Statutory Instruments of the Scottish Parliament

"the 1993 Act" means the Pension Schemes Act 1993[1];

"the 1995 Act" means the Pensions Act 1995[2];

"the 1999 Act" means the Welfare Reform and Pensions Act 1999

;

"active member" has the same meaning as in section 124(1) of the1995 Act;

"benefits under a pension arrangement" has the same meaning as insection 27(1)[3], subject to section 12A(10)[4] andany reference to the rights or interests which a party has or may have inbenefits under a pension arrangement includes a reference to the rights orinterests which a party has or may have in such benefits which are payablein respect of the death of either party;

"deferred member" has the meaning given by section 124(1) of the1995 Act;

"a party" means a party to a marriage;

"occupational pension scheme" has the same meaning as in section 1of the 1993 Act;

"pension arrangement" has the same meaning as in section 46(1) ofthe 1999 Act;

"person responsible for a pension arrangement" has the samemeaning as in section 46(2) of the 1999 Act;

"personal pension scheme" has the same meaning as in section 1 ofthe 1993 Act but, as if the reference to employed earners in thatdefinition were to any earner;

"matrimonial property" has the same meaning as in section 10(4)and (5);

"relevant date" has the same meaning as in section 10(3);

"salary related occupational pension scheme" has the meaning givenin regulation 1A of the Occupational Pension Schemes (Transfer Values)Regulations 1996[5].

    (2) Any reference in these Regulations to-

(a) a numbered section is to a section bearing that number in the Act;

(b) a numbered regulation is to a regulation bearing that number in theseRegulations.

Valuation
     3.  - (1) The value of any benefits under a pension arrangement shall becalculated and verified, for the purposes of the Act, in accordance withthis regulation and regulation 4.

    (2) The value, as at the relevant date, of the rights or interests which aparty has or may have in any benefits under a pension arrangement as atthat date shall be calculated as follows and in accordance with-

(a) paragraph (3), if the party with pension rights is a deferred member ofan occupational pension scheme;

(b) paragraph (4), if the party with pension rights is an active member ofan occupational pension scheme;

(c) paragraphs (5) and (6), if-


(i) the party with pension rights is a member of a personal pension scheme; or

(ii) those rights are contained in a retirement annuity contract; or



(d) paragraphs (7) to (9), if-



(i) the pension of the party with pension rights is in payment;

(ii) the party with the pension rights holds an annuity other than aretirement annuity contract; or

(iii) the rights of the party with pension rights are contained in a deferredannuity contract other than a retirement annuity contract.

    (3) Where the party with pension rights is a deferred member of anoccupational pension scheme, the value of the benefits which he has underthat scheme shall be taken to be-

(a) in the case of an occupational pension scheme other than a salaryrelated scheme, the cash equivalent to which he acquired a right undersection 94(1)(a) of the 1993 Act[6] (right to cash equivalent)on the termination of his pensionable service, calculated on the assumptionthat he has made an application under section 95 of that Act[7](ways of taking right to cash equivalent) on the date on which the requestfor the valuation was received; or

(b) in the case of salary related occupational pension scheme, theguaranteed cash equivalent to which he would have acquired a right undersection 94(1)(aa) of the 1993 Act[8] if he had made anapplication under section 95(1) of that Act, calculated on the assumptionthat he has made an application under section 95 of that Act on the date onwhich the request for the valuation was received.

    (4) Where the party with pension rights is an active member of anoccupational pension scheme, the valuation of the benefits which he hasaccrued under that scheme shall be calculated and verified-

(a) on the assumption that the member has made a request for an estimate ofthe cash equivalent that would be available to him were his pensionableservice to terminate on the date on which the request for valuation wasreceived; and

(b) in accordance with regulation 11 and Schedule 1 to the OccupationalPension Schemes (Transfer Values) Regulations 1996[9](disclosure).

    (5) Where the party with pension rights is a member of a personal pensionscheme, or those rights are contained in a retirement annuity contract, thevalue of thebenefits which he has under that scheme or contract shall betaken to be the cash equivalent to which he would have acquired a rightunder section 94(1)(b) of the 1993 Act, if he had made an application undersection 95(1) of that Act on the date on which the request for thevaluation was received.

    (6) In relation to a personal pension scheme which is comprised in aretirement annuity contract made before 4th January 1988, paragraph (5)shall apply as if such a scheme were not excluded from the scope of ChapterIV of Part IV of the 1993 Act by section 93(1)(b) of that Act (scope ofChapter IV).

    (7) Except in a case to which, or to the extent to which, paragraph (9)applies, the cash equivalent of benefits in respect of a person referred toin paragraph (2)(d) shall be calculated and verified in such a manner asmay be approved in particular cases by-

(a) a Fellow of the Institute of Actuaries;

(b) a Fellow of the Faculty of Actuaries[10];or

(c) a person with actuarial qualifications who is approved by the ScottishMinisters, at the request of the person responsible for the pensionarrangement in question, as being a proper person to act for the purposesof this regulation in connection with that arrangement.

    (8) Except in a case to which paragraph (9) applies, cash equivalents areto be calculated and verified by adopting methods and making assumptionswhich-

(a) if not determined by the person responsible for the pension arrangementin question, are notified to him by the actuary referred to in paragraph(7); and

(b) are certified by the actuary to the person responsible for the pensionarrangement in question as being consistent with the "Retirement BenefitScheme-Transfer Values (GN11)" published by the Institute of Actuariesand the Faculty of Actuaries and current at the date on which the requestfor valuation is received[11].

    (9) Where the cash equivalent, or any portion of it represents rights tomoney purchase benefits under the pension arrangement in question of theparty with pension rights, and those rights do not fall, either wholly orin part, to be valued in a manner which involves making estimates of thevalue of benefits, then that cash equivalent, or that portion of it, shallbe calculated and verified in such manner as may be approved in particularcases by the person responsible for the pension arrangement in question,and by adopting methods consistent with the requirement of Chapter IV ofPart IV of the 1993 Act (protection for early leavers-transfer values).

    (10) For the purposes of paragraph (3), (4), (7) or (9), section 93(1)(a)(i)of the 1993 Act[12] (scope of Chapter IV) shall be construed asif the words "at least one year" had been omitted from that provision.

    (11) For the purposes of paragraph (3), (4) and (5) where the date on whichthe request for valuation was received is more than 12 months after therelevant date then the date for the purpose of valuing the benefits shallbe the relevant date.

Apportionment
     4. The value of the proportion of any rights or interests which a partyhas or may have in any benefits under a pension arrangement as at therelevant date and which forms part of the matrimonial property by virtue ofsection 10(5) shall be calculated in accordance with the followingformula-

Revocation and saving
     5.  - (1) Subject to paragraph (2), there are hereby revoked:

(a) regulation 3, and regulations 1 and 2 thereof insofar as they relate toregulation 3, of the Divorce etc. (Pensions)(Scotland) Regulations 1996

;(b) regulation 4, and regulations 1, 2 and 3 thereof insofar as they relateto regulation 4, of the Divorce etc. (Pensions)(Scotland) AmendmentRegulations 1997[13].

    (2) Notwithstanding paragraph (1), the Regulations specified in paragraph(1) shall continue to apply to any action for divorce commenced before 1December 2000 or any action for declarator of nullity of marriage commencedbefore that date.


JAMES WALLACE
A member of the Scottish Executive

St Andrew's House, Edinburgh
18th April 2000

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make provision with respect to the calculation andverification of benefits under a pension arrangement in relation to actionsfor divorce or actions for declarator of nullity of marriage.

These Regulations do not affect any action for divorce or any actionfor declarator of nullity of marriage commenced before 1st December 2000(regulation 1(2)). For the purposes of these Regulations an action fordivorce or declarator of nullity of marriage shall commence on the date ofservice of the summons (regulation 1(3)).

Regulation 3 provides for the calculation and verification of benefitsunder a pension arrangement. In particular, provision is made for-

    (1) the relevant date for the purposes of valuing benefits under a pensionagreement to be the date on which the request for valuation is made to theperson responsible for the pension arrangement unless the action fordivorce or declarator of nullity of marriage has commenced more than 12months earlier. In those cases the relevant date for the purposes ofvaluation will be the date of service of the court summons (regulation3(3), (4), (5) and (11)); and

    (2) the manner of valuation of pension rights where a party is:

(a) a deferred member of an occupational pension scheme (regulation 3(3));

(b) an active member of an occupational pension scheme (regulation 3(4));

(c) a member of a personal pension scheme (regulation 3(5));

(d) a member whose rights are contained in a retirement annuity contract(regulation 3(5) and 3(6));

(e) a member whose pension rights are in payment or holds an annuitycontract or holds a deferred annuity contract other than a retirementannuity contract (regulation 3(7), (8) and (9)).

Regulation 4 provides for the apportionment of the value of suchbenefits. Provision is made apportioning the value of the benefits inaccordance with the period of time the party in the pension arrangement hasbeen in both the pension arrangement and in the marriage as a proportion ofthe period of time that person has been in the pension arrangement(regulation 4).

Regulation 5 revokes regulations 1 and 2 (partially) and regulation 3of the Divorce etc. (Pensions) (Scotland) Regulations 1996 and regulations1, 2 and 3 (partially) and regulation 4 of the Divorce etc. (Pensions)(Scotland) (Amendment) Regulations 1997.

[1] 1993 c.48.back

[2] 1995 c.26.back

[3] The definitions of "benefits under a pensionarrangement" and "pension arrangement" were inserted by the 1999Act, Schedule 12, paragraph 12.back

[4] Section 12A(10) was substituted by the 1999 Act, Schedule12, paragraph 9(9).back

[5] S.I. 1996/1847; regulation 1A was inserted by S.I.1997/786, regulation 12(3).back

[6] Section 94(1)(a) was amended by the Pensions Act 1995("the 1995 Act"), section 154.back

[7] Section 95 was amended by the 1995 Act, Schedule 6,paragraph 3.back

[8] Section 94(1)(aa) was inserted by the 1995 Act, section154(2).back

[9] S.I. 1996/1847.back

[10] The Institute of Actuaries is at Staple Inn Hall, HighHolborn, London WCIV 7QJ. The Faculty of Actuaries is at Maclaurin House,18 Dublin Street, Edinburgh EH1 3PP.back

[11] A copy of this publication can be obtained from theInstitute of Actuaries or Faculty of Actuaries.back

[12] Section 93(1)(a) was substituted by the 1995 Act, section152(2).back

[13] S.I. 1997/745.back

ISBN 0 11 059326 X