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18 2002

PENSIONS (AMENDMENT) ACT, 2002

Chapter 3

Amendments to Part III of Principal Act

Amendment of Part III (title thereof) of Principal Act.

15. —Part III of the Principal Act is amended by the substitution for the title to that Part of the following title:

“PART III

Preservation of Benefits and Minimum Value of Contributory Retirement Benefits”.

Amendment of section 27(1) of Principal Act.

16. —Section 27(1) of the Principal Act is amended by the insertion of the following definitions:

“‘contributory retirement benefit’ means a member's ordinary retirement benefit multiplied by the member's reckonable service during which, under the rules of the scheme, he was required to pay contributions to the scheme and divided by the member's total reckonable service;

‘contributory scheme’ means a defined benefit scheme under the rules of which members are, or have been, required to pay contributions to the scheme;

‘minimum contributory retirement benefit’ means a contributory retirement benefit of at least the minimum value required under section 35A;

‘ordinary retirement benefit’ means long service benefit, excluding any such benefit which is secured by way of additional voluntary contributions or which represents a transfer of accrued rights from another scheme;”.

Amendment of section 28 of Principal Act.

17. —Section 28 of the Principal Act is amended—

(a) by the substitution in subsection (1) for “the commencement of this Part” of “1 January 1991”, and

(b) by the substitution for subsection (2) of the following subsection—

“(2) A member of a scheme whose service in relevant employment terminates otherwise than on death before normal pensionable age shall be entitled to a benefit (in this Act referred to as a ‘preserved benefit’) if—

(a) his service in relevant employment so terminates after 1 January 1991 but on or before 1 June 2002, and he has completed at least five years' qualifying service of which at least two such years fall after 1 January 1991, or

(b) his service in relevant employment so terminates after 1 June 2002, and he has completed at least two years' qualifying service which fall after 1 January 1991.”.

Amendment of section 29 of Principal Act.

18. —Section 29 of the Principal Act is amended—

(a) by the insertion in paragraph (a) of subsection (5) after “paragraph 1” of “and, where appropriate, paragraph 4”;

(b) by the substitution in paragraph (b) of subsection (5) for “paragraph 1” of “paragraphs 1 and 4”;

(c) by the deletion in subsection (6) of “and shall be provided in addition to the preserved benefit under subsection (2)”;

(d) by the substitution in the proviso to subsection (6) for “the commencement of this Part”, in each place where those words occur, of “1 January 1991”;

(e) by the substitution in subsection (7)—

(i) for “another scheme” of “another occupational pension scheme”;

(ii) for “that scheme” of “that occupational pension scheme”; and

(iii) for “in addition to” of “as part of”;

and

(f) by the substitution in the proviso to subsection (7)—

(i) for “other scheme”, in each place where those words occur, of “other occupational pension scheme”; and

(ii) for “the commencement of this Part”, in each place where those words occur, of “1 January 1991”.

Amendment of section 30 of Principal Act.

19. —Section 30 of the Principal Act is amended—

(a) by the substitution for subsection (4) of the following subsection:

“(4) Subject to subsections (5) and (6), the appropriate contributions shall be the contributions paid by or in respect of the member concerned for the purposes of long service benefit from—

(a) in the case of a member who is entitled to a preserved benefit under section 28(2)(a), 1 January 1991 or, if later, the date of the commencement of the relevant employment,

(b) in the case of a member who is entitled to a preserved benefit under section 28(2)(b), the date of the commencement of the relevant employment,

but excluding additional voluntary contributions and any payment representing a transfer of accrued rights from another scheme.”;

(b) by the substitution in the proviso to subsection (5) for “the commencement of this Part”, in each place where those words occur, of “1 January 1991”;

(c) by the substitution in subsection (6)—

(i) for “another scheme” of “another occupational pension scheme”; and

(ii) for “that scheme” of “that occupational pension scheme”;

and

(d) by the substitution in the proviso to subsection (6)—

(i) for “that scheme” of “that occupational pension scheme”;

(ii) for “the commencement of this Part” of “1 January 1991”; and

(iii) for “such commencement” of “that date”.

Amendment of section 32 of Principal Act.

20. —Section 32 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the substitution for “in accordance with the provisions of this Part” of “in accordance with section 28(2)(a)”; and

(ii) by the substitution for “the commencement of this Part” of “1 January 1991”;

(b) by the substitution for subsection (2) of the following subsection:

“(2) A member of a scheme who is entitled to preserved benefit under the scheme in accordance with section 28(2)(b) shall not be entitled to receive a refund of any contributions paid to that scheme.”;

and

(c) the insertion of the following subsection after subsection (2):

“(3) A member of a scheme who would be entitled to preserved benefit under the scheme in accordance with the provisions of this Part if his service in relevant employment were to terminate shall not be entitled to receive a refund of any contributions paid to that scheme.”.

Amendment of section 33 of Principal Act.

21. —Section 33 of the Principal Act is amended—

(a) by the substitution for subsection (1) of the following subsection:

“(1) In this section and Part B of the Second Schedule ‘revaluation year’ means a year beginning on or after 1 January 1996.”.

and

(b) in subsection (2) by the substitution for “paragraph 1 or 3 or both” of “any or all of paragraphs 2, 3 and 4”.

Amendment of section 34 of Principal Act.

22. —Section 34 of the Principal Act is amended—

(a) by the substitution for subsection (2) of the following:

“(2) A member of a scheme to whom this section applies shall be entitled to the transfer of an amount of money from the scheme (in this Part referred to as a ‘transfer payment’) in accordance with subsection (3) equal—

(a) in the case of a defined benefit scheme, to the actuarial value of the preserved benefit, and of any amount payable under section 29(4), on the date on which the relevant application under subsection (3) is received by the trustees or on a date selected by the trustees which is not earlier than three months before, nor later than three months after, the first-mentioned date, and

(b) in the case of a defined contribution scheme, to the accumulated value of the appropriate contributions under the scheme in respect of the member, such value to be determined on a date not later than three months following the date of the receipt of the application,

and in each case regulations may prescribe that the transfer payment is to be calculated in accordance with any applicable professional guidance issued by the Society of Actuaries in Ireland and specified in the regulations or with any applicable guidance issued by any other person (including the Minister) and specified in the regulations:

Provided that—

(i) in the case of a member who is entitled to a preserved benefit under section 28(2)(b), the part of the transfer payment which represents the actuarial value of benefits specified in section 44(a)(v) may be reduced by multiplying it by the specified percentage shown in the most recent actuarial funding certificate in respect of that scheme, and

(ii) in the case of a relevant scheme, if there is contained in the most recent actuarial funding certificate provided under section 42 in respect of the scheme a statement to the effect that the scheme does not satisfy the funding standard, the transfer payment may be reduced by the trustees on the advice of the actuary, having regard to the provisions of section 48.”;

(b) in subsection (3)—

(i) in paragraph (b) by the substitution for “for the purposes of this Act.” of “for the purposes of this Act, or”; and

(ii) by the insertion of the following paragraphs after paragraph (b):

“(c) in the making of a payment to another scheme which is not a funded scheme, which provides or is capable of providing long service benefit, of which he is a member or a prospective member and the trustees of which are willing to accept payments made under this paragraph, or

(d) where so prescribed, and in accordance with such conditions as may be prescribed, in the making of a payment to the trustees, custodians, managers or administrators of an arrangement for the provision of retirement benefits established within the State, not being an arrangement of the kind mentioned in paragraph (a), (b) or (c), or

(e) where so prescribed, and in accordance with such conditions as may be prescribed, in the making of a payment to the trustees, custodians, managers or administrators of an arrangement for the provision of retirement benefits established outside the State.”;

and

(c) by the insertion in subsection (6) after “subsection (3)(a)” of “or (c)”.

Contributory retirement benefit for persons leaving schemes after 1 June 2002.

23. —The following section is inserted after section 35 of the Principal Act:

“Minimum Value of Contributory Retirement Benefit.

35A.—(1) Where the service in relevant employment of a member of a contributory scheme terminates after 1 June 2002—

(a) at or after normal pensionable age, or

(b) within five years before normal pensionable age,

and the member is entitled under the rules of the scheme to a contributory retirement benefit, the amount of the contributory retirement benefit shall, if necessary, be increased so that its actuarial value is not less than the minimum value calculated in accordance with Part C of the Second Schedule.

(2) No part of the amount of any increase to a contributory retirement benefit to be made under subsection (1) shall be provided by reducing the amount of any other benefit payable under the rules of the scheme concerned.

(3) Any increase in contributory retirement benefit arising under subsection (1) shall be payable out of the resources of the scheme.

(4) Except as provided for in this Part, a contributory retirement benefit increased under subsection (1) shall be payable in accordance with, and subject to, the rules of the scheme, being the rules as at the date of the termination of the relevant employment.”.

Amendment of section 36 of Principal Act.

24. —Section 36 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the insertion in paragraph (a) after “benefit” of “or of a minimum contributory retirement benefit”; and

(ii) by the insertion in paragraph (b) after “benefit” of “or a member's minimum contributory retirement benefit”;

and

(b) by the insertion in subsection (2) after “preserved benefit” of “or a contributory retirement benefit”.

Amendment of section 37 of Principal Act.

25. —Section 37 of the Principal Act is amended—

(a) by the insertion in subsection (4) after “preserved benefit” of “and the minimum value of contributory retirement benefit under section 35A”; and

(b) by the insertion in subsection (4A) after “preserved benefit” of “and the minimum value of contributory retirement benefit under section 35A”.

Amendment of section 39 of Principal Act.

26. —The following section is substituted for section 39 of the Principal Act:

“Schemes may provide higher benefits.

39.—(1) Nothing in the other provisions of this Part or in the Second Schedule shall be construed as precluding a scheme from providing benefits, in lieu of preserved benefit or minimum contributory retirement benefit, on a higher scale, or payable at any earlier, or, at the request of the member of the scheme, at any later time or otherwise more favourably than is provided for under this Part:

Provided that—

(a) such benefits are of an actuarial value that is equivalent to or greater than that of preserved benefit,

(b) on the death of a member before any such benefit commences to be payable the amount thereof shall not be less than the amount that would, but for this section, have been payable by virtue of section 29(4) or 30(3), as appropriate,

(c) a member who is entitled to preserved benefit under this Part shall not be entitled to receive a refund of any contributions paid to the scheme in contravention of section 32,

(d) such benefits shall be provided to the same extent to or in respect of members whose service in relevant employment terminates as a consequence of their moving to another Member State as to or in respect of members whose service in relevant employment terminates for any other reason.

(2) Where a scheme provides benefits to or in respect of a member whose service in relevant employment terminates but who is not entitled to a preserved benefit under this Part, such benefits shall, be provided to the same extent to or in respect of members whose service in relevant employment terminates as a consequence of their moving to another Member State as to or in respect of members whose service in relevant employment terminates for any other reason.”.