PENSIONS Citation, commencement and interpretation 1 1 These Regulations may be cited as the Personal Pension Schemes (Appropriate Schemes) Regulations 1997 and shall come into force on 6th April 1997. 2 In these Regulations— “the 1993 Act" means the Pension Schemes Act 1993; ... ... ... ... “overseas scheme" means an occupational pension scheme which is administered wholly or primarily outside the United Kingdom but does not include one which is contracted-out within the meaning of section 7(3) of the 1993 Act nor one to which section 53 of the 1993 Act applies; “pensionable age" has the meaning given by the rules in paragraph 1 of Part I of Schedule 4 to the Pensions Act 1995; and ... “tax week" has the same meaning as in section 181(1) of the 1993 Act. ... 3 In these Regulations, unless the context otherwise requires, any reference— a to a numbered regulation is to the regulation in these Regulations bearing that number; b in a regulation to a numbered paragraph is to the paragraph of that regulation bearing that number; and c in a paragraph to a lettered sub-paragraph is to the sub-paragraph of that paragraph bearing that letter. Forms of schemes which may be appropriate schemes 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Persons who and bodies which may establish schemes 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Requirements in respect of an application for an appropriate scheme certificate 4 1 Every application for an appropriate scheme certificate (“the certificate”) shall be made in writing to the Secretary of State and shall include— a the name of the scheme and the address where it is administered; b the names and addresses of the administrators of the scheme; c the name, address and position (in relation to the scheme) of the person making the application for the certificate; d the name and address of the person who has established the scheme or, in the case of a company, the registered office; e such evidence as the Secretary of State may reasonably require that the scheme satisfies such of the requirements of regulation 3 as apply to it; f which of the forms specified in regulation 2(2) the scheme is to take g the name and address of a bank or building society which accepts payments made by automated credit transfer together with the name and account number of that bank or building society into which it is desired that minimum contributions should be paid; and h the date from which the desired certificate shall have effect. 2 Every application shall be accompanied by a copy of— the documents constituting the scheme; and the rules of the scheme, if they are not set out in those documents or any of them, except where the Secretary of State in his discretion dispenses wholly or partly with this requirement. 3 Every person who has made an application shall supply such other documents and information as the Secretary of State may reasonably require. Issue of appropriate scheme certificates 5 When the Secretary of State has determined that a personal pension scheme is, or at any time was, an appropriate scheme, he shall issue an appropriate scheme certificate so stating to the person who applied for it. Requirement to give the Secretary of State information 6 The administators of the scheme shall furnish the Secretary of State— a with such reports, accounts and other documents and information relating to the scheme to which the certificate relates, in such manner and at such times as is reasonably required by him; b with particulars in writing of— i any change in identity, names and addresses of the administrators of the scheme; ii any change in the name or address of the person who has established the scheme; iii any change affecting the information given under regulation 4(1)(e) and (f); and iv any change of circumstances affecting the scheme as the Secretary of State may have required them to notify. as soon as practicable after its occurrence. Provision of information for purposes of contracting-out 6A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cancellation, variation and surrender of an appropriate scheme certificate 7 An appropriate scheme certificate may be cancelled, varied or surrendered where there is any change in respect of the information which was provided by virtue of regulations 4 and 6. Applications for the variation of, and to surrender, appropriate scheme certificates 8 1 Every application for the variation of, or to surrender, an appropriate scheme certificate— a shall be made in writing to the Secretary of State by the administrators of the scheme; b shall be made only after notices of intention to make that application have been given by the administrators in accordance with paragraph (2) except where (in the case of an application for the variation of an appropriate scheme certificate) the Secretary of State dispenses with this requirement; and c shall include a statement that all notices required by paragraph (2) to be given in relation to that application have been duly given. 2 Notice of intention to make an application such as is mentioned in paragraph (1) shall be given in writing to— a any member of the scheme who has protected rights under it; and b any earner who, jointly with the trustees or managers of the scheme, has given in relation to the scheme a notice under section 44(1) of the 1993 Act which has not been cancelled, by sending it to his last known address. 3 Notices given under this regulation shall specify— a the name of the scheme and the address where it is administered; b the date from which it is desired that the variation or surrender shall have effect; and c where the application is to surrender an appropriate scheme certificate, any arrangements made or proposed for the preservation or transfer of protected rights under the scheme. 4 Every person who makes an application under this regulation shall supply such other documents and information as the Secretary of State may reasonably require. Cancellation of an appropriate scheme certificate 9 For the purpose of section 34(8) of the 1993 Act (no cancellation of an appropriate scheme certificate shall have effect from a date earlier than that on which the cancellation is made except in prescribed circumstances) the prescribed circumstance is where the Secretary of State considers that the scheme has failed to satisfy the requirements for continuing to be an appropriate scheme before the date cancellation is made and in such a case the date of effect of the cancellation— a shall not be a date other than 6th April in any year; and b shall not be earlier than 6th April in the tax year in which the Secretary of State considers that the scheme first failed to satisfy those requirements. Notice under section 44(1) of the 1993 Act 10 1 A notice under section 44(1) of the 1993 Act (notice of earner’s chosen scheme) shall be given in writing in such form as the Secretary of State may in his discretion accept. 2 Subject to paragraph (4), the date specified in a notice under section 44(1) of the 1993 Act as the date from which the scheme is to be the earner’s chosen scheme shall, subject to paragraph (3), be 6th April in the year notice is given or 6th April in the next tax year. 3 Where a notice is given by 17th May in a tax year it may specify 6th April in the preceding tax year. 4 In a case where a scheme (“the first scheme”) was an earner’s chosen scheme on the date with effect from which the first scheme ceased to be an appropriate scheme, the date specified in a notice under section 44(1) of the 1993 Act as the date from which another scheme (“the second scheme”) is to be the earner’s chosen scheme may be the date with effect from which the first scheme ceased to be an appropriate scheme (whether or not that date is 6th April), if that date is not earlier than whichever is the earlier of— a the date 6 months earlier than that on which the Secretary of State receives the notice; and b 6th April in the tax year in which the Secretary of State receives the notice. Notice under section 44(2) of the 1993 Act 11 a A notice under section 44(2) of the 1993 Act (cancellation of a notice given under section 44(1)) shall be given in writing and in such form as the Secretary of State may in his discretion accept. b The date specified in a notice under section 44(2) of the 1993 Act shall, subject to paragraph (3), be 6th April in the tax year in which the Secretary of State receives the notice or 6th April in the next tax year. c Where notice under section 44(2) of the 1993 Act is given by the earner and not by the trustees or managers of the scheme the date shall be at least a year later than the date specified in the notice given under section 44(1) of that Act. Circumstances in which minimum contributions are not to be paid 12 1 Minimum contributions shall not be paid in respect of an earner for the tax year or any part of the tax year in which that earner— a reaches pensionable age; or b dies and in which he would have reached pensionable age. 1A Subject to paragraph (2), where the earner is no longer a member of the earner’s chosen scheme, minimum contributions in respect of that earner shall be paid— a to the trustees or managers of the earner’s chosen scheme, if the earner has become a member of another scheme, and the earner’s chosen scheme is able to transfer the payment to that other scheme, b to the trustees or managers of another scheme of which the earner is a member, if known to HMRC , or c in all other circumstances, to the earner. 2 Where effect has been given to the earner’s protected rights under section 28 of the 1993 Act (ways of giving effect to protected rights), as it had effect prior to the abolition date minimum contributions shall not, except as provided by paragraphs (3) to (9) be paid in respect of the period during which the scheme was the earner’s chosen scheme. 3 Where effect has been given to the earner’s protected rights by the making of a transfer payment to another appropriate scheme which has become the earner’s chosen scheme or a money purchase contracted-out scheme, the minimum contributions shall be paid to the trustees or managers of that scheme , except where the earner is no longer a member of that scheme, in which case the minimum contributions shall instead be paid to the earner . 4 Where effect has been given to the earner’s protected rights by the making of a transfer payment to a salary-related scheme or an overseas scheme and the Secretary of State becomes aware, as a consequence of evidence in respect of the earner’s age being brought to his attention, that an additional amount of minimum contributions would have been payable had he been aware of that evidence, that additional amount of minimum contributions shall be paid to the trustees or managers of that scheme , except where the earner is no longer a member of that scheme, in which case the additional amount of minimum contributions shall instead be paid to the earner . 5 Where effect has been given to the earner’s protected rights by the purchase of an annuity or by the provision by the scheme of a pension, and the amount of the minimum contributions in question is at least 10 times as great as the lower earnings limit for the tax year in which the Secretary of State becomes aware that minimum contributions are payable or would be payable, but for paragraph (2), those minimum contributions shall be paid (in the case of an annuity) to the insurance company from which the annuity has been purchased or (in the case of a pension) to the trustees or managers of the scheme. 6 Where effect has been given to the earner’s protected rights by the purchase of an annuity or by the provision by the scheme of a pension and— a the circumstances in paragraph (5) do not exist; and b minimum contributions are payable for the tax year or part of the tax year in which the earner died, those minimum contributions shall be paid to the earner’s widow, widower or surviving civil partner , or if the earner died unmarried, and was not a civil partner at the time of his or her death they may at the Secretary of State’s discretion be paid to any person. 7 Where effect has been given to the earner’s protected rights by the purchase of an annuity or by provision by the scheme of a pension and— a the circumstances in paragraph (5) do not exist; and b the Secretary of State becomes aware, as a consequence of evidence in respect of the earner’s age being brought to his attention, that an additional amount of mimimum contributions would have been payable had he been aware of that evidence, that additional amount of minimum contributions shall be payable for any tax year before or part of a tax year before effect has been given to protected rights to the earner or the earner’s widow, widower or surviving civil partner , or if the earner died unmarried, and was not a civil partner at the time of his or her death they may at the Secretary of State’s discretion be paid to any person. 8 Where effect has been given to the earner’s protected rights by the provision of a lump sum, minimum contributions shall be payable to the earner or the earner’s widow, widower or surviving civil partner , or if the earner died unmarried, and was not a civil partner at the time of his or her death they may at the Secretary of State’s discretion be paid to any person. 9 Where effect has been given to the earner’s protected rights by the making of payments under an interim arrangement, minimum contributions shall continue to be payable to the trustees or managers of the earner’s chosen scheme. Manner of payment of minimum contributions 13 Minimum contributions shall be paid— a by automated credit transfer into a bank or building society account which relates to the relevant scheme and which accepts payments made by automated credit transfer; or b in such other manner as the Secretary of State may in his discretion approve. Allocation of minimum contributions 14 A personal pension scheme can be an appropriate scheme only if the rules of the scheme provide that any minimum contributions falling to be applied so as to provide benefits in respect of a member are to be so applied from the date on which payment is made by the Secretary of State in accordance with regulation 13 and that such minimum contributions are to be allocated to that member’s account within three months of that date. Calculation or estimation of earnings 15 1 In relation to any tax year, the earnings of an earner shall be calculated or estimated, for the purposes of section 45(1) of the 1993 Act, on the basis mentioned in this regulation. 2 In paragraph (3)— “eligible tax week" means any tax week in any part of which the earner in question is at least 16 years of age and in no part of which he is over pensionable age; and “ineligible tax week" means any tax week which is not an eligible tax week. 3 In relation to any eligible tax week in a tax year the earnings of an earner shall be taken to be the amount calculated or estimated in accordance with paragraph (4) divided by the number of eligible tax weeks in that tax year, and in relation to any ineligible tax week they shall be taken to be nil. 4 The formula to be applied shall be the formula set out in paragraph (5)(a) or, if it produces a smaller value for X, the formula set out in paragraph (5)(b), so however, that if the formula set out in paragraph (5)(a) produces a negative value for X, or if the value of P is nil, the value of X shall be taken to be nil. 5 The formulae mentioned in paragraph (4) are— a X = P + R - S - 52L ; and b X = 53U - 52L. 6 In paragraph (7)— a “primary Class 1 contributions" does not include contributions which the earner, being a married woman or widow, is liable to make at a reduced rate in accordance with an election which she has made and which is still operative; and b the reference to contributions as having been paid includes the case of contributions which are treated as having been paid under regulation 39 of the Social Security (Contributions) Regulations 1979 but does not include the case of contributions which are treated as not paid under regulation 38(1) and (2)(a) of those Regulations. 7 In this regulation— a L is the lower earnings limit for the tax year in question; b P is the total earnings, in so far as the earnings for each week did not exceed U, paid to or for the benefit of the earner in relation to the tax year in question, in relation to which primary Class 1 contributions have been paid with respect to employments that are not contracted-out; c R is the total earnings, in so far as the earnings for each week did not exceed U, paid to or for the benefit of the earner in relation to the tax year in question, in relation to which primary Class 1 contributions have been paid with respect to employments that are contracted-out; d S is the total earnings, in so far as the earnings for each week equalled or exceeded L but did not exceed U, paid to or for the benefit of the earner in relation to the tax year in question, in relation to which primary Class 1 contributions have been paid with respect to employments that are contracted-out; and e U is the upper accrual point for the tax year in question. Calculation of minimum contributions 16 1 For the purposes of determining the appropriate age related percentage for the purposes of section 45(1) of the 1993 Act , the Secretary of State may require an earner to send documentary evidence of his date of birth. 2 For the purposes of section 45B(2) of the 1993 Act (information held as to the age to be disclosed by the Secretary of State to trustees or managers of an appropriate personal pension scheme and such other persons as may be prescribed) the prescribed person shall be the person who is responsible for administering the scheme. Adjustment of amount of minimum contributions 17 Where the amount of minimum contributions payable in respect of an earner in relation to a tax year would otherwise not be a whole number of pence, it shall be adjusted to the nearest whole number of pence, and any amount of half penny or less shall be disregarded. Cancellation of membership of interest-bearing account-funded appropriate personal pension schemes 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitional provision in respect of earnings 19 For the purposes of paying minimum contributions in respect of an employed earner for any period up to and including the tax year 1996—1997, regulations 16 and 17 of the Personal Pension Schemes (Appropriate Schemes) Regulations 1988 shall continue to have effect as if regulation 15 of these Regulations had not come into force. Revocations 20 The regulations listed in column 1 of Schedule 3 to these Regulations are revoked to the extent specified in column 3 of that Schedule. Signed by authority of the Secretary of State for Social Security Oliver Heald Parliamentary Under-Secretary of State, Department of Social Security.