any pension payable to the Member, Widow or Widower under
any other provision of the Scheme may be offset against the pension entitlement under this
Provision 5 except to the extent that

	 	(1)	 	any part of the pension is an equivalent pension benefit within the meaning of
the National Insurance Act 1965; or
	 
	 	(2)	 	any part of the pension is an increase, calculated in accordance with Schedule
3 of the 1993 Act and added to the amount that would be payable but for Chapter II of
Part IV of the 1993 Act or regulations made under it; or
	 
	 	(3)	 	offsetting would contravene the anti-franking legislation (see Provision 8
below).

	6.	 	REVALUATION OF GMP
	 
	6.1	 	Revaluation before state pensionable age. The Member’s GMP at state pensionable age or at
the Member’s earlier death will be calculated by increasing the accrued rights to GMP at
cessation of Contracted-out Employment under one of the options (A), or (B) below.

	 	(A)	 	Section 148 Revaluation
	 
	 	 	 	The increase will be by the percentage by which earnings factors for the tax year in
which Contracted-out Employment ceases are increased by the last order under section
148 of the Social Security Administration Act 1992 to come into force before the tax
year in which the Member reaches state pensionable age (or dies, if earlier).
	 
	 	(B)	 	Fixed Rate Revaluation
	 
	 	 	 	The increase will be by such rate as regulations made under section 55(5) of the
1993 Act specify as being relevant at the date Contracted-out Employment ceases, for
each completed tax year after the tax year containing that date up to and including
the last complete tax year before the Member reaches state pensionable age (or dies,
if earlier).
	 
	 	 	 	The Trustees and the Principal Employer shall decide which of the options (A) or (B)
applies to the Scheme. They may at any time decide that one of the other two
methods shall be used, instead of the method currently being used, for all Members
ceasing to be in Contracted-out Employment after a specified date.

	6.2	 	Transfers in. Where a transfer payment is received in respect of a Member from another
scheme (“the transferring scheme”) which includes accrued rights of the Member to a GMP the
earnings factors used in calculating that GMP will normally be revalued using Section 148
Revaluation during the Member’s Contracted-out Employment, and 6.1 above will apply if that
Contracted-out Employment ceases before state pensionable age. The Trustees may, however,
decide, if the provisions of the transferring scheme so allow, to use Fixed Rate Revaluation
or limited revaluation (as described in the 1993 Act) from

74

 

the date on which the Member ceased to be in contracted-out employment by reference to the
transferring scheme until the Member attains state pensionable age (or dies, if earlier) but
the Trustees may not make that decision if, on becoming a Member, the Member’s
contracted-out employment in relation to a previous scheme is treated as continuing for the
purposes of the 1993 Act.

Where the Scheme accepts the proceeds of, or the assignment of, an insurance policy which
consists of, or includes, accrued rights to GMP, the Trustees may use either Section 148
Revaluation or the method of revaluation that was in use under the policy unless the method
was limited revaluation for the purposes of the 1993 Act.

Transfers out. Where a Member’s accrued rights to GMP are transferred to another
contracted-out salary related scheme or to a Section 53 salary related scheme, the Trustees
may agree with the administrator of that scheme that the Member’s GMP shall, instead of
being revalued using the method currently being adopted under 6.1 above, be revalued using
another method which would be permitted if that scheme contained a Provision in the same
terms as 6.2 above.

	7.	 	INCREASE OF GMP
	 
	7.1	 	Increase after state pensionable age. If the commencement of any Member’s GMP is postponed
for any period after state pensionable age, that GMP shall be increased to the extent, if any,
specified in section 15 of the 1993 Act.
	 
	7.2	 	Increase after state pensionable age or Member’s death. Any GMP to which a Member, Widow or
Widower is entitled under Provision 5 above shall, insofar as it is attributable to earnings
in the tax years from and including 1988/1989, be increased in accordance with the
requirements of section 109 of the 1993 Act.
	 
	8.	 	ANTI-FRANKING
	 
	 	 	Except as provided in sections 87-92 and 110 of the 1993 Act, no part of a Member’s, Widow’s
or Widower’s pension under the Scheme may be used to frank an increase in the Member’s,
Widow’s or Widower’s GMP under Provision 6 or Provision 7 above.
	 
	9.	 	COMMUTATION OF GMP
	 
	 	 	In addition to the restrictions on commutation contained in the Rules:

	 	(1)	 	where commutation is taking place before state pensionable age, other than on
the death of the Member, Fixed Rate Revaluation must be applied to any GMP included in
the aggregate pension, and such GMP must be revalued to state pensionable age for the
purposes of calculating that aggregate.
	 
	 	(2)	 	where the Member’s pension, being an alternative to Short Service Benefit,
becomes payable before or after Normal Retiring Date, the value of that pension must,
to the reasonable satisfaction of the Trustees, be at least equal to the value of the
Short Service Benefit, plus the revaluation to Normal Retiring Date that the

75

 

deferred pension would have attracted in accordance with Chapter II of Part IV of
the 1993 Act had it been provided by the Scheme at Normal Retiring Date, and the
revaluation of GMP referred to in (1) above.

	 	(3)	 	Where commutation of the whole of a Member’s deferred pension is taking place
at Normal Retiring Date (or on the winding-up of the Scheme if earlier), the Members
pension in excess of GMP must be revalued up to Normal Retiring Date in accordance with
Chapter II of Part VI of the 1993 Act, and the GMP revalued in accordance with (1)
above.

	10.	 	SUSPENSION OF GMP
	 
	 	 	Payment of a GMP may be suspended during any period when:

	 	(a)	 	the person receiving the GMP is unable to act (by reason of mental disorder or
otherwise) but the amount of the GMP must either be paid or applied for the maintenance
of the recipient or his dependants, or paid to the recipient when the recipient is
again able to act, or paid to the recipient’s estate after that recipient’s death.
	 
	 	(b)	 	the recipient of the GMP is in prison or detained in legal custody, but the
amount of the GMP must then be paid or applied for the maintenance of such one or more
of the recipient’s dependants as the Trustees shall determine.
	 
	 	(c)	 	the Member is receiving the GMP but is then re-employed in an employment to
which the Scheme relates. The GMP must then be increased under Provision 7.1 during
the period of suspension.

	11.	 	CONTRIBUTIONS EQUIVALENT PREMIUMS
	 
	11.1	 	A contributions equivalent premium shall be paid, subject to 11.2 below, in respect of a
Member who ceases to be in Pensionable Service before whichever is the earlier of the Member’s
Normal Retiring Date and the end of the tax year preceding that in which the Member will reach
state pensionable age with less than 2 years’ Qualifying Service. A contributions equivalent
premium shall not be paid where the Member’s accrued rights includes rights transferred from a
personal pension, nor where the Member is a woman who dies in contracted-out employment in
respect of Widower’s GMP.
	 
	 	 	Payment of the contributions equivalent premium extinguishes the Member’s accrued rights to
GMPs under the Scheme. Therefore, where the premium is paid, any refund of contributions to
the Member or any transfer payment from the Scheme in respect of a Member shall be reduced
by the certified amount (as defined in the 1993 Act) in relation to that premium and any
pension benefit under the Scheme for the Member or the Member’s Widow or Widower shall be
reduced so as to allow for the fact that their accrued rights to GMPs have been
extinguished.

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	11.2	 	The premium shall not be payable if:

	 	(a)	 	its amount is less than £17 (or such greater amount as is specified in
regulations made under the 1993 Act).
	 
	 	(b)	 	the Member’s accrued rights to GMPs are transferred to another scheme, policy
or contract
	 
	 	(c)	 	the Member has become entitled to an immediate or a deferred pension under the
Scheme on ceasing to be in Pensionable Service.

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APPENDIX 2 — PROTECTED RIGHTS RULES

	1.	 	Definitions
	 
	 	 	In this Appendix 3, the following words have the following meanings in addition to those
defined in Rule 1 of the Rules:
	 
	 	 	“Commencement Date” means the date from which pension provided from the Member’s Protected
Rights Assets will be paid to the Member. This will not be earlier than the date on which
the Member attains the age of 60. The pension will not be paid later than the date on which
the Member attains the age of 65, unless the Member agrees that payment should start from a
later date, but this later date must be acceptable to the Inland Revenue.
	 
	 	 	“Insurer” means an insurance company, or a friendly society which complies with the
conditions of Regulation 11 of SI 1996 No. 1537.
	 
	 	 	“Member” means an individual who is in contracted-out employment in relation to the Scheme
and who is accruing Protected Rights Assets, or an individual who has Protected Rights
Assets in the Scheme in respect of previous membership of the Scheme or another scheme.
	 
	 	 	“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, and/ or service or pensionable service.
	 
	 	 	“Protected Rights” and “Protected Rights Assets” are defined in Provision 4 below.
	 
	 	 	“Qualifying Widow or Widower” means a widow or widower of the Member who, when the Member
dies, is aged 45 or over, or is entitled to child benefit for a Qualifying Child under age
18, or is living with a Qualifying Child under age 16. There will, however, be no
Qualifying Widow or Qualifying Widower insofar as the rate of the pension or annuity paid to
the Member has, in accordance with Regulation 4(2)(b)(iii) of SI 1996 No. 1537, been
determined by reference to his or her life only.
	 
	 	 	“Qualifying Child” means a child of the Member and the Member’s widow or widower. It also
includes any other child for whom the Member was entitled to child benefit immediately
before the Member died (or would have been if the child had been in Great Britain). If the
Member and the widow or widower were living together at the time the Member died, it also
includes any child for whom the widow or widower was then entitled to child benefit (or
would have been if the child had been in Great Britain).
	 
	 	 	“Section 9(2B) Rights” has the same meaning as in Regulation 1(2) of SI 1996 No. 1172.

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	2.	 	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.
	 
	3	 	Minimum Payments
	 
	3.1	 	Minimum payments will be paid to the Scheme within time limits laid down by the 1995 Act in
respect of all Members who are in contracted-out employment in relation to the Scheme. These
minimum payments are the contracted-out rebate percentage of the Member’s earnings from the
employer between the lower and upper earnings limits for National Insurance purposes. (For
this purpose “rebate percentage” means the appropriate flat rate percentage for the purposes
of Section 42A(2) of the 1993 Act). They are inclusive of any amounts deducted from the
Member’s earnings and paid by the employer to the Scheme as described in 3.2 below.
	 
	3.2	 	The minimum payments under 3.1 above will be contributed by the employer except that, if the
rules of the Scheme require a Member to contribute to the Scheme, the amount of that
contribution up to the Member’s share of minimum payments must be deducted by the employer
from that Member’s earnings and paid to the Scheme as part of the minimum payments. A
Member’s share of minimum payments is the amount by which his National Insurance contributions
on his earnings from the employer are less than would have been the case if he had not been
contracted-out. (Other contributions by Members will be paid by deduction from earnings or
otherwise as described in the rules of the Scheme.)
	 
	3.3	 	Investment. Minimum payments must be invested on behalf of the Member within one month of
the end of the income tax month to which they relate and age related payments made by the
Secretary of State under Section 42A(3) of the 1993 Act must be invested on behalf of the
Member within one month of the payment by the Secretary of State.
	 
	4.	 	Members’ Protected Rights
	 
	4.1	 	Payments to which the Protected Rights Provisions apply. The Protected Rights Provisions
apply to the following payments made to the Scheme in respect of a Member and the benefits
resulting from those payments:

	 	4.1.1	 	minimum payments as described in Provision 3.1 above, and payments made by the
Secretary of State under Section 42A(3) of the 1993 Act; and
	 
	 	4.1.2	 	incentive payments made under Section 7 of the Social Security Act 1986 and
Regulation 3(10) of SI 1987 No 1115; and
	 
	 	4.1.3	 	transfer payments received under Provision 9 below covering Protected Rights
or GMPs or Section 9(2B) Rights derived from other occupational pension schemes; or

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	 	4.1.4	 	transfer payments received under Provision 9 below covering Protected Rights
derived from personal pension schemes or an insurance policy which is an appropriate
policy under Section 32A of the 1993 Act; or
	 
	 	4.1.5	 	transfer payments received under Provision 9 below covering GMPs or Section
9(2B) Rights under insurance policies or annuity contracts of the type described in
Section 19 of the 1993 Act; and
	 
	 	4.1.6	 	payments of minimum contributions by the Secretary of State for Social
Security made under Regulation 14 of SI 1988 No. 137 or Regulation 12 of SI 1997 No.
470.

	4.2	 	Payments to which the Protected Rights Provisions do not apply. Any payments other than
those specified in 4.1 above (and the benefits resulting from such payments) are not subject
to the Protected Rights Provisions unless the rules of the Scheme specifically state
otherwise.
	 
	4.3	 	Money Purchase Benefits. The payments to which the Protected Rights Provisions apply and
their proceeds under the Scheme must be used to provide the Member with Money Purchase
Benefits except so far as they are used to meet administrative expenses of the Scheme and to
pay commission.
	 
	 	 	The Members’ right to these benefits are called “Protected Rights”. The Scheme assets
representing these Protected Rights are referred to in these Protected Rights Provisions as
“Protected Rights Assets”.
	 
	4.4	 	Calculation. The value of the Member’s Protected Rights Assets must be calculated in a way
approved by the Trustees. It must be at least as favourable as the way in which any other
Money Purchase Benefits of the Member in the Scheme are calculated. It must also be
consistent with the requirements set out in the rest of these Protected Rights Provisions.
Where the valuation of the Protected Rights Assets involves making estimates of the value of
benefits, then the manner of calculation must be approved by an Actuary. The methods and
assumptions used must be either determined by the Trustees, or notified to the Trustees by an
Actuary, and must in either case be certified by an Actuary to be consistent with the relevant
requirements of the 1993 Act, and with “Retirement Benefit Schemes — Transfer Values (GN11)”
published jointly by the Institute of Actuaries and the Faculty of Actuaries and current when
the calculation is being made. The Trustees must keep such records as will enable the amount
of the Member’s Protected Rights Assets to be calculated at any time.
	 
	4.5	 	Employee Contributions. Unless Regulation 30(1)(b) of SI 1996 No. 1172 is deleted by
amending Regulations, all employee contributions must be used to provide Money Purchase
Benefits, even if the Scheme otherwise provides salary related benefits, except where
Regulation 30(2) of SI 1996 No. 1172 permits otherwise.
	 
	 	 	If the rules of the Scheme provide for compulsory employee contributions, then each
employee’s contribution up to the contracted-out rebate percentage of his Primary Class 1
contributions on his earnings between the lower and upper earnings limits for National

80

 

Insurance purposes count as minimum payments under Provision 3.1 above. These Protected
Rights Provisions apply to them.

Other employee contributions do not count as minimum payments. These Protected Rights
Provisions only apply to them if the rules of the Scheme say that the Protected Rights
Provisions apply to all payments to the Scheme.

	4.6	 	Overriding effect. So far as Protected Rights are concerned, these Protected Rights
Provisions override any inconsistent provisions elsewhere in the Scheme, except any that are
in accordance with the provisions of the 1993 Act and which are necessary in order that Inland
Revenue approval for the purposes of Chapter I of Part XIV of the Income and Corporation Taxes
Act 1988 is not prejudiced.
	 
	4.7	 	These Protected Rights Provisions will be treated as including Provisions to the effect of
any rule that must be included for the Scheme to be contracted-out on a money purchase basis
in relation to Member’s employment. If any of these Protected Rights Provisions are
inconsistent with the requirements of the 1993 Act (and Regulations made under it) in relation
to money purchase contracted-out schemes, the latter will prevail.
	 
	5	 	Pension for Member
	 
	5.1	 	When Pension is paid. The pension from a Member’s Protected Rights Assets becomes payable at
the Commencement Date specified in the rules of the Scheme. The Trustees may (but need not)
allow the Member to choose a later Commencement Date, in which case the Member must notify the
Trustees of the date chosen by writing to them at least one month before the specified
Commencement Date.
	 
	5.2	 	Providing the Pension. When the Member reaches the Commencement Date the Protected Rights
Assets will be used to provide a pension for life.
	 
	 	 	The pension must be one offered without regard to the sex of the Member either in making the
offer or in calculating the amount of the pension. Marital status will be taken into
account only where and on the basis permitted under Regulation 4(2) of SI 1996 No. 1537.
	 
	5.3	 	Member’s right to choose. The Member has the right to choose any Insurer or, where the rules
of the Scheme allow, the Scheme, to provide the pension. If the Member decides to choose an
Insurer, he must do so by writing to tell the Trustees which Insurer he has chosen at least
one month, but not more than 6 months, before the Commencement Date.
	 
	 	 	If the Member agrees to the pension becoming payable at a later date than age 65, and there
is less than one month between the date on which he agrees to a later date and that later
date, then he can only choose an Insurer by telling the Trustees so in writing on the same
day as he agrees to the later date. The Trustees may allow any Member a longer period in
which to make his choice.

81

 

	5.4	 	Trustees’ Choice. If the Member does not choose an Insurer by writing to tell the Trustees
by the latest date permitted under 5.3 above, the Trustees may choose an Insurer, or the
Scheme.
	 
	5.5	 	Form of Pension. The pension will include provision for benefits after the Member’s death as
described in Provision 6 below. Where that allows alternative benefits, then a Member who
chooses an Insurer may at the same time choose which alternatives apply. If the Trustees
choose an Insurer, they may allow the Member to choose the alternatives or the Trustees may
choose the alternatives. If the pension is provided by the Scheme, the alternatives applying
will be those described in the rules of the Scheme, or the alternatives allowed in Provision 6
below which the Trustees agree to provide.
	 
	5.6	 	Lump Sum instead of Trivial Pension. If the pension which can be provided from a Member’s
Protected Rights Assets is trivial, the Trustees may pay the Member the cash value of his
Protected Rights Assets instead. But they may not do so if the Member has any other rights
under the Scheme which are not being satisfied by a lump sum.
	 
	 	 	The Trustees may only treat a pension as trivial if either:

	 	5.6.1	 	all benefits payable to the Member under the Scheme and all other retirement
benefit schemes relating to the same employment do not exceed the value of a pension of
£260 per annum (or such greater amount as may be prescribed by Regulations made under
Section 28 of the 1993 Act and is permitted by the Inland Revenue), or
	 
	 	5.6.2	 	in other circumstances as may be prescribed.

	6	 	Member dies after Pension starts
	 
	6.1	 	Qualifying Widow’s or Widower’s Pension. The pension provided from a Member’s Protected
Rights Assets will include provision for a pension to continue to be paid to any Qualifying
Widow or Widower. Subject to 6.5 below, the Qualifying Widow’s or Widower’s pension will be
half the amount that would have been payable if the Member had survived.
	 
	6.2	 	Duration of Pension. The Qualifying Widow’s or Widower’s pension will be paid for life
unless provision is made for it to stop:

either if the Qualifying Widow or Widower remarries before reaching state
pensionable age

or if, before the Qualifying Widow or Widower reaches age 45, the situation changes
so that she or he is neither entitled to child benefit for a Qualifying Child under
age 18 nor living with a Qualifying Child under age 16.

	6.3	 	No Qualifying Widow or Widower but Dependant. The pension provided from a Member’s Protected
Rights Assets may (but need not) be on terms that, if the Member does not leave a Qualifying
Widow or Widower, then a pension will be paid to a

82

 

dependant of the Member. Subject to 6.5 below, the dependant’s pension will not be more
than half the amount that would have been payable if the Member had survived.

	6.4	 	No Qualifying Widow or Widower but Dependent Child(ren). The pension provided from a
Member’s Protected Rights Assets may (but need not) be on terms that, if the Member does not
leave a Qualifying Widow or Widower and no dependant’s pension is to be provided, but he does
leave a Dependent Child (or Dependent Children), a pension will be paid for the benefit of
that child or those children. “Dependent Child(ren)” means a child (or children) for whom the
Member was entitled to child benefit immediately before he died (or would have been if the
child had been in Great Britain).
	 
	 	 	Subject to 6.5 below, the amount paid as pension for the child(ren) will not be more than
half the amount that would have been payable if the Member had survived. The pension will
be paid only so long as at least one Dependent Child is under age 18.
	 
	6.5	 	5-Year Guarantee. The pension provided from a Member’s Protected Rights Assets may (but need
not) be on terms that it will in any event be paid for up to 5 years. Then, if the Member
dies during the 5 years, any survivor’s pension payable may be an amount up to the amount of
the pension payable to the Member until the end of the 5 years, after which it will not be
more than half the amount that would have been payable if the Member had survived. If a
pension guarantee applies, a pension of an amount up to the amount of the Member’s pension
will still be paid for the rest of the 5 years even if no survivor’s pension is payable, or
the survivor’s pension ceases to be payable before the end of the 5 years. In these
circumstances, the pension will be paid 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 during the payment period).
	 
	7	 	Member dies before Pension starts
	 
	7.1	 	Qualifying Widow’s or Widower’s Pension. If a Member dies before his pension under Provision
5 above starts, the Trustees must take reasonable steps to find out whether the Member is
survived by a Qualifying Widow or Widower.
	 
	 	 	If the Trustees discover that the Member is survived by a Qualifying Widow or Widower then,
as soon as is practicable, the Member’s Protected Rights Assets must be used to provide the
Qualifying Widow or Widower with a pension. The pension may be provided by the Scheme if
the rules of the Scheme allow for this. If they do not, or if they allow a Qualifying Widow
or Widower to choose an Insurer and she or he does so, the pension must be bought from an
Insurer.
	 
	7.2	 	Duration of Pension. The Qualifying Widow’s or Widower’s pension will be paid for life unless
provision is made for it to stop:

either if the Qualifying Widow or Widower remarries before reaching state
pensionable age

83

 

or if, before the Qualifying Widow or Widower reaches age 45, the situation changes
so that she or he is neither entitled to child benefit for a Qualifying Child under
age 18 nor living with a Qualifying Child under age 16.

	7.3	 	Qualifying Widow’s or Widower’s right to choose. If the rules of the Scheme do not allow for
a pension to be provided from the Scheme, or if they do allow for this but they also allow the
Qualifying Widow or Widower to choose an Insurer, the Trustees must write and tell the
Qualifying Widow or Widower that she or he has the right to choose an Insurer. The Qualifying
Widow or Widower then has three months to write back to the Trustees and tell them which
Insurer has been chosen. The pension may (but need not) include any or all of the
alternatives described in 7.2 above and 7.5 and 7.6 below. If the Qualifying Widow or Widower
chooses an Insurer, she or he may at the same time choose which alternatives will apply to the
pension.
	 
	7.4	 	Trustees’ Choice. If a Qualifying Widow or Widower who is allowed to choose an Insurer does
not do so by writing to tell the Trustees by the latest date permitted under 7.3 above, the
Trustees may choose an Insurer or the Scheme. The pension may (but need not) include any or
all of the alternatives described in 7.2 above and 7.5 and 7.6 below. The Trustees may allow
the Qualifying Widow or Widower to choose which alternatives will apply to the pension or the
Trustees may choose the alternatives. If the pension is provided by the Scheme, the
alternatives applying will be those described in the rules of the Scheme, or the alternatives
allowed in Provision 6 above which the Trustees agree to provide.
	 
	7.5	 	Child’s Pension. The pension bought with or provided from a Member’s Protected Rights Assets
may (but need not) be on terms that, if the Qualifying Widow or Widower is still receiving a
pension when she or he dies and leaves a Dependent Child (or Dependent Children), the pension
will continue for the benefit of that child or those children. “Dependent Child(ren)” means a
child (or children) for whom the Qualifying Widow or Widower was entitled to child benefit
immediately before she or he died (or would have been if the child had been in Great Britain).
The amount paid as pension for the child(ren) will not be more than the Qualifying Widow’s or
Widower’s pension would have been if she or he had survived. It will continue to be paid only
so long as at least one Dependent Child is under age 18.
	 
	7.6	 	5-Year Guarantee. The pension bought with or provided from a Member’s Protected Rights
Assets may (but need not) be on terms that, if the Qualifying Widow or Widower dies within 5
years of the pension commencing (or if the pension continues under 7.5 above but the last
Dependent Child dies or reaches age 18 within 5 years of the pension commencing), the pension
will continue to be paid for the rest of the 5 years 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 during the payment period).
	 
	7.7	 	Lump Sum instead of Trivial Pension. If there is a surviving Qualifying Widow or Widower and
the pension which can be provided is trivial, the Trustees may if they wish pay her or him the
cash value of the Protected Rights Assets as a lump sum instead. But they may not do so if
the Member had any other rights under the Scheme when he died

84

 

which are not being satisfied by a lump sum, or if the Inland Revenue limits would otherwise
be infringed.

If there are other rights under the Scheme which are to be satisfied by payment of a lump
sum, the Trustees will calculate the amount of that lump sum by reference to the amount of
the relevant pension, on a basis which they have either agreed with the Inland Revenue or
had certified as reasonable by an Actuary.

The Trustees may only treat a pension as trivial if the pension which is being vided from
the Scheme and all other retirement benefit schemes relating to the same employment is not
more than L260 per annum (or such greater amount as may be prescribed by Regulations made
under Section 28 of the 1993 Act and is permitted by the Inland Revenue), and the only
benefit being provided under the Scheme (including this Provision) is a lump sum within
Inland Revenue limits.

	7.8	 	Qualifying Widow or Widower dies before Pension starts. If the Qualifying Widow or Widower
dies before the pension is provided, the Trustees will pay the value of the Member’s Protected
Rights Assets in accordance with any direction given by the Member in writing. If there has
been no direction given, the value will be paid to the Member’s estate.
	 
	7.9	 	No Qualifying Widow or Widower. If the Trustees decide that the Member died without leaving
a Qualifying Widow or Widower, then as soon as practicable the Trustees will pay the value of
the Member’s Protected Rights Assets in accordance with any direction given by the Member in
writing. If there has been no direction given, the value will be paid to the Member’s estate.
	 
	8	 	Transfer of Protected Rights Assets out of the Scheme
	 
	8.1	 	Transfer of Protected Rights Assets. The Trustees may, at the written request of a Member,
transfer his Protected Rights Assets (which may be part of a larger transfer) to another
occupational pension scheme of which the Member has become a member or to an appropriate
personal pension scheme. The Member may withdraw the request by giving the Trustees notice in
writing to that effect but may not withdraw the request after the Trustees have entered into
an agreement with a third party to make the transfer to the other scheme. A Member who has
withdrawn a request may make another.
	 
	8.2	 	Conditions for Transfer of Protected Rights Assets. A transfer payment made out of the
Scheme under the rules of the Scheme may only include a Member’s Protected Rights Assets if
the following conditions are fulfilled. These conditions depend on the type of scheme to
which a transfer is being made.

	 	8.2.1	 	Money purchase contracted-out schemes and appropriate personal pension
schemes.

The transfer must comply with the conditions set out in Regulation 3 of SI 1996 No.
1461.

85

 

	 	8.2.2	 	Salary related contracted-out schemes
	 
	 	 	 	The transfer must comply with the requirements of Regulation 4 of SI 1996 No. 1461.
	 
	 	8.2.3	 	Overseas schemes
	 
	 	 	 	The transfer must comply with the requirements of Regulation 5 of SI 1996 No. 1461.

	8.3	 	Discharge of Protected Rights. Where the Member’s Protected Rights Assets are transferred in
accordance with this Provision, the Member will cease to have any Protected Rights under the
Scheme and the Trustees will be discharged from any obligation to give effect to those
Protected Rights.
	 
	9	 	Transfer into the Scheme
	 
	9.1	 	Acceptance of Transfer. The Trustees may, at the request of the Member, or a former Member,
accept:

	 	9.1.1	 	a transfer of assets representing Protected Rights for the Member from another
scheme which is, or was, an appropriate personal pension scheme, an occupational
pension scheme contracted-out by the money purchase test or an insurance policy which
is an appropriate policy under Section 32A of the 1993 Act; or
	 
	 	9.1.2	 	a transfer payment in respect of the Member’s accrued rights to GMPs or
Section 9(2B) Rights under a scheme which is, or was, a salary related contracted-out
scheme, or an insurance policy or (in the case of GMPs or Section 9(2B) Rights) annuity
contract of the type described in Section 19 of the 1993 Act.

	9.2	 	Use of Transfer Payment to provide Protected Rights. The Trustees must use that part of any
transfer payment representing Protected Rights or accrued rights to GMPs or Section 9(2B)
Rights to provide the Member with Protected Rights under the Scheme. The rest of the transfer
payment will only be used to provide Protected Rights if the rules of the Scheme say that
these Protected Rights Provisions apply to all payments to the Scheme.
	 
	10	 	General provisions about Benefits
	 
	10.1	 	Beneficiary unable to act. If the Trustees believe that a person entitled to payment of a
Member’s Protected Rights Assets or of a pension provided with those assets is unable to act
by reason of mental disorder or otherwise, the Trustees 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 the person dies without
becoming able to act, payment must be made to that person’s estate.

86

 

	10.2	 	Prison. If a person entitled to benefit is serving a period of imprisonment or detention in
legal custody, payments which are or become due to that person of a Member’s Protected Rights
Assets or of a pension provided from those assets may be suspended. The value of the
suspended payments must be used for the maintenance of one or more of that person’s
dependants.
	 
	10.3	 	Whereabouts unknown. Any payment due to any person of a Member’s Protected Rights Assets or
of the pension provided from those assets may be forfeited if at least 6 years have passed
from the date the payment became due and the address of the person is not known to the
Trustees.
	 
	11	 	General Provisions about Pensions
	 
	11.1	 	Payment Intervals. The pension provided with a Member’s Protected Rights Assets will be paid
in advance or arrear as is arranged with the Insurer providing it. If the Scheme is providing
the pension it will be as provided in the rules of the Scheme.
	 
	 	 	If it is payable in advance, it must be paid at least once a year.
	 
	 	 	If it is payable in arrear, it must be paid at least monthly, unless the recipient agrees in
writing that it can be paid less often. It must be paid at least once a year.
	 
	11.2	 	Increase in Payment. Insofar as it is derived from GMPs transferred into the Scheme or from
payments or contributions in respect of any tax year before 6 April 1997, the pension provided
with a Member’s Protected Rights Assets must increase each year by the same percentage as a
GMP accruing after 5 April 1988. These increases are governed by orders under Section 109 of
the 1993 Act, and reflect increases in the general level of prices up to a maximum of 3%. The
pension may (but need not) be on terms that it will increase by a greater amount, but not by
more than 3% in any year. Insofar as any money purchase pension under the Scheme is
attributable to employment carried on after 5 April 1997 or payments in respect of such
employment, it will be increased when and as required by Section 51 of the 1995 Act
	 
	 	 	The first increase must be made not later than the first anniversary of the pension
starting. Further increases must be made on each anniversary of the first increase.
	 
	11.3	 	Enforceability. The Trustees may only buy a pension from an Insurer with a Member’s
Protected Rights Assets if the Trustees are satisfied that any person who is or may be
entitled to payment of that pension may enforce that entitlement:

11.3.1 under a trust; or

11.3.2 under a deed poll; or

11.3.3 under Scottish law.

87

 

	12	 	Alterations to these Protected Rights Provisions
	 
	12.1	 	Power to alter Protected Rights Provisions. The person, persons or bodies having the power
of alteration in relation to the rest of the Scheme may at any time in writing make any
alteration to these Protected Rights Provisions necessary to comply with the contracting-out
requirements of the 1993 Act applicable to money purchase contracted-out schemes and to
schemes which have ceased to be money purchase contracted-out schemes. The Protected Rights
Provisions will only apply for so long as anyone continues to have Protected Rights under the
Scheme. This power of alteration may be exercised by them without any condition except the
one in 12.2 below. It is additional to, and independent of, any other power of alteration in
relation to the Scheme.
	 
	12.2	 	Restriction on Alterations. No alteration to these Protected Rights Provisions may be made
except as permitted under Section 37 of the 1993 Act. This applies whether the alteration is
made under 12.1 above or under any other power of alteration in relation to the Scheme.
	 
	13	 	Scheme ceases to be a Money Purchase Contracted-out Scheme
	 
	 	 	If the Scheme ceases to be contracted-out by the money purchase test, the Trustees will
inform Members of their rights and options in accordance with SI 1996 No. 1655 and will seek
the approval of the Secretary of State to any proposed arrangements for securing Protected
Rights. When the Scheme is being wound up, protected rights may be discharged by insurance
policies in accordance with the provisions of Section 32A of the 1993 Act.
	 
	14	 	Investments
	 
	 	 	The Scheme will comply with the restrictions imposed under Section 40 of the 1995 Act
(Employer-Related Investments).
	 
	15	 	Insured Scheme
	 
	 	 	If the benefits under the Scheme are secured by one or more policies of assurance or annuity
contracts and the Scheme is managed by an insurance company which issued the policy or
contract, the insurance company will be notified of any alteration in the membership of the
Scheme and the amount of earnings of any Member.

88

 

APPENDIX 3 — ACTUARIAL CERTIFICATE

89

 

SECTION 67 ACTUARIAL CERTIFICATE

To: The Trustees of the Scheme named below

	 	 	 	 	 
	Name of Scheme

	 	:
	 	Biwater Retirement and Security Scheme
	 
	 	 	 	 
	PSO Reference Number

	 	:
	 	SF2/39115

I hereby certify that :

	(a)	 	I have been appointed by the Trustees as actuary for the Scheme in accordance with the
requirements of Section 47 of the Pensions Act 1995; and
	 
	(b)	 	In my opinion, if the power to modify the Scheme is exercised by the execution of the Deed of
Variation to which this Certificate is attached (“the Deed”), then the exercise of this power
in this manner does not adversely affect any member of the Scheme (without his consent) in
respect of his entitlement, or accrued rights, acquired before the power is exercised.

This Certificate is given in accordance with Section 67 of the Pensions Act 1995 (“Section 67”) and
The Occupational Pension Schemes (Modification of Schemes) Regulations 1996 (“the Regulations”).
Words and expressions used in this Certificate have the same meanings as in Section 67 and the
Regulations.

The Certificate is valid only in respect of Section 67 and the Regulations and so long as:

	(a)	 	No other modifications whatsoever are made to the Scheme prior to the execution of the Deed;
and
	 
	(b)	 	No modifications whatsoever are made to the Deed from its wording at the date this
Certificate is signed; and
	 
	(c)	 	Where the power to modify the Scheme is exercised by a person other than the Trustees, the
Trustees have approved the exercise of this power represented by the execution of the Deed.

	 	 	 	 	 	 	 	 	 
	/s/ D. Carr

	 			Date	 	28 March 2003	 	
	 

	 	 
	 	 	 	 

	 	 
	D. CARR

	 	 	 	Qualification:
	 	Fellow of the Institute of Actuaries	 	 
	 
	 	 	 	 	 	 	 	 
	Mill Pool House

	 	 	 	Cartwright
	 	Consulting Ltd	 	 
	Mill Lane
	 	 	 	 	 	 	 	 
	Surrey GU7 1EY
	 	 	 	 	 	 	 	 

90EX-10.16.2

 

Exhibit 10.16.2

DATED 14 May 2003

BIWATER RETIREMENT AND SECURITY SCHEME

Deed of Correction

changing the Main and ex-WCAPS Editions of the

Fifth Definitive Trust Deed and Rules

with effect on and from 1st April 2003

CMS Cameron McKenna

Mitre House

160 Aldersgate Street

London ECIA 4DD

T +44(0)171 367 3000

F +44(0)171 367 2000

File Ref: 104585.00001

Doc.Ref: 20606914.01

C/M/S/ Cameron McKenna

(cms)

TRANSITIONAL LEGAL SERVICES

CERTIFIED
TO BE A TRUE AND
COMPLETE COPY OF THE ORIGINAL

CMS CAMERON
MCKENNA
DATE 16/5/2003
CMS Cameron McKenna

Mitre House

160 Aldersgate Street

London EC1A 4DD

 

 

THIS DEED OF CORRECTION is made the 14th day of May 2003

PARTIES

	(1)	 	The Principal Employer
	 
	 	 	BIWATER PLC whose registered office is at Biwater House, Station Approach, Dorking, Surrey
RH4 ITZ and
	 
	(2)	 	The Trustees
	 
	 	 	TERENCE WILLIAM ALBERT BARKER of “the Willows”, 20 Holme Park, Upper Newbold, Chesterfield,
Derbyshire S41 8XB NORMAN ERIC DODD of 5 Ashworth Avenue, Urmston, Manchester M41 8TH JOHN
ERNEST ALFRED KERSLAKE of Ivy House, Stack Hills Road, Todmorden, OL14 5QW ANTHONY JOHN READ
of 4 Hazlemere Drive, St Leonards, Ringwood, Hants and BARRY SHORT of 15 Rimbury Way,
Christchurch, Dorset BH23 2RQ

RECITALS

	(A)	 	This Deed is supplemental to two editions of a Fifth Definitive Trust Deed called the “Main
Edition” and the “ex-WCAPS Edition” respectively and both made on 1st April 2003
(together called “the Trust Deeds”), both with Rules attached (together called “the Rules”)
and which constitute the current provisions of the Biwater Retirement and Security Scheme
(“the Scheme”)
	 
	(B)	 	In accordance with Clause 24 of the Trust Deeds, the Trustees may amend the provisions of the
Rules with the consent of the Principal Employer at any time by deed
	 
	(C)	 	The Trustees and the Principal Employer wish to correct the Trust Deeds and the Rules to
reflect the agreed intentions of both parties
	 
	(D)	 	 The Trustees are the present trustees of the Scheme

-1-

 

OPERATIVE PROVISIONS

The Trustees, with the consent of the Principal Employer, in exercise of the powers described in
recital (B) above declare that with effect from 1st April 2003 the Trust Deeds and the Rules shall
be amended as follows:-

	1.	 	In Clause 8.12 of the Trust Deed of the Main Edition, the words “The Trustees will be obliged
to follow a Member’s preferences” will replace “The Trustees will not be obliged to follow a
Member’s preferences”.
	 
	2.	 	In the definition of “Water Company” in Rule l of both the Main Edition and the WCAPS
Edition, the words “and Cascal Services Limited” shall be deleted.

IN WITNESS of which the parties have executed this document as a deed on the date set out above.

	 	 	 
	EXECUTED as a deed on
	 	 
	behalf of BIWATER PLC by
	 	 
	 
	 	 
	Director

	 	/s/ D.L. Magor
	 
	 	 
	Secretary

	 	/s/ Martin Robert Anthony Duffy
	 
	 	 
	SIGNED AND DELIVERED as a Deed by
	 	 
	TERENCE WILLIAM ALBERT BARKER

	 	/s/ T.
Barker

	in the presence of
	 	 
	 
	 	 
	Witness

	 	D. Barker
	 
	 	 
	 

	 	 
	 
	 	 
	Address

	 	 The Willows
 20 Holme Park Ave
 Chesterfield
 841 8XB
	 
	 	 
	SIGNED AND DELIVERED as a Deed by
	 	 
	NORMAN ERIC DODD in the presence of

	 	/s/
Norman
Eric Dodd

	 
	 	 
	Witness

	 	J.P. Dawson
	 
	 	 
	 

	 	 
	 
	 	 
	Address

	 	Biwater Place
 Gregge Street

Heywood
 Laneashire
 OL102DV

 

 

	 	 	 	 
	SIGNED AND DELIVERED as a Deed by
	 	 	 
	JOHN ERNEST ALFRED KERSLAKE

	 	 	/s/
John
Earnest Alfred Kerslake

	in the presence of
	 	 	 
	 
	 	 	 
	Witness
	 	 	/s/ SIGNATURE ILLEGIBLE

	 
	 	 	 
	 

	 	 	 
	 
	 	 	 
	Address

	 	 	[ADDRESS ILLEGIBLE]

	 
	 	 	 
	SIGNED AND DELIVERED as a Deed by
	 	 	 
	ANTHONY JOHN READ

	 	 	/s/ Anthony John Read

	in the presence of
	 	 	 
	 
	 	 	 
	Witness

	 	 	/s/ SIGNATURE ILLEGIBLE

	 
	 	 	 
	 
	 	 	 
	 
	 	 	 
	Address

	 	 	[ADDRESS ILLEGIBLE]

	 
	 	 	 
	SIGNED AND DELIVERED as a Deed by
	 	 	 
	BARRY SHORT

	 	 	/s/ Barry Short

	in the presence of
	 	 	 
	 
	 	 	 
	Witness

	 	 	J. M. Ward
	 
	 	 	 
	 
	 	 	 
	 
	 	 	 
	Address

	 	 	8 Rimbury Way
 X Church B. H. 232 RQ

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]