PENSIONS Citation, commencement and interpretation 1 1 These Regulations may be cited as the Personal Pension Schemes (Transfer Values) Regulations 1987 and shall come into force on 27th July 1987. 2 In these Regulations, unless the context otherwise requires— “ the Act ” means the Pension Schemes Act 1993 ; ... “ cash equivalent ” has the same meaning as in Chapter 1 of Part 4ZA of the Act as it applies to personal pension schemes ; “initial cash equivalent” means the amount calculated in accordance with regulation 3(2) to (4); “ member ” means a member of a personal pension scheme to whom Chapter 1 of Part 4ZA of the Act applies ; ... ... “personal pension scheme” has the same meaning as in section 181(1) of the Act; ... “ receiving scheme ” means a scheme under whose rules transfer credits or rights are to be acquired by a member in exercise of his choice under section 95(3)(a) or (b) of the Act ; “ scheme ” means occupational pension scheme or personal pension scheme; “ trustees ”, in relation to a scheme which is not set up or established under a trust, means the managers of the scheme; and other expressions have the same meaning as in Chapter 1 of Part 4ZA of the Act as it applies to personal pension schemes . Requirements to be satisfied 2 1 The prescribed requirements referred to in section 95(3)(a) and (b) of the Act (cash equivalent of member’s rights under a personal pension scheme to be used for acquiring transfer credits or rights under another scheme) are that— a the receiving scheme— i is registered under section 153 of the Finance Act 2004 (registration of pension schemes), or ii is a qualifying recognised overseas pension scheme as defined in section 169 of that Act (recognised transfers), b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Paragraph (1)(a)(i) shall not apply if the receiving scheme was immediately before the 6th April 2006 approved under Chapter III of Part XIV of the Income and Corporation Taxes Act 1988 (retirement annuities), unless the transfer is from a contract or scheme which was immediately before 6th April 2006 approved under Chapter III of Part XIV of that Act. Use of cash equivalents for subscribing to self-employed pension arrangements 2A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Manner of calculation and verification of cash equivalents 3 1 Cash equivalents are to be calculated and verified by calculating the initial cash equivalent in accordance with this regulation and then making any increases or reductions in accordance with regulation 4. 2 The initial cash equivalent is the realisable value at the date of calculation of any benefits to which the member is entitled. 3 The trustees must calculate that realisable value— a in accordance with the scheme rules; and b in a manner which is— i approved by the trustees; and ii consistent with Chapter 1 of Part 4ZA of the Act. 4 The realisable value must include any increases to the benefits resulting from a payment of interest made in accordance with the scheme rules. Increases and reductions of cash equivalents 4 1 Initial cash equivalents may, or as the case may be must, be increased or reduced in accordance with this regulation. 2 If the whole or any part of the benefits referred to in section 94 of the Act (right to cash equivalent) is or has been surrendered, commuted or forfeited before the trustees of the personal pension scheme do what is needed to comply with what the member requires, the initial cash equivalent must be reduced in proportion to the reduction in the total value of the benefits. 3 If the trustees of a personal pension scheme fail without reasonable excuse to do what is needed to carry out what a member of the scheme requires within 6 months of the relevant date, that member’s initial cash equivalent must be increased by— a the interest on that initial cash equivalent, calculated on a daily basis over the period from the relevant date to the date on which the trustees carry out what the member requires, at the same rate as that payable for the time being on judgment debts by virtue of section 17 of the Judgment Act 1838 (judgment debts to carry interest); or if it is greater, b the amount, if any, by which that initial cash equivalent falls short of what it would have been if the relevant date had been the date on which the trustees carry out what the member requires. 4 In a case where both paragraphs (2) and (3) fall to be applied to a calculation, paragraph (2) must be applied first. Signed by authority of the Secretary of State for Social Services. Nicholas Scott Minister of State, Department of Health and Social Security