the siemens benefits scheme definitive trust deed … deed and rules... · deed (21713155.06) 3...

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DATED 2007

THE SIEMENS BENEFITS SCHEME

DEFINITIVE TRUST DEED AND RULES

CMS Cameron McKenna LLP Mitre House

160 Aldersgate Street London EC1A 4DD

T +44(0)20 7367 3000 F +44(0)20 7367 2000

Doc ref: (21713155.06)

PSO Ref: 19/78032

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DEFINITIVE TRUST DEED AND RULES

OF THE SIEMENS BENEFITS SCHEME

TRUST DEED ......................................................................................................................... 3

SCHEDULE 1 INTERPRETATION ....................................................................................39

SCHEDULE 2 RULES OF THE INVESTOR PLAN SECTION........................................55

SCHEDULE 3 RULES OF THE BOOSTER, SAVER AND FOUNDATION SECTION ..................................................................................................................75

SCHEDULE 4 RULES OF THE SAVER PLAN PLUS SECTION ................................... 102

SCHEDULE 5 RULES OF THE TOWER PLAN SECTION............................................ 124

SCHEDULE 6 RULES OF THE HORIZON PLAN SECTION....................................... 147

SCHEDULE 7 RULES OF THE ELECTRIC PLAN ......................................................... 167

SCHEDULE 8 RULES OF THE CHEMFEED SECTION............................................... 192

APPENDIX 1 -REGISTERED PENSION SCHEME REQUIREMENTS ........................................... 210

APPENDIX 2 - GMP RULES ....................................................................................................... 213

APPENDIX 3 – PROTECTED RIGHTS RULES ............................................................................ 221

DEED

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DEFINITIVE TRUST DEED AND RULES OF THE SIEMENS BENEFITS SCHEME

TRUST DEED

CLICK HERE TO RETURN TO MAIN INDEX

TRUST DEED ......................................................................................................................... 3

RECITALS................................................................................................................................ 6 OPERATIVE PROVISIONS ................................................................................................... 7

1. INTRODUCTION ..................................................................................................... 8 1.1 Interpretation..................................................................................................................................... 8 1.2 Commencement ................................................................................................................................ 8 1.3 Constitution of the Fund ................................................................................................................. 8 1.4 Effect................................................................................................................................................... 8 1.5 Applicable law.................................................................................................................................... 8 1.6 Rules of the Investor Plan Section ................................................................................................. 8 1.7 Rules of the Final Salary Sections ................................................................................................... 8

2. TRUSTEES................................................................................................................. 9 2.1 Appointment and removal of Trustees.......................................................................................... 9 2.2 Remuneration of Trustees ............................................................................................................... 9 2.3 How Trustees may act ...................................................................................................................... 9 2.4 Power to delegate ............................................................................................................................ 10 2.5 Personal interests............................................................................................................................. 10 2.6 Trustee liability................................................................................................................................. 10 2.7 Trustee director liability.................................................................................................................. 11 2.8 Liability insurance............................................................................................................................ 12

3. ADMINISTRATION.................................................................................................13 3.1 Staff and agents ............................................................................................................................... 13 3.2 Scheme advisers............................................................................................................................... 13 3.3 Actuarial valuation .......................................................................................................................... 13 3.4 Expenses of administration ........................................................................................................... 13 3.5 Accounts........................................................................................................................................... 13 3.6 Notices.............................................................................................................................................. 14 3.7 Power to bind the Scheme............................................................................................................. 14 3.8 Questions of fact and interpretation ............................................................................................ 14 3.9 Power to commence, settle and defend proceedings................................................................. 14 3.10 Confidentiality ................................................................................................................................. 15

4. PAYMENT OF BENEFITS .....................................................................................16 4.1 Personal details ................................................................................................................................ 16

DEED

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4.2 Payment of benefits ........................................................................................................................ 16 4.3 Incorrect payments ......................................................................................................................... 17 4.4 Lump sum in place of trivial pensions ......................................................................................... 17 4.5 Lump sum on serious ill-health..................................................................................................... 18 4.6 Payment of lump sum death benefits........................................................................................... 18 4.7 Payments to personal representatives .......................................................................................... 19 4.8 Taxation deductions........................................................................................................................ 19 4.9 Unclaimed benefits ......................................................................................................................... 19 4.10 Annuity in satisfaction of Member’s rights ................................................................................. 19 4.11 Pension Sharing Order ................................................................................................................... 20

5. FORFEITURE AND ALIENATION ......................................................................21 5.1 Charges, lien and set-off................................................................................................................. 21 5.2 Crime, negligence or fraud............................................................................................................. 21 5.3 Restrictions on alienation and forfeiture ..................................................................................... 22 5.4 Excess contributions on bankruptcy............................................................................................ 22

6. INVESTMENT .........................................................................................................23 6.1 Power of investment....................................................................................................................... 23 6.2 Investment of money purchase assets.......................................................................................... 23 6.3 Power to borrow and to insure ..................................................................................................... 23

7. POWERS AND OBLIGATIONS OF THE EMPLOYERS.....................................25 7.1 Powers of Employers ..................................................................................................................... 25 7.2 Termination of employment.......................................................................................................... 25

8. EMPLOYERS’ CONTRIBUTIONS.........................................................................26 8.1 Ordinary Employer contributions ................................................................................................ 26 8.2 Further contributions ..................................................................................................................... 26 8.3 Reduction or suspension of contributions .................................................................................. 26

9. PARTICIPATION OF EMPLOYERS......................................................................27 9.1 Participation by employers............................................................................................................. 27 9.2 Substitution of Principal Employer .............................................................................................. 27 9.3 Employer ceasing to participate .................................................................................................... 28 9.4 Consequences of an Employer ceasing to participate ............................................................... 28 9.5 Bulk transfer to another arrangement .......................................................................................... 29

10. TERMINATION AND WINDING UP ...................................................................30 10.1 Power of termination...................................................................................................................... 30 10.2 Termination of the Scheme ........................................................................................................... 30 10.3 Application of the General Assets of the Fund on a winding up ............................................ 30 10.4 Money Purchase benefits ............................................................................................................... 31 10.5 Securing benefits on winding up................................................................................................... 31

DEED

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10.6 Merger............................................................................................................................................... 32

11. AMENDMENTS AND AUGMENTATIONS.........................................................33 11.1 Power of amendment ..................................................................................................................... 33 11.2 Restrictions on amendment power............................................................................................... 33 11.3 Declarations ..................................................................................................................................... 33 11.4 Augmentation of benefits .............................................................................................................. 33

12. SPECIAL RULES FOR CALCULATING BENEFITS UNDER FINAL SALARY SECTIONS.................................................................................................35

12.1 Exchanging pension for lump sum .............................................................................................. 35 12.2 Family leave...................................................................................................................................... 35 12.3 Absence due to ill-health................................................................................................................ 36 12.4 Secondment and other absences ................................................................................................... 37 12.5 Members with part-time Service ................................................................................................... 37 12.6 Maximum pension........................................................................................................................... 38

DEED

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THIS DEFINITIVE DEED is made the day of 2007

BETWEEN:-

(1) SIEMENS PLC (company number 00727817) whose registered office is at Siemens House, Oldbury, Bracknell, Berkshire RG12 8FZ (the “Principal Employer”) and

(2) SIEMENS BENEFITS SCHEME LIMITED (company number 02543236) whose registered office is at the same address (the “Trustees”)

RECITALS

(a) This Definitive Trust Deed is supplemental to:

(i) a definitive deed and rules dated 1st October 1990 made between Siemens Holdings Plc of the one part and the Trustees of the other part by which the Siemens Benefits Scheme (the "Scheme") was established

(ii) a deed of amendment dated 30th July 1992

(iii) a second definitive deed and rules dated 22nd September 1994

(iv) a third definitive deed and rules dated 17 December 1998

(v) a deed of amendment dated 10 October 1999

(vi) a deed of admission and amendment dated 30 September 2002

(vii) a deed of amendment dated 20 November 2002

(viii) a fourth definitive deed and rules dated 16 December 2004 which currently governs the Scheme

(ix) a deed of amendment dated 31 March 2005

(x) a deed of amendment dated 25 August 2005

(xi) a deed of amendment dated 10 March 2006

as subsequently amended by a resolution of the Trustees under Section 68 of the Pensions Act 1995

(b) The Trustee is the sole Trustee of the Scheme as at the date of this deed.

(c) The parties to this deed wish to cancel the existing provisions of the Scheme and to replace them with the provisions adopted by this deed with effect from the Effective Date.

(d) The terms defined in Schedule 1 to the Deed have the same meaning in this deed.

DEED

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(e) The alterations to be effected by this Deed are alterations to which the subsisting rights provisions of the Pensions Act 1995 (as defined in section 67 of that Act) do not apply (by virtue of regulations made under section 67) or which are not "regulated modifications" (as defined in section 67A of the Pensions Act 1995)

(f) The actuary to the Scheme has confirmed in writing that, following execution of this deed, he is satisfied that the Scheme will continue to satisfy the statutory standard in accordance with Section 12A of the Pension Schemes Act 1993.

OPERATIVE PROVISIONS

1. Subject to Clause 1.4 of the Deed, the Principal Employer, with the consent of the Trustees, declares that from the Effective Date the following provisions of the Deed and the Schedules and Appendices to it shall be the provisions governing the Scheme to the exclusion of the provisions previously in force.

2. Any act or omission of the Trustees before the date of this deed which would have been valid if this deed had been in force at the time of that act or omission shall be deemed to be valid and Clause 2.6 (Trustee liability) applies in relation to any such act or omission.

DEED – CLAUSE 1: INTRODUCTION

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1. INTRODUCTION

1.1 Interpretation

The definitions and rules of construction in Schedule 1 (Interpretation) to this Deed apply throughout this Deed and the Rules contained in the Schedules to it.

1.2 Commencement

The Scheme commenced on 1 October 1990 and this Deed shall be deemed to have come into operation on the Effective Date.

1.3 Constitution of the Fund

The Trustees shall hold all the assets of the Scheme and any income, cash or other assets received for the purposes of the Scheme on trust to be used in accordance with the provisions of this Deed.

The assets held on trust by the Trustees for the purposes of the Scheme shall constitute the Fund.

1.4 Effect

Subject to Appendix 1 (Registered Pension Scheme Requirements), benefits to or in respect of Members or Pensioners who retired, left Active Membership or died before the Effective Date shall be calculated as set out in the provisions governing the Scheme before the Effective Date. However, Clauses 1 to 11 of this Deed shall apply to such Members and Pensioners in place of any corresponding provisions of the Scheme previously in force.

1.5 Applicable law

The law of England and Wales applies to this Deed and to the Scheme and its administration.

1.6 Rules of the Investor Plan Section

Schedule 2 to this Deed contains the Rules of the Investor Plan Section which apply to or in respect of any Member or Pensioner who was in Active Membership of the Investor Plan Section on or after the Effective Date. The Rules of the Investor Plan Section shall, unless expressly stated otherwise, only apply in respect of benefits relating to Pensionable Service in the Investor Plan Section and to rights transferred into the Investor Plan Section in accordance with the provisions of Schedule 2 to this Deed.

1.7 Rules of the Final Salary Sections

Schedules 3 and following to this Deed contain the Rules of the Final Salary Sections which apply to or in respect of any Member or Pensioner who is in Active Membership of any of the Final Salary Sections on or after the Effective Date. The Rules of the Final Salary Sections shall, unless expressly stated otherwise, only apply in respect of benefits relating to Pensionable Service in the relevant Final Salary Section and to rights transferred into it in accordance with the provisions of those Schedules.

DEED – CLAUSE 2: TRUSTEES

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2. TRUSTEES

2.1 Appointment and removal of Trustees

2.1.1 The Principal Employer may by deed at any time remove all or any of the Trustees or appoint new or additional Trustees (without any limit on numbers) or a corporate body as a sole, new or an additional Trustee (whether or not it is a trust corporation) provided that at all times, there is at least one Trustee.

2.1.2 In exercising its power of appointing and removing Trustees the Principal Employer shall ensure that the Trustees (or, in the case of a sole corporate trustee, the directors of such corporate trustee) shall consist of an equal number of member and employer representatives and, in addition to such number, a chairman who shall be appointed by the Principal Employer. The member representatives shall be elected in such manner as the Principal Employer may from time to time decide and any temporary vacancy in the number of member representatives shall be filled in such manner and at such time as the Principal Employer and Trustees agree.

2.1.3 If an independent trustee is required to be appointed, that independent trustee shall be deemed to be a member representative for the purposes of calculating equality of numbers of representatives.

2.1.4 Notwithstanding the other provisions of this clause where a corporate body is sole Trustee it may appoint an additional Trustee (who shall be a director or secretary of such corporate trustee) when necessary to give a valid receipt for the proceeds of sale or other capital money arising under a trust for sale of land or for capital money arising under the Settled Land Act 1925. Such additional Trustee's powers shall be limited to the exercise of the power of sale and he may be removed at any time by the corporate Trustee or the Principal Employer.

2.1.5 The powers in this Clause 2.1 must be exercised by the Principal Employer and the Trustees in such a manner as to give effect to any arrangements made pursuant to legislation relating to member-nominated trustees and directors.

2.2 Remuneration of Trustees

The Trustees may be paid such remuneration (if any) for fulfilling the role of Trustee as may be agreed with the Principal Employer. Such remuneration shall be paid from the Fund except to the extent that the Principal Employer agrees that one or more of the Employers shall pay it.

2.3 How Trustees may act

2.3.1 Where there is a corporate body acting as sole Trustee, it shall act in accordance with its Memorandum and Articles of Association. As at the date of this Deed, the Memorandum and Articles allow the directors of the Trustee to meet together for business, adjourn and otherwise regulate their meetings as they think fit, and may decide the quorum necessary for the transaction of business. A trustee director may at any time on reasonable notice convene a meeting of the Trustee at the office of the Principal Employer or at such other place as the Trustee may determine. Unless otherwise decided two trustee directors shall form a quorum.


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The trustee directors may appoint one of their number to be the chairman who shall preside at all meetings of the Trustee. If the chairman is absent from any meeting the trustee directors present shall elect another of their number as chairman for the duration of that meeting. Questions arising at a meeting shall be decided by a majority of votes and in case of an equality of votes the chairman shall not have a second or casting vote. A written resolution, whether in counterpart or otherwise, signed by all the trustee directors shall be as effective as one passed at a meeting of the Trustee.

2.3.2 Any consent, decision, notice or other document shall be deemed to be sufficient to comply with the Deed if signed on behalf of such Trustee by any two directors of the Trustee, or any one director and the secretary provided authority has been delegated to them in accordance with Clause 2.4 (Power to delegate).

2.4 Power to delegate

The Trustees may delegate any of their powers (discretionary or otherwise) and duties to a committee of the Trustees or to any one or more persons (whether or not a Trustee) on such terms (including payment) as the Trustees may determine. The power to delegate includes the power to allow sub-delegation of specified powers (but not general sub-delegation of all powers by a delegate).

2.5 Personal interests

2.5.1 Any act or decision of the Trustees shall be valid even where a Trustee had an interest in that act or decision.

2.5.2 In this Clause 2.5 references to Trustees apply equally to directors of a corporate body acting as a Trustee.

2.6 Trustee liability

2.6.1 Subject to the following paragraphs of this Clause a Trustee shall not be liable for any act, omission or breach of trust nor for any act or omission of any agent, delegate or nominee of the Trustee.

2.6.2 Subject to the following paragraphs of this Clause, each Trustee shall be indemnified out of the Fund against all liabilities (including costs) incurred by him in the management and administration of the Scheme.

2.6.3 A Trustee shall not be entitled to an indemnity out of the Fund for

(a) liability to pay any fine or penalty under Section 168(4) of the Pension Schemes Act 1993 or Section 10 of the Pensions Act 1995;

(b) any fine imposed by way of penalty for an offence relating to the Scheme of which he is convicted ; or

(c) any liability which cannot by virtue of Section 33 of the Pensions Act 1995 be excluded or restricted


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but, subject to Clauses 2.6.5 and 2.6.6 below, shall be indemnified by the Principal Employer against such liabilities.

2.6.4 Subject to Clauses 2.6.5 and 2.6.6, in addition to the indemnity from the Fund, each Trustee shall be indemnified by the Principal Employer against all liabilities incurred by him in the management and administration of the Scheme.

2.6.5 Nothing in this Clause shall apply to any liability arising out of a Trustee’s personal conscious and dishonest wrongdoing, or in the case of a professional trustee out of his own negligence.

2.6.6 Any Trustee who is also a director of the Principal Employer or of an associated company (as defined in Section 309A of the Companies Act 1985) of the Principal Employer shall not be entitled to an indemnity from the Principal Employer under this Clause to the extent that such an indemnity is prohibited by legislation.

2.6.7 For the purposes of Clauses 2.6.1 to 2.6.6 above, the Trustees shall include any former Trustee including those who left office prior to the Effective Date.

2.7 Trustee director liability

2.7.1 In the case of a director of a corporate body acting as a Trustee, Clause 2.6 (Trustee liability) applies as if that director were a Trustee, subject to the provisions of this Clause. For the avoidance of doubt, nothing in this Clause 2.7 affects the protection provided to the corporate body itself under Clause 2.6.

2.7.2 In the case of a director, this Clause and Clause 2.6 are subject to any limitations contained in the Companies Act 1985 and no protection provided under either Clause is intended to or shall exceed the limitations under that Act.

2.7.3 To the extent prohibited by legislation, a director shall not be entitled to an indemnity from the Principal Employer for:

(a) any liability incurred by the director to the corporate body acting as a Trustee or an associated company (as defined in Section 309A of the Companies Act 1985);

(b) liability to pay a fine imposed in criminal proceedings or a liability incurred in defending criminal proceedings in which he is convicted; or

(c) liability to pay a sum payable to a regulatory authority by way of penalty in respect of non-compliance with any requirement of a regulatory nature.

2.7.4 No exoneration or indemnity under this Clause or Clause 2.6 shall apply to any liability arising out of a director’s personal conscious and dishonest wrongdoing, or in the case of a director who is a professional trustee out of his own negligence.

2.7.5 References to a director in this Clause are references to a current or former director or officer of a corporate body which is current acting or formerly acted as a Trustee including those who left office prior to the Effective Date.


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2.8 Liability insurance

2.8.1 The Trustees may obtain insurance against liability for any act or omission in relation to the Scheme and may insure the Scheme against claims by beneficiaries who are not known to the Trustees or whom the Trustees have been unable to contact and may charge all premiums relating to that insurance as an expense recoverable out of the Fund. Such insurance may cover any current or former Trustee and any current or former director or officer of a corporate body acting as a Trustee. However, premiums may not be recovered from the Fund to the extent insurance covers any liability to pay any fine or penalty under Section 168(4) of the Pension Schemes Act 1993 or Section 10 of the Pensions Act 1995 or any fine imposed by way of penalty for an offence of which the Trustee or director is convicted.

2.8.2 There will be no exoneration or indemnity out of the Fund or by the Principal Employer under Clause 2.6 or 2.7 above to the extent that the Trustees (or the director) have successfully recovered under an indemnity under an insurance arrangement.

DEED – CLAUSE 3: ADMINISTRATION

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3. ADMINISTRATION

3.1 Staff and agents

3.1.1 The Trustees may employ such staff and agents as they deem appropriate for the proper administration of the Scheme and on such terms as they consider appropriate.

3.1.2 Unless the Trustees decide otherwise, the Trustees shall be the Scheme Administrator for the purposes of Section 270 of the Finance Act 2004.

3.2 Scheme advisers

3.2.1 The Trustees shall appoint an Actuary and an auditor to the Scheme on such terms as they consider to be appropriate. The Trustees may remove any Actuary or auditor whenever they think fit.

3.2.2 The Trustees may appoint and remove any other adviser to the Scheme on such terms as they consider appropriate.

3.3 Actuarial valuation

3.3.1 There shall be an actuarial valuation of the Scheme every three years or at such shorter intervals as the Trustees may decide. After each actuarial valuation the Actuary shall report to the Trustees and to the Principal Employer on the financial condition of the Scheme, shall make a recommendation about the contributions to be payable by the participating Employers and shall make such other comments and recommendations as he thinks fit.

3.3.2 Where an actuarial valuation of the Scheme under this Clause discloses a surplus of assets over liabilities calculated on the assumption that all benefits were secured by the purchase of annuities the Principal Employer may, having taken the advice of an actuary, direct the Trustees to make a payment of some or all of that surplus to the Principal Employer (or to each of Employers in such shares as the Principal Employer may direct) but subject to compliance with any relevant legislation.

3.4 Expenses of administration

3.4.1 The Trustees shall be reimbursed out of the Fund for all liabilities, costs and expenses incurred by them in the management and administration of the Scheme, but may agree with the Principal Employer that the Employers will bear such of those liabilities, costs and expenses as the Principal Employer shall decide.

3.4.2 Where permitted by law, the Trustees may recover any such liabilities, costs and expenses from a Member or Pensioner (whether by a reduction in benefits under the Scheme or otherwise).

3.5 Accounts

The Trustees shall cause proper accounts to be kept, and an account and balance sheet of the Fund made up to the accounting date in each year shall be prepared and audited by the


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auditor appointed by the Trustees. The accounting date shall be such date as determined by the Trustees.

3.6 Notices

3.6.1 Any notice to the Trustees shall, in relation to a corporate body acting as sole Trustee, be sent to the registered office of the Trustee or, where there is more than one Trustee, be sent to the last known address of the secretary to the Trustees or the chairman of Trustees or to the last known address of all of the Trustees. Any notice to the Trustees shall be deemed to be served at the time it is received.

3.6.2 Any notice to any Member, Pensioner or other person entitled to any other benefit shall be sent to his last known address. If such notice is delivered by hand, it shall be deemed to have been served at the time of delivery. Any such notice posted by first class post shall be deemed to be served on the second day after it was posted and any such notice posted by second class post shall be deemed to have been served on the fifth day after it was posted.

3.6.3 Notwithstanding the previous provisions of this Clause, the Trustees may use and may at their discretion accept the use by any person of any communication sent by electronic means including by facsimile, e-mail or telephone text message and any such communication shall be deemed to be served at a time determined by the Trustees.

3.6.4 The Trustees may at their discretion accept any notice as being validly given notwithstanding that it was not given in writing or did not satisfy any notice period required under this Deed or under legislation.

3.7 Power to bind the Scheme

The Trustees may enter into such agreements and give such undertakings, indemnities or guarantees, as the Trustees shall, in their absolute discretion, decide are proper for the efficient administration of the Scheme. For the avoidance of doubt, unless otherwise stated such agreements, undertakings, indemnities or guarantees shall bind the successors in office to the Trustees who entered into those agreements or who originally gave such undertakings, indemnities or guarantees.

3.8 Questions of fact and interpretation

Except where expressly stated otherwise, the Trustees with the consent of the Principal Employer shall determine all issues or questions of fact in relation to the administration of the Scheme.

3.9 Power to commence, settle and defend proceedings

In addition to the powers conferred on the Trustees by general law, the Trustees may commence and pursue legal proceedings relating to the operation of the Scheme, their actions as Trustees or the rights of beneficiaries under the Scheme and may defend any such proceedings. The Trustees have complete discretion to settle, compromise or submit to mediation or arbitration any claim or other matter relating to the Scheme.


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3.10 Confidentiality

Subject to the requirements of any legislation or to any order of the court or direction of the Pensions Ombudsman, the Trustees shall be entitled to refuse to disclose to any Member, Pensioner or other actual or potential beneficiary the whole or any part of any documents, minutes, records or other data in their possession and shall not be obliged to provide the reasons for any decision of the Trustees, whether discretionary or otherwise.

DEED – CLAUSE 4: PAYMENT OF BENEFITS

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4. PAYMENT OF BENEFITS

4.1 Personal details

4.1.1 Before making any payment out of the Fund, the Trustees may require the production of a certificate, or such other evidence as they may think fit, of the birth, age, marriage, civil partnership, continued existence or death of the Member, Pensioner or other person claiming the benefit or of his Dependants or of any other information which may be relevant to a person’s entitlement to receive payment from the Fund. Payment of the amount due may be withheld until the required information is provided (but in such a case no interest will be payable in respect of the period for which payment is withheld).

4.1.2 If any beneficiary, or other person on their behalf, provides any incorrect or invalid information to the Trustees or fails to provide any information requested by them, the Trustees may, having considered the advice of the Actuary, make such arrangements as they consider reasonable to adjust any pension or other benefit payable out of the Fund in order to provide the correct level of benefits to or in respect of that beneficiary.

4.2 Payment of benefits

4.2.1 The following provisions shall apply to the payment of pensions or other benefits from the Scheme.

4.2.2 Pensions shall be payable at such intervals (including annually) as the Trustees may decide and may be paid in advance or arrears.

4.2.3 Pensions shall not be apportioned to the date of death or the date upon which they cease to be payable except where the Trustees decide otherwise.

4.2.4 Subject to Section 66A of the Pensions Act 1995, pensions or other payments are payable to a United Kingdom bank account maintained by the Pensioner or beneficiary or in such other way as the Trustees think fit and subject to the Pensioner or beneficiary producing any documentation required by the Trustees. Any agreement by the Trustees for payment through the post or to a bank account other than one in the United Kingdom maintained by the Pensioner or beneficiary shall be at the risk (and where the Trustees consider appropriate, at the expense) of the Pensioner or beneficiary.

4.2.5 If the Trustees think that any person entitled to receive a payment from the Fund cannot manage his affairs due to physical or mental infirmity or otherwise, the following provisions apply:

(a) the Trustees may pay that sum to any person for the maintenance or benefit of the person concerned or, at the Trustees’ discretion, to one or more of the Member’s or Pensioner’s Dependants, or, retain the whole or part of the sum due in the Fund;

(b) any amount retained in the Fund under Clause 4.2.5(a) may at any later date be paid by the Trustees to the person otherwise entitled to it, to any


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person for the maintenance or benefit of the person concerned or to one or more of the Member’s or Pensioner’s Dependants;

(c) any amount still retained in the Fund on the death of the person concerned will be held by the Trustees on discretionary trust in accordance with Clause 4.6 (Payment of lump sum benefits on death); and

(d) the Trustees shall not be obliged to see to the application of any benefit paid to any person who undertakes to apply it for the benefit of the person concerned and his receipt shall be a complete discharge to the Trustees.

4.2.6 If any person entitled to receive a payment from the Fund is in prison or other legal custody for a period, the Trustees may suspend that person’s benefits for that period and pay an equivalent sum to one or more of that person’s spouse or Dependants.

4.2.7 For the purposes of Clauses 4.2.5 and 4.2.6 the term “Dependant” shall be applied as if the Member or Pensioner had died on the day before the Trustees exercise their powers under those Clauses or such earlier date as the Trustees decide is appropriate.

4.3 Incorrect payments

Where any Member, Pensioner or other person is paid a sum from the Fund to which they are not then entitled or which exceeds their then entitlement from the Fund, the Trustees may demand repayment of that sum together with interest (if any) at such rate as the Trustees consider appropriate and may, where they consider it to be appropriate, deduct any such sum from future payments due to or in respect of that person.

4.4 Lump sum in place of trivial pensions

4.4.1 Where a trivial pension becomes payable or is in payment, the Trustees may convert that pension into a lump sum on such basis as the Trustees may decide having taken the advice of an Actuary and payment of that lump sum shall be a complete discharge to the Trustees in respect of that trivial pension.

4.4.2 For the purposes of this Clause, a trivial pension is

(a) in respect of a Member or Pensioner who has attained age 60 but not age 75, any pension which is capable of being commuted into a trivial commutation lump sum for the purposes of Paragraph 7 of Schedule 29 to the Finance Act 2004;

(b) in respect of any spouse, Civil Partner, Dependant or Eligible Child of a Member or Pensioner any pension payable to that spouse, Dependant or Eligible Child which is capable of being commuted into a trivial commutation lump sum death benefit for the purposes of Paragraph 20 to Schedule 29 to the Finance Act 2004.


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4.4.3 For the avoidance of doubt a pension may be commuted under this Clause notwithstanding the fact that the pension was in payment on 6 April 2006 or the Member or Pensioner had left Active Membership prior to that date.

4.4.4 Trivial pensions of spouses and Dependants may also be commuted in the same circumstances or may be commuted for a lump sum payable to the Member at the same time as the Member’s pension becomes payable.

4.5 Lump sum on serious ill-health

Subject to any legislative requirements relating to benefits which arise from employment which is contracted-out of the State Second Pension (or its predecessor), when a pension first becomes payable to a Member, the Trustees may convert into a single lump sum payment any pension payable to a Member if the Trustees, having taken advice from a medical practitioner, are satisfied that such commutation is justified owing to the Member being expected to live for less than one year and the payment would qualify as a serious ill-health lump sum under paragraph 4 of Schedule 29 to the Finance Act 2004. The sum payable shall be calculated as the value of the Member’s benefits as determined by the Trustees having taken the advice of an Actuary, without taking into account the shortened life expectancy of the Member in question. Commutation under this Clause shall not affect any benefits payable on the death of the Member, but in calculating these benefits the Member shall be assumed to have taken maximum commutation that would have been available if in normal health.

4.6 Payment of lump sum death benefits

4.6.1 Where on the death of a Member, Pensioner or other beneficiary an amount is stated to be held on discretionary trust in accordance with this Clause 4.6, the Trustees shall, subject to the following provisions of this Clause pay or apply all or any part of that sum to or for the benefit of any Relatives, Dependants, personal representatives (or executors) or nominated beneficiaries of the deceased Member or Pensioner in such shares as the Trustees decide.

4.6.2 The Trustees may establish separate trusts for the benefit of any beneficiary mentioned in Clause 4.6.1 above

4.6.3 If the Trustees have not exercised these powers within two years of the death of the Member or Pensioner, they shall hold the sum as a separate fund, outside the Scheme, on trust for the personal representatives (or executors) of the deceased Member or Pensioner or, if there are none, his statutory next of kin. However, if the Trustees are unable to identify or trace the Member or Pensioner’s statutory next of kin the Trustees may retain that sum as part of the General Assets.

4.6.4 The Trustees may have regard to any document signed by the Member or Pensioner expressing his wishes for the disposal of the sum, and any person charity or unincorporated association named in the document will be a “nominated beneficiary”.

4.6.5 Where any sum held under discretionary trust would otherwise be payable to the Crown, the Duchy of Lancaster or the Duke of Cornwall as bona vacantia, or would vest in a creditor of the Member or Pensioner, the Trustees shall retain that sum as part of the General Assets.


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4.6.6 The Trustees may deduct from any sum payable under this Clause an amount equal to all or part of the costs and expenses relating to the funeral of the Member or Pensioner and shall pay any such sum in settlement of those costs or expenses or to any person who has incurred these costs or expenses. For the avoidance of doubt the Trustees may make a payment under this Clause in advance of exercising their general discretion as to the payment of a lump sum under this Clause.

4.6.7 If the Former Spouse of a Member or Pensioner dies before the Trustees have implemented the relevant Pension Sharing Order then the Former Spouse shall be treated as if he was entitled to Pension Credit Benefits under the Scheme at the time of his death and 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 on discretionary trust in accordance with Clause 4.6.1 above and pensions for the Dependants of the Former Spouse as they shall decide. For the purposes of this Rule, references to “Member” in this Clause 4.6 and in the definition of “Dependants” 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 for so long as the child remains a Dependant.

4.7 Payments to personal representatives

Where any sum is payable to the estate of a Member, Pensioner or other beneficiary the Trustees may pay that sum to any person who the Trustees consider capable of being the personal representative (or executors) of the Member, Pensioner or beneficiary without seeing a grant of representation or other relevant documentation or to any other person the Trustees consider has an interest in the Member’s estate and a receipt given by that person is a complete discharge to the Trustees.

4.8 Taxation deductions

The Trustees may deduct from any payment made under the Scheme a sum equal to the tax or other liability to HM Revenue & Customs in respect of that payment.

4.9 Unclaimed benefits

4.9.1 Subject to the requirements of any applicable legislation, benefits are only payable when claimed by the Member or beneficiary and the Trustees are not obliged to locate the recipient of a benefit in order to inform him of his entitlement to a benefit from the Scheme.

4.9.2 A Member or other beneficiary will cease to be entitled to any sum which has become due if it has not been claimed for at least six years from the date upon which it became due. If that payment formed an instalment of a pension, the right to the pension shall not be extinguished but the right to the unclaimed instalment will be forfeited.

4.10 Annuity in satisfaction of Member’s rights

The Trustees may buy from an Insurance Company an insurance policy or annuity contract to satisfy any benefits payable under the Rules. Where a policy or contract is in the name


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of the beneficiary he shall have no claim upon or interest in the Fund. The Trustees may buy a policy or contract without the consent of the Member or beneficiary, provided that any relevant conditions in the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991 are satisfied. If the Trustees do this in substitution for Deferred Benefits, they must be reasonably satisfied that the purchase price is not less than the value of the Member’s accrued rights to benefit under the Rules.

4.11 Pension Sharing Order

4.11.1 Where the benefits of a Member or Pensioner are subject to the provisions of a Pension Sharing Order the benefits payable to the Member or Pensioner in accordance with this Deed shall be reduced by the debit applicable in accordance with Section 29(1)(a) of the Welfare Reform and Pensions Act 1999.

4.11.2 Any Pension Credit or Pension Credit Benefit may be discharged in any manner consistent with the Welfare Reform and Pensions Act 1999, as determined by the Trustees. Any benefits consequently provided under the Scheme may, where the Trustees decide, 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 or a Pensioner for the purposes of the Deed to the extent considered appropriate by the Trustees (provided that for the purposes of Clause 10.3 (Application of the General Assets of the Fund on a winding up) or Clause 10.4 (Money Purchase benefits), as appropriate, they shall be regarded as a Member if their pension is not in payment upon the winding up of the Scheme and as a Pensioner if it is then in payment).

DEED – CLAUSE 5: FORFEITURE AND ALIENATION

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5. FORFEITURE AND ALIENATION

5.1 Charges, lien and set-off

5.1.1 The Employer and the Trustees shall be entitled to a charge over, lien on or set-off against any benefit to which a Member or Pensioner is or may become entitled for the purpose of enabling the Employer or the Trustees to obtain the discharge of some monetary obligation due from the Member or Pensioner to the Employer or the Trustees and arising out of a criminal, negligent or fraudulent act or omission by the Member, Pensioner or other beneficiary, or if he is a Trustee, arising out of his breach of trust (unless the Trustee’s liability for breach of trust is excluded under Clause 2.6 (Trustee liability) or 2.7 (Trustee Director Liability)).

5.1.2 Where a charge, lien or set-off is imposed under this Clause:

(a) its amount must not exceed the amount of the monetary obligation, or, if less, the value of the benefit;

(b) the Trustees shall determine the impact on the benefits otherwise payable to the Member or Pensioner;

(c) the Member or Pensioner must be given a certificate showing the amount of the charge, lien or set-off and its effect on his benefits;

(d) where there is a dispute about the amount, the charge, lien or set-off must not be exercised until the obligation has become enforceable under a court order or an award of an arbitrator, but the Trustees may suspend payment of any benefits until the dispute is resolved; and

(e) the charge, lien or set-off cannot be exercised in respect of benefits received following a transfer from a Registered Pension Scheme except where the scheme is attributable to employment with the same Employer or an associated employer and the benefits of which could have been charged or a lien or set-off exercised in respect of them under the scheme from which they were transferred.

5.2 Crime, negligence or fraud

If a Member or Pensioner owes money to his Employer as a result of his criminal, negligent or fraudulent act or omission, the Trustees may forfeit the benefits payable to or in respect of him. The amount forfeited must not exceed the amount of the debt or, if less, the actuarial value of the benefits. If there is a dispute about the amount of the debt, forfeiture must not take place until the debt has become enforceable under a court order or the award of an arbitrator. The Trustees may suspend payment of any benefits until the dispute has been resolved. The Member or Pensioner must be given a certificate showing the amount forfeited and the effect on his benefits. The amount forfeited may, if the Trustees so decide, be paid to the Employer.

DEED – CLAUSE 5: FORFEITURE AND ALIENATION

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5.3 Restrictions on alienation and forfeiture

5.3.1 Subject to Clause 5.3.3, no benefit arising under the Scheme shall be capable of being assigned or applied for the benefit of anyone other than the person entitled, or prospectively or contingently entitled to it, and:

(a) every assignment of, or charge on, any such benefit and any agreement to assign or charge it shall be void, and

(b) on the bankruptcy of any such person, the benefit shall not pass to any trustee or other person acting on behalf of the creditors of the person entitled.

5.3.2 Upon any attempted assignment, the Member or Pensioner shall cease to be entitled to any benefits which he may otherwise expect to receive under the Rules but the Trustees may then apply an amount equal to such benefits for the benefit of the Member or Pensioner or his Dependants or Relatives in such shares and proportions as they think fit.

5.3.3 The provisions of this Clause do not apply to any assignment or charge permitted in this Deed or in accordance with:

(a) legislation in relation to pension rights of individuals adjudged bankrupt;

(b) Chapter I of Part IV of the Welfare Reform and Pensions Act 1999 (Sharing of rights under pension arrangements); or

(c) Sections 166 or 167 of the Pensions Act 1995 (Pensions on divorce).

(d) Schedule 5 to the Civil Partnerships Act 2004

or, subject to the consent of the Trustees, as otherwise permitted under Section 172A of the Finance Act 2004 (Surrender).

5.4 Excess contributions on bankruptcy

Where a court order has been made in relation to a Member under Chapter V of Part IX of the Insolvency Act 1986 (Effect of Bankruptcy on Certain Rights, Transactions, etc), the Trustees may take all steps as are necessary to comply with such an order, including making such adjustments in relation to benefits payable to or in respect of the Member as they consider necessary.

DEED – CLAUSE 6: INVESTMENT

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6. INVESTMENT

6.1 Power of investment

6.1.1 The Trustees shall have the same full and unrestricted powers of investing and changing investments as if they were the beneficial owners of the Fund. All money held in or for the purposes of the Fund shall be placed in an account with a bank or invested in such other manner as the Trustees may determine, whether involving liability or not, and whether producing income or not, and with or without security.

6.1.2 All investments shall be held in the names of the Trustees or in the name of a nominee or agent appointed by the Trustees on such terms as the Trustees may decide are appropriate.

6.1.3 The Trustees shall not in any event invest in employer-related investments (as defined in Section 40 of the Pensions Act 1995) except to the extent permitted by legislation.

6.2 Investment of money purchase assets

6.2.1 In exercising their powers of investment under Clause 6.1 (Power of investment) the Trustees shall from time to time notify Members with Investment Accounts or AVC Accounts of the range of investment funds or vehicles in which the Investment Accounts and AVC Accounts of those Members may be invested and the facilities and charges for switching investments among such investment funds or vehicles. The Trustees may add to and withdraw funds or vehicles from the range available to Members from time to time and may transfer existing monies to any new or alternative fund without the consent of the Member. Provided the Trustees have taken appropriate professional advice in the selection of such investment funds or vehicles, they shall not be liable in any way for their underperformance or suitability.

6.2.2 The Trustees shall ask each Member to select one or more investment fund or vehicle in which he wishes his Investment Account or AVC Account to be invested. Subject to the Trustee’s right to change the range of funds available to Members, the Trustees will follow the Member’s selection and shall not be liable in any way for the performance or suitability of the investment fund or vehicle selected by the Member. The Trustees may, however, invest a Member’s Investment Account or AVC Accounts in a different fund if the fund ceases to be amongst those in the range of funds being made available to Members. The Trustees shall also notify the Members of the manner in which they will invest a Member’s Investment Account or AVC Account in circumstances where the Member has not informed the Trustee of his selection.

6.3 Power to borrow and to insure

6.3.1 The Trustees may borrow money required for the purposes of the Scheme to the same extent as if they were the beneficial owners of the Fund provided that such borrowing may not exceed the limits for unauthorised borrowing under Section

DEED – CLAUSE 6: INVESTMENT

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182 (Unauthorised borrowing: money purchase arrangements) or 184 (Unauthorised borrowing: other arrangements) of the Finance Act 2004.

6.3.2 The Trustees may insure the Fund, any individual asset or investment of the Fund (including any risks which may arise in the course of holding any investment).

DEED – CLAUSE 7: POWERS AND OBLIGATIONS OF THE EMPLOYEES

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7. POWERS AND OBLIGATIONS OF THE EMPLOYERS

7.1 Powers of Employers

7.1.1 In exercising any discretionary power or giving any consent under this Deed, the Principal Employer or any other Employer shall not be required to consider anything except its own interests.

7.1.2 If in respect of any Member or Pensioner a power or consent is expressed to be exercisable by the Employer of that Member or Pensioner but that employer no longer participates in the Scheme, such power or consent shall be exercisable by the Principal Employer.

7.1.3 Unless otherwise provided for in the Rules, any discretionary power or obligation conferred or imposed on an Employer may be exercised or complied with:

(a) by the board of directors of the Employer acting by resolution or by a written document signed by all its members; or

(b) by some person duly nominated in the same manner by the Employer to exercise the powers and discretions conferred upon it.

7.2 Termination of employment

Nothing in this Deed shall restrict the rights of the Employer to terminate the employment of a Member. The benefits to which a Member might claim to be entitled from the Fund in respect of a period after his contract of service could lawfully be terminated shall not be used as a ground for increasing damages in any action brought by such Member against the Employer.

DEED – CLAUSE 8: EMPLOYERS’ CONTRIBUTIONS

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8. EMPLOYERS’ CONTRIBUTIONS

8.1 Ordinary Employer contributions

8.1.1 Each of the Employers shall make the following contributions to the Fund:

(a) such amounts as the Principal Employer shall decide having taken the advice of an actuary and after consultation with the Trustees is required to provide benefits to or in respect of Members or Pensioners in the Final Salary Sections of the Scheme provided that where required by legislation (in particular Section 229 of the Pensions Act 2004) the Principal Employer and the Trustees must agree the amounts payable;

(b) such amounts as are required to comply with Rule 2.3 (Employers’ contributions) of Schedule 2;

(c) sums equal to the total of Employee Directed Contributions and all other sums in place of the contributions that a Member would have paid had he not been a Flex Member;

(d) such additional amounts as are required to meet the cost of providing benefits on the death of any Active Member;

(e) such amounts as are payable by the Employers in respect of the expenses of administering the Scheme in accordance with Clause 3.4 (Expenses of administration);

(f) such amount as the Principal Employer shall decide (if any) having taken the advice of an actuary is required to meet any levy payable under legislation; and

(g) such additional amounts as may be required elsewhere in this Deed.

8.1.2 The Trustees shall prepare a schedule of contributions in accordance with the requirements of relevant legislation. The contributions paid by the Employers in accordance with this Clause shall not be less than that stated in the schedule of contributions and shall be paid by the due date specified in that schedule.

8.2 Further contributions

Each of the Employers shall contribute such further amounts to the Fund as may be decided by the Principal Employer having taken the advice of an actuary, after consultation with the Trustees.

8.3 Reduction or suspension of contributions

Subject to Clause 8.1.2 the Principal Employer may give written notice to the Trustees to reduce or suspend the contributions due under this Clause 8 and the Employer concerned shall then not be bound to pay any such contributions, or more than the reduced contribution but any contributions due before the effective date of that notice remain payable to the Fund by the Employer.

DEED – CLAUSE 9: PARTICIPATION OF EMPLOYERS

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9. PARTICIPATION OF EMPLOYERS

9.1 Participation by employers

9.1.1 Subject to Clause 9.1.2, any employer which is invited by the Principal Employer to participate in the Scheme shall participate in the Scheme with effect from a date specified by the Principal Employer provided that the employer enters into a deed with the Trustees under which it agrees to comply with the provisions of this Deed so far as they relate to it and to its Employees who become Members.

9.1.2 Unless the Trustees agree otherwise, an employer shall only participate in the Scheme if it is associated with the Principal Employer. For these purposes, associated means where it is controlled by the Principal Employer or it and the Principal Employer are controlled by a third person (control being determined in accordance with Section 840 of the Income and Corporation Taxes Act 1988) or where there are sufficient links between the employer and the Principal Employer for the Trustees to regard them as being associated.

9.1.3 When an Employer starts participating in the Scheme, it may with the agreement of the Principal Employer and the Trustees exclude from eligibility for membership any class of Employee whether on the grounds of age, status, type of employment or otherwise and in relation to Employees in the Employer’s Service who are eligible for membership exclude, vary or modify any of the provisions of this Deed and the Schedules to it and substitute or add any other provisions.

9.1.4 When an Employer first participates in the Scheme the Trustees may accept a transfer payment from the trustees of any scheme in which the Employees of the Employer have previously been Members and shall apply that transfer payment in accordance with the provisions of Rule 9.4 (Transfers in) in such manner as the Trustees shall determine.

9.2 Substitution of Principal Employer

9.2.1 Subject to the following provisions of this Clause and to the consent of the Trustees and the Principal Employer, any company, firm or person may become and assume the rights and obligations of the Principal Employer under the Scheme by executing a deed of substitution under which it undertakes to observe and comply with the provisions of this Deed.

9.2.2 Any new Principal Employer must be the successor to the current Principal Employer’s business whether as a result of reconstruction, amalgamation, purchase or otherwise.

9.2.3 Upon appointment of a new Principal Employer in accordance with this Clause the previous Principal Employer shall be discharged from all obligations as Principal Employer of the Scheme and all powers or consents of the Principal Employer under the Scheme shall be exercisable by the new Principal Employer.


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9.3 Employer ceasing to participate

9.3.1 Subject to Clause 9.3.2, an Employer will cease to participate in the Scheme on the happening of any of the following events or the expiry of any notice given in accordance with the following provisions:

(a) the Employer ceases to be associated with the Principal Employer where it was so associated when it commenced participation (associated being as defined in Rule 9.1.2) or if it was not so associated on commencement of participation if the Principal Employer’s interest in the Employer has reduced to such an extent that the Principal Employer notifies the Trustees that it desires that the Employer cease to participate;

(b) the Employer goes into Insolvency;

(c) the Principal Employer and Trustees agree by deed that the Employer shall cease to participate, such cessation to take effect on the date specified in the deed;

(d) the Employer (other than the Principal Employer) no longer has Employees who are Active Members and gives notice in writing to the Trustees that it intends to cease to participate in the Scheme;

(e) the Principal Employer gives written notice to the Trustees where it has been found inexpedient by the Employer and Principal Employer for an Employer to continue to participate (such notice being deemed to expire on the date specified in the notice or, where no date is specified, the date of the notice itself).

9.3.2 Where Clause 9.3.1(a) applies, the Principal Employer may permit that Employer to continue to participate in the Scheme for such period and on such terms as it may decide. Any such period may not exceed 12 months without the prior consent of the Trustees.

9.4 Consequences of an Employer ceasing to participate

9.4.1 Subject to the provisions of Clause 9.5 (Bulk transfer to another arrangement) where an Employer ceases to participate in the Scheme in accordance with Clause 9.3 (Employer ceasing to participate) any Member employed by the retiring employer who was in Active Membership shall be deemed to have left Active Membership on the date of cessation of his Employer’s participation in the Scheme (unless their employment transfers to another Employer with effect from that date and they remain eligible for membership of the Scheme) but no Member shall become entitled to a refund of his contributions.

9.4.2 Subject to Clause 9.4.3, when an Employer ceases to participate in the Scheme its obligation to contribute to the Scheme shall cease but any amount due from the Employer prior to cessation of participation shall remain payable.

9.4.3 Where an Employer ceases to participate in circumstances where a debt would be due under Section 75 or 75A of the Pensions Act 1995 (Deficiencies in the assets) or such a debt otherwise becomes due, the debt may be apportioned amongst the


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retiring Employer and all other Employers in such proportions as the Principal Employer decides.

9.4.4 In the event that a Member’s or Pensioner’s Employer no longer participates in the Scheme the Principal Employer may give any consent in respect of that Member or Pensioner which would otherwise have been required under the Deed from their Employer.

9.5 Bulk transfer to another arrangement

9.5.1 Where an Employer ceases to participate in the Scheme in accordance with Clause 9.3 (Employer ceasing to participate) the Principal Employer may request the Trustees to make a bulk transfer to another fund, scheme or arrangement approved for this purpose by the Inland Revenue in respect of some or all of the Members whose benefits under the Scheme relate in whole or in part to Service with that Employer. Such transfers may be made without the consent of the Members, Pensioners and other beneficiaries provided that the Trustees comply with the conditions set out in Regulation 12 of the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991. However, if a Member or Pensioner makes a written objection to the Trustees to the transfer of his benefits within one month of being notified of the transfer, his benefits shall not be so transferred.

9.5.2 Any bulk transfer under this Clause shall be calculated on such basis as the Principal Employer shall determine but shall not be less than the cash equivalent of the benefits being transferred calculated in accordance with Chapter IV of Part IV of the Pension Schemes Act 1993 (allowing for any reductions in the cash equivalent permitted by legislation) and shall not be more than a fair share of the Fund as certified by an actuary.

9.5.3 The Principal Employer may also request that a bulk transfer is made in accordance with this Clause following the disposal of all or part of the business of an Employer.

DEED – CLAUSE 10: TERMINATION AND WINDING UP

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10. TERMINATION AND WINDING UP

10.1 Power of termination

The Scheme may be terminated by the Principal Employer at any time by giving at least one month’s prior notice in writing to the Trustees. From the expiration of that notice or the termination of the Scheme for any other reason, the Employers shall not be liable for any further payments to the Fund, except for payments due on or before the date of termination or in accordance with Section 75 of the Pensions Act 1995 (Deficiencies in the assets).

10.2 Termination of the Scheme

10.2.1 The Scheme shall be terminated:

(a) on the expiry of notice given under Clause 10.1 (Power of termination);

(b) on the decision by the Trustees to terminate the Scheme if the Trustees are of the opinion that the objects for which the Scheme was established no longer exist or that its administration cannot effectively and practically be carried on, but only after having consulted with the Principal Employer and having received professional advice that they would be acting properly in good faith and in the interests of the beneficiaries to wind up the Scheme on these grounds; or

(c) in accordance with any requirement of legislation including any order of the Pensions Regulator.

10.2.2 On the termination of the Scheme, Members then in Active Membership shall be notified and they shall be treated as if their Active Membership had terminated. Except where Clause 10.2.3 applies, the Scheme shall be wound up.

10.2.3 Except where winding up is required by legislation, on termination of the Scheme the Trustees may decide to defer the winding up. The Principal Employer’s consent is required for any decision to defer the winding up of the Scheme except during a period of Insolvency.

10.2.4 If the Scheme is wound up or the winding up is deferred in accordance with this Clause 10.2, the power of amendment conferred by Clause 11 (Amendments and Augmentations) shall continue in relation to the provisions of this Deed.

10.2.5 Upon termination of the Scheme and prior to completion of the winding up, the Trustees must comply with the provisions of Sections 73 to 73B of the Pensions Act 1995.

10.3 Application of the General Assets of the Fund on a winding up

10.3.1 This Clause applies upon the winding up of the Scheme.

10.3.2 Subject to the payment of all costs, charges and expenses other than any cost, charges and expenses to be met from the Investor Plan Section in accordance with Clause 10.4 (Money Purchase benefits), the General Assets of the Fund shall


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be applied by the Trustees to secure the obligations of the Final Salary Sections in accordance with the provisions of Section 73 of the Pensions Act 1995 (Preferential liabilities on winding up).

10.3.3 Each Member’s AVC Account shall be used to secure benefits in respect of that Member in accordance with Clause 10.5 (Securing benefits on winding up). The benefits to be secured shall be those agreed between the Member and the Trustees or, failing such agreement, as the Trustees decide.

10.3.4 Where, having provided for all the liabilities of the Scheme (or the Final Salary Sections) in accordance with Section 73 of the Pensions Act 1995, surplus assets remain in the General Assets the Trustees:

(a) may at their discretion, subject to the consent of the Principal Employer (unless it is in a period of Insolvency), and having regard to the advice of an actuary, augment any pension or other benefit payable under the Scheme including those under the Investor Plan Section; and

(b) shall pay any balance remaining to the Employers in such shares as the Trustees decide subject to compliance with Section 76 of the Pensions Act 1995 (Excess assets on winding up).

10.4 Money Purchase benefits

10.4.1 Upon the winding up of the Scheme, each Member’s Investment Account and any benefits which are referred to in Clause 10.4.4 shall be applied in accordance with this Clause.

10.4.2 The Trustees shall set aside such part of each Member’s Investment Account as the Trustees decide is required to meet expenses relating to the operation and winding-up of the Investor Plan Section.

10.4.3 The balance of each Member’s Investment Account will be applied to secure benefits in respect of that Member in accordance with Clause 10.5 (Securing benefits on winding up). The benefits to be secured shall be determined in accordance with the provisions of Rule 4 of Schedule 2 (Benefits on leaving Active Membership).

10.4.4 Any other benefits which are money purchase benefits as defined in Section 181 of the Pension Schemes Act 1993 (General interpretation) shall be secured in a manner determined by the Trustees.

10.5 Securing benefits on winding up

10.5.1 Upon the winding up of the Scheme benefits payable under the Scheme to or in respect of any Member or Pensioner or other beneficiary shall be secured by one or more of the following methods:

(a) acquiring transfer credits allowed under the rules of another occupational pension scheme which satisfies requirements prescribed by legislation and is able and willing to accept payment in respect of the Member, Pensioner or other beneficiary;


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(b) acquiring rights allowed under the rules of any other Registered Pension Scheme which is able and willing to accept payment in respect of the Member’s accrued rights;

(c) buying one or more annuities which satisfy requirements prescribed by legislation from one or more Insurance Companies which are willing to accept payment in respect of the Member, Pensioner or other beneficiary;

(d) assigning the benefit of one or more contracts to provide an annuity which satisfies requirements prescribed by legislation;

(e) commuting the benefit into a lump sum payment to or in respect of the Member, Pensioner or other beneficiary on such terms as the Trustees decide, having taken the advice of an Actuary provided that the lump sum satisfies the requirements of Paragraph 10 (Winding-up lump sum) or Paragraph 21 (Winding-up lump sum death benefit) of Schedule 29 to the Finance Act 2004.

10.5.2 The Members, Pensioners or any other recipient of a pension from the Scheme shall not be required to consent to their benefits being secured in accordance with this Clause provided that the Trustees comply with any relevant conditions set out in legislation (including Regulation 12 of the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991).

10.6 Merger

10.6.1 The Scheme or any part of it may be merged with one or more Registered Pension Schemes established for the benefit of employees of any of the Employers or of any other company which may be an associated, subsidiary or holding company of any of the Employers on such terms as the Principal Employer and the Trustees shall agree. The Members, Pensioners or other beneficiaries under the Scheme shall be transferred to effect such merger and their consent is not required unless the conditions set out in Regulations 12(2) and (3) of the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991 are not satisfied.

On any such merger becoming effective the Trustees shall transfer the Fund to the trustees of such other scheme or schemes. The Scheme shall then be wound up and the Trustees shall be free from all responsibility in respect of the Scheme and its beneficiaries.

10.6.2 All or part of any other Registered Pension Scheme for the benefit of employees of any subsidiary or associated company of the Principal Employer may be merged with the Scheme on such terms as the Trustees having taken the advice of an Actuary and with the consent of the Principal Employer think fit.

10.6.3 Any merger under this Clause shall be subject to the requirements of applicable legislation and without prejudice to the provisions of Clause 9.5 (Bulk transfer to another arrangement).

DEED – CLAUSE 11 AMENDMENTS AND AUGMENTATIONS

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11. AMENDMENTS AND AUGMENTATIONS

11.1 Power of amendment

11.1.1 Subject to any statutory requirements and Clause 11.2 (Restrictions on amendment power), the Principal Employer may, by deed, with the written consent of the Trustees amend all or any part of this Deed (including all or any part of the Schedules and Appendices to it) whether retrospectively or otherwise. Subject to Clause 11.1.2, any provisions so made shall be as valid as if they had been originally made and may be amended in the same way.

11.1.2 Subject to any statutory requirements and Clause 11.2 (Restrictions on amendment power), if the Trustees decide by resolution and with the consent of the Principal Employer that the effect of an amendment by deed does not reflect the intention of the parties to that deed, such amendment shall be void to the extent that it does not reflect those intentions.

11.1.3 References in this Clause 11 to an amendment include any alteration, addition to, repeal or replacement of any provision of this Deed.

11.2 Restrictions on amendment power

11.2.1 No amendment shall prejudice or adversely affect any pension then payable or change the main purpose of the Scheme, which shall continue to be the provision of pension, lump sum and other benefits to or in respect of Employees, either on retirement at a specified age or on death or incapacity at some earlier age.

11.2.2 No amendment may be made which would reduce the value of a Saver Plan Plus Member’s benefits accrued up to the date of alteration unless the amendment is required to meet legislation or the relevant Members affected have consented in writing.

For the purpose of this Clause 11.2.2 the value of a Member’s benefits shall be calculated as if the Member’s Pensionable Service terminated on the date of the change and Rule 4 (Benefits on leaving Active Membership) of Schedule 4 applied, except that the Member’s Final Pensionable Salary shall include allowance for projected Final Pensionable Salary increases to assumed date of retirement or earlier leaving Active Membership on a basis determined by the Scheme Actuary.

11.3 Declarations

For the purpose of enabling the Scheme to continue to be a Registered Pension Scheme, the Trustees may give such declarations as may be required by HM Revenue & Customs under Section 153 of the Finance Act 2004 (Registration of pension schemes). Any such declaration shall be deemed to be incorporated in the Deed, and, to the extent that it is inconsistent with any of the provisions of the Scheme (including any provision which is stated to be overriding), it shall override that provision.

11.4 Augmentation of benefits

11.4.1 The Principal Employer may direct the Trustees to:

(a) provide additional or improved benefits;

DEED – CLAUSE 12 SPECIAL RULES FOR CALCULATING BENEFITS UNDER FINAL SALARY SECTIONS

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(b) bring forward or otherwise change the date of payment of any benefit; or

(c) increase any benefit

for any Member, Pensioner, employee or former employee of any of the Employers or a Dependant of any such person.

11.4.2 The provision of any benefit under Clause 11.4.1 is subject to payment, whether by way of lump sum or increased regular contributions of such additional contributions (if any) by the Employer or the Member or both of them as the Trustees shall decide having taken the advice of an Actuary. If the Employer or the Member fails to pay any contribution due under this Clause, the Trustees may suspend or adjust the benefits payable to the person concerned.


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35

12. SPECIAL RULES FOR CALCULATING BENEFITS UNDER FINAL SALARY SECTIONS

12.1 Exchanging pension for lump sum

12.1.1 With the consent of the Trustees, where a pension becomes payable to a spouse, Civil Partner or adult Dependant or to an Eligible Child who has attained the age of 18, the person entitled to receive that pension may request the Trustees to exchange all or part of that pension for a lump sum benefit on such terms as the Trustees may decide.

12.1.2 Any lump sum under this Clause shall not reduce the pension payable to the spouse or Civil Partner of a Member or Pensioner (except one who was living together as man and wife (or a same sex equivalent) with someone other than the Member at the time of the Member’s death) below the minimum (if any) required under Part III of the Pension Schemes Act 1993.

12.1.3 On payment of a lump sum in exchange for a pension under this Clause , the Trustees and the Fund shall be discharged from all liability relating to the pension (or that part of it which is exchanged for a lump sum)

12.2 Family leave

12.2.1 Paid Family 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. However, during any period of Paid Family Leave a Member shall only be required to pay contributions on the amount of contractual remuneration, statutory maternity pay, statutory paternity pay or statutory adoption pay actually paid for that period.

12.2.2 Unpaid Family Leave shall not be treated as Pensionable Service. However, the Principal Employer may nonetheless agree with a Member that in respect of a period of Unpaid Family Leave or other leave approved by his Employer shall be treated as Pensionable Service with the Member’s contributions and benefits and the Employer’s contributions calculated as if he had not been absent by reference to the Member’s Pensionable Salary before his absence.

12.2.3 A Member to whom this Rule applies:

(a) shall not be treated as remaining in Active Membership if he has failed to pay any necessary Member contributions;

(b) who is not treated as remaining in Active Membership under this Clause 12.2 shall, if the Trustees and Principal Employer agree, nonetheless be treated as remaining in Active Membership for the purpose of Rule 5 (Lump sum benefits on death) and Rule 6 (Spouse’s and Dependants’ pensions) and the benefits payable on the Member’s death shall be calculated by reference to his Pensionable Salary before his absence started;


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(c) who fails to return to work at the end of her maternity leave in accordance with the conditions of any legal right shall be treated as having left Active Membership on the later of the date when any remuneration or maternity pay stops being paid and the end of the Member’s ordinary maternity leave;

(d) who fails to return to work following a period of adoption leave (as defined in Section 75A of the Employment Rights Act 1996) or paternity leave (as defined in the Paternity and Adoption Leave Regulations 2002) shall be treated as having left Active Membership at the end of the period of ordinary adoption leave or paid paternity leave;

(e) who has not paid contributions due to the Scheme during any period of Paid Family Leave or Unpaid Family Leave may, with the consent of his Employer, pay the contributions due in respect of that period following his return to work on such terms as the Trustees may decide and on payment of those contributions the period in question shall count as Pensionable Service during which the Member worked normally;

(f) shall not be required to pay contributions under this Clause 12.2 if they were a Flex Member who was not paying contributions prior to commencement of leave, but the Employer shall pay contributions in respect of the relevant period of service for and on behalf of the Member who would otherwise pay contributions under Clause 12.2.2 or 12.2.3(e) if he were not a Flex Member.

12.3 Absence due to ill-health

12.3.1 This Rule applies where a Member is away from work because of illness or any other incapacity.

12.3.2 For so long as his Employer continues to pay him, the Member must pay any contributions payable under Rule 2.1 (Member’s ordinary contributions) and his Pensionable Service shall continue. In such circumstances, contributions and benefits shall be calculated by reference to his Pensionable Salary before his absence or such greater amount as the Principal Employer requires by reference to any salary scale applicable to the Member or by reference to any increased Salary paid to Employees of the same position. If a Member’s Pensionable Salary decreases because he is away from work because of illness, the Trustees may calculate any benefits to which he becomes entitled by reference to his Pensionable Salary before the absence commenced.

12.3.3 If the Member stops being paid by his Employer, he will cease to accrue Pensionable Service until he is again being paid by his Employer.

12.3.4 Even though his Pensionable Service has ceased to accrue, the Member will be treated for the purposes of entitlement to benefits under Rule 5 (Lump sum benefits on death), Rule 6 (Spouse’s and Dependant’s pensions) and Rule 4 (Benefits on leaving Active Membership) as still being in Active Membership until he either leaves the Scheme or leaves his Employer’s Service. If he dies during that period the benefits payable on his death shall be calculated by reference to his Salary or Pensionable Salary (as appropriate) before his absence


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started, but if he dies more than 2½ years (or such other period as may be decided by the Trustees) after his absence started, he will be treated as having left Active Membership on the day before his death.

12.4 Secondment and other absences

12.4.1 Periods of absence covered by this Rule are periods of absence for the following reasons which have been approved by the Employer:

(a) secondment or temporary transfer to another employer;

(b) a course of study or training;

(c) work of national importance; or

(d) any other leave of absence.

12.4.2 During any period of absence in accordance with Clause 12.4.1 above, the Member’s Employer may arrange to continue the Member’s contributions (if any) and shall pay any Employer’s contributions, in which case the Member’s Pensionable Service will continue to accrue. If contributions cease to be paid in respect of the Member, he will be deemed to have left Active Membership and will cease to accrue Pensionable Service until he is again being paid by the Employer.

12.4.3 Subject to Clause 12.4.4, and notwithstanding the provisions of Clause 12.4.2, in the event of the death of any Member who is absent from Service for any of the reasons specified in Clause 12.4.1 above, the benefits payable on his death under Rule 5 (Lump sum benefits on death) and Rule 6 (Spouse’s and Dependant’s pensions) shall be calculated as if he remained in Active Membership at the time of his death by reference to his Salary or Pensionable Salary (as the case may be) before his absence started. If he dies more than one year (or such other period as may be decided by the Trustees) after his absence commenced the Member shall be treated as having left Active Membership on the day before his death.

12.4.4 Where a Member remains in Active Membership in accordance with this Clause, the Principal Employer may at any time at its discretion decide that his Pensionable Service shall cease and the provisions of Rule 4 (Benefits on leaving Active Membership) shall apply.

12.5 Members with part-time Service

12.5.1 The provisions of this Rule shall apply in relation to the calculation of benefits payable to any Members in respect of any period of part-time Service.

12.5.2 For the purposes of calculating the Member’s Final Pensionable Salary, the Member’s Pensionable Salary during any period of part-time Service shall be the equivalent Pensionable Salary of a full-time Employee. The equivalent full-time Pensionable Salary shall be calculated as if the Member’s contractual hours of work were equal to the hours he would have worked had he been a full-time Employee during that period as declared by the Employer and notified to the Trustees.


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12.5.3 Pensionable Service in respect of periods of part-time Service shall be calculated by multiplying the number of Years of such part-time Service by that fraction which his contractual hours of work bear to the hours which he would have worked had he been a full-time Employee during that period, which fraction shall be declared by the Employer and notified to the Trustees.

12.5.4 If the fraction of part-time Service under Clause 12.5.3 above changes, a separate calculation shall be made of the Pensionable Service in respect of each period when the part-time fraction is constant.

12.5.5 Where any benefits are based on prospective periods of Pensionable Service, the fraction applying under Clause 12.5.3 above on the last day of actual Pensionable Service shall apply to the period of prospective Pensionable Service.

12.5.6 The provisions in Clause 12.5.3 above do not apply to the calculation of the number of Years of Pensionable Service which the Member must have completed before he becomes entitled to benefits under the Scheme.

12.6 Maximum pension

A Member’s pension on retirement, before any commutation to provide a lump sum, and excluding any benefits derived from a Member’s AVC Account or Employee Directed Contributions, shall not exceed two-thirds of the Member’s Final Remuneration from his Employer or, if less in the case of a Post-89 Member, two-thirds of the Earnings Cap.

SCHEDULE 1 INTERPRETATION

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39

SCHEDULE 1 INTERPRETATION


SCHEDULE 1 INTERPRETATION ....................................................................................39

1. GENERAL INTERPRETATION............................................................................40

2. DEFINITIONS .........................................................................................................40

SCHEDULE 1: INTERPRETATION

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1. GENERAL INTERPRETATION

In this Deed:

(a) unless the context otherwise requires, words importing the singular shall include the plural, and vice versa, and words importing the masculine, feminine or neuter gender shall include either or both of the others, and words importing persons shall include corporations;

(b) references to an enactment, or any regulation made under it, shall include any corresponding legislation in Northern Ireland and shall include a reference to any statutory modification or re-enactment of it.

2. DEFINITIONS

In this Deed the following words shall, unless the context otherwise requires, have the following meanings and where these words are used in the Deed they are identified by the first letter being capitalised.

Accrued Pension means at any date for a Horizon Plan Member who joined the Schroders Retirement Benefits Scheme before 1 January 1991, his Scale Pension multiplied by A/B where:

A = the Member’s Pensionable Service

B = the Pensionable Service the Member would complete if he remained a Member until his Normal Retirement Date.

Acquired Member means an Investor Plan Member who joined the Scheme after 1 May 2003 consequent upon his employment being transferred to an Employer or upon his employer being acquired by any Employer.

Active Member means a Member of the Scheme in Active Membership.

Active Membership means membership of the Scheme while accruing benefits by reference to Pensionable Service. A Member shall cease to be in Active Membership on the earliest date of retirement, death or otherwise ceasing to accrue benefits. For the avoidance of doubt a Chemfeed Member who is in Active Membership of the Investor Plan will be treated as being in Active Membership for the purposes of the Chemfeed Section as well.

Actuary means an actuary or firm of actuaries appointed by the Trustees.

AVC Account means the individual accounts containing the additional voluntary contributions of Members of the Final Salary Section in accordance with Rule 2.2 (Additional voluntary contributions) of the Rules of the Final Salary Section adjusted in line with the investment return on those contributions.

Basic AVCs means so much of a Member’s AVC Account as represents (a) contributions paid before 6 April 2006 and (b) contributions paid on or after that date which, when added to any ordinary contributions paid by a Member, are less than 15% of the Member’s Pensionable Salary in any tax year. In respect of a Flex Member, Basic AVCs means so much of a Member’s AVC Account as represents contributions which, when added to any


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ordinary contributions paid by a Member (including contributions equivalent to those sacrificed by a Member), are less than 15% of the Member’s Pensionable Salary in any tax year (ignoring in the calculation of Pensionable Salary any salary sacrificed under the Flex Plan).

Booster Plan Member means a Member who has joined the Scheme for Booster Plan benefits in accordance with Rule 1.1. (Eligibility) of Schedule 3.

Chemfeed Member means a former member of the Veolia Plan whose accrued benefits were transferred to the Scheme with effect from 30 November 2004.

Chemfeed Section means the Section of the Scheme under which benefits set out in Schedule 8 are provided.

Chemfeed Transferring Active means a Chemfeed Member who was in Active Membership under the Chemfeed division of the Veolia UK Pension Plan on 30 November 2004.

Civil Partner means a person who is in a civil partnership with the Member or Pensioner under the Civil Partnerships Act 2004.

Clause means a clause of the Deed excluding the Schedules and Appendices to it.

Core Contribution means a contribution by the Member of 3% of the Member’s Pensionable Salary. In the case of a Post 89 Member it means a contribution of 3% of the Member’s basic contractual pay (excluding overtime) together with the total bonus and commission payments received by him from time to time up to a maximum of 15% of his Pensionable Salary. In the case of a Flex Member, it means an amount calculated as above but sacrificed from a Member’s salary under the Flex Plan.

Death Benefit Salary means the basic fixed annual salary or wages of a Member at the date of his death (or date of leaving Active Membership where Rule 5.4.2 of Schedule 3 applies) together with the bonus and commission payments received from his Employer in the twelve months preceding his death (or date of leaving Active Membership where Rule 5.4.2 of Schedule 3 applies) or such higher amount as may be obtained by applying this definition for an earlier period of 12 months ending not more than 10 years before the Member’s date of death.

except in the case of:

Investor Plan Members as set out in Schedule 2 where it means the basic fixed annual contractual pay (excluding overtime) of the Member at date of death or earlier date of leaving Active Membership and the bonus and commission payments received by the Member from his Employer in the 12 months preceding his death or earlier date of leaving Active Membership. However, if the total of a Member’s basic fixed annual contractual pay (excluding overtime), bonus and commission payments received in any earlier period of 12 consecutive months ending not more than 10 years before the Member’s death (or earlier date of leaving Active Membership) produces a higher amount, that amount shall be his Death Benefit Salary. In the case of a Post 89 Member Death Benefit Salary shall be subject to the Earnings Cap


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In the case of a Flex Member, Death Benefit Salary shall include an amount equivalent to any salary sacrificed by the Member under the Flex Plan

Deed means the Deed and includes all Schedules and Appendices to it.

Deferred Benefits means benefits provided in accordance with Rule 4.3 (Calculation and payment of Deferred Benefits) of each of Schedules 2 and following.

Dependants means:

(a) the spouse or Civil Partner of the Member or Pensioner at the time of his death;

(b) the spouse or Civil Partner of a Pensioner at the time of his retirement;

(c) any individuals (other than a child of the Member or Pensioner) who in the opinion of the Trustees were, at the time of the death of the Member or Pensioner, financially dependent on the Member or Pensioner or dependent because of disability, or had a financial relationship of mutual dependence with the Member or Pensioner; and

(d) any children of the Member or Pensioner (including any adopted children) who have not reached the age of 18 or who continue to receive full-time education or training up to the age of 23 or who were dependent on the Member or Pensioner because of disability at the time of his death.

E & J Member means a Chemfeed Member who was designated an E & J Member under the Veolia Plan.

E & J Water Member means an E & J Member designated as a “Former Water Member” under the Veolia Plan.

Earnings Cap means

(a) prior to 6 April 2006 the permitted maximum as was defined in Section 590C of the Income and Corporation Taxes Act 1988;

(b) for the year beginning 6 April 2006 £108,600; and

(c) for each year beginning on each subsequent 6 April the amount applicable at the immediately preceding 6 April increased (but not, where applicable, reduced) in line with the increase in the Retail Prices Index for the twelve months up to the immediately preceding September and rounded up to the nearest multiple of £600 or such higher amount as the Principal Employer and the Trustees may decide.

Eastern Member means a former member of the ESPS or the EGPS who joined the Scheme on 1 January 2001 having immediately before that date been a member of the EGPS or the Eastern Group of the ESPS.

East Midlands Member means a former member of the ESPS who joined the Scheme on 1 September 2001 (other than Members who elected to be treated as Booster or Saver Plan Members from that date) having immediately before that date been a member of the East Midlands Electricity group of the ESPS.


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Effective Date means 1 October 2004 in respect of Schedule 5 (Tower Plan), 1 December 2004 in respect of Schedule 8 (Chemfeed Section), 5 December 2005 in respect of references to Civil Partners and otherwise 6 April 2006.

EGPS means the Eastern Group Pension Scheme.

Electric Plan Member means a Member eligible for membership of the Electric Plan Section in accordance with Rule 1 of Schedule 7.

Electric Plan Section means the Section of the Scheme under which benefits set out in Schedule 7 are provided.

Eligible Child means any child of the Member or Pensioner who:

(a) is under age 18; or

(b) is under age 23 and receiving full-time education or vocational training; or

(c) was dependent on the Member or Pensioner at the time of his death on account of physical or mental incapacity.

For the purposes of this definition, “child” means any biological child of the Member or Pensioner, any legally adopted child or a stepchild. The Trustees have discretion to include an illegitimate child or a foster child.

Employee means an employee of an Employer.

Employee Directed Contributions means sums (excluding any sacrificed contributions otherwise payable under Rule 2.1 (Member’s ordinary contributions)) equal to such whole percentage of a Flex Member’s Pensionable Salary as does not exceed 20% of his Pensionable Salary (ignoring all such sacrificed ordinary contributions) and which a Flex Member has elected to sacrifice from his earnings at least one month prior to a Flex Anniversary Date (or other such election date as the Principal Employer and Trustees may agree) by such form of notice to his Employer and the Trustees as the Employer may require. A Member may not alter the percentage he has specified until the following Flex Anniversary Date or upon a Life Event. A Member’s earnings may not be reduced by any election below such amount as the Principal Employer may from time to time determine. Employee Directed Contributions for Investor Plan Members shall be applied in the same manner as contributions to an Investment Account under Schedule 2 (Investor Plan) and for all other Members shall be applied in the same manner as additional voluntary contributions, including for the purpose of determining priority on winding up.

Employer means the Principal Employer or any other employer which is participating in the Scheme in accordance with Clause 9.1 (Participation by employers). Where the context so requires and subject to Clause 9.4 (Consequences of an Employer ceasing to participate), Employer means the Employer which, in relation to a Member or a Pensioner, is his employer or was his employer on the date he left Active Membership.

Employer Matching Contribution means a credit that is equal to the Member’s Core Contribution and Non Core Contribution.

ESPS means the Electricity Supply Pension Scheme.


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Final Pensionable Salary means the highest figure produced from averaging the Member’s Pensionable Salary in any continuous period of 36 months of Pensionable Service in the ten years before leaving Active Membership.

However in relation to:

(a) Investor Plan Members it means the Pensionable Salary received by a Member in the 12 months immediately preceding retirement

(b) Electric Plan Members it means whichever is the greater of:

(i) the highest Pensionable Salary of a Member in any twelve months in his last five years of Active Membership; or

(ii) the highest figure produced from averaging any three consecutive years’ Pensionable Salary figures as notified to the Trustees in the ten years before leaving Active Membership.

For the purpose of this calculation:-

(i) the Pensionable Salary paid to a Member in any year in the last ten years shall be increased by the percentage increase by which the Government’s index of retail prices at the date of leaving Active Membership exceeds the level at the end of each such year;

(ii) if the Member’s Pensionable Salary has been reduced by reason of absence owing to illness or injury, his Pensionable Salary shall be deemed to be the rate payable if such absence had not occurred;

(iii) where a Member has less than five or ten years’ Pensionable Service as appropriate under the Siemens Benefits Scheme, service under the ESPS shall be included.

(c) Horizon Plan and Tower Plan Members it means the Pensionable Salary received by a Member in the 12 months before leaving Active Membership.

(d) Chemfeed Members it means the greater of:

(i) the Pensionable Salary received by the Member in the twelve months prior to ceasing Pensionable Service; and

(ii) the highest Pensionable Salary received by the Member in any Scheme Year during the final five years of Pensionable Service.

For this purpose Pensionable Service means service under the Veolia Plan and, if a Chemfeed Transferring Active, includes Service as an Investor Plan Member

(e) A Post 89 Member, Final Pensionable Salary shall in any event not exceed the Earnings Cap.

Final Remuneration means the greater of:


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(a) the highest remuneration upon which tax liabilities have been determined for any one of the 5 years preceding the Relevant Date being the aggregate of:

(i) basic pay for the year in question; and

(ii) the yearly average of any fluctuating emoluments over 3 or more consecutive years ending with the expiry of the corresponding basic pay year. Fluctuating emoluments for a year earlier than the last basic pay year may be increased in proportion to the increase in the Retail Prices Index from the last day of that year to the last day of basic pay year; and

(b) the yearly average of the total emoluments from the Employer which are assessable to income tax under Case I or II of Schedule E and upon which tax liability has been determined for any 3 or more consecutive years ending not earlier than 10 years before the Relevant Date. Where such emoluments are received after the Relevant Date, but are earned or qualified for prior to that date, they may be included if the yearly average of 3 or more consecutive years begins no later than the commencement of the year ending with the Relevant Date.

Final Salary Sections means the sections of the Scheme known as the “Final Salary Sections” the benefits for which are set out in Schedules 3 and following.

Final Scheme Salary means the highest annual figure produced by averaging Salary figures as notified to the Trustees over any 36 consecutive months ending in the 10 years before leaving Active Membership. In the case of a Flex Member, his Salary for the above calculation shall include an amount equivalent to any salary sacrificed by the Member under the Flex Plan.

Flex Anniversary Date means each 1 January or such other date in a year as the Principal Employer and Trustees may agree and notify to relevant Members in advance

Flex Member means a Member whose membership of the Flex Plan is approved by his Employer and who has not opted out of the Flex Plan.

Flex Plan means the flexible benefits plan operated by the Employers with effect from 1 April 2005 under the name My Choice (or any replacement plan designated by the Principal Employer) through which employees may exchange pay for other employee benefits

Former Spouse means an individual to whom a Pension Credit has been allocated in relation to the Scheme.

Foundation Plan Member means a Member who has opted to accrue Foundation Plan benefits in accordance with Rule 1.1.4 or 1.1.5 of Schedule 3.

Fund means the pension fund constituted under the Deed and comprises the General Assets, Investment Accounts and AVC Accounts.

General Assets means the assets of the Fund but excluding Investment Accounts and AVC Accounts.

GMP means the guaranteed minimum pension of a Member, Widow, Widower or Civil Partner as defined in the Pension Schemes Act 1993.


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Grid Member means a former member of the ESPS who joined the Scheme on 1 September 2001 or on 1 August 2002 (other than a Member who elected to be treated as Booster or Saver Plan Members from that date) having immediately before that date been a member of the National Grid Group of the ESPS and who is a protected person as defined in Regulation 2 of the Electricity (Protected Persons) (England and Wales) Pension Regulations 1990.

Horizon Plan means the Section of the Scheme under which benefits set out in Schedule 6 are provided.

Horizon Plan Member means a Member eligible in accordance with Rule 1 of Schedule 6 to be a Horizon Plan Member who has not opted out

Incapacity means mental or physical ill-health or disability which renders a Saver Plan Plus Member permanently incapable of continuing his current employment

Insolvency means, in relation to an Employer or the Principal Employer, its liquidation, provisional liquidation, administration, receivership, administrative receivership or its entering into a voluntary arrangement.

Insurance Company has the meaning given by Section 275 of the Finance Act 2004.

Investment Account means an account maintained by the Trustees in relation to a Member which is credited with:

(a) in relation to a Member of the Investor Plan Section, an amount equal to the contributions paid to the Scheme by or in respect of that Member in accordance with Rule 2 (Contributions) and any transfer payment received in respect of the Member in accordance with Rule 9.4 (Transfers in);

(b) in relation to a Member of the Final Salary Section, any transfer payment credited to the Investment Account of that Member in accordance with Rule 9.4 (Transfers in); and

(c) such other amount as may be credited to a Member’s Investment Account in accordance with the Rules

together with the income and capital gains and losses arising from investments representing the Member’s Investment Account.

Investor Plan means the Section of the Scheme under which benefits set out in Schedule 2 are provided.

Investor Plan Member means a Member eligible in accordance with Rule 1 of Schedule 2 to be an Investor Plan Member who has not opted out.

Life Event shall mean:

(a) becoming a father;

(b) commencement or return from maternity leave;

(c) adopting a child;


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(d) death of spouse, partner or Dependant;

(e) marriage, divorce or legal separation;

(f) relocation of place of employment by his Employer;

(g) being on long term sickness (as determined by the Employer in line with company policy) and receiving permanent health insurance payments;

(h) return to work after such long term sickness;

(i) a fundamental change to working hours as determined by the Principal Employer;

(j) a change to a Member’s occupational benefit entitlement deemed significant by the Principal Employer;

(k) an increase of 25% or more in a Member’s Salary;

(l) switching between Booster, Saver and Foundation Plan categories;

(m) any other event decided by the Principal Employer as a result of which the Flex Member may be permitted to alter choices he has made under the Flex Plan.

Member means an Active Member and, where appropriate, an Employee or a former employee who is entitled to Deferred Benefits. For the avoidance of doubt, a Member can be a Member of both a Final Salary Section and the Investor Plan Section but only in respect of different periods of Service.

Minimum Pension Age means:

(a) prior to 6 April 2010, age 50

(b) on or after 6 April 2010:

(i) in the case of an Electric Plan Member compulsorily retired by his employer after the age of 50 where retirement is consequent upon reorganisation or redundancy, age 50;

(ii) in the case of a Tower Plan Member made redundant over the age of 50, or if made redundant by his Employer over the age of 45 having completed 10 years’ Pensionable Service, age 50;

(iii) in the case of any Member who retains a right to retire at age 50 in accordance with paragraph 22 of Schedule 36 to the Finance Act 2004 following a block transfer into the Scheme, age 50; or

(iv) in the case of any other Member, age 55.

New Benefits Member means a Tower Plan Member who joined the BBC Pension Scheme on or after 1 October 1996.

NHSPS Member means a Member whose employment was transferred to an Employer after 1 October 1998 and who immediately before the date of transfer either was a Member


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of, or at that time was entitled to become a member of, the National Health Service Pension Plan (or another scheme which is in the opinion of the Trustees an alternative to it), other than such a person who was offered and accepted membership of another section of the Scheme.

NHSPS A Member means an NHSPS Member who joins the Scheme on or after 10 March 2006.

Non Core Contribution means any additional contribution of the Member in excess of his Core Contribution (which can only be a whole percentage of the Member’s Pensionable Salary) up to a maximum of 7% of his Pensionable Salary. In the case of a Post 89 Member it means any additional contribution (as a whole percentage) in excess of his Core Contribution up to a maximum of 7% of the Member’s basic contractual pay (excluding overtime) together with the total bonus and commission payments received by him from time to time up to a maximum of 15% of his Pensionable Salary. In the case of a Flex Member, it means an amount calculated as above but sacrificed from a Member’s salary under the Flex Plan.

Normal Retirement Date means the last day of the month in which a Member attains the age of 65

except in the case of:

(i) Electric Plan Members where it means the date on which a Member attains the age of 63, or in the case of a Pre-1988 Member, the date on which a Member attains the age of 60

(ii) Horizon Plan Members where it means the date on which the Member attains the age of 60

Old Benefits Member means a Tower Plan Member who joined the BBC Pension Scheme before 1 October 1996.

Paid Family Leave means any period throughout which a Member is absent from work due to pregnancy or confinement, or on paternity leave or adoption leave and for which the Employer pays any contractual remuneration or statutory maternity, paternity or adoption pay and any other period during which a Member is absent from work for family reasons during which his employer pays any contractual remuneration.

Past Service Reserve means in relation to a Saver Plan Plus Member an amount equal to the value of the benefits prospectively and contingently payable under the Scheme by reference to his completed Pensionable Service, but allowing for projected Final Pensionable Salary increases from the actual date of leaving Active Membership to assumed date of retirement or earlier leaving Active Membership as determined by the Scheme Actuary.

PCSPS Member means a Member whose employment was transferred to an Employer after 1 October 1998 and who immediately before the date of transfer either was a Member of, or at that time were entitled to become a member of, the Principal Civil Service Pension Scheme or the Principal Civil Service Pension Scheme in Northern Ireland.


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Pensionable Death Benefit Salary means the Death Benefit Salary of a Member less an amount equal to the annual rate of the basic flat rate State retirement pension for a single person as at the date of death or, if greater, 80% of the Member’s Salary at the date of his death but in respect of a Member who is or was at any material time a part-time Member his Pensionable Death Benefit Salary shall be calculated as if his contractual hours of work per week were equal to the hours per week which he would have worked had he been a full-time Employee during that period in order to arrive at the Pensionable Death Benefit Salary applicable to that part-time Member.

Pensionable Salary means the greater of the Salary of a Member less an amount equal to the annual rate of the basic flat rate State retirement pension for a single person or 80% of the Member's Salary.

However in the case of:

(a) Investor Plan Members it means the basic contractual pay (excluding overtime) of the Member together with the total bonus and commission payments received by the Member from time to time, but excluding any such bonus or commission payments not actually paid before leaving Active Membership. In the case of a Post 89 Member his Pensionable Salary shall not exceed the Earnings Cap;

(b) Electric Plan Members it means the total basic fixed annual salary or wages of a Member including cost of living and productivity bonus (but, in respect of an Eastern Member in relation to arrangements implemented in April 1999, only 30% of the additional productivity bonus shall be included unless he exercised the option in Rule 2.1.4 (Member’s ordinary contributions) of Schedule 7 but shall not unless an Employer in any particular case so decides, include any other bonuses, commissions, overtime and other fluctuating emoluments. Other than for the purpose of being the basis of calculations of Final Pensionable Salary, the Pensionable Salary of a Post 89 Member shall not exceed the Earnings Cap;

(c) Saver Plan Plus Members it means the total basic contractual annual salary or wages of a Member together with all elements of pay that were pensionable under the Principal Civil Service Pension Scheme or the National Health Service Pension Scheme as appropriate and any other elements of pay that may become pensionable in respect of past and future Pensionable Service as agreed by the Principal Employer and Trustees. In the case of a Post 89 Member this shall not exceed the Earnings Cap;

(d) Horizon Plan Members where it means the basic annual contractual pay of the Member (excluding overtime or any other payments received by the Member from time to time). In the case of a Post 89 Member Pensionable Salary shall not exceed the Earnings Cap;

(e) Tower Plan Members it means the total basic contractual annual salary or wages of a Member together with London Weighting allowance, bonuses, unpredictability allowances, deputisation payments and shift payments. In the case of a Post 89 Member this shall not exceed the Earnings Cap;

(f) Chemfeed Members for the purpose of calculating benefits under Schedule 8 (but not benefits as an Investor Plan Member) means the Member’s basic annual salary


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less (except in the case of E & J Members) the basic flat rate State retirement pension for a single person;

(g) A Flex Member, Pensionable Salary in respect of any period while participating in the Flex Plan shall include an amount equivalent to any pay or salary sacrificed by the Member under the Flex Plan.

Pensionable Service means:

(a) In relation to a Member of the Final Salary Sections, the following periods:

(i) the last or only period of continuous Service while in Active Membership under the Final Salary Section;

(ii) for an Electric Plan Member whose right to benefits under the ESPS have been transferred to the Scheme, such contributing service under the ESPS as was notified to the Trustees upon transfer from the ESPS and any additional period acquired by the payment of additional voluntary contributions under Rule 7.1.5;

(iii) for a Horizon Plan Member all Service whilst a member of the Schroders Retirement Benefit Scheme;

(iv) such further period as shall be credited to the Member in accordance with Rule 3.4 (Late retirement), Rule 8.4 (Transfers in) and Rule 9 (Pension Increases) of the relevant Final Salary Section or any other provision of this Deed.

(b) In relation to a Member of the Investor Plan Section, the period of Service during which the Member is contributing to the Investor Plan Section and such additional period as may be permitted under the Rules of the Investor Plan Section;

(c) Subject to Clause 12 (Special Rules for calculating benefits under Final Salary Sections), any period of Service during which the Member does not pay the contributions required under Rule 2.1 (Members’ ordinary contributions), shall not be treated as Pensionable Service unless the Member is not required to pay contributions by virtue of being a Flex Member;

(d) For the purposes of calculating benefits in a Final Salary Section, only Pensionable Service while a Member of that Section shall be taken into account.

Where an Electric Plan Member has in aggregate completed more than 9 years of full time service while a Member of the Scheme and the ESPS, Pensionable Service will be deemed to include the period to the end of the next complete year where Pensionable Service would otherwise include an incomplete year. However, the amount of member contributions, payable at the rate of 5% or 6% of Pensionable Salary as applicable, for the remaining part of that incomplete year shall be deducted from the benefits consequently payable.

Pension Credit means a credit under Section 29(1)(b) of the Welfare Reform and Pensions Act 1999.


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

Pensioner means a person who is receiving a pension out of the Fund by virtue of his previous membership of the Scheme or by reason of transfer credits received by the Fund.

Pension Sharing Order means any order, provision or agreement as referred to in Section 28(1) of the Welfare Reform and Pensions Act 1999.

Post 89 Member means a Member who did not have continued rights, as defined in the HM Revenue & Customs’ Practice Notes on the Approval of Occupational Pension Schemes (IR12) as in force on 5 April 2006.

Pre-April 1997 Final Pensionable Salary means the highest annual figure produced by averaging Pre-April 1997 Pensionable Salary figures over any 36 consecutive months ending in the ten years before leaving Active Membership.

Pre-April 1997 Pensionable Salary means the Salary of a Member as notified to the Trustees less an amount equal to the annual rate of the basic flat rate State retirement pension for a single person.

Pre-1988 Member means an Electric Plan Member who was employed by a participating employer in the ESPS on 31 March 1988 and remained in continuous employment with such an employer on 17 May 1990.

Principal Employer means SIEMENS PLC and includes any other company, firm or person which becomes the Principal Employer under the Scheme in accordance with Clause 9.2 (Substitution of Principal Employer).

Qualifying Service means the total of:

(a) actual Service whilst a Member of the Scheme and any additional periods which count as Pensionable Service and which do not fall within paragraphs (b) and (c) below;

(b) any previous period of Qualifying Service whilst a Member of the Scheme in respect of which a Member remains entitled to Deferred Benefits;

(c) actual periods of service in any previous employment during which the Member was a member of an occupational pension scheme from which the Trustees have received a transfer payment; and

(d) such other period as the Trustees, with the consent of the Employer, may allow.

Qualifying Service shall not be interrupted if there is a break in Service in exercise of a right under Part VIII of the Employment Rights Act 1996 (Maternity Leave and Parental Leave) and the Member returns to Active Membership within one month of returning to work or the break corresponds to the Member’s absence from Service in furtherance of a trade dispute (as defined in Section 35 of the Jobseekers Act 1995) or the break does not exceed one month.


(21713155.06) 52

Registered Pension Scheme means a scheme or arrangement which is registered with HM Revenue & Customs under Chapter 2 of Part 4 of the Finance Act 2004 (Registration of Pension Schemes).

Relatives means in relation to any deceased Member or Pensioner:

(a) his spouse and former spouses

(b) his and his spouse’s lawful or adoptive parents and grandparents

(c) such parents’ and grandparents’ widows, widowers, children (which includes legitimate, adoptive and stepchildren and any other children to whom the Trustees believe the Member or Pensioner stood in loco parentis) and their descendants and their spouses.

Relevant Date means the date of leaving Active Membership.

Rule of 85 means a Member’s Pensionable Service (including pensionable service under the Veolia Plan) plus his age equal at least 85

Rules means the current rules of the Scheme as they apply to each section of the Scheme as set out in Schedules 2 and following. Unless otherwise stated, reference to a particular Rule shall be to that Rule in whichever Schedule applies to the Member, Pensioner or other beneficiary in question.

Salary means the total basic contractual annual salary or wages of a Member together with the total bonus and commission payments received by the Member in the previous 12 months. In the case of a Post 89 Member this shall not exceed the Earnings Cap.

Saver Plan Member means a Member who has joined the Scheme for Saver Plan benefits in accordance with Rule 1.1 (Eligibility) of Schedule 3.

Saver Plan Plus Member means all PCSPS and NHSPS Members as described in Rule 1 of Schedule 4.

Saver Plan Plus Section means the Section of the Scheme under which benefits set out in Schedule 4 are provided.

Scale Pension means:

(a) for a Member who joined the Schroders Retirement Benefits Scheme before 1 January 1991, an amount equal to his Final Pensionable Salary multiplied by the number of sixtieths shown in the table below against the Pensionable Service he has completed (including, where Active Membership terminates before Normal Retirement Date, the period of Pensionable Service he would have completed if he had remained a Horizon Plan Member until Normal Retirement Date);

(b) for a Member who joined the Schroders Retirement Benefits Scheme on or after 1 January 1991, an annual pension equal to one forty-fifth of his Final Pensionable Salary multiplied by the period of Pensionable Service (not exceeding 30 years) he has completed


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Pensionable Service that a Member can complete by Normal Retirement Date

Pension at Normal Retirement Date as a proportion of Final Pensionable Salary

10 years 12/60

10 years 6 months 13/60

11 years 14/60


12 years 16/60


13 years 18/60



14 years 21/60



15 years 24/60



16 years 27/60



17 years 30/60



18 years 33/60



19 years 36/60




Between 20 and 40 years 40/60


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Scheme means the Scheme governed by the Deed and known as the SIEMENS BENEFITS SCHEME.

Scheme Year means a year commencing 1 April and ending on the following 31 March.

Seeboard Member means a former member of the ESPS who joined the Scheme on 1 December 1999 having immediately before that date been a member of the Seeboard Group of the ESPS.

Service means the period of employment with any of the Employers and Service shall be deemed continuous although performed with more than one of the Employers, so long as any break in such employment does not exceed one month.

Supplementary AVCs means the part of a Member’s AVC Account in excess of Basic AVCs.

Tower Plan means the section of the Scheme under which benefits set out in Schedule 5 are provided.

Tower Plan Member means a Member eligible in accordance with Rule 1 of Schedule 5 to be a Tower Plan Member and who has not opted out.

Trustees means the trustees or trustee for the time being of the Scheme. For as long as there is a sole corporate trustee, references to Trustees or Trustee shall mean that corporate trustee and not the directors of it except where the context otherwise requires.

Unpaid Family Leave means any period throughout which a Member is absent from work due to maternity, paternity leave or adoption leave for which the Employer does not pay him any contractual remuneration or statutory maternity, paternity or adoption pay and any other period during which a Member is absent from work for family reasons and does not receive any contractual remuneration.

Veolia Plan means the Chemfeed final salary division of the Veolia UK Pension Plan.

W & T Member means a Chemfeed member who was designated a W & T Member under the Veolia Plan.

Waiting Period Member means a person who is not a member of the relevant Scheme, but who will be eligible to join it on completion of a specific period of service.

Year shall include a fraction of a year calculated by reference to the number of complete months in any incomplete year which shall represent twelfths of a year except:

(i) in the case of Pensionable Service credited to a Tower Plan Member in respect of service under the BBC Pension Scheme where it shall include a fraction of a year calculated by reference to the number of days in any incomplete year which shall represent 1/365th of a year; and

(ii) in the case of Electric Plan Members where it shall include a fraction of a year calculated by reference to the number of days in any incomplete year which shall represent 1/365th of a year. Where an Electric Plan Member has completed nine or more years of Pensionable Service, any incomplete year shall be rounded up to the next higher year in calculating Pensionable Service.

SCHEDULE 2 INVESTOR PLAN RULES

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SCHEDULE 2 RULES OF THE INVESTOR PLAN SECTION


SCHEDULE 2 RULES OF THE INVESTOR PLAN SECTION........................................55

1. ELIGIBILITY AND MEMBERSHIP ......................................................................57 1.1 Eligibility........................................................................................................................................... 57 1.2 Joining............................................................................................................................................... 57 1.3 Opting out ........................................................................................................................................ 57 1.4 Medical report.................................................................................................................................. 58

2. CONTRIBUTIONS ..................................................................................................59 2.1 Members’ ordinary contributions ................................................................................................. 59 2.2 Additional voluntary contributions .............................................................................................. 59 2.3 Employers’ contributions............................................................................................................... 59

3. BENEFITS ON RETIREMENT .............................................................................60 3.1 Retirement ........................................................................................................................................ 60 3.2 Benefits on retirement .................................................................................................................... 60 3.3 Provision of benefits on retirement.............................................................................................. 61 3.4 Late retirement ................................................................................................................................ 61 3.5 Early retirement on grounds of ill-health .................................................................................... 61 3.6 Flexible retirement .......................................................................................................................... 62

4. BENEFITS ON LEAVING ACTIVE MEMBERSHIP...........................................63 4.1 Application of this Rule ................................................................................................................. 63 4.2 Entitlement to Deferred Benefits ................................................................................................. 63 4.3 Calculation and payment of Deferred Benefits .......................................................................... 63 4.4 Early payment of Deferred Benefits ............................................................................................ 63 4.5 Refunds of contributions ............................................................................................................... 64 4.6 Preservation Laws ........................................................................................................................... 64

5. LUMP SUM BENEFITS ON DEATH ....................................................................65 5.1 Lump sum on death in Service...................................................................................................... 65 5.2 Other lump sum on death benefits............................................................................................... 65

6. SPOUSE’S AND DEPENDANTS’ PENSIONS ......................................................66 6.1 Dependant’s pensions on death of a Member ............................................................................ 66 6.2 General provisions applicable to Dependant’s pensions .......................................................... 66 6.3 Benefits on the death of a Pensioner ........................................................................................... 67

7. ADDITIONAL VOLUNTARY CONTRIBUTIONS ..............................................68 7.1 Payment of additional voluntary contributions .......................................................................... 68 7.2 Deferring benefits from additional voluntary contributions .................................................... 68

SCHEDULE 2 INVESTOR PLAN RULES

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8. SPECIAL RULES FOR CALCULATING BENEFITS ...........................................69 8.1 Family leave...................................................................................................................................... 69 8.2 Absence due to ill-health................................................................................................................ 70 8.3 Secondment and other absences................................................................................................... 70

9. TRANSFERS AND BUY-OUTS...............................................................................72 9.1 Transfers out.................................................................................................................................... 72 9.2 Buy-outs............................................................................................................................................ 72 9.3 General provisions relating to transfers out and buy-outs........................................................ 72 9.4 Transfers in ...................................................................................................................................... 73

10. MAXIMUM BENEFITS AND CONTRACTING OUT .........................................74 10.1 Requirements for Registered Pensions Schemes........................................................................ 74 10.2 Contracting-out ............................................................................................................................... 74

SCHEDULE 2 INVESTOR PLAN RULES RULE 1: ELIGIBILITY AND MEMBERSHIP

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1. ELIGIBILITY AND MEMBERSHIP

1.1 Eligibility

1.1.1 Subject to the following provisions of this Rule, all Employees who are aged between 16 and 75 are eligible to join the Investor Plan Section unless their contract of employment expressly states otherwise. An Employee will not be eligible to be a Member while contributing to a stakeholder plan nominated by his Employer.

1.1.2 An Employee who is an Active Member under a Final Salary Section may opt to join the Investor Plan Section if he opts out of the Final Salary Section.

1.1.3 The Principal Employer may admit to membership of the Investor Plan Section any employee who is not otherwise eligible to join, subject to such terms and conditions as the Principal Employer considers appropriate.

1.2 Joining

Membership of the Investor Plan Section shall be optional. Every Employee shall be deemed to have become a Member as soon as he became eligible, unless he opts out of the Scheme by giving written notice to the Trustees no later than the date he becomes eligible in such form as they require.

1.3 Opting out

1.3.1 An Active Member may opt-out of the Investor Plan Section at any time on giving three months’ written notice to the Trustees in such form as they require. The Member shall cease to be an Active Member of the Scheme on the day after such notice expires and be treated as having left Active Membership.

1.3.2 Employees who do not join the Investor Plan Section when first eligible to do so or who opt out of the Investor Plan Section in accordance with Rule 1.2.1 or 1.3.1 above, but remain in Service, shall only be permitted to join or rejoin with the consent of the Trustees and the Principal Employer and subject to such conditions (including the production of medical evidence and restrictions on benefits) as the Trustees may impose.

1.3.3 A Member may opt out of participation in the Flex Plan for pension purposes, or vary the rate of Non Core Contribution to be sacrificed, only

(a) with effect from date of joining by written notice to the Trustees within one month of joining;

(b) with effect from a Flex Anniversary Date by written notice to the Trustees at least one month before the Flex Anniversary Date (or such other date as the Principal Employer and Trustees may agree) or

(c) with effect from such date as determined by the Principal Employer if written notice is given within one month (or such later time as the Principal Employer may decide) after a Life Event.

SCHEDULE 2 INVESTOR PLAN RULES RULE 1: ELIGIBILITY AND MEMBERSHIP

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A Member who joins the Investor Plan after 1 January 2006 may only opt out of participation in the Flex Plan by opting out of the Investor Plan.

1.4 Medical report

The Trustees or Employer may require a new Member (other than an Acquired Member) at any time within three months after joining the Investor Plan, or any individual about to become a Member, to undergo a medical examination. If the medical examination is unsatisfactory, or if he refuses or fails to undergo a medical examination, the Trustees may restrict his benefits on death or ill health early retirement as the Trustees see fit.

SCHEDULE 2 INVESTOR PLAN RULES – RULE 2: CONTRIBUTIONS

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2. CONTRIBUTIONS

2.1 Members’ ordinary contributions

Each Active Member shall pay the Core Contribution to the Fund to be credited to the Member’s Investment Account. In addition the Member may elect to pay Non Core Contributions by giving notice to the Trustees in such form as they decide. A Member may change the rate of Non Core Contributions he wishes to pay with effect from 1 January by giving written notice to the Trustees prior to 1 December of the preceding year, or such other date or dates as the Trustees and Principal Employer may agree. An Investor Plan Member who is a Flex Member shall not be required to make any contributions to the Scheme.

2.2 Additional voluntary contributions

An Active Member may make additional voluntary contributions to the Fund in accordance with Rule 7.1 (Payment of additional voluntary contributions).

2.3 Employers’ contributions

2.3.1 The Investment Account of each Investor Plan Member shall be credited with the Employer Matching Contribution to provide retirement benefits in accordance with the Rules. While an Investor Plan Member is a Flex Member, his Investment Account shall additionally be credited with an amount equal to:

(a) the Core Contribution which the Member would have contributed had he not elected to become a Flex Member

(b) the Non Core Contribution which the Member has elected to sacrifice from his earnings under the Flex Plan

(c) Employee Directed Contributions made on his behalf.

2.3.2 The Member’s Employer shall make such contributions to the Fund unless the Principal Employer, acting on actuarial advice and after consultation with the Trustees, determines that such contributions can be credited to the Investment Accounts of Investor Plan Members from the General Assets.

2.3.3 Contributions commence with the first payment of Pensionable Salary after becoming a Member and stop at age 75, or leaving Active Membership if earlier. The Employer may treat any contributions credited by it under this Rule in respect of a Member who has left Active Membership without being entitled to Deferred Benefits as having been paid in or towards the discharge of its obligations in respect of other Members.

SCHEDULE 2 INVESTOR PLAN RULES – RULE 3: BENEFITS ON RETIREMENT

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3. BENEFITS ON RETIREMENT

3.1 Retirement

The Trustees shall provide benefits under this Rule 3 in respect of a Member where:

3.1.1 an Active Member retires from Service at or after Normal Retirement Date;

3.1.2 an Active Member who has reached Minimum Pension Age leaves Service prior to Normal Retirement Date and retires with the consent of the Employer and Trustees;

3.1.3 an Active Member who is not in receipt of benefit from any disability income scheme of the Employer or any other benefit determined as a similar benefit by the Trustees (who shall be the sole judge) and in the opinion the Employer and the Trustees having taken the advice of a registered medical practitioner has become (and will continue to be) incapable of discharging his duties by reason of ill-health or incapacity, and retires from Service as a result of his incapacity; and

3.1.4 a Member’s benefits become payable in accordance with Rule 3.4 (Late retirement) or Rule 3.6 (Flexible retirement).

3.2 Benefits on retirement

3.2.1 On retirement under Rule 3.1 (Retirement) the Trustees shall, subject to the following provisions of this Rule, pay to the Member from his Investment Account such lump sum (if any) as the Member may request and shall use the balance of the Member’s Investment Account to provide:

(a) a pension for the Member; and

(b) such benefits for the Dependants of the Member, payable on his death, as the Member shall decide.

3.2.2 The lump sum payable to the Member shall not exceed the maximum permitted under paragraph 1 (Pension commencement lump sum) of Schedule 29 to the Finance Act 2004 as modified by Schedule 36 of that Act.

3.2.3 The pension provided to the Member shall be payable for life and payment may be guaranteed for an agreed period. It may be of a fixed amount or may increase each year in such manner as the Member shall decide.

3.2.4 Any pension provided for the Dependants of the Member shall be payable for life or, in respect of any children of the Member, for so long as they remain a Dependant of the Member.

3.2.5 The benefits provided to the Dependants of the Member shall not exceed any applicable limits in Schedule 28 to the Finance Act 2004.

3.2.6 Where a Member does not select the benefits to be provided on his retirement the Trustees shall defer provision of his benefits until such time as the Member does select his benefits or, at the option of the Trustees, may provide such benefits in respect of the Member as the Trustees in their absolute discretion decide.


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3.3 Provision of benefits on retirement

3.3.1 Except where Rule 3.3.2 applies, the benefits (other than the lump sum) payable to or in respect of a Member under Rule 3.2 (Benefits on retirement) shall be provided by the purchase of a policy or annuity contract with an Insurance Company selected by the Trustees or, where the Member makes a selection within such period as the Trustees decide, selected by the Member. Any such policy will be in the name of the Member unless the Trustees decide to purchase it in the Trustees’ name. When purchasing any such policy, the Trustees shall not be obliged to take into account the individual circumstances of the Member nor to carry out a review of all available Insurance Companies.

3.3.2 Rather than purchase a policy or annuity contract with an Insurance Company, the Trustees may, with the consent of the Principal Employer, agree to provide benefits to or in respect of a Member from the Scheme. In such circumstances the Member’s Investment Account (or the balance after providing any lump sum benefit) shall be transferred to the General Assets and the Scheme shall provide an equivalent annuity of such amount as the Actuary advises may be received from the Member’s Investment Account. Before providing benefits from the Scheme in accordance with this Rule, the Trustees must give the Member an opportunity to select an Insurance Company in accordance with Rule 3.3.1 above.

3.3.3 The Trustees may also provide under the Scheme in accordance with Rule 3.3.2 only part of the Member’s benefits in which case only the appropriate part of the Member’s Investment Account (as decided by the Trustees) shall be transferred to the General Assets.

3.4 Late retirement

3.4.1 Where an Active Member reaches Normal Retirement Date and stays in Service he may, with the consent of the Principal Employer and the Trustees, elect to remain in Active Membership until the date of his actual retirement from Service provided that he pays contributions under Rule 2.1 (Members’ ordinary contributions) in respect of the extra period of Pensionable Service. He may also request payment of some or all of his accrued rights under the Scheme in accordance with Rule 3.6 (Flexible Retirement).

3.4.2 Where an Active Member reaches Normal Retirement Date and stays in Service but does not remain in Active Membership under Rule 3.4.1 his pension may, at his option (but only with the consent of the Principal Employer and Trustees) be deferred until any age before he leaves Service.

3.5 Early retirement on grounds of ill-health

3.5.1 If the Employer and Trustee believe the Member incapable of discharging his duties due to Total Incapacity, he shall be entitled to benefits calculated in accordance with Rule 3.2 (Benefits on retirement) but his Investment Account shall be augmented by crediting to it an amount equal to Employer Matching Contributions (up to a maximum of 6% of Final Pensionable Salary per annum) that would have been credited between the date the Member left Active Membership and his Normal Retirement Date assuming the Member paid contributions (or had sacrificed salary in the case of a Flex Member) at the same


(21713155.06) 62

average rate as he had paid (or sacrificed) in his last 12 months of Active Membership.

3.5.2 If the Employer and Trustees believe the Member incapable of discharging his duties due to Partial Incapacity, he shall be entitled to benefits calculated in accordance with Rule 3.2 (Benefits on retirement) but his Investment Account shall be augmented by crediting to it an amount equal to the Core Contribution that would have been paid (or sacrificed in the case of a Flex Member) by the Member between the date the Member leaves Active Membership and his Normal Retirement Date calculated on the basis of the Member’s Final Pensionable Salary.

3.5.3 For the purposes of this Rule, Total Incapacity means mental or physical ill-health or disability which renders it impossible for a Member to continue his current employment or any other occupation which would provide for a significant level of remuneration. Partial Incapacity means mental or physical ill-health or disability which is less than Total Incapacity but which is sufficiently serious to prevent the Member from following his normal occupation or significantly impairs his earning ability.

3.6 Flexible retirement

3.6.1 Where a Member has reached Minimum Pension Age, he may, with the consent of the Principal Employer request payment of some or all of his accrued rights under the Scheme even where he remains in Service. The benefits will be payable in accordance with Rule 3.2 (Benefits on retirement) and Rule 3.3 (Provision of benefits on retirement).

3.6.2 If the Member requests payment of benefits under this Rule, if the Principal Employer consents, he may nevertheless remain in Active Membership under this section until the date of actual retirement from Service or Normal Retirement Date if earlier.

SCHEDULE 2 INVESTOR PLAN RULES – RULE 4: BENEFITS ON LEAVING ACTIVE MEMBERSHIP

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4. BENEFITS ON LEAVING ACTIVE MEMBERSHIP

4.1 Application of this Rule

This Rule 4 shall apply to a Member who (otherwise than by death) leaves Active Membership before reaching Normal Retirement Date, without an immediate pension becoming payable to him.

4.2 Entitlement to Deferred Benefits

A Member who on leaving Active Membership either:

(a) has completed two years’ Qualifying Service; or

(b) is someone on whose behalf the Trustees have accepted a transfer payment from a personal pension scheme,

shall be entitled to Deferred Benefits payable in accordance with Rule 4.3.

4.3 Calculation and payment of Deferred Benefits

4.3.1 Deferred Benefits payable to a Member shall be provided in accordance with Rule 3.2 (Benefits on retirement) and Rule 3.3 (Provision of benefits on retirement).

4.3.2 Subject to the following provisions of this Rule 4, Deferred Benefits shall come into payment when the Member reaches Normal Retirement Date or such later date as the Trustees may agree, but not later than the day the Member reaches age 75.

4.3.3 Where a Member leaves Active Membership with an entitlement to Deferred Benefits his Investment Account shall continue to be credited with such income and capital gains and losses as arise in the period before his benefits come into payment. The Trustees may deduct from his Investment Account such investment and administrative expenses as they shall determine. Any such expenses shall not exceed the amount which is permitted in accordance with Chapter II of Part IV of the Pension Schemes Act 1993 (Revaluation of accrued benefits (excluding guaranteed minimum pensions)).

4.4 Early payment of Deferred Benefits

4.4.1 This Rule applies where a Member who is entitled to Deferred Benefits has;

(a) reached Minimum Pension Age; or

(b) in the opinion of the Trustees (having taken advice from a registered medical practitioner) has become and will continue to be incapable of carrying on his normal employment due to physical or mental infirmity or his earning capacity is destroyed or seriously impaired and has ceased to carry on that occupation.

4.4.2 Where this Rule applies, the Member may receive early payment of his Deferred Benefits, but subject to the consent of the Trustees.

SCHEDULE 2 INVESTOR PLAN RULES – RULE 4: BENEFITS ON LEAVING ACTIVE MEMBERSHIP

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4.5 Refunds of contributions

4.5.1 This Rule applies to a Member who, on leaving Pensionable Service, is not entitled to Deferred Benefits.

4.5.2 Subject to Rule 4.5.3 below, a Member to whom this Rule applies shall receive a refund of that part of his Investment Account which relates to his own contributions. However, where a Member left Active Membership because he was declared redundant by his Employer he may instead opt to be treated as if he were entitled to Deferred Benefits. Furthermore, where an Acquired Member who was an active member of another pension scheme immediately before joining the Scheme leaves Active Membership without entitlement to Deferred Benefits, he may opt to be treated as if he were entitled to Deferred Benefits provided his period of pensionable service under the Scheme and pensionable service under his former scheme are equal to at least two years in aggregate.

4.5.3 Where the Member has completed at least three months’ Qualifying Service the Trustees shall offer the Member the option, as an alternative to a refund of contributions under Rule 4.5.2 above, Deferred Benefits in accordance with Rule 4.3 (Calculation and payment of Deferred Benefits).

4.5.4 A Member entitled to Deferred Benefits shall not be entitled to a refund of his own contributions.

4.5.5 In this Rule references to contributions paid by a Member shall include all contributions paid by him to the Fund and (so far as allowed) to any other scheme or arrangement in which he formerly participated and which have been transferred to the Fund.

4.6 Preservation Laws

Notwithstanding the provisions of this Deed, Deferred Benefits shall be calculated and paid in a manner consistent with the requirements of Part IV of the Pension Schemes Act 1993.

SCHEDULE 2 INVESTOR PLAN RULES – RULE 5: LUMP SUM BENEFITS ON DEATH

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5. LUMP SUM BENEFITS ON DEATH

5.1 Lump sum on death in Service

5.1.1 Subject to Rule 6.1 (Dependant’s pension on death of a Member) where an Active Member dies in Service, the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to three times the Death Benefit Salary of such Member at the time of his death together with the amount standing to the credit of the Member’s Investment Account subject to an overall minimum of six times the Member’s Death Benefit Salary.

5.1.2 For the purposes of Rules 5.1.1 and 5.2.3, where such a Member had previously drawn part of his Investment Account under Rule 3.6 (Flexible retirement), the amount standing to the credit of his Investment Account on death shall be increased by an amount or amounts previously drawn revalued at the rate of 5% for each Year between the date of withdrawal and the date of the Member’s death.

5.2 Other lump sum on death benefits

5.2.1 This Rule applies on the:

(a) the death prior to Normal Retirement Date of a Member entitled to Deferred Benefits; and

(b) the death of a Member after Normal Retirement Date but before his benefits have been secured in accordance with Rule 3.3 (Provision of benefits on retirement).

5.2.2 Where this Rule applies, the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) the amount standing to the credit of the Member’s Investment Account.

5.2.3 However, where the Member left Active Membership because he was declared redundant by his Employer and

(a) he dies within one year of leaving Active Membership ; and

(b) the Member had not commenced alternative employment before the date of his death,

the Trustees shall hold on discretionary trusts a sum equal to three times the Death Benefit Salary together with the amount standing to the credit of his Investment Account subject to an overall minimum of six times the Member’s Death Benefit Salary.

SCHEDULE 2 INVESTOR PLAN RULES – RULE 6: SPOUSE’S AND DEPENDANT’S PENSIONS

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6. SPOUSE’S AND DEPENDANTS’ PENSIONS

6.1 Dependant’s pensions on death of a Member

6.1.1 This Rule applies on:

(a) the death of an Active Member in Service;

(b) the death prior to Normal Retirement Date of a Member entitled to Deferred Benefits; and

(c) the death of a Member after Normal Retirement Date but before his benefits have been secured in accordance with Rule 3.3 (Provision of benefits on retirement).

6.1.2 Subject to Rule 6.2 (General provisions applicable to Dependant’s pensions), where this Rule applies the Trustees may at their discretion use all or part of the Member’s Investment Account or lump sum payable under Rule 5.1 (Lump sum on death in Service) to provide such pensions for one or more of the Dependants of the Member as the Trustees shall decide.

6.1.3 Subject to Rule 6.1.4, where the Trustees decide under this Rule to provide a pension to the Dependant of a Member that pension shall be provided by the purchase of a policy or annuity contract with an Insurance Company selected by the Trustees or, where the Dependant makes a selection within such period as the Trustees decide, selected by the Dependant. Any such policy will be in the name of the Dependant unless the Trustees decide to purchase it in the Trustees’ name. When purchasing any such policy, the Trustees shall not be obliged to take into account the individual circumstances of the Dependant nor to carry out a review of all available Insurance Companies.

6.1.4 Rather than purchase a policy or annuity contract with an Insurance Company under Rule 6.1.3 above, the Trustees may, with the consent of the Principal Employer, agree to provide benefits to or in respect of a Member from the Scheme. In such circumstances the sum available to provide the benefits shall be transferred to the General Assets and the Scheme shall provide such benefits to or in respect of the Member as the Trustees shall decide. Before providing benefits from the Scheme in accordance with this Rule, the Trustees must give the Member an opportunity to select an Insurance Company in accordance with Rule 6.1.3 above.

6.2 General provisions applicable to Dependant’s pensions

6.2.1 A pension payable to a spouse or adult Dependant shall be payable from the death of the Member and shall be payable for life.

6.2.2 A pension payable to a child shall continue only for so long as the child remains an Eligible Child.

6.2.3 A pension payable to a child under these Rules may be paid to any person who undertakes to apply it for the maintenance or benefit of the child, and the Trustees shall not be obliged to see to the application of any pension so paid.

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6.2.4 The benefits payable to the Dependant of a Member shall not exceed any applicable limits in Schedule 28 to the Finance Act 2004.

6.3 Benefits on the death of a Pensioner

The benefits payable on the death of a Pensioner shall be whatever benefits were, at the time of the Pensioner’s retirement, provided to be payable on his death in accordance with Rule 3.2.1 (Benefits on retirement).

SCHEDULE 2 INVESTOR PLAN RULES – RULE 7: ADDITIONAL VOLUNTARY CONTRIBUTIONS

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7. ADDITIONAL VOLUNTARY CONTRIBUTIONS

7.1 Payment of additional voluntary contributions

7.1.1 If an Active Member wishes to buy added benefits, he may make additional voluntary contributions to the Fund. Additional voluntary contributions can be in the form of a lump sum or additional periodic contributions and may be started, varied or terminated at any time by written notice to the Trustees in such form and at such time as the Trustees may require.

7.1.2 The Trustees are entitled (but not obliged) to refuse to accept additional voluntary contributions where the payment of such additional voluntary contribution would, when added to any other contributions payable by or in respect of the Member under Rule 2.1 (Members’ ordinary contributions) be expected to result in the Member exceeding the annual allowance for the purposes of Section 227 of the Finance Act 2004 (Annual allowance charge).

7.1.3 If a Member remains in Service after Normal Retirement Date, he may continue to make additional voluntary contributions to fund additional benefits.

7.1.4 Additional voluntary contributions will be credited to the Member’s Investment Account.

7.2 Deferring benefits from additional voluntary contributions

7.2.1 Subject to the following provisions of this Rule, a Member who has paid additional voluntary contributions under this Rule 7 may, when he starts to receive his other benefits under the Scheme elect to defer receipt until such later date as he may determine (but not beyond his 75th birthday) of the benefits which can be provided by such part of his Investment Account as the Trustees determine relates to his additional voluntary contributions.

7.2.2 If a Member defers receipt of the benefits from his additional voluntary contributions in accordance with this Rule he may still elect to receive part of those benefits as a lump sum at the same time as his main benefits under the Scheme but any such lump sum must not exceed the maximum amount payable as a pension commencement lump sum under Schedule 29 to the Finance Act 2004 as modified by Schedule 36 to that Act.

7.2.3 If a Member who has deferred receipt of benefits from his additional voluntary contributions in accordance with this Rule dies before those benefits come into payment, the Trustees shall hold the value of those contributions on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits).

7.2.4 Where a Member defers receipt of benefits from his additional voluntary contributions under this Rule he will nonetheless be considered to be a Pensioner for the purposes of this Deed.

SCHEDULE 2 INVESTOR PLAN RULES – RULE 8: SPECIAL RULES FOR CALCULATING BENEFITS

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8. SPECIAL RULES FOR CALCULATING BENEFITS

8.1 Family leave

8.1.1 Paid Family 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. During any period of Paid Family Leave:

(a) a Member shall only be required to pay contributions on the amount of contractual remuneration, statutory maternity pay, statutory paternity pay or statutory adoption pay actually paid for that period; and

(b) the Member’s Investment Account shall continue to be credited with a sum in addition to the Employer Matching Contribution equal to the difference between the contributions paid by the Member under paragraph (a) above and the contributions which the Member would have paid under Rule 2.1 (Members’ ordinary contributions) had he not been on Paid Family Leave. A Flex Member who was not paying contributions prior to leave commencing shall not be required to pay contributions, but his Investment Account shall instead be credited with contributions as if he were receiving remuneration likely to be paid for that period if not on leave.

8.1.2 Unpaid Family Leave shall not be treated as Pensionable Service. However, the Principal Employer may nonetheless agree with a Member that in respect of a period of Unpaid Family Leave or other leave approved by his Employer the Member may pay Core and Non Core Contributions and benefits as if he had not been absent in which case his Investment Account shall be credited with Employer Matching Contributions accordingly. For the purposes of calculating contributions and credits under this Rule 8.1.2, the Member’s Employer shall determine the Pensionable Salary the Member would have received during his absence.

8.1.3 A Member to whom this Rule applies:

(a) shall not be treated as remaining in Active Membership if he has failed to pay any necessary Member contributions;

(b) who is not treated as remaining in Active Membership under this Rule 8.1 shall, if the Trustees and Principal Employer agree, nonetheless be treated as remaining in Active Membership for the purpose of Rule 5 (Lump sum benefits on death) and Rule 6 (Spouse’s and Dependants’ pensions) and the benefits payable on the Member’s death shall be calculated by reference to his Pensionable Salary before his absence started;

(c) who fails to return to work at the end of her maternity leave in accordance with the conditions of any legal right shall be treated as having left Active Membership on the later of the date when any remuneration or maternity pay stops being paid and the end of the Member’s ordinary maternity leave;


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(d) who fails to return to work following a period of adoption leave (as defined in Section 75A of the Employment Rights Act 1996) or paternity leave (as defined in the Paternity and Adoption Leave Regulations 2002) shall be treated as having left Active Membership at the end of the period of ordinary adoption leave or paid paternity leave;

(e) who has not paid contributions due to the Scheme during any period of Paid Family Leave or Unpaid Family Leave may, with the consent of his Employer, pay the contributions due in respect of that period following his return to work on such terms as the Trustees may decide and on payment of those contributions his Employer shall also pay its contributions in respect of that period;

(f) shall not be required to pay contributions under this Rule 8.1 (other than under Rule 8.1.2 or 8.1.3(a)) if they were a Flex Member who was not paying contributions prior to commencement of leave.

8.2 Absence due to ill-health

8.2.1 This Rule applies where a Member is away from work because of illness or any other incapacity.

8.2.2 For so long as his Employer continues to pay him, the Member will continue to pay Core and Non-Core Contributions under Rule 2.1 (Member’s ordinary contributions) and his Investment Account shall continue to be credited with Employer Matching Contributions. In the case of a Flex Member, Core Contributions, Non-Core Contributions and Employee Directed Contributions shall also continue to be credited to his Investment Account.

8.2.3 If the Member dies during such absence, the benefits payable on his death shall be calculated by reference to his Death Benefit Salary or, if it produces a higher figure, by reference to his Death Benefit Salary immediately before his absence commenced.

8.3 Secondment and other absences

8.3.1 Periods of absence covered by this Rule are periods of absence for the following reasons which have been approved by the Employer:

(a) secondment or temporary transfer to another employer;

(b) a course of study or training;

(c) work of national importance; or

(d) any other leave of absence.

8.3.2 During periods of paid leave the Member will continue to pay Core Contributions and Non Core Contributions and his Investment Account shall continue to be credited with the Employer’s Matching Contributions (and in the case of a Flex Member Core Contributions, Non Core Contributions and Employee Directed Contribution shall also be credited to his Investment Account), but no


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contributions shall be payable or credited by either the Employer or the Member if the Member becomes a member of another pension scheme during a period of absence, in which event his membership of this Scheme shall cease.

8.3.3 Subject to Rule 8.3.4, and notwithstanding the provisions of Rule 8.3.2, in the event of the death of any Member who is absent from Service for any of the reasons specified in Rule 8.3.1 above, the benefits payable on his death shall be calculated by reference to his Death Benefit Salary immediately before his death or, if it produces a higher figure, by reference to his Death Benefit Salary immediately before his absence started. If he dies more than one year (or such other period as may be decided by the Principal Employer) after his absence commenced and during such absence while no contributions were being paid in respect of him under Rule 8.3.2, no benefits shall be payable except that the amount standing to the credit of the Member’s Investment Account will be held on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits).

8.3.4 Where a Member remains in Active Membership in accordance with this Rule, the Principal Employer may at any time at its discretion decide that his Pensionable Service shall cease and the provisions of Rule 4 (Benefits on leaving Active Membership) shall apply.

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9. TRANSFERS AND BUY-OUTS

9.1 Transfers out

9.1.1 A Member with Deferred Benefits may require the Trustees to transfer the value of his Investment Account to one or more arrangements selected by the Member.

9.1.2 The transfer may be made to any scheme or arrangement which is capable of accepting a recognised transfer under Section 169 of the Finance Act 2004 (Recognised transfers) and is willing to accept that transfer.

9.1.3 If a Court has made an order attaching to a Member’s benefit as a result of matrimonial proceedings, the Trustees shall notify the trustees of the scheme receiving any transfer payment and the former spouse who was a party to the proceedings in accordance with Regulation 4 of the Divorce etc (Pensions) Regulations 2000 or any equivalent regulations relating to Civil Partners.

9.1.4 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 scheme receiving any transfer payment.

9.2 Buy-outs

Instead of requesting a transfer payment under Rule 8.1 (Transfers out) a Member to whom that Rule applies may require the Trustees to use the value of his Investment Account to purchase from an Insurance Company of the Member’s choice a policy or annuity contract. The benefits provided by the policy or annuity contract may be different from the Member’s accrued rights, so long as they are authorised under Section 164 of the Finance Act 2004 (Authorised member payments).

9.3 General provisions relating to transfers out and buy-outs

9.3.1 The following provisions of this Rule shall apply to the exercise of rights under Rule 8.1 (Transfers out) or Rule 8.2 (Buy-outs). Any reference in this Rule to a transfer shall be deemed to include a buy-out.

9.3.2 A Member may request more than one transfer payment so long as all of his entitlement under the Scheme is transferred.

9.3.3 Transfer rights may be exercised:

(a) at any time up to the later of one year before Normal Retirement Date or six months after leaving Active Membership; or

(b) at such later date as the Trustees may decide prior to Normal Retirement Date or whilst a Member remains in Service after Normal Retirement Date

but in either case may not be exercised after the Member has received any benefit under the Scheme, including a refund of contributions, or after the Member attains the age of 75.

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9.3.4 A transfer application may be withdrawn at any time before the Trustees make or become bound to make a transfer payment or purchase or become bound to purchase an annuity.

9.3.5 Following a transfer in accordance with Rule 8.1 (Transfers out) or Rule 8.2 (Buy-outs) the Trustees and the Fund shall be discharged from all liability to which the transfer relates.

9.4 Transfers in

9.4.1 If any Member or any former Member either was previously a member of a Registered Pension Scheme or a qualifying recognised overseas pension scheme (as defined in the Finance Act 2004) or has had his rights under any such scheme bought out with an Insurance Company, then the Trustees may with the consent of the Principal Employer receive a transfer payment from such scheme or arrangement, or an assignment of or the surrender value of the policy concerned.

9.4.2 Subject to Rule 9.4.3, on receipt of a transfer or assignment under this Rule the amount received shall be credited to the Investment Account of the Member.

9.4.3 Where the transfer from another scheme or arrangement relates to a Pension Credit, the Trustees may only accept that transfer with the consent of the Principal Employer. Unless the Trustees with the consent of the Member decide otherwise, the transfer and the benefits relating to it shall be provided in the Scheme in addition to and in an entirely separate Investment Account from that relating to the benefits which the Member is otherwise entitled to receive under the provisions of the Scheme.

SCHEDULE 2 INVESTOR PLAN RULES – RULE 10: MAXIMUM BENEFITS AND CONTRACTING OUT

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10. MAXIMUM BENEFITS AND CONTRACTING OUT

10.1 Requirements for Registered Pensions Schemes

These Rules incorporate the provisions of Appendix 1 (Registered Pension Scheme requirements) and the provisions of that appendix override any other provision of this Deed.

10.2 Contracting-out

Investor Plan Members shall not be in contracted out employment as defined in Section 8 of the Pension Schemes Act 1993.

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SCHEDULE 3 RULES OF THE BOOSTER, SAVER AND FOUNDATION SECTION


SCHEDULE 3 RULES OF THE BOOSTER, SAVER AND FOUNDATION SECTION ..................................................................................................................75

1. ELIGIBILITY AND MEMBERSHIP ......................................................................77 1.1 Eligibility........................................................................................................................................... 77 1.2 Opting out ........................................................................................................................................ 77 1.3 Medical reports ................................................................................................................................ 78

2. CONTRIBUTIONS ..................................................................................................79 2.1 Members’ ordinary contributions ................................................................................................. 79 2.2 Additional voluntary contributions .............................................................................................. 79 2.3 Employers’ contributions............................................................................................................... 80

3. BENEFITS ON RETIREMENT .............................................................................81 3.1 Retirement of an Active Member at Normal Retirement Date................................................ 81 3.2 Ill-health early retirement of Active Members............................................................................ 81 3.3 Early retirement of Active Members in other cases................................................................... 82 3.4 Late retirement ................................................................................................................................ 83 3.5 Lump sum on retirement ............................................................................................................... 83 3.6 Surrender of pension for additional spouse’s, Dependant’s or children’s pensions ............. 84 3.7 Level Pension Option..................................................................................................................... 84

4. BENEFITS ON LEAVING ACTIVE MEMBERSHIP...........................................85 4.1 Application of this Rule ................................................................................................................. 85 4.2 Entitlement to Deferred Benefits ................................................................................................. 85 4.3 Calculation and payment of Deferred Benefits .......................................................................... 85 4.4 Early payment of Deferred Benefits ............................................................................................ 86 4.5 Late payment of Deferred Benefits .............................................................................................. 86 4.6 Preservation Laws ........................................................................................................................... 86

5. LUMP SUM BENEFITS ON DEATH ....................................................................87 5.1 Lump sum on death in Service...................................................................................................... 87 5.2 Lump sum on death after retirement ........................................................................................... 87 5.3 Lump sum on death in Service after Normal Retirement Date ............................................... 87 5.4 Lump sum on death of a Member entitled to Deferred Benefits ............................................ 87

6. SPOUSE’S AND DEPENDANTS’ PENSIONS ......................................................89 6.1 Spouse’s pension on death while an Active Member ................................................................ 89 6.2 Spouse’s pension on death of a Pensioner .................................................................................. 89 6.3 Spouse’s pension on death in Service after Normal Retirement Date .................................... 89 6.4 Spouse’s pension on death of a Member entitled to Deferred Benefits ................................. 89

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6.5 Pension for Dependant .................................................................................................................. 89 6.6 Children’s pensions ......................................................................................................................... 90 6.7 General provisions applicable to spouse’s, Dependant’s and children’s pensions................ 91 6.8 Civil Partners.................................................................................................................................... 91

7. ADDITIONAL VOLUNTARY CONTRIBUTIONS ..............................................92 7.1 Payment of additional voluntary contributions .......................................................................... 92 7.2 Benefits from additional voluntary contributions ...................................................................... 92 7.3 Deferring benefits from AVC Accounts ..................................................................................... 93

8. TRANSFERS AND BUY-OUTS...............................................................................94 8.1 Transfers out.................................................................................................................................... 94 8.2 Buy-outs............................................................................................................................................ 94 8.3 General provisions relating to transfers out and buy-outs........................................................ 94 8.4 Transfers in ...................................................................................................................................... 95

9. PENSION INCREASES ...........................................................................................96 9.1 Standard Increases........................................................................................................................... 96 9.2 Discretionary increases ................................................................................................................... 96

10. MAXIMUM BENEFITS AND CONTRACTING OUT .........................................97 10.1 Requirements for Registered Pension Schemes.......................................................................... 97 10.2 GMP Rules....................................................................................................................................... 97 10.3 Contracted-out employment after 5 April 1997 ......................................................................... 97 10.4 Safeguarded Rights.......................................................................................................................... 97

11. SUPPLEMENTARY BENEFITS FOR FORMER PLESSEY FUND MEMBERS.................................................................................................................98

11.1 Application ....................................................................................................................................... 98 11.2 Benefit guarantee............................................................................................................................. 98 11.3 Benefit guarantee - limits ............................................................................................................... 98 11.4 Benefit guarantee - time of operation .......................................................................................... 99 11.5 Individual transfer payments ......................................................................................................... 99 11.6 Transfer to GEC Plan .................................................................................................................... 99 11.7 Interpretation................................................................................................................................. 100

12. BENEFIT GUARANTEE FOR FORMER GEC PLAN MEMBERS .................. 101 12.1 Application ..................................................................................................................................... 101 12.2 Benefit guarantee........................................................................................................................... 101

12.3 Limit on benefit guarantee....................................................................................... 101

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 1: ELIGIBILITY AND MEMBERSHIP

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1.1 Eligibility

1.1.1 Employees who were eligible for membership of this section were all permanent employees who commenced Service before 1 October 2002 who had attained the age of 18 but were under the age of 60, including full-time salaried directors, but excluding an employee with an appointment expected to be of less than three years' duration and an employee seconded to an Employer who is a member of another pension scheme established by the Employer by whom he is seconded.

1.1.2 Any Member in Active Membership on 31 March 1997 and who opted in writing to the Trustees prior to 14 March 1997 to receive Booster Plan benefits accruing in accordance with Rule 3.1.1(b), or any Employee who joined the Scheme between 1 April 1997 and 30 September 2002 and at the date of joining was over the age of 40 and on joining had opted in writing to receive Booster Plan benefits, shall, subject to Rules 1.1.4, 1.1.5 and 1.2, be a Booster Plan Member.

1.1.3 Any Member in Active Membership on 31 March 1997 who did not opt in writing to the Trustees to receive Booster Plan benefits prior to 14 March 1997, or an Employee who joined the Scheme between 1 April 1997 and 30 September 2002 and did not opt to receive Booster Plan benefits, shall, subject to Rules 1.1.4, 1.1.5 and 1.2, be a Saver Plan Member.

1.1.4 Any Booster Plan Member or Saver Plan Member in Active Membership on 1 October 2005 who opted to become a Foundation Plan Member with effect from 1 October 2005 shall subject to Rules 1.1.5 and 1.2, be a Foundation Plan Member.

1.1.5 From 1 October 2005 any Member to whom this Rule 1 applies may opt to become a Booster, Saver or Foundation Plan Member with effect from the next 1 April by giving the Trustees notice in writing at least 14 days before the 1 April Date. However, between 1 October 2005 and 31 March 2007 only a Member in Active Membership on 31 March 1997 or any other Member after attaining the age of 40 may opt to become a Booster Plan Member. After 1 April 2007 no Member shall be entitled to become a Booster Plan Member other than a Member who had previously been a Booster Plan Member who may opt to rejoin this category by notice in accordance with this Rule.

1.1.6 The Principal Employer may admit to membership of any category of this section any employee who is not otherwise eligible to join, subject to such terms and conditions as the Principal Employer, with the consent of the Trustees, considers appropriate.

1.2 Opting out

1.2.1 An Active Member may opt-out of this Section at any time on giving three calendar months’ written notice to the Trustees. The Member shall cease to be an Active Member of the Scheme on the day after such notice expires and be treated as having left Active Membership.

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1.2.2 An Active Member of this Section may opt to join the Investor Plan Section at any time on giving such written notice to the Trustees as they may require. The Member will cease to be an Active Member of this Section on the day after such notice expires and become an Active Member of the Investor Plan Section on the same date.

1.2.3 Employees who do not join this Section when first eligible to do so or who opt out of this Section in accordance with Rule 1.2.1 or 1.2.2 above, but remain in Service, shall only be permitted to join or rejoin with the consent of the Trustees and the Principal Employer and subject to such conditions (including the production of medical evidence) as the Trustees may impose.

1.2.4 A Member may opt out of participation in the Flex Plan for pension purposes only:

(a) with effect from a Flex Anniversary Date by written notice to the Trustees at least one month before the Flex Anniversary Date (or such other date as the Principal Employer and Trustees may agree) or

(b) with effect from such date as determined by the Principal Employer if written notice is given within one month (or such later time as the Principal Employer may decide) after a Life Event.

1.3 Medical reports

The Trustees, or any Insurance Company with whom the Trustees have insured any of the benefits under the Scheme, may require a Booster, Saver or Foundation Plan Member, or any employee who is not a Member but on whose death benefits are payable under this Schedule, to undergo a medical examination. If the medical examination shows that he does not have the normal expectation of life, or if the Member or Employee refuses or fails to undergo a medical examination, the Trustees may, subject to the requirements of the Disability Discrimination Act 1995, decide to refuse payment in respect of:

(a) the benefits payable on death before Normal Retirement Date in whole or in part of a new Member within 3 months after joining

(b) an existing Member or Employee of the whole or any part of any increased benefits resulting from a future increase in Salary

(c) a Member or Employee who is absent from work owing to illness or injury at the time he joins the Scheme or begins Service (as the case may be) of the benefits payable on death before Normal Retirement Date in whole or in part until he has completed two months continuous active Service after returning to work or satisfied such other terms as may be imposed by the Insurance Company.

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION SECTION RULES – RULE 2: CONTRIBUTIONS

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2. CONTRIBUTIONS


Each Active Member shall contribute to the Fund at the following rates of Pensionable Salary:-

Category of Member % of Pensionable Salary

Booster 9% Saver 6% Foundation 3.5%

However, the ordinary contributions of any Member aged 50 or over on 1 April 1997 will be reduced to:-

(a) 5½% while a Booster Plan Member

(b) 2½% while a Saver Plan Member; and

(c) nil while a Foundation Plan Member,

in accordance with the following table:-

Age at 1st April 1997: Reduction begins on

57 or older 1 April 1997

56 1st of month after Member's 58th birthday



53 1st of month after Member's 61st birthday

52 1st of month after Member's 62nd birthday

51 1st of month after Member's 63rd birthday


A Saver, Booster or Foundation Plan Member who is a Flex Member shall not be required to make any contributions to the Scheme.


If an Active Member wishes to buy added benefits, he may make additional voluntary contributions to the Fund in accordance with Rule 7.1 (Payment of additional voluntary contributions).

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For the purposes of this Section, Employer contributions are dealt with in Clause 8 (Employers’ contributions) of the Deed.

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 3: BENEFITS ON RETIREMENT

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3.1 Retirement of an Active Member at Normal Retirement Date

3.1.1 An Active Member who retires from Active Membership at Normal Retirement Date shall be entitled to an annual pension for life calculated at the following rates:-

(a) for each Year of Pensionable Service whilst a Member of the Scheme prior to 1 April 1997, the greater of:-

(i) 1/60th of his Pre-April 1997 Final Pensionable Salary, or

(ii) 1/90th of Final Scheme Salary

(b) for each Year of Pensionable Service whilst a Booster Plan Member, 1/45th of his Final Pensionable Salary

(c) for each Year of Pensionable Service whilst a Saver Plan Member, 1/60th of his Final Pensionable Salary

(d) for each Year of Pensionable Service whilst a Foundation Plan Member, 1/80th of his Final Pensionable Salary

The pension payable to a Member whose accrued benefits under the Plessey Pension Fund were transferred to this Scheme with effect from 1 April 1991 shall be the greater of the above calculation or the total of the contributions made by such Member to this Scheme and the Plessey Pension Fund (without interest) divided by 2.6.

3.1.2 Any Member in respect of whom a transfer payment has been received or who has made voluntary contributions or has had Employee Directed Contributions made on his behalf shall be entitled to the additional benefits secured by them.

3.2 Ill-health early retirement of Active Members

3.2.1 Any Active Member not in receipt of benefit from any Disability Income Benefit Scheme of the Employer or any other benefit determined as a similar benefit by the Trustees (who shall be the sole judge) who (i) has become in the opinion of the Employer and the Trustees incapable of discharging his duties by reason of Total or Partial Incapacity, and (ii) retires from Active Membership in consequence, shall be entitled to benefits in accordance with this Rule.

3.2.2 If the Employer and Trustees believe the Member incapable of discharging his duties due to Total Incapacity, the Member shall be entitled to an immediate pension calculated in the manner prescribed in Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and Rule 3.5 (Lump Sum on retirement) but with his Pensionable Service enhanced by the additional period of Pensionable Service which would have accrued if he had remained in Service until Normal Retirement Date. In making this calculation, the Member will be deemed to have continued to be a Booster Plan Member if he was such a Member at the date of his retirement, a Saver Plan Member if he was such a Member at the date of his retirement or a Foundation Plan Member if he was such a Member at the date of


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his retirement. If the Employer and Trustees believe the Member incapable of discharging his duties due to Partial Incapacity but not Total Incapacity, the Member shall be entitled to an immediate pension calculated in the manner prescribed in Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) with no enhancement to Pensionable Service and no reduction for early payment.

3.2.3 The Trustees may in any case where any Member who has not attained Normal Retirement Date shall have been granted a pension under this Rule withdraw, suspend or reduce such pension if there shall have been an improvement in the Member's health or if for any reason he is able to carry on remunerative employment, whether with the Employer or otherwise; but so that, on the Member retiring on reaching Normal Retirement Date, the pension payable shall not be less than the pension previously payable after deducting the portion of pension (including any pension increase) attributable to the period of ill-health enhancement.

3.2.4 For the purposes of this rule, Total Incapacity means mental or physical ill-health or disability which renders it impossible for a Member to continue his current employment or any other occupation which would provide for a significant level of remuneration. Partial Incapacity means mental or physical ill-health or disability which is less than Total Incapacity but which is sufficiently serious to prevent the Member from following his normal occupation or significantly impair his earning ability.

3.2.5 The value of any pension under this Rule 3.2 shall not be less than the value of the Member’s Deferred Benefits. A Member entitled to benefits under this Rule may nevertheless opt to receive a deferred pension under Rule 4 (Benefits on leaving Active Membership).

3.3 Early retirement of Active Members in other cases

3.3.1 An Active Member who has reached Minimum Pension Age and who leaves Service prior to Normal Retirement Date other than in receipt of an early retirement pension under Rule 3.2 (Ill-health early retirement of Active Members) may, with the Employer’s and Trustees’ consent, receive an immediate pension and lump sum calculated in accordance with Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and Rule 3.5 (Lump sum on retirement).

3.3.2 The pension payable under Rule 3.3.1 will be reduced to take account of the Member’s age at retirement by such amount as the Trustees after consultation with the Principal Employer on the policy of such reductions (and not consultation in each individual case) may decide and as shall be certified as reasonable by an Actuary.

3.3.3 Where a Member has reached Minimum Pension Age, he may, with the consent of the Principal Employer request payment of all or half of his accrued rights under the Scheme even where he remains in Service. The pension payable will be an amount determined by the Trustees in accordance with Rules 3.3.1 and 3.3.2 and the provisions of Rule 3.5 (Lump sum on retirement) apply. On or after 6 April 2010, the provisions of this Rule 3.3.3 can only apply after a Member reaches age 55.


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3.3.4 If the Member requests payment of any of his benefits under Rule 3.3.3 he shall cease to be in Active Membership as a member of this Section from the date on which the pension becomes payable but if the Principal Employer consents, he may remain in Active Membership until the date of his actual retirement from Service under the Investor Plan.

3.3.5 If a Member draws half his accrued rights under Rule 3.3.3, he shall be treated as a Pensioner in respect of the rights he has drawn and as a Member with entitlement to Deferred Benefits in respect of the rest of his remaining benefits under this Section.

3.3.6 The value of any pension under this Rule 3.3 shall not be less than the value of the Member’s Deferred Benefits calculated in accordance with Rule 4.4 (Early payment of Deferred Benefits). A Member entitled to benefits under this Rule may opt to receive a deferred pension under Rule 4 (Benefits on leaving Active Membership).

3.4 Late retirement

Where an Active Member reaches Normal Retirement Date and stays in Service he may:

(a) remain in Active Membership provided that he pays contributions under Rule 2.1 (Member’s ordinary contributions) in respect of that extra period of Pensionable Service in which case, his pension will come into payment when he leaves service and shall be calculated by reference to his Final Pensionable Salary and Pensionable Service at that date;

(b) request payment of half or all his benefits in accordance with Rule 3.3.3 (Early retirement of Active Member in other cases)

(c) leave Active Membership of the Section in which case payment of his pension may, at his option (but only with the consent of the Principal Employer and Trustees) be deferred until any age before he leaves Service. When the pension comes into payment, the Member shall be entitled to the same pension as at Normal Retirement Date but increased by such amount as the Trustees having taken the advice of an Actuary shall decide having regard to the period of deferment.

3.5 Lump sum on retirement

3.5.1 Subject to the following paragraphs of this Rule, a Member who becomes entitled to a pension under this Rule 3 may elect to receive a lump sum payable when his pension commences in return for a reduction in his pension.

3.5.2 The lump sum shall be such amount as the Member may request but not exceeding the capital value in actuarial terms of such pension. In return for such lump sum the pension payable to the Member shall be reduced by such amount as shall be certified as reasonable by an Actuary.

3.5.3 If a Member has become entitled to a pension under Rule 3.2 (Ill health early retirement of Active Members), he may also elect to receive a lump sum under Rule 3.5.1 but the Trustees may restrict or refuse payment of such lump sum if


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the Trustees have reason to believe that the Member’s condition may improve so that a reduction or suspension in pension may be appropriate in the future.

3.5.4 The lump sum will not exceed the maximum amount payable as a pension commencement lump sum under Schedule 29 of the Finance Act 2004 as modified by Schedule 36 to that Act.

3.6 Surrender of pension for additional spouse’s, Dependant’s or children’s pensions

3.6.1 A Member may at any time before his pension comes into payment make a written application to the Trustees to surrender part of his pension (“an Allocation”) in order that a pension or additional pension may be provided on his death for one or more of his spouse, Eligible Children or Dependants.

3.6.2 The amount of the pension or additional pension to be provided under this Rule will be determined by the Trustees having regard to the advice of an Actuary. The provisions of Rule 6.7 (General provisions applicable to spouse’s, Dependant’s and children’s pensions) shall apply to any such pension or additional pension.

3.6.3 The amount of pension allocated by the Member shall not exceed an amount which would have the effect of making the pension allocated greater than the remaining pension payable to the Member (before any reduction by way of commutation under Rule 3.5 (Lump sum on retirement)).

3.6.4 The pension payable to a Member shall be permanently reduced by any Allocation except in the event of the death of the beneficiary of the Allocation before the Member retires.

3.6.5 Any Allocation under this Rule must not permit any lump sum to be payable on the death of the Member after age 75 nor for any pension payable on death of the Member after age 75 to exceed the limits under paragraphs 16B and 16C of Schedule 28 to the Finance Act 2004.

3.6.6 The Trustees may refuse an Allocation where a Member is granted a pension on the grounds of ill-health or incapacity or where any medical report obtained under Rule 1.3 (Medical reports) is in the Trustees’ opinion adverse.

3.6.7 The Trustees may make such administrative arrangements for the effective operation of this Rule as they think fit.

3.7 Level Pension Option

If the Trustees agree, a Member whose pension from the Scheme starts before State pensionable age may choose to have his pension increased before that date and reduced after it so that his pension from the Scheme before that date is more nearly level with his total pension from the Scheme and the State after it. The amount of the Member’s pension and of any pension payable on his death will be calculated on a basis certified by the Actuary to be reasonable.

State pensionable age has the meaning given by the rules in paragraph 1 of Schedule 4 to the Pensions Act 1995.

No surrender under this Rule can be revoked.

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 4: BENEFITS ON LEAVING ACTIVE MEMBERSHIP

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This Rule 4 shall apply to a Member who (otherwise than by death) leaves Active Membership before reaching his Normal Retirement Date, without an immediate pension becoming payable to him.


A Member on leaving Active Membership shall, subject to the following provisions of this Rule 4, be entitled to Deferred Benefits payable at Normal Retirement Date.


4.3.1 Deferred Benefits payable to a Member shall be a pension calculated in accordance with Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and lump sum calculated in accordance with Rule 3.5 (Lump sum on retirement) but based on the Member’s Pensionable Service and Final Scheme Salary, Final Pensionable Salary and/or Pre-April 1997 Final Pensionable Salary at the date of his leaving Active Membership.

4.3.2 Subject to Rule 4.4 (Early payment of Deferred Benefits) and Rule 4.5 (Late payment of Deferred Benefits), Deferred Benefits shall come into payment when the Member reaches Normal Retirement Date.

4.3.3 Deferred Benefits shall include any additional benefit which:

(a) is provided from the Member’s AVC Account or Employee Directed Contributions credited to him;

(b) represents a transfer of accrued rights from another scheme;

(c) has been granted either at the time membership commenced or subsequently in respect of Service before the date of grant; or

(d) is a benefit to which the Member is to contribute the whole or part of the cost where that whole or part had not been fully contributed by the time his Active Membership has ended.

In the case of an additional benefit under (c) or (d) above the Deferred Benefits shall include only such proportion of the additional benefit as the period of Pensionable Service since the date on which the benefit commenced to accrue bears to the period from such date until Normal Retirement Date or the date on which the benefit would have fully accrued, if earlier.

4.3.4 Deferred Benefits shall be revalued before they come into payment in accordance with Chapter II of Part IV of the Pension Schemes Act 1993 (Revaluation of accrued benefits (excluding guaranteed minimum pensions)).

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4.4.1 A Member entitled to Deferred Benefits who has reached Minimum Pension Age may receive early payment of his Deferred Benefits, but subject to the consent of the Trustees.

4.4.2 A Member who has not reached Minimum Pension Age may, subject to the consent of the Trustees, receive early payment of his Deferred Benefits if in the opinion of the Trustees, having taken advice from a registered medical practitioner, he is (and will continue to be) incapable of following his normal employment due to physical or mental infirmity or his earning capacity is destroyed or seriously impaired due to physical or mental infirmity.

4.4.3 Where a Member takes early payment of his benefits under this Rule, his Deferred Benefits shall be reduced to reflect early payment to such extent as the Trustees consider appropriate after consultation with the Principal Employer on the policy of such reductions (and not consultation in each individual case) and as shall be certified as reasonable by an Actuary. Any such reduction need not be the same as applies to Active Members under Rule 3.3 (Early retirement of Active Members in other cases).

4.5 Late payment of Deferred Benefits

4.5.1 Where a Member entitled to Deferred Benefits reaches Normal Retirement Date he may, subject to the consent of the Trustees, elect to defer receipt of his benefits to such later date as the Member may decide, but not later than the day he reaches age 75.

4.5.2 Where a Member defers receipt of his benefits under this Rule his pension will be increased by such amount as the Trustees decide, having taken the advice of an Actuary, with regard to the period of deferment.



SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 5: LUMP SUM BENEFITS ON DEATH

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5.1.1 Where an Active Member dies in Service, the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to three times the Death Benefit Salary of such Member before his death together with a sum equal to the contributions of the Member to the Fund without interest.

5.1.2 Where a Member has been a Flex Member, the Trustees shall also hold on discretionary trusts a sum equal to the ordinary contributions including Employee Directed Contributions he would have paid had he not participated in the Flex Plan, without interest.

5.2 Lump sum on death after retirement

5.2.1 On the death of a Pensioner within five years after his retirement the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) an amount equal to the balance of the pension which he would have received during the remainder of the five years but without taking into account any increase in pension under Rule 9 (Pension increases) which would come into force after his death.

5.2.2 A lump sum benefit is not payable under this Rule where the Pensioner had attained age 75 at the time of his death. However, where the Pensioner had attained age 75 the Trustees may at their discretion use the value of the lump sum which would otherwise have been payable to increase the benefits payable to the Dependants of the Pensioner in such manner as the Trustees may decide.

5.3 Lump sum on death in Service after Normal Retirement Date

Where a Member dies in Service (but not in Active Membership) after Normal Retirement Date having been in Active Membership up to Normal Retirement Date, the death benefits shall be calculated in accordance with Rule 5.2 (Lump sum on death after retirement) as if the Member had retired on the day before his death. In addition, the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) an amount equal to the amount the Member would have received under Rule 3.5 (Lump sum on retirement) if he had retired on the day before his death and elected to receive the largest permissible lump sum.

5.4 Lump sum on death of a Member entitled to Deferred Benefits

5.4.1 On the death of any Member entitled to Deferred Benefits which are not in payment the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to the Member’s contributions without interest (and, in the case of a Member who has been a Flex Member, a sum equal to the ordinary contributions he would have paid had he not participated in the Flex Plan, including any Employee Directed Contributions);

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5.4.2 The additional lump sum payable under Rule 5.1 by reference to Salary will also be held on discretionary trusts if:

(a) the Member left Active Membership because he was declared redundant by his Employer;

(b) the Member dies within one year of leaving Active Membership; and

(c) the Member had not commenced alternative employment before the date of his death.

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 6: SPOUSE’S AND DEPENDANT’S PENSIONS

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6.1 Spouse’s pension on death while an Active Member

The spouse of an Active Member who dies in Service shall be entitled to receive a pension calculated as the aggregate of:

(a) 1% of the Member's Pensionable Death Benefit Salary for each Year of Pensionable Service up to 1 April 1997

(b) 0.75% of the Member’s Pensionable Death Benefit Salary for each Year of Pensionable Service while a Foundation Plan Member and, if the Member is a Foundation Plan Member at the date of his death 0.75% of his Pensionable Death Benefit Salary for each further Year of Pensionable Service he could have completed if he had remained in Service until his Normal Retirement Date

(c) 1% of the Member's Pensionable Death Benefit Salary at date of death for each Year of Pensionable Service while a Saver Plan Member and, if the Member is a Saver Plan Member at the date of his death, 1% of his Pensionable Death Benefit Salary for each further Year of Pensionable Service he could have completed if he had remained in Service until his Normal Retirement Date

(d) 1.33% of the Member's Pensionable Death Benefit Salary at date of death for each Year of Pensionable Service while a Booster Plan Member and, if the Member is a Booster Plan Member at the date of his death, 1.33% of the Member's Pensionable Death Benefit Salary for each further Year of Pensionable Service the Member could have completed if he had remained in Service until his Normal Retirement Date.

6.2 Spouse’s pension on death of a Pensioner

The spouse of a Pensioner shall be entitled to receive a pension equal to 60% of the pension which the Pensioner was receiving at his death.

6.3 Spouse’s pension on death in Service after Normal Retirement Date

Where a Member dies in Service (but not in Active Membership) after Normal Retirement Date he shall be treated as if he had retired and become a Pensioner on the day before his death and a pension shall be payable in accordance with Rule 6.2 (Spouse’s pension on death of a Pensioner).

6.4 Spouse’s pension on death of a Member entitled to Deferred Benefits

The spouse of a Member who dies whilst entitled to Deferred Benefits which are not in payment, whether or not married to him when he left Service shall be entitled to receive a pension from the Member’s death equal to 60% of the Deferred Benefits which had accrued to the Member on leaving Active Membership revalued in accordance with Rule 4.3.4 (Calculation and payment of Deferred Benefits).

6.5 Pension for Dependant

Where at the Member’s or Pensioner’s death he was not married, or he was not living with his spouse or Civil Partner (and whether or not there was any financial dependency), the


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Trustees may pay a pension to one or more of the Member’s Dependants. Any such pension shall not exceed the amount of pension payable under Rule 6.1 (Spouse’s pension on death while an Active Member), or Rule 6.2 (Spouse’s pension on death of a Pensioner) or Rule 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits) (as appropriate) calculated assuming that the Dependant is the same age as the Member or Pensioner. To the extent that the Trustees pay a pension to a Dependant under this Rule, the rights of the spouse shall be forfeited.

6.6 Children’s pensions

6.6.1 Subject to Rule 6.6.2, on the death of an Active Member or a Pensioner leaving an Eligible Child or Children then a pension for the benefit of each Eligible Child will be paid equal to -

(a) where a spouse's or Dependant's pension is for the time being payable, one-third of that pension where there is one Eligible Child, one-half shared equally where there are two Eligible Children and two-thirds shared equally where there are three or more Eligible Children

(b) where no spouse's or Dependant's pension is for the time being payable, the provisions of paragraph (a) shall apply as if the Member or Pensioner had left an eligible spouse, but in addition a further pension for the benefit of such Eligible Children jointly and if more than one in equal shares will be payable equal to the amount of such spouse's or Dependant's pension that would otherwise have been payable.

6.6.2 The total amount of any spouse's, Dependant's and children's pensions shall not exceed 100% of the pension which the Member would have received if he had remained in Active Membership (at the same Pensionable Salary he was receiving at the date of his death) until and had retired upon reaching his Normal Retirement Date or of the pension which the Member was receiving at the time of his death.

6.6.3 For the purposes of this Rule, the spouse's or Dependant's pension shall be calculated in the same way as a spouse's pension under Rule 6.1 (Spouse’s Pension on Death while an Active Member) or 6.2 (Spouse’s Pension on Death of a Pensioner) as the case may be and the provisions of Rules 6.5 (Pension for Dependent) and 6.7.3 (Reduction in Spouse’s Pension) shall be disregarded.

6.6.4 Where a Member entitled to Deferred Benefits dies before his Deferred Benefits become payable, each of the Member’s Eligible Children shall be entitled to receive a pension. Where there is one Eligible Child the pension will be equal to one-third of the spouse’s pension payable in accordance with Rule 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits). Where there are two Eligible Children the pension will be equal to one-half of the spouse’s pension shared equally between them and where there are more than two Eligible Children it will be equal to two-thirds of the spouse’s pension shared equally.

6.6.5 Where no spouse’s or Dependant’s pension is for the time being payable, the provisions set out above shall apply, but in addition a further pension for the benefit of such Eligible Children jointly and if more than one in equal shares will be payable equal to the amount of the spouse's or Dependant's pension that


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would otherwise have been payable for so long as there remains an Eligible Child but so that the total amount of any spouse's, Dependant's and children's pensions shall not exceed 100% of the Member's Deferred Benefits.

6.7 General provisions applicable to spouse’s, Dependant’s and children’s pensions

6.7.1 A pension payable to a spouse or adult Dependant shall be payable from the death of the Member or Pensioner and shall be payable for life.

6.7.2 A pension payable to a child under Rule 6.5 (Pension for Dependant) or under Rule 6.6 (Children’s pensions) shall continue for so long as the child remains an Eligible Child.

6.7.3 The Trustees may reduce any pension payable to a spouse or adult Dependant who is more than ten years younger than the Member or Pensioner by such amount as the Trustees shall decide not exceeding 2.5% for each year of disparity in excess of ten.

6.7.4 If a Member has married under a law which allows polygamy and, on the day of the death of the Member or Pensioner, has more than one spouse, the Trustees must decide which, if any, survivor is the spouse for the purposes of Rules 6.1 (Spouse’s pension on death while an Active Member), 6.2 (Spouse’s pension on death of a Pensioner) and 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits). In such circumstances they may consider any one or more of the other spouses for a pension under Rule 6.5 (Pension for Dependant) without having to investigate whether they satisfy the definition of Dependant in Schedule 1 to and irrespective of whether the Member or Pensioner was living with the spouse selected for the purposes of Rules 6.1 to 6.4 at the date of his death.


6.7.6 Where the Member or Pensioner had attained the age of 75 at the time of his death, the total level of pensions payable to his spouse, Dependants or Eligible Children may not exceed the limits under paragraph 16B and 16C of Schedule 28 of the Finance Act 2004.

6.8 Civil Partners

Where the Trustees have a discretion in relation to the payment of any pension following the death of a Member or Pensioner, they must exercise that discretion in such manner as is necessary to comply with the requirements of the Civil Partnerships Act 2004 (and regulations made under it).

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 7: ADDITIONAL VOLUNTARY CONTRIBUTIONS

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7.1.2 The Trustees are entitled (but not obliged) to refuse to accept additional voluntary contributions where the payment of such additional voluntary contribution would, when added to any other ordinary contributions payable by or in respect of the Member under Rule 2.1 (Member’s ordinary contributions) be expected to result in the Member exceeding the annual allowance for the purposes of Section 227 of the Finance Act 2004 (Annual allowance charge).


7.1.4 Except where Trustees, with the consent of the Principal Employer, agree otherwise with the Member, additional voluntary contributions will be credited to the Member’s AVC Account to provide benefits in accordance with Rule 7.2 (Benefits from additional voluntary contributions).

7.2 Benefits from additional voluntary contributions

7.2.1 Subject to deferring receipt under Rule 7.3 (Deferring benefits from AVC Accounts), benefits relating to additional voluntary contributions shall commence at the same time as the Member’s main scheme benefits. The Member’s AVC Account will be used to secure additional benefits in respect of that Member. The benefits secured shall:

(a) be additional to all other benefits payable under the Rules;

(b) be in a form determined by the Trustees and may be paid as a lump sum in whole or in part;

(c) be reasonable having regard to the amount of the contributions.

7.2.2 A Member’s Basic AVCs shall be used by the Trustees to provide benefits from the Scheme. Unless the Trustees, with the consent of the Principal Employer, agree otherwise, the Member’s Supplementary AVCs will be used to purchase a policy or annuity contract from an Insurance Company selected by the Trustees or, where the Member makes a selection within such time period as the Trustees decide, selected by the Member. Any such policy will be in the name of the Member unless the Trustees decide to purchase it in the Trustees’ name. When purchasing any such policy the Trustees shall not be obliged to take into account the individual circumstances of the Member nor to carry out a review of all available Insurance Companies.

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 7: ADDITIONAL VOLUNTARY CONTRIBUTIONS

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7.3 Deferring benefits from AVC Accounts

7.3.1 Subject to the following provisions of this Rule, a Member who is entitled to benefits under Rule 7.2 (Benefits from additional voluntary contributions) may, when he starts to receive his main pension from the Scheme, elect to defer the payment of the benefits from his AVC Account until such later date as he may determine, but not beyond his 75th birthday.

7.3.2 If a Member defers receipt of benefits from his AVC Account in accordance with this Rule he may still elect to receive part of those benefits by way of a lump sum when those benefits come into payment, but any such lump sum must not exceed the maximum amount payable as a pension commencement lump sum under Schedule 29 to the Finance Act 2004 as modified by Schedule 36 to that Act.

7.3.3 If a Member who has deferred receipt of benefits from his AVC Account in accordance with this Rule dies before those benefits come into payment, the Trustees shall hold the value of his AVC Account on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits).

7.3.4 Where a Member defers receipt of benefits from his AVC Account under this Rule, he will nonetheless be considered to be a Pensioner for the purposes of this Deed.

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 8: TRANSFERS AND BUY-OUTS

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8.1 Transfers out

8.1.1 A Member with Deferred Benefits may require the Trustees to transfer the cash equivalent of his Deferred Benefits to one or more arrangements selected by the Member. The amount of the cash equivalent shall be calculated using methods and assumptions decided by the Trustees and approved by an Actuary and may be reduced where permitted by legislation.




8.2 Buy-outs

Instead of requesting a transfer payment under Rule 8.1 (Transfers out) a Member to whom that Rule applies may require the Trustees to use the cash equivalent of his benefits to purchase from an Insurance Company of the Member’s choice a policy or annuity contract. The benefits provided by the policy or annuity contract may be different from the Member’s accrued rights, so long as they are authorised under Section 164 of the Finance Act 2004 (Authorised member payments).



8.3.2 A Member may request more than one transfer payment so long as all of the cash equivalent is transferred, or, if the receiving arrangement is unable to accept contracted-out liabilities, all except the part in respect of such contracted-out liabilities must be transferred.



SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 8 TRANSFERS AND BUY-OUTS

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8.3.5 Following the application of the cash equivalent in accordance with Rule 8.1 (Transfers out) or Rule 8.2 (Buy-outs) the Trustees and the Fund shall be discharged from all liability to which the transfer relates.

8.3.6 Where the Active Membership of a Member terminates at his request but he remains in Service, the amount of any transfer payment shall be the cash equivalent of the part of the Member’s benefits which have accrued to or in respect of him after 5 April 1988.

8.4 Transfers in

8.4.1 If any Member or any former Member either was previously a member of a Registered Pension Scheme or a qualifying recognised overseas pension scheme (as defined in the Finance Act 2004) or has had his rights under any such scheme bought out with an Insurance Company, then the Trustees may with the consent of the Principal Employer receive a transfer payment from such scheme or arrangement, or an assignment of or the surrender value of the policy concerned. Where the transfer from another scheme or arrangement relates to a Pension Credit, the Trustees may only accept that transfer with the consent of the Principal Employer.

8.4.2 On receipt of a transfer or assignment under this Rule the amount received shall be credited to an Investment Account in the name of the Member unless the Trustees decide with the consent of the Principal Employer to credit the Member with such additional defined benefits as the Trustees, having taken the advice of an Actuary, shall consider appropriate.

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 9: PENSION INCREASES

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9. PENSION INCREASES

9.1 Standard Increases

9.1.1 Any pension currently payable from the Scheme shall increase each year as follows:

(a) such part of the pension which relates to Pensionable Service prior to 6 April 2006 shall be increased by the percentage increase in the Retail Prices Index during the previous 12 months or, if less, by 5%; and

(b) such part of the pension which relates to Pensionable Service on or after 6 April 2006 shall be increased by the percentage increase in the Retail Prices Index during the previous 12 months or, if less, by 3%.

9.1.2 Rule 9.1.1 does not apply to any part of a pension

(a) derived from the payment by the Member of voluntary contributions (except to the extent that the Trustees have granted added years of Pensionable Service or otherwise decide); or

(b) which has been commuted; or

(c) which has been surrendered to provide a pension for a Dependant.

9.1.3 The increases payable under this Rule shall take effect on 1 April each year and shall be calculated as at each 1 April by reference to the number of completed months since the date when the pension became payable, or, if later, from the date of the last calculation. For the purposes of this Rule, the Trustees shall use the Retail Prices Index published in the preceding January

9.2 Discretionary increases

In addition to the provisions of Rule 9.1 (Standard increases), the Principal Employer and the Trustees shall make regular annual reviews of pensions in payment, and any pension in payment may from time to time be further increased by such amount and at such times as the Trustees, with the consent of the Principal Employer, and having regard to the availability of funds, may decide.

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 10: MAXIMUM BENEFITS AND CONTRACTING OUT

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10.1 Requirements for Registered Pension Schemes

These Rules incorporate the provisions of Appendix 1 (Registered Pension Scheme requirements) and the provisions of that appendix override any other provisions of this Deed.

10.2 GMP Rules

These Rules incorporate the Overriding Appendix of GMP Rules which is contained in Appendix 2. Appendix 2 only applies to GMP entitlements transferred into the Scheme.

10.3 Contracted-out employment after 5 April 1997

The Rules of this Schedule are designed to allow the Section of the Scheme to be contracted-out by virtue of Section 9(3) of the Pension Schemes Act 1993 (Contracting-Out Requirements for money schemes).

These Rules incorporate an Overriding Appendix of Protected Rights Rules which is contained in Appendix 3.

10.4 Safeguarded Rights

Where the Trustees have granted benefits under the Scheme:

10.4.1 in accordance with Clause 4.11 (Pension sharing order), or

10.4.2 in respect of a transfer under Rule 8.4 (Transfers in)

the Member or Pensioner will be entitled to safeguarded rights (as defined in Section 68A of the Pension Schemes Act 1993) 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 allowed under such legislation) and this Deed shall be deemed to be modified accordingly.

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 11: SUPPLEMENTARY BENEFITS FOR FORMER PLESSEY FUND MEMBERS

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11. SUPPLEMENTARY BENEFITS FOR FORMER PLESSEY FUND MEMBERS

11.1 Application

11.1.1 This Rule 11 applies to persons ("Plessey Members") who were members or former members of the Plessey Pension Fund, the Plessey Executive Pension Fund or the Automatic Telephone & Electric Company Limited Pension Fund ("the Plessey Funds") in respect of whom transfers from those funds have been made pursuant to transfer agreements dated 30 April 1991 as amended ("the Transfer Agreements") to this Scheme or to The GEC 1972 Plan ("the GEC Plan").

11.2 Benefit guarantee

11.2.1 Subject to Rule 11.2.2 below, the Scheme shall provide such relevant benefits as are necessary to ensure that the benefits paid to any Plessey Member or to the spouse children or dependants of any Plessey Member under the GEC Plan or the Scheme in respect of pensionable service accrued under the Plessey Funds up to 31 March 1991 are no less than those which would have been payable to him her or them respectively under the Plessey Fund or Funds, assuming that the Plessey Funds and the early retirement factors used in calculating benefits under them had continued in force without amendment

11.2.2 Subject to Rule 11.4.2 below, Plessey Members and their spouses children and dependants shall be entitled to benefits calculated as described in the forms and tables and introductory note attached to a deed of amendment to the Scheme dated 20 July 1992 and made between the Principal Employer and the Trustees

11.2.3 If there is a conflict:-

(i) the provisions of this Rule 11 shall prevail over the introductory note, and

(ii) the provisions of the forms and tables shall prevail over both this Rule 11 and the introductory note.

11.3 Benefit guarantee - limits

For the purposes of calculating the benefits payable under Rule 11.2 it shall be assumed (whether or not it is the case) that:-

(a) the benefits payable under the GEC Plan or the Scheme in respect of pensionable service accrued under the Plessey Funds up to 31 March 1991 will be the greater of:-

(i) those specified in the relevant Transfer Agreement, and

(ii) the benefits actually paid

(b) the early retirement factors shall be those used generally under the GEC Plan or the Scheme (as the case may be) at the time of calculation

(c) the revaluation of deferred pension credits under the GEC Plan in respect of Plessey Members shall have been no less favourable than the revaluation of

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deferred pensions applicable generally to members of that Plan (as required by the provisions of the Transfer Agreements)

(d) for the purpose of calculating benefits on death in deferment or death in retirement discretionary increases under the Plessey Funds would have been the same as those granted in the Scheme.

11.4 Benefit guarantee - time of operation

11.4.1 The benefits payable under Rule 11.2 will be determined when the relevant benefit under the GEC Plan or the Scheme is (or in the case of a benefit for which no provision is made in the GEC Plan would have been) determined and will become payable when all the relevant benefit under the GEC Plan or the Scheme becomes (or in the case of a benefit for which no such provision is made would have become) payable - on retirement, leaving pensionable service or death (including death after leaving pensionable service whether before or after retirement) as the case may be

11.4.2 The guarantee does not apply to any abatement of benefits under the GEC Plan by reason of deficiency of assets (whether on winding up or otherwise) nor, subject to Rule 11.3 (d) and sections 2.3 and 2.4 of the introductory note to the forms and tables, to discretionary increases to pensions in payment or deferment.

11.5 Individual transfer payments

11.5.1 The following provisions of this Rule shall apply to Plessey Members who are members of the GEC Plan ("GEC Plessey Members") in place of the provisions of Rules 8.1 (Transfers out) and 8.3 (General provisions relating to transfers out and buy-outs)

11.5.2 Where a transfer payment in respect of a GEC Plessey Member is made from the GEC Plan to another scheme, fund or arrangement such GEC Plessey Member may require a transfer to the same scheme fund or arrangement of the amount required to secure the benefits prospectively payable to him his spouse children and dependants under this Rule.

11.5.3 The Trustees shall on the application in writing of a GEC Plessey Member to whom Rule 11.5.2 above applies make such a transfer of an amount determined by the Scheme Actuary to be the amount required for that purpose and such GEC Plessey Member his spouse children and dependants shall cease to be entitled to any benefits under the Scheme.

11.6 Transfer to GEC Plan

11.6.1 Subject as provided below the Trustees may make such arrangements as they think fit with the trustees of the GEC Plan for the GEC Plan to take over responsibility for the benefit guarantee given in this Section in respect of GEC Plessey Members in consideration of the transfer to the GEC Plan of the amount required to secure the benefits prospectively payable to them their spouses children and dependants under this Section


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11.6.2 No such arrangements shall be made unless the Scheme Actuary and legal advisers to the Trustees have (so far as it is within their respective fields of expertise) advised the Trustees and the Trustees themselves are satisfied that the proposed arrangements are satisfactory from the point of view of the GEC Plessey Members their spouses children and dependants and in particular (but without limiting the generality of the foregoing) that:-

(i) there are workable arrangements for giving effect to such benefit guarantee

and

(ii) there are satisfactory provisions for giving effect to such benefit guarantee on the winding up of the GEC Plan

11.6.3 The amount mentioned in Rule 11.6.1 above shall be determined by the Scheme

Actuary

11.6.4 On such arrangements as mentioned in Rule 11.6.1 above being made GEC Plessey Members their spouses children and dependants shall cease to be entitled to benefits under the Scheme.

11.7 Interpretation

11.7.1 In this Rule 11 references to the GEC Plan and to the Scheme shall where the context admits include any other scheme established by participating employers in the GEC Plan or the Scheme (as the case may be)

11.7.2 In this Rule 11 "Scheme Actuary" means the Actuary for the time being acting for the Trustees generally in relation to the Scheme

SCHEDULE 3 BOOSTER, SAVER AND FOUNDATION PLAN – RULE 12 BENEFIT GUARANTEE FOR FORMER GEC PLAN MEMBERS

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12. BENEFIT GUARANTEE FOR FORMER GEC PLAN MEMBERS

12.1 Application

This Rule applies to former members of The G.E.C. 1972 Plan (“the GEC Plan”) who became Members of the Scheme with effect from 1 July 1997 and who agreed, prior to 27 February 1998, to the transfer of their benefits from the GEC Plan.

12.2 Benefit guarantee

Subject to Rule 12.3 (Limit on benefit guarantee), whenever a Member to which this Rule applies retires, dies or otherwise leaves Active Membership, an estimate of the benefits that would have been payable to or in respect of that Member from the GEC Plan had he remained a contributing member of the GEC Plan throughout the period of his Pensionable Service under the Scheme will be calculated in accordance with advice from the Scheme Actuary. If the benefit so calculated is greater than the benefit otherwise payable under the Scheme Rules (including the service credit awarded under Rule 9.4 (Transfers in)), the greater benefit will be paid from the Scheme.

12.3 Limit on benefit guarantee

In estimating the benefits payable from the GEC Plan for the purposes of Rule 12.2 (Benefit guarantee), the Scheme Actuary shall make such assumptions as he believes are appropriate and are consistent with the announcement to employees of Siemens GEC Communications Systems Limited dated 2 February 1998. In particular, the Scheme Actuary:-

(a) will assume that the GEC Plan continued in force on the rules that applied at 1 July 1997

(b) will take account of any discretionary practices adopted in calculating benefits under the GEC Plan as at 1 July 1997, but if less generous discretionary practices are being employed in relation to the GEC Plan at the effective date of the calculation, those less generous practices shall be taken into account instead

(c) may make appropriate adjustments to take account of different member contribution rates under the GEC Plan and this Scheme

(d) shall make appropriate adjustments to reflect the contracted-out status of the Scheme.


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SCHEDULE 4 RULES OF THE SAVER PLAN PLUS SECTION


SCHEDULE 4 RULES OF THE SAVER PLAN PLUS SECTION ................................... 102

1. ELIGIBILITY AND MEMBERSHIP .................................................................... 104 1.1 Eligibility......................................................................................................................................... 104 1.2 Opting out ...................................................................................................................................... 104

2. CONTRIBUTIONS ................................................................................................ 105 2.1 Members’ ordinary contributions ............................................................................................... 105 2.2 Additional voluntary contributions ............................................................................................ 105 2.3 Employers’ contributions............................................................................................................. 105

3. BENEFITS ON RETIREMENT ........................................................................... 106 3.1 Retirement of an Active Member at Normal Retirement Date.............................................. 106 3.2 Ill-health early retirement of Active Members.......................................................................... 106 3.3 Early retirement of Active Members in other cases................................................................. 106 3.4 Late retirement .............................................................................................................................. 107 3.5 Lump sum on retirement ............................................................................................................. 108 3.6 Surrender of pension for additional spouse’s, Dependant’s or children’s pensions ........... 108

4. BENEFITS ON LEAVING ACTIVE MEMBERSHIP......................................... 110 4.1 Application of this Rule ............................................................................................................... 110 4.2 Entitlement to Deferred Benefits ............................................................................................... 110 4.3 Calculation and payment of Deferred Benefits ........................................................................ 110 4.4 Early payment of Deferred Benefits .......................................................................................... 111 4.5 Late payment of Deferred Benefits ............................................................................................ 111 4.6 Preservation Laws ......................................................................................................................... 111

5. LUMP SUM BENEFITS ON DEATH .................................................................. 112 5.1 Lump sum on death in Service.................................................................................................... 112 5.2 Lump sum on death after retirement ......................................................................................... 112 5.3 Lump sum on death in Service after Normal Retirement Date ............................................. 112 5.4 Lump sum on death of a Member entitled to Deferred Benefits .......................................... 112

6. SPOUSE’S AND DEPENDANTS’ PENSIONS .................................................... 114 6.1 Spouse’s pension on death while an Active Member .............................................................. 114 6.2 Spouse’s pension on death of a Pensioner ................................................................................ 114 6.3 Spouse’s pension on death in Service after Normal Retirement Date .................................. 114 6.4 Spouse’s pension on death of a Member entitled to Deferred Benefits ............................... 114 6.5 Pension for Dependant ................................................................................................................ 114 6.6 Children’s pensions ....................................................................................................................... 114 6.7 General provisions applicable to spouse’s, Dependant’s and children’s pensions.............. 115


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6.8 Civil Partners.................................................................................................................................. 116

7. ADDITIONAL VOLUNTARY CONTRIBUTIONS ............................................ 117 7.1 Payment of additional voluntary contributions ........................................................................ 117 7.2 Benefits from additional voluntary contributions .................................................................... 117 7.3 Deferring benefits from AVC Accounts ................................................................................... 118

8. TRANSFERS AND BUY-OUTS............................................................................. 119 8.1 Transfers out.................................................................................................................................. 119 8.2 Buy-outs.......................................................................................................................................... 120 8.3 General provisions relating to transfers out and buy-outs...................................................... 120 8.4 Transfers in .................................................................................................................................... 120

9. PENSION INCREASES ......................................................................................... 122 9.1 Standard Increases......................................................................................................................... 122 9.2 Discretionary increases ................................................................................................................. 122

10. MAXIMUM BENEFITS AND CONTRACTING OUT ....................................... 123 10.1 Requirements for Registered Pension Schemes........................................................................ 123 10.2 GMP Rules..................................................................................................................................... 123 10.3 Contracted-out employment after joining the Saver Plan Plus .............................................. 123 10.4 Safeguarded Rights........................................................................................................................ 123

SCHEDULE 4 SAVER PLAN PLUS – RULE 1 ELIGIBILITY AND MEMBERSHIP

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1.1 Eligibility

1.1.1 All PCSPS Members and NHSPS Members are eligible to join the Saver Plan Plus Section.

1.1.2 The Principal Employer with the consent of the Trustees may admit to membership of the Saver Plan Plus Section any employee who is not otherwise eligible to join.

1.1.3 Membership of the Saver Plan Plus Section shall be optional. Every Employee shall be deemed to have joined the Saver Plan Plus Section as soon as he became eligible. An Employee may, however, opt not to join the Section by giving written notice to the Employer in such form as it may require.

1.2 Opting out

1.2.1 An Active Member may opt-out of this Section at any time on giving three calendar months’ written notice to the Trustees. The Member shall cease to be an Active Member of the Scheme on the day after such notice expires and be treated as having left Pensionable Service.


1.2.3 Employees who opt out of this Section in accordance with Rule 1.2.1 or 1.2.2 above, but remain in Service, shall only be permitted to join or rejoin with the consent of the Trustees and the Principal Employer and subject to such conditions (including the production of medical evidence and restrictions on benefits) as the Trustees and the Principal Employer may impose.


(a) with effect from a Flex Anniversary Date by written notice to the Trustees at least one month before the Flex Anniversary Date (or such other date as the Principal Employer and Trustee may agree) or


SCHEDULE 4 SAVER PLAN PLUS – RULE 2: CONTRIBUTIONS

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2. CONTRIBUTIONS


Each PCSPS Member shall while an Active Member contribute to the Fund at the rate of 1½% of Pensionable Salary except for a PCSPS Member who on date of joining the Scheme was aged 60 or over who shall contribute at the rate of 1% of Pensionable Salary. An NHSPS Member shall while an Active Member contribute to the Fund at the rate of 5% of Pensionable Salary if he is designated by his Employer as a manual employee or at the rate of 6% of Pensionable Salary if he is designated by his Employer a non-manual employee. A PCSPS or NHSPS Member who is a Flex Member shall not be required to make any contributions to the Scheme.





SCHEDULE 4 SAVER PLAN PLUS – RULE 3: BENEFITS ON RETIREMENT

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3.1.1 An Active Member who retires from Active Membership at Normal Retirement Date shall be entitled to an annual pension for life calculated at the rate of 1/60th of his Final Pensionable Salary at the date of retirement for each Year of Pensionable Service.



3.2.1 Any Active Member who has become in the opinion of the Trustees, having taken the advice of a registered medical practitioner, incapable of discharging his duties by reason of Incapacity, and who retires from Active Membership in consequence shall be entitled to an immediate pension and lump sum.

3.2.2 The pension and lump sum will be calculated as set out in Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and Rule 3.5 (Lump sum on retirement) but his Pensionable Service shall be enhanced by the additional period of Pensionable Service which would have accrued if he had remained in Pensionable Service until Normal Retirement Date.



3.3.1 An Active Member who has reached Minimum Pension Age and who leaves Service prior to Normal Retirement Date other than in receipt of an ill-health early retirement pension under Rule 3.2 (Ill-health early retirement of Active Members) may, with the Employer’s and Trustees’ consent, receive an immediate pension and lump sum calculated in accordance with Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and Rule 3.5 (Lump sum on retirement). The consent of the Employer and Trustees shall not be required if the Member has reached age 60 (or reached age 50 in the case of an NHSPS A Member).

3.3.2 The pension payable under Rule 3.3.1 will be reduced to take account of the Member’s age at retirement as follows:

(a) on retirement before age 55, a 6% reduction shall apply for each Year prior to age 55

(b) on retirement before age 60, a 3.6% reduction shall apply for each Year between age 55 to 60


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or by such other amounts as the Trustees, after consultation with the Principal Employer on the policy of such reductions (and not consultation in each individual case), may decide and as shall be certified as reasonable by the Actuary to the Trustees, but in any event on retirement after age 60 no reduction shall apply.


3.3.4 If the Member requests payment of any of his benefits under Rule 3.3.3 he shall cease to be in Active Membership as a member of this Section from the date on which the pension becomes payable but if the Principal Employer consents, he may remain in Active Membership until the date of his actual retirement from Service if earlier under the Investor Plan.



3.3.7 The Trustees may adjust a pension payable under this Rule having regard to any benefit payable to the Member under Appendix 2 (GMP Rules) and, unless the Trustees agree otherwise, a pension will not be payable under this Rule if the reduction applied under Rule 3.3.2 would reduce the pension below the minimum payable at state pensionable age in accordance with Appendix 2.

3.4 Late retirement


(a) remain in Active Membership provided that he pays contributions under Rule 2.1 (Member’s ordinary contributions) in respect of that extra period of Pensionable Service in which case, his pension will come into payment when he leaves Service and shall be calculated by reference to his Final Pensionable Salary and Pensionable Service at that date;


(c) leave Active Membership of the Section in which case payment of his pension may, at his option (but only with the consent of the Principal Employer and


(21713155.06) 108

Trustees) be deferred until any age before he leaves Service. When the pension comes into payment, the Member shall be entitled to the same pension as at Normal Retirement Date but increased by such amount as the Trustees having taken the advice of an Actuary shall decide having regard to the period of deferment.



3.5.2 The lump sum shall be such sum as the Member requests but not exceeding the capital value in actuarial terms of such pension. In return for such lump sum the pension payable to the Member shall be reduced by such amount as the Trustees decide, having taken the advice of the Actuary. However, at least £14.47 will be offered as a lump sum for each £1 per annum reduction in pension if retirement is at age 60 and at least £13.00 will be offered as a lump sum for each £1 per annum reduction in pension if retirement is at age 65.



3.6.1 A Member may at any time before his pension comes into payment make a written application to the Trustees to surrender part of his pension (“an Allocation”) in order that a pension or additional pension or lump sum may be provided on his death for one or more of his spouse, Eligible Children or Dependants.

3.6.2 The amount of the pension or additional pension or lump sum to be provided under this Rule will be determined by the Trustees having regard to the advice of an Actuary. The provisions of Rule 6.7 (General provisions applicable to spouse’s, Dependant’s and children’s pensions) shall apply to any such pension or additional pension.

3.6.3 The amount of pension allocated by the Member shall not exceed an amount which would have the effect of making the pension allocated -and the pension value of the lump sum greater than the remaining pension payable to the Member (before any reduction by way of commutation under Rule 3.5 (Lump sum on retirement)).




(21713155.06) 109

3.6.6 The Trustees may refuse an Allocation where a Member is granted a pension on the grounds of ill-health or incapacity. The Trustees shall also be entitled to require the Member to obtain a written medical report into his state of health at the time of his application for an Allocation and may refuse an Allocation if the report is, in the opinion of the Trustees, adverse.


SCHEDULE 4 SAVER PLAN PLUS – RULE 4: BENEFITS ON LEAVING ACTIVE MEMBERSHIP

(21713155.06) 110







4.3.1 Deferred Benefits payable to a Member shall be a pension calculated in accordance with Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and lump sum calculated in accordance with Rule 3.5 (Lump sum on retirement) but based on the Member’s Pensionable Service and Final Pensionable Salary at the date of leaving Active Membership.









SCHEDULE 4 SAVER PLAN PLUS – RULE 4: BENEFITS ON LEAVING PENSIONABLE SERVICE

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4.4.2 A Member who has not reached Minimum Pension Age may, subject to the consent of the Trustees, receive early payment of his Deferred Benefits if in the opinion of the Trustees, having taken advice from a registered medical practitioner, his condition would have led to retirement on medical grounds under Rule 3.2 (Ill-health early retirement of Active Members) if he had remained in Pensionable Service.

4.4.3 Where a Member takes early payment of his benefits under this Rule, his Deferred Benefits shall be reduced to reflect early payment to such extent as the Trustees consider appropriate after consultation with the Principal Employer on the policy of such reductions (and not consultation in each individual case) and as shall be certified as reasonable by the Actuary. Any such reduction need not be the same as applies to Active Members under Rule 3.3 (Early retirement of Active Members in other cases).

4.4.4 The Trustees may adjust a Member’s Deferred Benefits having regard to any benefits payable to the Member under Appendix 2 (GMP Rules) and a pension will not be payable under this Rule if the reduction applied under Rule 4.4.2 would reduce the pension below the minimum payable at state pensionable age in accordance with Appendix 2.






SCHEDULE 4 SAVER PLAN PLUS – RULE 5: LUMP SUM BENEFITS ON DEATH

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5.1 Lump sum on death in Pensionable Service

5.1.1 Where an Active Member dies in Service the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to three times the Death Benefit Salary of such Member before his death together with a sum equal to the contributions of the Member to the Fund without interest

5.1.2 Where a Member has been a Flex Member, the Trustees shall also hold on discretionary trusts a sum equal to the ordinary contributions (including Employer Directed Contributions) he would have paid had he not participated in the Flex Plan, without interest.





Where a Member dies in Service (but not in Active Membership) after Normal Retirement Date having been in Active Membership up to Normal Retirement Date, the death benefits shall be calculated in accordance with Rule 5.2 (Lump sum on death after retirement) as if the Member had retired on the day before his death. In addition, the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) an amount equal to the amount the Member would have received under Rule 3.5 (Lump sum on retirement) if he had retired on the day before his death and elected to receive the largest permissible lump sum (if any).


5.4.1 On the death of any Member entitled to Deferred Benefits which are not in payment the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to the Member’s ordinary contributions (and in the case of a Member who has been a Flex Member, a sum equal to the ordinary contributions he would have paid had he not participated in the Flex Plan, including any Employee Directed Contributions).

5.4.2 The additional lump sum payable under Rule 5.1 by reference to Salary will also be held on discretionary trusts if:

SCHEDULE 4 SAVER PLAN PLUS – RULE 5: LUMP SUM BENEFITS ON DEATH

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(a) the Member left Active Membership because he was declared redundant by his Employer;


(c) the Member had not commenced alternative employment before the date of his death.

SCHEDULE 4 SAVER PLAN PLUS – RULE 6: SPOUSE’S AND DEPENDANTS’ PENSIONS

(21713155.06) 114



The spouse of an Active Member who dies in Active Membership before Normal Retirement Date shall be entitled to receive a pension equal to 60% of the pension which the Member would have received if he had remained in Pensionable Service until his Normal Retirement Date and calculated using his Final Pensionable Salary as at his death.


The spouse of a Pensioner shall be entitled to receive a pension equal to 60% of the pension which the Pensioner was receiving at his death. However, if the pension of a Pensioner who was formerly an NHSPS A Member has been reduced on account of any lump sum received under Rule 3.5 (Lump sum on retirement), the spouse’s pension shall be calculated ignoring that reduction.




The spouse of a Member who dies whilst entitled to Deferred Benefits which are not in payment, shall be entitled to receive a pension from the Member’s death equal to 60% of the Deferred Benefits which had accrued to the Member on leaving Active Membership revalued in accordance with Rule 4.3.4 (Calculation and Payment of Deferred Benefits).


Where at the Member’s or Pensioner’s death he was not married, or he was not living with his spouse or Civil Partner (and whether or not there was any financial dependency), the Trustees may pay a pension to one or more of the Member’s Dependants. Any such pension shall not exceed the amount of pension payable under Rule 6.1 (Spouse’s pension on death while an Active Member), or Rule 6.2 (Spouse’s pension on death of a Pensioner) or Rule 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits) (as appropriate). To the extent that the Trustees pay a pension to a Dependant under this Rule, the rights of the spouse shall be forfeited.


6.6.1 Subject to Rule 6.6.3, where an Active Member or a Pensioner dies each Eligible Child shall be entitled to receive a pension equal to one-third of the spouse's or Dependant's pension which is for the time being payable where there is one Eligible Child, one-half shared equally where there are two Eligible Children and two-thirds shared equally where there are three or more Eligible Children

6.6.2 Where no spouse's or Dependant's pension is for the time being payable, the provisions of Rule 6.6.1 shall apply as if the Member or Pensioner had left an eligible spouse, but in addition a further pension for the benefit of such Eligible


(21713155.06) 115

Children jointly and if more than one in equal shares will be payable equal to the amount of such spouse's or Dependant's pension that would otherwise have been payable

6.6.3 The total amount of any spouse's Dependant's and children's pensions shall not exceed 100% of the pension which the Member would have received if he had remained in Active Membership (at the same Pensionable Salary he was receiving at the date of his death) and had retired upon reaching his Normal Retirement Date or of the pension which the Member was receiving at the time of his death.

6.6.4 For the purposes of this Rule, the spouse's or Dependant's pension shall be calculated in the same way as a spouse's pension under Rule 6.1 (Spouse’s pension on death while an Active Member) or 6.2 (Spouse’s pension on death of a Pensioner) as the case may be and the provisions of Rules 6.5 (Pension for Dependant) and 6.7.3 (Reduction in Spouse’s Pension) shall be disregarded.

6.6.5 Where a Member entitled to Deferred Benefits dies before his Deferred Benefits become payable, each of the Member’s Eligible Children shall be entitled to receive a pension. Where there is one Eligible Child the pension will be equal to one-third of the spouse’s pension payable in accordance with Rule 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits). Where there are two Eligible Children the pension will be equal to one-half of the spouse’s pension shared equally between them and where there are more than two Eligible Children will be equal to two-thirds of the spouse’s pension shared equally.

6.6.6 Where no spouse’s or Dependant’s pension is payable, the provisions of Rule 6.6.5 shall apply, but in addition a further pension for the benefit of such Eligible Children jointly and if more than one in equal shares shall be payable equal to the amount of the spouse’s or Dependant’s pension that would otherwise have been payable.



6.7.2 A pension payable to a child under Rule 6.5 (Pension for Dependant) or under Rule 6.6 (Children’s pensions) shall continue for so long as the child remains an Eligible Child.


6.7.4 If a Member has married under a law which allows polygamy and, on the day of the death of the Member or Pensioner, has more than one spouse, the Trustees must decide which, if any, survivor is the spouse for the purposes of Rules 6.1 (Spouse’s pension on death while an Active Member), 6.2 (Spouse’s pension on death of a Pensioner) and 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits). In such circumstances they may consider any one or more of the other spouses for a pension under Rule 6.5 (Pension for Dependant) without


(21713155.06) 116

having to investigate whether they satisfy the definition of Dependant in Schedule 1 to and irrespective of whether the Member or Pensioner was living with the spouse selected for the purposes of Rules 6.1 to 6.4 at the date of his death.



6.8 Civil Partners


SCHEDULE 4 SAVER PLAN PLUS – RULE 7: ADDITIONAL VOLUNTARY CONTRIBUTIONS

(21713155.06) 117




7.1.2 The Trustees are entitled (but not obliged) to refuse to accept additional voluntary contributions where the payment of such additional voluntary contribution would, when added to any other contributions payable by or in respect of the Member under Rule 2.1 (Member’s ordinary contributions) be expected to result in the Member exceeding the annual allowance for the purposes of Section 227 of the Finance Act 2004 (Annual allowance charge).








7.2.2 A Member’s Basic AVCs shall be used by the Trustees to provide benefits from the Scheme. Unless the Trustees, with the consent of the Principal Employer, agree otherwise the Member’s Supplementary AVCs will be used to purchase a policy or annuity contract from an Insurance Company selected by the Trustees or, where the Member makes a selection within such time period as the Trustees decide, selected by the Member. Any such policy will be in the name of the Member unless the Trustees decide to purchase it in the Trustees’ name. When purchasing any such policy the Trustees shall not be obliged to take into account the individual circumstances of the Member nor to carry out a review of all available Insurance Companies.

SCHEDULE 4 SAVER PLAN PLUS – RULE 7: ADDITIONAL VOLUNTARY CONTRIBUTIONS

(21713155.06) 118






SCHEDULE 4 SAVER PLAN PLUS – RULE 8: TRANSFERS AND BUY-OUTS

(21713155.06) 119


8.1 Transfers out

8.1.1 A Member with Deferred Benefits may require the Trustees to transfer the cash equivalent of his Deferred Benefits to one or more arrangements selected by the Member. The amount of the cash equivalent shall be calculated using methods and assumptions decided by the Trustees and approved by an Actuary and may be reduced where permitted by legislation. The cash equivalent available for transfer for an NHSPS A Member shall not in any event be reduced to reflect underfunding in the Scheme, and the Principal Employer shall provide any additional payment necessary to ensure that the full cash equivalent is paid in respect of any such Member.




8.1.5 Where the employment of a group of Saver Plan Plus Members is transferred to another employer which is not an Employer participating in the Scheme (or which is permitted to participate only for a temporary period), the Trustees shall make available for transfer to a scheme which is willing and able to accept the liabilities of the Scheme in relation to such Members an amount which is the lesser of:-

(a) a Past Service Reserve in respect of the transferring Saver Plan Plus Members

(b) a fair share of the Fund as calculated by the Scheme Actuary

(c) such amount as certified by the Scheme Actuary as will provide under the receiving scheme benefits overall equivalent in value to the benefits accrued under the Scheme (calculated on the Past Service Reserve basis).

If such a transfer involves NHSPS A Members, the transfer payment in respect of them shall be the lesser of (a) and (c).

If a scheme or arrangement is unable or unwilling to accept such a transfer, benefits shall be provided under the Scheme in accordance with this Section 9 (Preservation of Benefits on leaving Pensionable Service) except that in calculating Deferred Benefits, Final Pensionable Salary shall include allowance for Final Pensionable Salary increases to assumed date of retirement on a basis determined by the Scheme Actuary.


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8.2 Buy-outs











8.4 Transfers in



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SCHEDULE 4 SAVER PLAN PLUS – RULE 9: PENSION INCREASES

(21713155.06) 122



9.1.1 Any pension currently payable from the Scheme shall increase each year by the percentage increase in the Retail Prices Index during the previous 12 months or, if less, by 5%

9.1.2 However, the amount of pension which is calculated as representing a Member’s GMP will be subject to increases as follows:-

(a) between the Member’s actual date of retirement and State pensionable age, the GMP will increase as described in Rule 10.1.1 above.

(b) after attaining State pensionable age,

(i) the revalued GMP determined in accordance with paragraph (a), in so far as it is attributable to earnings up to and including the tax year 1987/8 will not be increased

(ii) one-half of the revalued GMP determined in accordance with paragraph (a), in so far as it is attributable to earnings after the tax year 1987/8 will be increased in accordance with paragraph (a) and the other one-half will not be increased.

9.1.3 Rule 9.1.1 does not apply to any part of a pension derived from the payment by the Member of voluntary contributions except to the extent that the Trustees have granted added Years of Pensionable Service or they otherwise decide.

9.1.4 The increases payable under this Rule shall take effect on 1 April each year and shall be calculated as at each 1 April by reference to the number of completed months since the date when the pension became payable, or, if later, from the date of the last calculation. For the purposes of this Rule, the Trustees shall use the Retail Prices Index as at the preceding January.



SCHEDULE 4 SAVER PLAN PLUS – RULE 10 MAXIMUM BENEFITS AND CONTRACTING-OUT

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10.2 GMP Rules


10.3 Contracted-out employment after joining the Saver Plan Plus

These Rules incorporate an Overriding Appendix of Protected Rights Rules which is contained in Appendix 3 and applies in respect of Pensionable Service after joining the Saver Plan Plus.



10.4.1 in accordance with Clause 4.11(Pension sharing order), or



SCHEDULE 5 TOWER PLAN

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SCHEDULE 5 RULES OF THE TOWER PLAN SECTION


SCHEDULE 5 RULES OF THE TOWER PLAN SECTION............................................ 124







SCHEDULE 5 TOWER PLAN

(21713155.06)

125

6.8 Civil Partners.................................................................................................................................. 140




10. MAXIMUM BENEFITS AND CONTRACTING OUT ....................................... 146 10.1 Requirements for Registered Pension Schemes........................................................................ 146 10.2 GMP Rules..................................................................................................................................... 146 10.3 Contracted-out employment after joining the Tower Plan..................................................... 146

10.4 Safeguarded Rights .................................................................................................. 146

SCHEDULE 5 TOWER PLAN – RULE 1: ELIGIBILITY AND MEMBERSHIP

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1.1 Eligibility

1.1.1 Employees who are eligible to join this Section are Employees who were Members or Waiting Period Members of the BBC Pension Scheme and whose employment transferred from the BBC to Siemens Business Services Limited on 30 September 2004, or whose employment was so transferred after that date in which case eligibility to join the Scheme shall be subject to the consent of the Principal Employer and the Trustees. A Waiting Period Member shall only become eligible to join this Section on completion of three years’ Service (including service with the BBC).

1.1.2 The Principal Employer with the consent of the Trustees may admit to membership of this Section any employee who is not otherwise eligible to join, subject to such terms and conditions as the Principal Employer, with the consent of the Trustees, considers appropriate.

1.2 Opting out

1.2.1 An Active Member may opt-out of this Section at any time on giving three months’ written notice to the Trustees. The Member shall cease to be an Active Member of the Scheme on the day after such notice expires and be treated as having left Active Membership.


1.2.3 Employees who did not join this Section when first eligible to do so or who opt out of this Final Salary Section in accordance with Rule 1.2.1 or 1.2.2 above, but remain in Service, shall only be permitted to join or rejoin with the consent of the Trustees and the Principal Employer and subject to such conditions (including the production of medical evidence and restrictions on benefits) as the Trustees and the Principal Employer may impose.




SCHEDULE 5 TOWER PLAN – RULE 2: CONTRIBUTIONS

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2. CONTRIBUTIONS


2.1.1 Each Active Member shall contribute to the Fund at the rate of 5% of Pensionable Salary from 1 October 2004, 5.5% of Pensionable Salary from 1 April 2005 and 6% of Pensionable Salary from 1 April 2006.

2.1.2 A Tower Plan Member who is a Flex Member shall not be required to make any contributions to the Scheme.





SCHEDULE 5 TOWER PLAN – RULE 3: BENEFITS ON RETIREMENT

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3.1.1 An Active Member who retires from Active Membership at Normal Retirement Date shall be entitled to an annual pension for life calculated at the rate of 1/60th

of his Final Pensionable Salary for each Year of Pensionable Service.



3.2.1 Any Active Member not in receipt of benefit from any Disability Income Benefit Scheme of the Employer or any other benefit determined as a similar benefit by the Trustees (who shall be the sole judge) who (i) has become in the opinion of the Employer and the Trustees incapable of discharging his duties by reason of Total or Partial Incapacity, and (ii) retires from Active Membership in consequence, shall be entitled to benefits in accordance with this Rule.

3.2.2 If the Employer and Trustees believe the Member incapable of discharging his duties due to Total Incapacity, the Member shall be entitled to an immediate pension calculated in the manner prescribed in Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and Rule 3.5 (Lump Sum on retirement) but with his Pensionable Service enhanced by the additional period of Pensionable Service which would have accrued if he had remained in Service until Normal Retirement Date. If the Employer and Trustees believe the Member incapable of discharging his duties due to Partial Incapacity but not Total Incapacity, the Member shall be entitled to an immediate pension calculated in the manner prescribed in Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) with no enhancement to Pensionable Service and no reduction for early payment.

3.2.3 The Trustees may in any case where any Member who has not attained Normal Retirement Date shall have been granted a pension under this Rule withdraw, suspend or reduce such pension if there shall have been an improvement in the Member's health or if for any reason he is able to carry on remunerative employment, whether with the Employer or otherwise; but so that, on the Member retiring on reaching Normal Retirement Date, the pension payable shall not be less than the pension previously payable after deducting the portion of pension (including any pension increase) attributable to the period of ill-health enhancement.

3.2.4 For the purposes of this rule, Total Incapacity means mental or physical ill-health or disability which renders it impossible for a Member to continue his current employment or any other occupation which would provide for a significant level of remuneration. Partial Incapacity means mental or physical ill-health or disability which is less than Total Incapacity but which is sufficiently serious to prevent the Member from following his normal occupation or significantly impair his earning ability.


()() (21713155.06)129



3.3.1 An Active Member who has reached Minimum Pension Age and who leaves Service prior to Normal Retirement Date other than in receipt of an ill-health early retirement pension under Rule 3.2 (Ill-health early retirement of Active Members) may, with the Employer’s and Trustee’s consent, receive an immediate pension and lump sum calculated in accordance with Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and Rule 3.5 (Lump sum on retirement).

3.3.2 The pension payable under Rule 3.3.1 will be reduced to take account of the Member’s age at retirement as follows:

Age at Retirement

Early retirement factor reduction – Old Benefit Member

Early retirement factor reduction – New Benefit Member

50 25% 40%

51 20% 36%

52 15% 32%

53 10% 28%

54 5% 24%

55 4% 20%

56 3% 16%

57 2% 12%

58 1% 8%

59 0% 4%

60 or over 0% 0%

The reduction will be interpolated for the exact years and days that early retirement precedes age 59 for an Old Benefit Member or 60 for a New Benefit Member.


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3.3.6 Where an Active Member is made redundant by his Employer on or after age 50 having completed at least 2 years’ Pensionable Service, the pension payable under Rule 3.3.1 will not be reduced to take account of early payment.



3.4 Late retirement


(a) remain in Active Membership provided that he pays contributions under Rule 2.1 (Member’s ordinary contributions) in respect of that extra period of Pensionable Service in which case, his pension will come into payment when he leaves Service and shall be calculated by reference to his Final Pensionable Salary and Pensionable Service at that date;


(c) leave Active Membership of the Section in which case payment of his pension may, at his option (but only with the consent of the Principal Employer and Trustees) be deferred until any age before he leaves Service. When the pension


(21713155.06)131

comes into payment, the Member shall be entitled to the same pension as at Normal Retirement Date but increased by such amount as the Trustees having taken the advice of an Actuary shall decide having regard to the period of deferment.



3.5.2 The lump sum shall be such amount as the Member may request but not exceeding the capital value in actuarial terms of such pension. In return for such lump sum the pension payable to the Member shall be reduced by such amount as shall be certified as reasonable by an Actuary.

3.5.3 If a Member has become entitled to a pension under Rule 3.2 (Ill health early retirement of Active Members), he may also elect to receive a lump sum under Rule 3.5.1 but the Trustees may reduce or refuse payment of such lump sum if the Trustees have reason to believe that the Member’s condition may improve so that a reduction or suspension in pension may be appropriate in the future.

3.5.4 The lump sum will not exceed the maximum amount payable as a pension commencement lump sum under Schedule 29 of the Finance Act 2004 as modified by Schedule 36 to that Act nor may the lump sum reduce the amount of pension below that payable in accordance with Appendix 2 (GMP Rules).







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SCHEDULE 5 TOWER PLAN – RULE 4: BENEFITS ON LEAVING PENSIONABLE SERVICE

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4.3.4 Deferred Benefits shall be revalued before they come into payment in accordance with Chapter II of Part IV of the Pension Schemes Act 1993 (Revaluation of accrued benefits (excluding guaranteed minimum pensions)), but for male Members GMPs will be equalised so that for a male Member retiring at age 60, his GMP will be revalued to age 60.


( (21713155.06)134



4.4.2 Where a Member takes early payment of his benefits under this Rule 4.4, his Deferred Benefits shall be reduced to reflect early payment as follows:

Age at Retirement Early retirement factor reduction

50 40%

51 36%

52 32%

53 28%

54 24%

55 20%

56 16%

57 12%

58 8%

59 4%

60 or over 0%

The reduction will be interpolated for the exact years and days that retirement precedes age 60.

However, where an Old Benefits Member who was made redundant by his Employer while in Pensionable Service at or over the age 45 but before attaining the age of 50 having completed at least 10 years’ Pensionable Service takes early payment of his benefits, his Deferred Benefits shall be reduced to take account of early payment as follows:

Age at redundancy Reduction factor at early retirement

45 10%

46 8%

47 6%


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48 4%

49 2%

50 or over 0%

The reduction will be interpolated for the exact years and days that redundancy precedes age 50.

4.4.3 A Member who has not reached Minimum Pension Age may, subject to the consent of the Trustees, receive early payment of his Deferred Benefits if in the opinion of the Trustees, having taken advice from a registered medical practitioner, his is (and will continue to be) incapable of following his occupation due to physical or mental infirmity.

4.4.4 Where a Member takes early payment of his benefits under Rule 4.4.3, his Deferred Benefits shall be reduced to reflect early payment to such extent as the Trustees, having taken the advice of an Actuary, consider appropriate.






SCHEDULE 5 TOWER PLAN – RULE 5: LUMP SUM BENEFITS ON DEATH

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5.1.1 Where an Active Member dies in Service the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to four times the Pensionable Salary of such Member before his death together with the value of the Member’s AVC Account.

5.1.2 Where a Member has been a Flex Member, the Trustees shall also hold on discretionary trusts a sum equal to any Employer Directed Contributions, he would have paid had he not participated in the Flex Plan, without interest.







5.4.1 On the death of any Member entitled to Deferred Benefits which are not in payment the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to the Member’s ordinary contributions (and in the case of a Member who has been a Flex Member, a sum equal to the ordinary contributions he would have paid had he not participated in the Flex Plan, including any Employee Directed Contributions).

5.4.2 On the death of a Member entitled to Deferred Benefits which are not in payment where:

(a) the Member left Active Membership as a consequence of being declared redundant by his Employer;

SCHEDULE 5 TOWER PLAN – RULE 5: LUMP SUM BENEFITS ON DEATH

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(c) the Member had not commenced alternative employment before the date of his death

the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to three times the Member’s Pensionable Salary.

SCHEDULE 5 TOWER PLAN – RULE 6: SPOUSE’S AND DEPENDANT’S PENSIONS

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The spouse of an Active Member who dies in Service shall be entitled to receive a pension equal to 60% of the pension which the Member would have received if he had remained in Pensionable Service until his Normal Retirement Date and calculated using his Final Pensionable Salary as at his death.


The spouse of a Pensioner shall be entitled to receive a pension equal to 60% of the pension which the Pensioner was receiving at his death.


Where a Member dies in Service (but not in Active Membership) after Normal Retirement Date he shall be treated as if he had retired and become a Pensioner on the day before his death and a pension shall be payable in accordance with Rule 6.2 (Spouse’s pension on death of a Pensioner) unless he was a Member who had elected to remain in Pensionable Service in accordance with Rule 3.4.1 (Late retirement) in which case a pension shall be payable in accordance with 6.1 (Spouse’s pension on death in Pensionable Service) based on his actual Final Pensionable Salary at death.


The spouse of a Member who dies whilst entitled to Deferred Benefits which are not in payment, shall be entitled to receive a pension from the Member’s death equal to 60% of the Deferred Benefits which had accrued to the Member on leaving Active Membership revalued in accordance with Rule 4.3.4 (Calculation and Payment of Deferred Benefits).


Where at the Member’s or Pensioner’s death he was not married, or he was not living with his spouse or Civil Partner (and whether or not there was any financial dependency), the Trustees may pay a pension to one or more of the Member’s Dependants. Any such pension shall not exceed the amount of pension payable under Rule 6.1 (Spouse’s pension on death while an Active Member), or Rule 6.2 (Spouse’s pension on death of a Pensioner) or Rule 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits) (as appropriate). To the extent that the Trustees pay a pension to a Dependant under this Rule, the rights of the spouse shall be forfeited.


6.6.1 Subject to Rule 6.6.3, where an Active Member or a Pensioner dies each Eligible Child shall be entitled to receive a pension equal to one-third of the spouse's or Dependant's pension which is for the time being payable where there is one Eligible Child, one-half shared equally where there are two Eligible Children and two-thirds shared equally where there are three or more Eligible Children

6.6.2 Where no spouse's or Dependant's pension is for the time being payable, the provisions of Rule 6.6.1 shall apply as if the Member or Pensioner had left an eligible spouse, but in addition a further pension for the benefit of such Eligible


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Children jointly and if more than one in equal shares will be payable equal to the amount of such spouse's or Dependant's pension that would otherwise have been payable.

6.6.3 The total amount of any spouse's Dependant's and children's pensions shall not exceed 100% of the pension which the Member would have received if he had remained in Active Membership (at the same Pensionable Salary he was receiving at the date of his death) and had retired upon reaching his Normal Retirement Date or of the pension which the Member was receiving at the time of his death.

6.6.4 For the purposes of this Rule, the spouse's or Dependant's pension shall be calculated in the same way as a spouse's pension under Rule 6.1 (Spouse’s pension on death while an Active Member) or 6.2 (Spouse’s pension on death of a Pensioner) as the case may be and the provisions of Rules 6.5 (Pension for Dependant) and 6.7.3 (Reduction in Spouse’s Pension) shall be disregarded.

6.6.5 Where a Member entitled to Deferred Benefits dies before his Deferred Benefits become payable, each of the Member’s Eligible Children shall be entitled to receive a pension. Where there is one Eligible Child the pension will be equal to one-third of the spouse’s pension payable in accordance with Rule 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits). Where there are two Eligible Children the pension will be equal to one-half of the spouse’s pension shared equally between them and where there are more than two Eligible Children it will be equal to two-thirds of the spouse’s pension shared equally.

6.6.6 Where no spouse’s or Dependant’s pension is payable, the provisions of Rule 6.6.5 shall apply, but in addition a further pension for the benefit of such Eligible Children jointly and if more than one in equal shares shall be payable equal to the amount of the spouse’s or Dependant’s pension that would otherwise have been payable.



6.7.2 A pension payable to a child under Rule 6.5 (Pension for Dependant) or under Rule 6.6 (Children’s pensions) shall continue for so long as the child remains an Eligible Child or such longer period as the Trustees may decide.


6.7.4 If a Member has married under a law which allows polygamy and, on the day of the death of the Member or Pensioner, has more than one spouse, the Trustees must decide which, if any, survivor is the spouse for the purposes of Rules 6.1 (Spouse’s pension on death while an Active Member), 6.2 (Spouse’s pension on death of a Pensioner) and 6.4 (Spouse’s pension on death of a Member entitled to


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140

Deferred Benefits). In such circumstances they may consider any one or more of the other spouses for a pension under Rule 6.5 (Pension for Dependant) without having to investigate whether they satisfy the definition of Dependant in Schedule 1 to and irrespective of whether the Member or Pensioner was living with the spouse selected for the purposes of Rules 6.1 to 6.4 at the date of his death.



6.7.7 The Trustees shall not be required to pay a spouse’s pension under Rule 6.2 (Spouse’s Pension or Death of a Pensioner) or Rule 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits) where the Member married the spouse after he left Service and less than six months before he died.

6.8 Civil Partners


SCHEDULE 5 TOWER PLAN – RULE 7: ADDITIONAL VOLUNTARY CONTRIBUTIONS

(21713155.06) 141




7.1.2 The Trustees are entitled (but not obliged) to refuse to accept additional voluntary contributions where the payment of such additional voluntary contribution would, when added to any other contributions payable by or in respect of the Member under Rule 2.1 (Member’s ordinary contributions) be expected to result in the Member exceeding the annual allowance for the purposes of Section 227 of the Finance Act 2004 (Annual allowance charge).


7.1.4 Subject to Rule 7.1.5 except where Trustees, with the consent of the Principal Employer, agree otherwise with the Member, additional voluntary contributions will be credited to the Member’s AVC Account to provide benefits in accordance with Rule 7.2 (Benefits from additional voluntary contributions).

7.1.5 A Member who had exercised an option under the BBC Pension Scheme prior to 1 September 2004 to enter into a contract for added years’ additional voluntary contributions shall be entitled to continue with the contract under this Scheme with contributions calculated at the same percentage of Pensionable Salary, and benefits accruing at the same level as would have accrued during the remainder of the contract had the Member remained a member of the BBC Pension Scheme. Any such added years contract shall end on the anniversary of the contract prior to the Member reaching age 60.

7.1.6 If a Member to whom Rule 7.1.5 applies leaves Active Membership after age 50 having completed more than 10 years of Pensionable Service, the Member shall be entitled to buy out some or all of his outstanding added years contract.

7.1.7 A Member who had exercised an option under the BBC Pension Scheme to pay additional voluntary contributions in circumstances where a matching employer contribution was payable under the rules of the BBC Pension Scheme shall be entitled to have the same matching contributions continued to be paid by his Employer to this Scheme, provided the Member’s contributions are paid from remuneration that does not form part of his Pensionable Salary.



SCHEDULE 5 TOWER PLAN – RULE 7: ADDITIONAL VOLUNTARY CONTRIBUTIONS

(21713155.06)142










SCHEDULE 5 TOWER PLAN – RULE 8: TRANSFERS AND BUY-OUTS

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8.1 Transfers out





8.2 Buy-outs








SCHEDULE 5 TOWER PLAN – RULE 8: TRANSFERS AND BUY-OUTS

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8.3.6 Where the Active Membership of a Member terminates at his request but he remains in Service, the amount of any transfer payment shall be the cash equivalent of the part of the Member’s benefits which have accrued to or in respect of him after 5 April 1988.

8.4 Transfers in



SCHEDULE 5 TOWER PLAN – RULE 9: PENSION INCREASES

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9.1.1 Any pension currently payable from the Scheme shall increase each year by the percentage increase in the Retail Prices Index during the previous 12 months or, if less, by 5%.

9.1.2 Rule 9.1.1 does not apply to:

(a) GMPs which shall be increased in accordance with Appendix 2 (GMP Rules); or

(b) any part of a pension derived from the payment by the Member of voluntary contributions (except to the extent that the Trustees have granted added years of Pensionable Services or otherwise decide); or

(c) any part of a pension which has been commuted; or

(d) any part of a pension which has been surrendered to provide a pension for a Dependant.




SCHEDULE 5 TOWER PLAN – RULE 10 MAXIMUM BENEFITS AND CONTRACTING OUT

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10.2 GMP Rules

These Rules incorporate the Overriding Appendix of GMP Rules which is contained in Appendix 2. Appendix 2 only applies to entitlements transferred into the Scheme.

10.3 Contracted-out employment after joining the Tower Plan

These Rules incorporate an Overriding Appendix of Protected Rights Rules which is contained in Appendix 3 and applies in respect of Pensionable Service after joining the Tower Plan.



10.4.1 in accordance with Clause 4.12 (Pension sharing order); or



SCHEDULE 6 HORIZON PLAN

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SCHEDULE 6 RULES OF THE HORIZON PLAN SECTION


SCHEDULE 6 RULES OF THE HORIZON PLAN SECTION....................................... 146







SCHEDULE 6 HORIZON PLAN

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148

6.8 Civil Partners.................................................................................................................................. 160




10. MAXIMUM BENEFITS AND CONTRACTING OUT ....................................... 166 10.1 Requirements for Registered Pension Schemes........................................................................ 166 10.2 GMP Rules..................................................................................................................................... 166 10.3 Contracted-out employment under the Horizon Plan............................................................. 166 10.4 Safeguarded Rights........................................................................................................................ 166

SCHEDULE 6 HORIZON PLAN – RULE 1: ELIGIBILITY AND MEMBERSHIP

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1.1 Eligibility

1.1.1 Employees who were eligible for membership of the Horizon Plan were Employees who were members of the Schroders Retirement Benefits Scheme on 30 June 2001 and who became Members of the Scheme on 1 July 2001.

1.1.2 The Principal Employer may admit to membership of the Horizon Plan any employee who is not otherwise eligible to join, subject to such terms and conditions as the Principal Employer considers appropriate.

1.2 Opting out

1.2.1 An Active Member may opt-out of this Section at any time on giving three months’ written notice to the Trustees. The Member shall cease to be an Active Member of the Scheme on the day after such notice expires and be treated as having left Active Membership.


1.2.3 Employees who did not join this Section when first eligible to do so or who opt out of this Section in accordance with Rule 1.2.1 or 1.2.2 above, but remain in Service, shall not be permitted to join or rejoin the Horizon Plan.

SCHEDULE 6 HORIZON PLAN – RULE 2: CONTRIBUTIONS

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2. CONTRIBUTIONS


2.1.1 Each Active Member in Active Membership shall contribute to the Fund at the rate of 3% of Pensionable Salary.

2.1.2 A Horizon Plan Member who is a Flex Member shall not be required to make any contributions to the Scheme.





SCHEDULE 6 HORIZON PLAN – RULE 3: BENEFITS ON RETIREMENT

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3.1.1 An Active Member who retires from Active Membership at Normal Retirement Date shall be entitled to an annual pension for life equal to his Scale Pension.

3.1.2 Any Member in respect of whom a transfer payment has been received or who has made voluntary contributions or has had Employee Directed Contributions paid on his behalf shall be entitled to the additional benefits secured by them.


3.2.1 Any Active Member who has become in the opinion of the Employer, having taken the advice of a registered medical practitioner, incapable of discharging his duties or any other job which a person of his skill and experience could reasonably be expected to carry out by reason of permanent ill-health or incapacity, and who retires from Service as a result of his incapacity, shall, subject to the consent of the Employer, be entitled to an immediate pension equal to the Scale Pension (if he joined the Schroders Retirement Benefits Scheme after 1 January 1991) or his Accrued Pension (if he joined before that date) and a lump sum calculated in accordance with Rule 3.4 (Lump Sum on retirement).

3.2.2 Prior to Normal Retirement Date, the Trustees may from time to time review the continued eligibility of a Pensioner in receipt of a pension under this Rule. The Trustees may withdraw, suspend and/or reduce such pension if there is an improvement in the Pensioner’s health or if he is able to carry on employment, whether with the Employer or otherwise in such manner as the Trustees may decide is appropriate. However, following any such withdrawal, suspension or reduction, when the Pensioner reaches Normal Retirement Date the pension payable shall not be less than his Deferred Benefits calculated as at the day he left Active Membership and revalued in accordance with Rule 4.3 (Calculation and payment of Deferred Benefits).



3.3.1 An Active Member who has reached Minimum Pension Age and who leaves Service prior to Normal Retirement Date other than in receipt of an ill-health early retirement pension under Rule 3.2 (Ill-health early retirement of Active Members) may, with the Employer’s consent, receive an immediate pension equal to the Scale Pension (if he joined the Schroders Retirement Benefits Scheme after 1 January 1991) or his Accrued Pension (if he joined before that date) and a lump sum calculated in accordance with Rule 3.5 (Lump sum on retirement).

3.3.2 The pension payable under Rule 3.3.1 will be reduced to take account of the Member’s age at retirement in such manner as the Trustees after consultation with


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the Principal Employer on the policy of such reductions (and not consultation in each individual case) decide and as shall be certified as reasonable by the Actuary.






3.4 Late retirement


(a) remain in Active Membership (although he will require the consent of the Principal Employer and Trustees to do this beyond age 65) provided that he pays contributions under Rule 2.1 (Member’s ordinary contributions) in respect of that extra period of Pensionable Service in which case his pension will come into payment when he leaves Service and shall be calculated by reference to his Final Pensionable Salary and Pensionable Service at that date;


(c) leave Active Membership of the Section in which case payment of his pension may, at his option (but only with the consent of the Principal Employer and Trustees) be deferred until any age before he leaves Service. When the pension comes into payment, the Member shall be entitled to the same pension as at


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Normal Retirement Date but increased by 0.5% for each complete month of deferment after Normal Retirement Date.



3.5.2 The lump sum shall be such amount as the Member may request but not exceeding the capital value in actuarial terms of such pension. In return for such lump sum the pension payable to the Member shall be reduced by such amount as the Trustees decide and which shall be certified as reasonable by the Actuary.










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SCHEDULE 6 HORIZON PLAN – RULE 4: BENEFITS ON LEAVING ACTIVE MEMBERSHIP

(21713155.06) 155





A Member on leaving Pensionable Service shall, subject to the following provisions of this Rule 4, be entitled to Deferred Benefits payable at Normal Retirement Date.


4.3.1 Deferred Benefits payable to a Member shall be a pension calculated in accordance with Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and lump sum calculated in accordance with Rule 3.5 (Lump sum on retirement) but based on the Member’s Accrued Pension if he joined the Schroders Retirement Benefits Scheme before 1 January 1991, or on his Scale Pension and using his Final Pensionable Salary at the date of leaving Active Membership if he joined the Schroders Retirement Benefits Scheme after that date.









SCHEDULE 6 HORIZON PLAN – RULE 4: BENEFITS ON LEAVING ACTIVE MEMBERSHIP

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4.4.2 A Member who has not reached Minimum Pension Age may, subject to the consent of the Trustees, receive early payment of his Deferred Benefits if in the opinion of the Trustees, having taken advice from a registered medical practitioner, his is (and will continue to be) incapable of following his occupation due to physical or mental infirmity.

4.4.3 Where a Member takes early payment of his benefits under this Rule, his Deferred Benefits shall be reduced to reflect early payment to such extent as the Trustees, having taken the advice of an Actuary, consider appropriate. Any such reduction need not be the same as applies to Active Members under Rule 3.3 (Early retirement of Active Members in other cases).






SCHEDULE 6 HORIZON PLAN – RULE 5: LUMP SUM BENEFITS ON DEATH

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Where an Active Member dies in Service the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to four times the Pensionable Salary of such Member before his death together with the value of the Member’s AVC Account and a sum equal to the ordinary contributions of the Member to the Fund (without interest) and any Employee Directed Contributions.



5.2.2 A lump sum benefit is not payable under this Rule where the Pensioner had attained age 75 at the time of his death. However, where the Pensioner had attained age 75 the Trustees may at their discretion use the value of the lump sum which would otherwise have been payable to increase the benefits payable to the Dependants of the Pensioner in such manner as the Trustees may decided.




On the death of any Member entitled to Deferred Benefits which are not in payment the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to the amount in the Member’s AVC Account, a sum equal to ordinary contributions of the Member to the Fund (without interest) and, in the case of a Member who has been a Flex Member, a sum equal to any Employee Directed Contributions.

SCHEDULE 6 HORIZON PLAN – RULE 6: SPOUSE’S AND DEPENDANT’S PENSIONS

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6.1 Spouse’s pension while an Active Member

The spouse of an Active Member who dies in Service shall be entitled to receive a pension equal to one-half of the pension which the Member would have received if he had remained in Active Membership until his Normal Retirement Date and calculated using his Final Pensionable Salary as at his death.


The spouse of a Pensioner shall be entitled to receive a pension equal to one-half of the pension which the Pensioner was receiving at his death. If the Pensioner’s pension has been reduced on account of any lump sum received under Rule 3.5 (Lump sum on retirement) or any allocation under Rule 3.6 (Surrender of pension for additional spouse’s, Dependant’s or children’s pensions), the spouse’s pension shall be calculated ignoring that reduction.




The spouse of a Member who dies whilst entitled to Deferred Benefits which are not in payment shall be entitled to receive a pension from the Member’s death equal to one-half of the Deferred Benefits which had accrued to the Member on leaving Active Membership revalued in accordance with Section 12B(4)(d) of the Pension Schemes Act 1993.


6.5.1 Subject to Rule 6.5.2, where at the Member’s or Pensioner’s death he was not married, or he was not living with his spouse or Civil Partner (and whether or not there was any financial dependency), the Trustees may pay a pension to one or more of the Member’s Dependants. Any such pension shall not exceed the amount of pension payable under Rule 6.1 (Spouse’s pension on death while an Active Member), or Rule 6.2 (Spouse’s pension on death of a Pensioner) or Rule 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits) (as appropriate). To the extent that the Trustees pay a pension to a Dependant under this Rule, the rights of the spouse shall be forfeited.

6.5.2 The pension payable to a spouse or Civil Partner must at least be equal to the minimum (if any) required under Part III of the Pension Schemes Act 1993 including, where applicable, those which would be payable to a spouse under the reference scheme in accordance with Section 12B(4) of that Act.


6.6.1 Where an Active Member dies in Pensionable Service leaving an Eligible Child or Children, then a pension for the benefit of each Eligible Child will be paid from


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the date of the Member’s death equal to 50% of the pension which the Member would have received if he had remained in Active Membership (at the same Pensionable Salary he was receiving at his death) and had retired upon reaching his Normal Retirement Date.

6.6.2 Where a Pensioner dies leaving an Eligible Child or Children then a pension for the benefit of each Eligible Child will be paid from the date of the Pensioner’s death equal to 50% of the pension the Pensioner was receiving at his death.

6.6.3 Where a Member entitled to Deferred Benefits dies before his Deferred Benefits become payable each of the Member’s Eligible Children shall be entitled to receive a pension from the date of the Member’s death equal to 50% of the Deferred Benefits which had accrued to the Member on leaving Active Membership revalued in accordance with Rule 4.3.4.

6.6.4 Where no spouse’s or Dependant’s pension is payable, the provisions of this Rule shall apply but the percentage of the pension payable to the Eligible Child or Children shall be doubled.

6.6.5 Not more than two of such pensions shall be paid at any one time; if there are more than two Eligible Children the pensions will be paid in order of seniority.








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6.8 Civil Partners


SCHEDULE 6 HORIZON PLAN – RULE 7: ADDITIONAL VOLUNTARY CONTRIBUTIONS

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7.1.2 The Trustees are entitled (but not obliged) to refuse to accept additional voluntary contributions where the payment of such additional voluntary contribution would be expected to result in the Member exceeding the annual allowance for the purposes of Section 227 of the Finance Act 2004 (Annual allowance charge).










7.3.1 Subject to the following provisions of this Rule, a Member who is entitled to benefits under Rule 7.2 (Benefits from additional voluntary contributions) may,


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160


6.8 Civil Partners


SCHEDULE 6 HORIZON PLAN – RULE 8: TRANSFERS AND BUY-OUTS

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8.1 Transfers out





8.2 Buy-outs








SCHEDULE 6 HORIZON PLAN – RULE 8: TRANSFERS AND BUY-OUTS

164




8.4 Transfers in


8.4.2 On receipt of a transfer or assignment under this Rule the amount received shall be credited to a Personal Account in the name of the Member unless the Trustees decide to credit the Member with such additional defined benefits as the Trustees, having taken the advice of an Actuary, shall consider appropriate.

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SCHEDULE 6 HORIZON PLAN – RULE 9: PENSION INCREASES

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9.1.1 Any pension currently payable from the Scheme shall increase each year by the percentage increase in the Retail Prices Index during the previous 12 months or, if less, by 5%.



(b) any part of a pension derived from the payment by the Member of voluntary contributions (except to the extent that the Trustees have granted added years of Pensionable Service or otherwise decide); or


(d) any part of a pension which has been surrendered to provide a pension for a Dependent.



In addition to the provisions of Rule 9.1 (Standard increases), the Principal Employer and the Trustees shall regular annual reviews of pensions in payment, and any pension in payment may from time to time be further increased by such amount and at such times as the Trustees, with the consent of the Principal Employer, and having regard to the availability of funds, may decide.

SCHEDULE 6 HORIZON PLAN – RULE 10: MAXIMUM BENEFITS AND CONTRACTING OUT

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10.2 GMP Rules

These Rules incorporate the Overriding Appendix of GMP Rules which is contained in Appendix 2. Appendix 2 only applies to entitlements transferred into the Scheme.

10.3 Contracted-out employment under the Horizon Plan

The Rules of the Horizon Plan are designed to allow the Horizon Plan to be contracted-out by virtue of Section 9(2B) of the Pension Schemes Act 1993 (Requirements for certification of schemes). In the event of any discrepancy between the Rules of this Schedule 6 and the requirement sunder Section 9(2B) the benefits provided by the Scheme for Horizon Plan Members must be at least equal to those required under Section 9(2B).



10.4.1 in accordance with Clause 4.12 (Pension share order), or

10.4.2 in respect of a transfer under Rule 8.4 (Transfer in)


SCHEDULE 7 ELECTRIC PLAN

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SCHEDULE 7 RULES OF THE ELECTRIC PLAN


SCHEDULE 7 RULES OF THE ELECTRIC PLAN ......................................................... 165




4. BENEFITS ON LEAVING ACTIVE MEMBERSHIP......................................... 176 4.1 Application of this Rule ............................................................................................................... 176 4.2 Entitlement to Deferred Benefits ............................................................................................... 176 4.3 Calculation and payment of Deferred Benefits ........................................................................ 176 4.4 Early payment of Deferred Benefits .......................................................................................... 177 4.5 Late payment of Deferred Benefits ............................................................................................ 177 4.6 Refunds of contributions ............................................................................................................. 177 4.7 Preservation Laws ......................................................................................................................... 178

5. LUMP SUM BENEFITS ON DEATH .................................................................. 179 5.1 Lump sum on death in Service.................................................................................................... 179 5.2 Lump sum on death after retirement ......................................................................................... 179 5.3 Lump sum on death of a Member entitled to Deferred Benefits .......................................... 180

6. SPOUSE’S AND DEPENDANTS’ PENSIONS .................................................... 182 6.1 Spouse’s pension on death while an Active Member .............................................................. 182 6.2 Spouse’s pension on death of a Pensioner ................................................................................ 182 6.3 Spouse’s pension on death in Pensionable Service after Normal Retirement Date............ 182 6.4 Spouse’s pension on death of a Member entitled to Deferred Benefits ............................... 183 6.5 Pension for Dependant ................................................................................................................ 183 6.6 Children’s pensions ....................................................................................................................... 183 6.7 General provisions applicable to spouse’s, Dependant’s and children’s pensions.............. 184


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6.8 Civil Partners.................................................................................................................................. 185




10. MAXIMUM BENEFITS, CONTRACTING OUT AND PROTECTED PERSONS REGULATIONS................................................................................... 191

10.1 Requirements for Registered Pension Schemes........................................................................ 191 10.2 GMP Rules..................................................................................................................................... 191 10.3 Contracted-out employment after 5 April 1997 ....................................................................... 191 10.4 Safeguarded Rights........................................................................................................................ 191 10.5 Protected Persons Regulations.................................................................................................... 191

SCHEDULE 7 ELECTRIC PLAN – RULE 1: ELIGIBILITY AND MEMBERSHIP

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1.1 Eligibility

1.1.1 All Eastern Members, East Midlands Members, Grid Members and Seeboard Members were eligible to join the Electric Plan.

1.1.2 The Principal Employer may admit to membership of the Electric Plan as an Eastern Member, East Midlands Member, Grid Member or Seeboard Member any employee who is not otherwise eligible to join, subject to such terms and conditions as the Principal Employer consider appropriate.

1.2 Opting out

1.2.1 An Active Member may opt-out of the Electric Plan at any time on giving such written notice to the Trustees as they require. The Member shall cease to be an Active Member of the Scheme on the day after such notice expires and be treated as having left Active Membership.

1.2.2 With the consent of the Principal Employer and the Trustees an Active Member of the Electric Plan may opt to be treated as a Booster, Saver or Foundation Plan Member at any time on giving such written notice to the Trustees as they may require. In such case, the benefits already accrued in accordance with this Section shall be converted to Booster Plan, Saver Plan or Foundation Plan benefits on such terms as the Trustees acting on the advice of the Actuary may decide.

1.2.3 Employees who did not join the Electric Plan when first eligible to do so or who opt out of the Electric Plan in accordance with Rule 1.2.1 or 1.2.2 above, but remain in Service, shall only be permitted to join or rejoin with the consent of the Trustees and the Principal Employer and subject to such conditions (including the production of medical evidence and restrictions on benefits) as the Trustees and the Principal Employer may impose.

1.2.4 Any election under Rule 1.2.1 or 1.2.2 above by an Electric Plan Member who is a protected person as defined in Regulation 2 of the Electricity (Protected Persons) (England and Wales) Pension Regulations 1990 must comply with Regulation 17 of those Regulations




SCHEDULE 7 ELECTRIC PLAN – RULE 2: CONTRIBUTIONS

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2. CONTRIBUTIONS


2.1.1 Other than as provided below, each Electric Plan Member shall contribute to the Fund at the rate of 6% of Pensionable Salary.

2.1.2 A Member under the age of 25 may at his own choice pay contributions of 3% of Pensionable Salary for up to 5 years or attaining the age of 25 whichever is later, but may later pay additional contributions to avoid the reduction in lump sum payable under Rules 3.5 (Lump sum on retirement) or 5.1 (Lump sum on death in Pensionable Service) by paying additional contributions for such period and at such rate (but in multiples of ½% of Pensionable Salary) as the Member shall elect. The abatement to which the Member shall be entitled in return for such additional contributions shall be calculated in accordance with the formula

A = R x P where A = the abatement expressed as a percentage of the Member’s Pensionable Salary R = the annual rate of additional contribution expressed as a percentage of the Member’s Pensionable Salary and P = the relevant period of payment of higher contributions expressed in years

2.1.3 Where a Member’s Pensionable Salary is reduced, such Member may within 3 months of the date of such reduction, opt to have his Pensionable Salary treated as if it had not been reduced for the purposes of calculating benefits and contributions, unless the reason for the reduction was part of a plan to bring the Member’s salary into line with a general reduction in salary, or as a result of misconduct or a change in full to part time employment.

2.1.4 An Eastern Member who elected to participate in arrangements comprising a basic salary and an additional monthly productivity bonus implemented from 1 April 1999 in relation to the data collection and meter operations departments had an option under the ESPS so that if his Pensionable Salary in any subsequent 12 month period ending on any 31 March was lower than his Pensionable Salary before commencing to participate in these arrangements, he could choose to have his Pensionable Salary before commencement of participation used as his Pensionable Salary for benefit and contribution purposes. Where an Eastern Member chose such option, its terms will be applied under the Scheme.

2.1.5 An East Midlands Member who was paying contributions at the rate of 5% of Pensionable Salary to the ESPS prior to joining the Scheme, shall also contribute to the Fund at the rate of 5% of Pensionable Salary, but no pension shall be payable to the Spouse, Dependants or Children of such a Member under Rule 6 (Spouse’s and Dependants’ Pensions).

2.1.6 An Electric Plan Member who is a Flex Member shall not be required to make any contributions to the Scheme.

2.1.7 An Electric Plan Member shall not be required to contribute after completing 40 years of Pensionable Service nor shall a Pre-1988 Member be required to contribute after reaching Normal Retirement Date.


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For the purposes of the Electric Plan, Employer contributions are dealt with in Clause 8 (Employers’ contributions) of the Deed.

SCHEDULE 7 ELECTRIC PLAN – RULE 3: BENEFITS ON RETIREMENT

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3.1.1 An Active Member who retires from Active Membership at Normal Retirement Date shall be entitled to an annual pension for life calculated at the rate of 1/80th of his Final Pensionable Salary at the date of retirement for each Year of Pensionable Service.



3.2.1 Any Active Member who has become in the opinion of a registered medical practitioner appointed by the Trustees incapable, other than temporarily of discharging any duties which his Employer may reasonably assign to him (having regard to the duties carried out by him immediately before such incapacity) by reason of bodily or mental incapacity or infirmity and who retires from service as a result of his incapacity, shall be entitled to an immediate pension and lump sum.

3.2.2 The pension and lump sum will be calculated as set out in Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and Rule 3.5 (Lump sum on retirement) but his Pensionable Service shall be enhanced by the additional period of Pensionable Service which would have accrued if he had remained in Pensionable Service until Normal Retirement Date (not exceeding 40 years) providing he satisfied the conditions set out in Rule 3.2.3 below, although for this purpose “Pensionable Service until Normal Retirement Date” for a Pre-1988 Member means Pensionable Service to age 65 (not exceeding 40 years). Otherwise, such a Member’s pension will be reduced to allow for his age at retirement by such amount as the Trustees, acting on the advice of an Actuary, shall decide, not being more than shall be certified as reasonable by the Actuary, with no enhancement of Pensionable Service.

3.2.3 The conditions referred to in Rule 3.2.2 are that

(a) the Member was a member of the ESPS on 1 April 1983; or

(b) the Member was in service for at least 5 years (unless a part time Member in which case he shall have been in Service for the period specified in the ESPS rules applicable immediately before joining this Scheme); or

(c) the Member’s incapacity was, in the opinion of the medical adviser appointed by the Trustees, due to an accident or illness associated with his employment or

(d) the Trustees at their discretion decide such enhanced pension should be payable.

3.2.4 Prior to Normal Retirement Date, the Trustees may from time to time review the continued eligibility of a Pensioner in receipt of a pension under this Rule. The


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Trustees may withdraw, suspend and/or reduce such pension if there is an improvement in the Pensioner’s health or if he is able to carry on employment, whether with the Employer or otherwise in such manner as the Trustees may decide is appropriate. The Trustees may also suspend payment of the pension if the Pensioner refuses to undergo a medical at the request of the Trustees. However, following any such withdrawal, suspension or reduction, when the Pensioner reaches Normal Retirement Date the pension payable shall not be less than his Deferred Benefits calculated as at the day he left Pensionable Service and revalued in accordance with Rule 4.3 (Calculation and payment of Deferred Benefits).



3.3.1 An Active Member who has reached age 55 and who leaves Service prior to Normal Retirement Date (or age 63 if a Pre-1988 Member) other than in receipt of an ill-health early retirement pension under Rule 3.2 (Ill-health early retirement of Active Members) may, with the Employer’s consent, receive an immediate pension and lump sum calculated in accordance with Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and Rule 3.5 (Lump sum on retirement) provided he has completed at least ten years’ Pensionable Service or has been in continuous Service for at least ten years.

3.3.2 An Active Member who has been compulsorily retired by his employer after attaining age 50, if the retirement is consequent upon reorganisation or redundancy, or for any other cause if the Employer so decides after the Member has reached Minimum Pension Age, is entitled to a pension and lump sum calculated in accordance with Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and Rule 3.5 (Lump sum on retirement).

3.3.3 Where a Member has reached Minimum Pension Age, he may, with the consent of the Principal Employer request payment of all or half of his accrued rights under the Scheme even where he remains in Service. The pension payable will be an amount determined by the Trustees in accordance with Rule 3.3.1 and the provisions of Rule 3.5 (Lump sum on retirement) apply.

3.3.4 If the Member requests payment of any of his benefits under Rule 3.3.3 he shall cease to be in Pensionable Service as a member of this Section from the date on which the pension becomes payable but if the Principal Employer consents, he may remain in Pensionable Service until the date of his actual retirement from Service if earlier under the Investor Plan.



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3.3.6 The value of any pension under this Rule 3.3 shall not be less than the value of the Member’s Deferred Benefits calculated in accordance with Rule 4.4 (Early payment of Deferred Benefits). A Member entitled to benefits under this Rule may opt to receive a deferred pension under Rule 4 (Benefits on leaving Pensionable Service).

3.3.7 Any additional cost to the Scheme as determined by the Principal Employer acting on the advice of an Actuary arising from the operation of Rules 3.3.1 or 3.3.2 shall be met by his Employer.

3.4 Late retirement

Where an Active Member reaches Normal Retirement Date and stays in Service he may elect to remain in Active Membership until the date of his actual retirement from Service provided that he pays contributions under Rule 2.1 (Members’ ordinary contributions) in respect of that extra period of Pensionable Service. At his subsequent retirement his pension shall be calculated by reference to his Final Pensionable Salary and Pensionable Service at the date of his actual retirement but with a maximum of 40 years of Pensionable Service up to Normal Retirement Date and 45 years of Pensionable Service in total to count.


3.5.1 Subject to the following paragraphs of this Rule, a Member who becomes entitled to a pension under this Rule 3 shall receive a lump sum payable when his pension commences.

3.5.2 The lump sum shall be 3/80ths of the Member’s Final Pensionable Salary for each year of his Pensionable Service (not exceeding 120/80ths in respect of Pensionable Service up to Normal Retirement Date or 135/80ths where Pensionable Service continues beyond Normal Retirement Date in accordance with Rule 3.4 (Late retirement))

3.5.3 At the election of a Member made at least one month prior to retirement, the lump sum may be converted in whole or in part to a pension on the basis of conversion rates approved by the Trustees from time to time on the advice of an Actuary. However, the pension at Normal Retirement Date (including the actuarial value of any unconverted lump sum) shall not exceed 2/3rds of his Final Pensionable Salary.

3.5.4 Subject to Rule 3.5.6 at the direction of a Member made at least one month prior to retirement, he may elect to receive a lump sum (in addition to the lump sum payable under Rule 3.5.2) in return for a reduction in his pension of such amount as shall be certified as reasonable by an Actuary.

3.5.5 The lump sum payable to a Member who has paid reduced contributions under Rule 2.1.2 shall be reduced by 3% of his Final Pensionable Salary for each Year of Pensionable Service in respect of which he has paid reduced contributions.



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3.6.3 The amount of pension allocated by the Member shall not exceed an amount which would have the effect of making the pension allocated and the pension value of the lump sum greater than the remaining pension payable to the Member (before any reduction by way of commutation under Rule 3.5 (Lump sum on retirement)).





SCHEDULE 7 ELECTRIC PLAN – RULE 4: BENEFITS ON LEAVING ACTIVE MEMBERSHIP

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A Member who on leaving Active Membership either:



shall, subject to the following provisions of this Rule 4, be entitled to Deferred Benefits payable at Normal Retirement Date.











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4.4.1 If an Electric Plan Member

(a) has become incapacitated to such extent that he would qualify for a pension if retiring from Active Membership under Rule 3.2 (Ill health early retirement of Active Members) subject to having attained the service qualifications under Rule 3.2.3, or

(b) he has reached the age of 50 having left Active Membership at his Employer’s request consequent on reorganisation or redundancy (and has not waived his right on leaving Service to have benefits paid from age 50)

he shall be entitled to immediate payment of his Deferred Benefits with no actuarial reduction for early payment.

4.4.2 In any other case where an Electric Plan Member entitled to Deferred Benefits has become incapable of following his normal employment because of physical or mental infirmity or his earning capacity is destroyed or seriously impaired by physical or mental infirmity or he has reached Minimum Pension Age, the Trustees may pay his Deferred Benefits immediately, but reduced to reflect early payment to such extent as they consider appropriate after consultation with the Principal Employer, although in the case of a male Pre-1988 Member retiring before age 63, his benefits attributable to contributing service under the ESPS Rules before 17 May 1990 shall be adjusted to take account of their early payment by a factor decided by the Actuary to the Trustees so that they are equivalent in value to the benefits which would have been payable to him if his Normal Retirement Date had been age 63 (with, in the case of a Grid Member, allowance for projected increases in Pensionable Salary to age 63).



4.5.2 Where a Member defers receipt of his benefits under this Rule his pension and lump sum will be increased by such amount as the Trustees decide, having taken the advice of an Actuary, with regard to the period of deferment.

4.6 Refunds of contributions

4.6.1 Where an Electric Plan Member leaves Active Membership having completed less than one year of Qualifying Service, he shall be entitled to receive a refund of his contributions together with compound interest at the rate of 3% per annum with half yearly rests, or, at the Member’s request, a transfer payment of an equivalent amount in accordance with Rule 8.1 (Transfers out).


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4.6.2 Where an Electric Plan Member leaves Active Membership having completed more than one year’s Qualifying Service, he shall be entitled to Deferred Benefits or a transfer in accordance with Rule 9.1 (Transfers out) but if the Member has completed less than two years’ of Qualifying Service, he may instead request a refund of contributions calculated in accordance with paragraph 4.6.1

4.6.3 Where the Member has completed at least three months’ Qualifying Service the Trustees shall offer the Member the option, as an alternative to a refund of contributions to take a transfer of his benefits to another scheme or arrangement selected by the Member and the following provisions shall apply:

(a) if the Member wishes to accept the option of a transfer he must do so by informing the Trustees in writing within three months of the Trustees sending him notice of that option (or any longer period allowed by the Trustees);

(b) the Member may request a transfer under this Rule to any scheme or arrangement which satisfies the requirements of Section 101AE of the Pension Schemes Act 1993 (Permitted ways of using cash transfer sum);

(c) the transfer shall be calculated in accordance with Section 101AF of the Pension Schemes Act 1993 (Calculation of cash transfer sum and contribution refund) and, where permitted by legislation, may be reduced by such amount as the Trustees decide in respect of administrative costs;

(d) on payment of a transfer under this Rule, the Trustees and the Fund shall be discharged from all liability to which the transfer relates; and

(e) if the Member does not accept the option of a transfer within three months of the Trustees sending him notice of that option (or any longer period allowed by the Trustees)or within that period he provides notice in writing to the Trustees that he does not wish to take that option, the Trustees shall pay a refund of contributions.

4.6.4 In this Rule references to contributions paid by a Member shall include all contributions paid by him to the Fund and (so far as allowed) to any other scheme or arrangement in which he formerly participated and which have been transferred to the Fund.



SCHEDULE 7 ELECTRIC PLAN – RULE 5: LUMP SUM BENEFITS ON DEATH

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5.1.1 Where an Active Member dies in Service a sum equal to four times the Pensionable Salary of an unmarried Member or three times the Pensionable Salary of a married Member will be held on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefit) with interest from the date of death to date of payment, except in the case of the death of an East Midlands Member where the lump sum will be three times the Pensionable Salary of an unmarried Member or twice the Pensionable Salary of a married Member. However, if the Member’s contributions to this and any Scheme from which a transfer payment has been received together with interest applied at the rate of 3% p.a. with half-yearly rests exceeds four years’ Pensionable Salary (or three years’ Pensionable Salary in the case of an East Midlands Member), the lump sum shall be increased by the amount of the excess. For the purposes of this Rule, a Member who has a Civil Partner shall be deemed a married Member.

5.1.2 In addition a sum equal to one year’s Pensionable Salary shall be payable to the spouse of a married Electric Plan Member which, by notice to the Trustees within 3 months of the Member’s death, the spouse may convert into an actuarially equivalent pension for life.

5.1.3 Where an Active Member dies after the age of 55 having completed at least five years’ Pensionable Service, the sum payable under Rule 5.1.1 above shall be increased by an amount produced by multiplying the pension that would have been payable under Rule 3.3 (Early retirement in other cases) if the Member had retired on the date of his death by the appropriate figure in the table below, but in the case of a Grid Member, only any excess of the amount calculated under this Rule 5.1.3 over one year’s Pensionable Salary will be added to the amount payable under Rule 5.1.1.

Age at death Number of times notional pension 55 3 56 3 57 3.5 58 4 59 4.5 60 or more 5

5.1.4 The total lump sum payable under this Rule in respect of a Member who has

elected to pay reduced contributions under Rule 2.1.2 shall be reduced in the manner set out in Rule 3.5.3. Furthermore, the total lump sum payable under this Rule shall not exceed 4.5 times the Member’s Pensionable Salary. For this purpose any sum converted to pension under Rule 5.1.2 above shall be counted as a lump sum.


5.2.1 On the death of a Pensioner within five years after his retirement the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) an amount equal to the balance of the pension which he


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would have received during the remainder of the five years but without taking into account any increase in pension under Rule 9 (Pension increases) which would come into force after his death together with interest from date of death to date of payment. However, if the Pensioner retired on grounds of ill health under Rule 3.2 (Ill health early retirement of Active Members), the lump sum payable shall be the lump sum calculated under Rule 5.1 (Lump sum on death in Pensionable Service) as if he had died in Pensionable Service on the date of his death less the lump sum and pension payments (excluding pension increases) actually paid to him.



5.3.1 On the death of an Eastern Member entitled to Deferred Benefits before they come into payment, the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefit) a sum equal to the total of

(a) the Member’s ordinary contributions (including contributions to any scheme in respect of which a transfer payment was received) together with compound interest at the rate of 3% per annum with half-yearly rests; and

(b) five times the deferred pension that had accrued to him including revaluation in accordance with Chapter II of Part IV of the Pension Schemes Act 1993 (Revaluation of accrued benefits (excluding guaranteed minimum pensions) to date of death.

5.3.2 On the death of an East Midlands Member entitled to Deferred Benefits before they come into payment, the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefit) a sum equal to the greater of (a) and (b) above.

5.3.3 On the death of a Grid Member entitled to Deferred Benefits before they come into payment the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefit) a sum equal to the total of

(a) the amount payable under Rule 3.5 (Lump sum on retirement); and

(b) five times the deferred pension that had accrued to him including revaluation in accordance with Chapter II of Part IV of the Pension Schemes Act 1993 (Revaluation of accrued benefits (excluding guaranteed minimum pensions) to date of death

5.3.4 On the death of a Seeboard Member entitled to Deferred Benefits before they come into payment the Trustees shall hold on Discretionary Trusts in accordance with Clause 4.6 (Payment of lump sum death benefit) a sum equal to the Member’s ordinary contributions (including contributions to any scheme in


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respect of which a transfer payment was received) together with compound interest at the rate of 3% per annum with half yearly rests.

SCHEDULE 7 ELECTRIC PLAN – RULE 6: SPOUSE’S AND DEPENDANTS’ PENSIONS

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6.1 Spouse’s pension on death in while an Active Member

The spouse of an Electric Plan Member who dies whilst in Active Membership shall be entitled to receive a pension equal to the percentage specified in the table below of the pension which the Member would have received if he had remained in Active Membership (at the same Pensionable Salary he was receiving at his death) until he had retired upon reaching his Normal Retirement Date, with a maximum of 40 years’ Pensionable Service to count. However, for the purpose of this Rule, “Normal Retirement Date” for a Pre-1988 Member will be 65 (with a maximum of 40 years’ Pensionable Service to count).

East Midlands Member 57.14%

Eastern Member 57.5%

Grid Member who joined the Scheme on 1 September 2001 64%

Grid Member who joined the Scheme on 1 August 2002 66.66%

Seeboard Member 55%

If the Member’s pension has been reduced by allocation the pension shall be calculated as if the reduction had not taken place.


The spouse of an Electric Plan Pensioner shall be entitled to receive a pension equal to the percentage of the pension which the Pensioner was receiving at his death (excluding such pension as may have been converted from a lump sum under Rule 3.5.3, as specified in the following table:





Seeboard Member 55%

6.3 Spouse’s pension on death in Pensionable Service after Normal Retirement Date

Where a Member dies in Service (but not in active Membership) after reaching his Normal Retirement Date he shall be treated as if he had retired on the date of his death and a pension shall be payable in accordance with Rule 6.2 (Spouse’s pension on death of a Pensioner).


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183


The spouse of a Member who dies whilst entitled to Deferred Benefits which are not in payment, shall be entitled to receive a pension from the Member’s death equal to the percentage specified in the table below of the Deferred Benefits which had accrued to the Member on leaving Active Membership revalued in accordance with Section 12B(4)(d) of the Pension Schemes Act 1993.





Seeboard Member 55%


6.5.1 Subject to Rule 6.5.2, where at the Member’s or Pensioner’s death he was not married, or he was not living with his spouse or Civil Partner (and whether or not there was any financial dependency), the Trustees may pay a pension to one or more of the Member’s Dependants. Any such pension shall not exceed the amount of pension payable under Rule 6.1 (Spouse’s pension on death in Pensionable Service), or Rule 6.2 (Spouse’s pension on death while an Active Member) or Rule 6.4 (Spouse’s Pension on death of a Member entitled to Deferred Benefits) (as appropriate). To the extent that the Trustees pay a pension to a Dependant under this Rule, the rights of the spouse shall be forfeited.



6.6.1 Where an Electric Plan Member (other than an East Midlands or Eastern Member) dies while an Active Member or a Pensioner (other than a former East Midlands or Eastern Member) dies leaving an Eligible Child or Children, then a pension for the benefit of each Eligible Child will be paid equal to:

(a) where a spouse’s pension is payable, 25% of the spouse’s pension

(b) where no spouse’s or Dependant’s pension is payable, the provisions of paragraph (a) shall apply but the percentage shall be doubled.


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184

An amount equal to not more than four of such pensions shall be payable at any one time; if there are more than four Eligible Children the pensions will be shared amongst all Eligible Children in such proportions as the Trustees shall decide.

6.6.2 Where an East Midlands Member dies while an Active Member or a Pensioner dies leaving an Eligible Child or Children, then a pension for the benefit of each Eligible Child will be paid equal to:

(a) where a spouse’s pension is payable, 50% of the spouse’s pension;


An amount equal to not more than two of such pensions shall be payable at any one time; if there are more than two Eligible Children the pensions will be shared amongst all Eligible Children in equal shares.

6.6.3 Where an Eastern Member dies while an Active Member or a Pensioner dies leaving an Eligible Child or Children, then a pension for the benefit of each Eligible Child will be paid equal to:

(a) where a spouse’s pension is payable, 25% of the Member’s pension;


An amount equal to not more than two of such pensions shall be payable at any one time; if there are more than two Eligible Children the pensions will be shared amongst all the Eligible Children in equal shares.





6.7.4 If a Member has married under a law which allows polygamy and, on the day of the death of the Member or Pensioner, has more than one spouse, the Trustees must decide which, if any, survivor is the spouse for the purposes of Rules 6.1 (Spouse’s pension on death in Pensionable Service), 6.2 (Spouse’s pension on death of a Pensioner) and 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits). In such circumstances they may consider any one or more of the other spouses for a pension under Rule 6.5 (Pension for Dependant) without


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having to investigate whether they satisfy the definition of Dependant in Schedule 1 to and irrespective of whether the Member or Pensioner was living with the spouse selected for the purposes of Rules 6.1 to 6.4 at the date of his death.



6.8 Civil Partners


SCHEDULE 7 ELECTRIC PLAN – RULE 7: ADDITIONAL VOLUNTARY CONTRIBUTIONS

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7.1.2 The Trustees are entitled (but not obliged) to refuse to accept additional voluntary contributions where the payment of such additional voluntary contribution would, when added to any other contribution payable by or in respect of the Member under Rule 2.1 (Member’s ordinary contributions) be expected to result in the Member exceeding the annual allowance for the purposes of Section 227 of the Finance Act 2004 (Annual allowance charge).



7.1.5 Any Member paying contributions to acquire added years of Pensionable Service before joining the Scheme may continue to do so on the same terms as applied under the ESPS.






7.2.2 A Member’s Basic AVCs shall be used by the Trustees to provide benefits from the Scheme. Unless the Trustees, with the consent of the Principal Employer, agree otherwise the Member’s Supplementary AVCs will be used to purchase a policy or annuity contract from an Insurance Company selected by the Trustees or, where the Member makes a selection within such time period as the Trustees decide, selected by the Member. Any such policy will be in the name of the Member unless the Trustees decide to purchase it in the Trustees’ name. When purchasing any such policy the Trustees shall not be obliged to take into account

SCHEDULE 7 ELECTRIC PLAN – RULE 7: ADDITIONAL VOLUNTARY CONTRIBUTIONS

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the individual circumstances of the Member nor to carry out a review of all available Insurance Companies.






SCHEDULE 7 ELECTRIC PLAN – RULE 8: TRANSFERS AND BUY-OUTS

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8.1 Transfers out





8.2 Buy-outs








SCHEDULE 7 ELECTRIC PLAN – RULE 8: TRANSFERS AND BUY-OUTS

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8.4 Transfers in


8.4.2 On receipt of a transfer or assignment under this Rule the amount received shall be credited to a Personal Account in the name of the Member unless the Trustees decide with the consent of the Principal Employer to credit the Member with such additional defined benefits as the Trustees, having taken the advice of an Actuary, shall consider appropriate.

SCHEDULE 7 ELECTRIC PLAN – RULE 9: PENSION INCREASES

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9.1.1 Any pension currently payable from the Scheme shall increase each year by the percentage increase in the Retail Prices Index during the previous 12 months or, if less and the Principal Employer so determines, by 5%.



(b) any part of a pension derived from the payment by the Member of voluntary contributions except to the extent that the Trustees have granted added years of Pensionable Service or they otherwise decide.

9.1.3 The increases payable under this Rule shall take effect on 1 April each year and shall be calculated as at each 1 April by reference to the number of completed months since the date when the pension became payable, or, if later, from the date of the last calculation. For the purposes of this Rule, the Trustees shall use the Retail Prices Index as at the preceding September or such other month as the Principal Employer and the Trustees decide.



SCHEDULE 7 ELECTRIC PLAN – RULE 10:MAXIMUM BENEFITS, CONTRACTING OUT AND PROTECTED PERSONS REGULATIONS

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10. MAXIMUM BENEFITS, CONTRACTING OUT AND PROTECTED PERSONS REGULATIONS



10.2 GMP Rules


10.3 Contracted-out employment after 5 April 1997

The Rules of the Electric Plan are designed to allow the Electric Plan to be contracted-out by virtue of Section 9(2B) of the Pension Schemes Act 1993 (Requirements for certification of schemes). In the event of any discrepancy between the Rules of this Schedule 7, and the requirements under Section 9(2B) the benefits provided by the Scheme for Electric Plan Members must be at least equal to those required under Section 9(2B).



10.4.1 in accordance with Clause 4.12 (Pension Sharing Order), or



10.5 Protected Persons Regulations

The Rules of this Section are designed to comply with the requirements of the Electricity (Protected Persons) (England and Wales) Pension Regulations 1990 and the Rules shall be deemed to be amended so that the requirements of those Regulations are met so far as they apply to Electric Plan Members who are also protected employees under those Regulations.

SCHEDULE 8 CHEMFEED SECTION

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SCHEDULE 8 RULES OF THE CHEMFEED SECTION


SCHEDULE 8 RULES OF THE CHEMFEED SECTION............................................... 190

1. ELIGIBILITY AND MEMBERSHIP .................................................................... 194 1.1 Eligibility......................................................................................................................................... 194

2. CONTRIBUTIONS ................................................................................................ 195 2.1 Members’ ordinary contributions ............................................................................................... 195 2.2 Employers’ contributions............................................................................................................. 195




6. SPOUSE’S AND DEPENDANTS’ PENSIONS ....................................................202 6.1 Spouse’s pension on death while an Active Member .............................................................. 202 6.2 Spouse’s pension on death of a Pensioner ................................................................................ 202 6.3 Spouse’s pension on death in Service after Normal Retirement Date .................................. 202 6.4 Spouse’s pension on death of a Member entitled to Deferred Benefits ............................... 202 6.5 Pension for Dependant ................................................................................................................ 202 6.6 Children’s pensions ....................................................................................................................... 202 6.7 General provisions applicable to spouse’s, Dependant’s and children’s pensions.............. 203 6.8 Civil Partners.................................................................................................................................. 204

SCHEDULE 8 CHEMFEED SECTION

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7. ADDITIONAL VOLUNTARY CONTRIBUTIONS ............................................205 7.1 Payment of additional voluntary contributions ........................................................................ 205

8. TRANSFERS AND BUY-OUTS.............................................................................206 8.1 Transfers out.................................................................................................................................. 206 8.2 Buy-outs.......................................................................................................................................... 206 8.3 General provisions relating to transfers out and buy-outs...................................................... 206

9. PENSION INCREASES .........................................................................................208 9.1 Standard Increases......................................................................................................................... 208 9.2 Discretionary increases ................................................................................................................. 208

10. MAXIMUM BENEFITS AND CONTRACTING OUT .......................................209 10.1 Requirements for Registered Pension Schemes........................................................................ 209 10.2 GMP Rules..................................................................................................................................... 209 10.3 Safeguarded Rights........................................................................................................................ 209

SCHEDULE 8 CHEMFEED SECTION – RULE 1: ELIGIBILITY AND MEMBERSHIP

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1.1 Eligibility

1.1.1 All Members of the Veolia Plan whose benefits were transferred to the Scheme with effect from 30 November 2004 are entitled to benefits under this Section. Any Employee who was in Active Membership under the Veolia Plan on 30 November 2004 became eligible to join the Investor Plan Section in accordance with Rule 1 (Eligibility and membership) of Schedule 2 of this Scheme.

1.1.2 No benefits shall be accrued by Active Membership on or after 1 December 2004 under this Chemfeed Section.

SCHEDULE 8 CHEMFEED SECTION – RULE 2: CONTRIBUTIONS

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2. CONTRIBUTIONS


Chemfeed Members are not required to make any contributions under the Chemfeed Section.



SCHEDULE 8 CHEMFEED SECTION – RULE 3: BENEFITS ON RETIREMENT

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3.1.1 A Chemfeed Transferring Active who retires from Active Membership at Normal Retirement Date shall be entitled to an annual pension for life calculated at the rate of 1/60th of his Final Pensionable Salary at the date of retirement for each Year of pensionable service under the Veolia Plan.

3.1.2 Any Member in respect of whom a transfer payment has been received from a Scheme other than the Veolia Plan or who has made voluntary contributions shall be entitled to the additional benefits secured by them.


3.2.1 Any Active Member who is entitled to benefits under Rule 3.5 (Early retirement on grounds of ill-health) of the Investor Plan Section shall subject to the consent of the Employer, be entitled to an immediate pension and lump sum under this Section.

3.2.2 The pension and lump sum will be calculated as set out in Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and Rule 3.5 (Lump sum on retirement) but the Member’s pension will be reduced to allow for his age at retirement by such amount as the Trustees after consultation with the Principal Employer on the policy of such reductions (and not consultation in each individual case) decide and as shall be certified as reasonable by an Actuary.



3.3.1 A Chemfeed Transferring Active who has reached Minimum Pension Age and is not in receipt of an ill-health early retirement pension under Rule 3.2 (Ill-health early retirement of Active Members) may, with the Employer’s and Trustee’s consent, receive an immediate pension and lump sum calculated in accordance with Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and Rule 3.5 (Lump sum on retirement). The consent of the Principal Employer shall not be required if the Rule of 85 applies to an E & J Member or if an E & J Water Member is made redundant on or after the age of 50.

3.3.2 Subject to Rule 3.3.5 the pension payable under Rule 3.3.1 will be reduced to take account of the Member’s age at retirement by such amount as the Trustees after consultation with the Principal Employer on the policy of such reductions (and not consultation in each individual case) shall decide and as shall be certified as reasonable by an Actuary.

3.3.3 The value of any pension under this Rule 3.3 shall not be less than the value of the Member’s Deferred Benefits calculated in accordance with Rule 4.4 (Early payment of Deferred Benefits). A Member entitled to benefits under this Rule


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may opt to receive a deferred pension under Rule 4 (Benefits on leaving Active Membership).


3.3.5 The reduction referred to in Rule 3.3.2 shall:

(a) in the case of a W & T Member who had attained the age of 45 at 1 August 1993 and was a member of the Wallace and Tiernan Pension Scheme at that date, be none for the period after the Member reaches the age of 60 and 2% for each Year between the date the Member leaves Service and the date he reaches 60;

(b) in the case of a W & T Member who was under the age of 45 at 1 August 1993 and was a member of the Wallace and Tiernan Pension Scheme at that date, be none if the Member leaves Service after attaining the age of 60 and the Rule of 85 applies and otherwise will be 2% for each Year between the date the Member leaves Service and the date he reaches Normal Retirement Date or the first day (not earlier than age 60) on which the Rule of 85 applies to him if earlier;

(c) in the case of a W & T Member who joined the Scheme after 1 August 1993, be none if the Member leaves Service after attaining the age of 60 and the Rule of 85 applies and otherwise will be 4% for each Year between the date the Member leaves Service and the date he reaches Normal Retirement Date or the first day (not earlier than age 60) on which the Rule of 85 applies to him if earlier;

(d) in the case of an E & J Member, be none if the Rule of 85 applies;

(e) in the case of E & J Water Member, be none if the member is made redundant on or after the age of 50;

(f) in the case of a Chemfeed Transferring Active who had joined the Elga Pension Scheme before 22 July 1992 and who has reached the age of 60, be none in relation to any Pensionable Service attributable to pensionable service in the Elga Pension Scheme before 5 April 1995 (if female) or pensionable service between 17 May 1990 and 5 April 1995 (if male).

3.4 Late retirement

Where a Chemfeed Transferring Active reaches Normal Retirement Date and stays in Service payment of his pension may, at his option (but only with the consent of the Principal Employer and Trustees) be deferred until any age before he leaves Service. When the pension comes into payment, the Member shall be entitled to the same pension as at Normal Retirement Date but increased by such amount as the Trustees having taken the advice of an Actuary shall decide having regard to the period of deferment.


(21713155.06)198



3.5.2 The lump sum shall be such amount as the Member may request but not exceeding the capital value in actuarial terms of such pension. In return for such lump sum the pension payable to the Member shall be reduced by such amount as the shall be certified as reasonable by an Actuary.





3.6.3 The amount of pension allocated by the Member shall not exceed an amount which would have the effect of making the pension allocated and the pension value of the lump sum greater than the remaining pension payable to the Member (before any reduction by way of commutation under Rule 3.5 (Lump sum on retirement)).



3.6.6 The Trustees may refuse an Allocation where a Member is granted a pension on the grounds of ill-health or incapacity. The Trustee shall also be entitled to require the Member to obtain a written medical report into his state of health at the time of his application for an Allocation and may refuse an Allocation if the report is, in the opinion of the Trustees, adverse.


SCHEDULE 8 CHEMFEED SECTION – RULE 4: BENEFITS ON LEAVING ACTIVE MEMBERSHIP

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This Rule 4 shall apply to a Member who was entitled to a preserved pension under the Veolia Plan before 30 November 2004 and to any Chemfeed Transferring Active who (otherwise than by death) leaves Service before reaching his Normal Retirement Date, without an immediate pension becoming payable to him.


Any Chemfeed Transferring Active who on leaving Service either:



and any Chemfeed Member shall, subject to the following provisions of this Rule 4, be entitled to Deferred Benefits payable at Normal Retirement Date.


4.3.1 Deferred Benefits payable to a Member shall be a pension calculated in accordance with Rule 3.1 (Retirement of an Active Member at Normal Retirement Date) and lump sum calculated in accordance with Rule 3.5 (Lump sum on retirement) but based on the Member’s pensionable service credited to him under the Veolia Plan and Final Pensionable Salary at the date of leaving pensionable service under the Veolia Plan or, if later, at the date of leaving Active Membership.



(a) is provided from the Member’s AVC Account;



(d) a benefit which the Member is to contribute the whole or part of the costs where the whole or part has not been fully contributed by the time his Active Membership has ended.


SCHEDULE 8 CHEMFEED SECTION– RULE 4: BENEFITS ON LEAVING ACTIVE MEMBERSHIP

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4.4.1 A Member entitled to Deferred Benefits who has reached Minimum Pension Age may receive early payment of his Deferred Benefits, but subject to the consent of the Trustees (or without such consent in the case of an E & J Member who has reached the age of 60 if the Rule of 85 applies to him) and only if any Deferred Benefits under the Investor Plan are drawn at the same time.

4.4.2 A Member who has not reached Minimum Pension Age may, subject to the consent of the Trustees, receive early payment of his Deferred Benefits if in the opinion of the Trustees, having taken advice from a registered medical practitioner has become (and will continue to be) incapable of following his normal employment due to physical or mental infirmity, but only if any Deferred Benefits under the Investor Plan are drawn at the same time.

4.4.3 Where a Member takes early payment of his benefits under this Rule, his Deferred Benefits shall be reduced to reflect early payment to such extent as the Trustees consider appropriate after consultation with the Principal Employer on the policy of such reductions (and not consultation in each individual case) and as shall be certified as reasonable by an Actuary. Any such reduction need not be the same as applies to Active Members under Rule 3.3 (Early retirement of Active Members in other cases). No reduction shall apply to an E & J Member to whom the Rule of 85 applies if he has attained the age of 60.

4.4.4 The Trustees may adjust a Member’s Deferred Benefits having regard to any benefits payable to the Member under Appendix 2 (GMP Rules) and a pension will not be payable under this Rule if the reduction applied under Rule 4.4.2 would reduce the pension below the minimum payable at state pensionable age in accordance with Appendix 2.






SCHEDULE 8 CHEMFEED SECTION – RULE 5: LUMP SUM BENEFITS ON DEATH

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Where a Chemfeed Transferring Active dies in Active Membership the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to the ordinary contributions of the Member to the Veolia Plan with compound interest at the rate of 3% per annum.


5.2.1 On the death of a Pensioner within five years after his retirement the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) an amount equal to the balance of the pension which he would have received under this Section during the remainder of the five years but without taking into account any increase in pension under Rule 9 (Pension increases) which would come into force after his death.



Where a Member dies in Service (but not in Active Membership) after Normal Retirement Date having been in Active Membership up to Normal Retirement Date, the death benefits shall be calculated in accordance with Rule 5.2 (Lump sum on death after retirement) as if the Member had retired on the day before his death. In addition, the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) an amount equal to the amount the Member would have received under Rule 3.5 (Lump sum on retirement) under this Section if he had retired on the day before his death and elected to receive the largest permissible lump sum (if any).


On the death of any Member entitled to Deferred Benefits which are not in payment the Trustees shall hold on discretionary trusts in accordance with Clause 4.6 (Payment of lump sum death benefits) a sum equal to the Member’s ordinary contributions to the Veolia Plan with compound interest at the rate of 3% per annum.

SCHEDULE 8 CHEMFEED SECTION – RULE 6: SPOUSE’S AND DEPENDANT’S PENSIONS

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The spouse of a Chemfeed Transferring Active who dies in Active Membership shall be entitled to receive a pension equal to one-half of the Deferred Benefits which had accrued to him based on his pensionable service under the Veolia Plan and his Final Pensionable Salary as at his death.


The spouse of a Pensioner shall be entitled to receive a pension equal to one-half of the pension which the Pensioner was receiving at his death and attributable to Pensionable Service under the Veolia Plan. If the Pensioner’s pension has been reduced on account of any lump sum received under Rule 3.5 (Lump sum on retirement) or any allocation under Rule 3.6 (Surrender of pension for additional spouse’s, Dependant’s or children’s pensions), the spouse’s pension shall be calculated ignoring that reduction.




The spouse of a Member who dies whilst entitled to Deferred Benefits which are not in payment shall be entitled to receive a pension from the Member’s death equal to one-half of the Deferred Benefits which had accrued to the Member on leaving Active Membership revalued in accordance with Section 12B(4)(d) of the Pension Schemes Act 1993.


6.5.1 Subject to Rule 6.5.2, where at the Member’s or Pensioner’s death he was not married, or he was not living with his spouse or Civil Partner (and whether or not there was any financial dependency), the Trustees may pay a pension to one or more of the Member’s Dependants. Any such pension shall not exceed the amount of pension payable under Rule 6.1 (Spouse’s pension on while an Active Member), or Rule 6.2 (Spouse’s pension on death of a Pensioner) or Rule 6.4 (Spouse’s pension on death of a Member entitled to Deferred Benefits) (as appropriate). To the extent that the Trustees pay a pension to a Dependant under this Rule, the rights of the spouse shall be forfeited.



Where a Chemfeed Transferring Active dies in Active Membership leaving an Eligible Child or Children, a Pensioner dies leaving an Eligible Child or Children or a Member


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203

entitled to Deferred Benefits dies before they come into payment, then a pension for the benefit of each Eligible Child will be paid from the date of the Member’s death equal to:

(a) where a Spouse’s or Dependant’s pension is for the time being payable, one half of that pension where there is one Eligible Child, or where there is more one Eligible Child, an amount equal to that pension shared between them in such proportions as the Trustees decide

(a) where no Spouse’s or Dependant’s pension is for the time being payable the provisions of paragraph (a) shall apply as if the Member or Pensioner had left an Eligible Spouse, but the fractions shall be increased to two thirds where there is one Eligible Child and one and one third where there is more than one Eligible Child.









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6.8 Civil Partners


SCHEDULE 8 CHEMFEED SECTION – RULE 7: ADDITIONAL VOLUNTARY CONTRIBUTIONS

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If an Active Member wishes to buy added benefits, he may make additional voluntary contributions to the Fund on such terms and receive such benefits as apply to them as an Investor Plan Member under Rule 7 of Schedule 2 of these Rules.

SCHEDULE 8 CHEMFEED SECTION – RULE 8: TRANSFERS AND BUY-OUTS

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8.1 Transfers out





8.2 Buy-outs








SCHEDULE 8 CHEMFEED SECTION – RULE 8: TRANSFERS AND BUY-OUTS

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SCHEDULE 8 CHEMFEED SECTION – RULE 9: PENSION INCREASES

(21713155.06) 208



9.1.1 Any pension currently payable from the Scheme in respect of Pensionable Service under the Veolia Plan shall increase each year by the percentage increase in the Retail Prices Index during the previous 12 months or, if less, by 5%.



(b) any part of a pension derived from the payment by the Member of voluntary contributions (except to the extent that the Trustees have granted added years of Pensionable Service or otherwise decide); or


(d) any part of a pension which has been surrendered to provide a pension for a Dependant; or

(e) any part of a pension which related to Pensionable Service in the Wallace and Tiernan Pension Scheme prior to 6 April 1997, which shall increase by the percentage increase in the Retail Prices Index during the previous 12 months or, if less by 3%.




SCHEDULE 8 CHEMFEED SECTION – RULE 10: MAXIMUM BENEFITS AND CONTRACTING OUT

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10.2 GMP Rules

These Rules incorporate the Overriding Appendix of GMP Rules which is contained in Appendix 2. Appendix 2 does not apply to Pensionable Service on or after 6 April 1997.



10.3.1 in accordance with Clause 4.12 (Pension Sharing Order), or

10.3.2 in respect of a transfer in to the Scheme


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APPENDIX 1 -REGISTERED PENSION SCHEME REQUIREMENTS


APPENDIX 1 -REGISTERED PENSION SCHEME REQUIREMENTS ...........................................209

APPENDIX 2 - GMP RULES ....................................................................................................... 212

APPENDIX 3 – PROTECTED RIGHTS RULES 221

APPENDIX 1 – REGISTERED PENSION SCHEME REQUIREMENTS

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APPENDIX 1 -REGISTERED PENSION SCHEME REQUIREMENTS


1. Defined Terms

For the purposes of this Appendix, the following terms are as defined in the Finance Act 2004: “Benefit Crystallisation Event”, “Lifetime Allowance”, “Lifetime Allowance Charge”, “Money Purchase Arrangement”, “Pension Protection Lump Sum Death Benefit”, “Scheme Sanction Charge” and “Unauthorised Member Payment”. An index to these terms is located at Section 280 of the Finance Act 2004.

2. Application of this Appendix

Notwithstanding the provisions of Clause 1.4 (Effect), this Appendix applies to all beneficiaries under the Scheme including Pensioners whose benefits came into payment prior to 6 April 2006 and Members who left Pensionable Service prior to that date.

3. Unauthorised payments

(a) In the event that a Member, Pensioner or other beneficiary is entitled under this Deed, or under any previous provision of the Scheme, to payment of a benefit all or part of which would amount to an Unauthorised Member Payment, that benefit shall, subject to the following provisions of this paragraph 3, be payable subject to deduction of any tax due, including any Scheme Sanction Charge.

(b) Where paragraph (a) above applies, the Trustees may, at the request of the person entitled to that benefit, pay such alternative benefits (whether to that person or otherwise) as the Trustees may decide, provided that such alternative benefits are not Unauthorised Member Payments. On payment of the alternative benefits, the Trustees and the Scheme shall be discharged from all liability in relation to the original benefit.

(c) Notwithstanding any other provision of this Deed or of any previous deed applicable to the Scheme, no Unauthorised Member Payment may be made from the Scheme where such payment would result in the Scheme exceeding the de-registration threshold under Section 158 of the Finance Act 2004 (Grounds for de-registration).

4. Scheme sanction charge

If the Trustees are liable for a Scheme Sanction Charge in respect of any Member, Pensioner or other beneficiary the Trustees are entitled to deduct that Scheme Sanction Charge from the benefits otherwise due to him or reduce the value of future benefits due to him in such manner as the Trustees determine.

5. Annual allowance

The Trustees shall select one or more nomination dates in respect of the Scheme for the purposes of Section 238 of the Finance Act 2004 (Pension input period) and in respect of any part of the Scheme which is a Money Purchase Arrangement each Member and Pensioner shall be deemed to consent to the Trustees making the selection of the nomination date for the purposes of that Section.

6. Lifetime Allowance Charge

(a) When any Benefit Crystallisation Event occurs the relevant Member or Pensioner must provide the Trustees with such information as they may reasonably require in relation to the extent to which (if any) his Lifetime Allowance is available. If any Member or Pensioner fails to provide that information, the Trustees are entitled to assume that none of the Member’s or Pensioner’s Lifetime Allowance is available.

APPENDIX 1 – REGISTERED PENSION SCHEME REQUIREMENTS

cCC()()

212

(b) Except where the Lifetime Allowance Charge becomes payable after the Member’s or Pensioner’s benefits have come into payment and subject to the requirements of any legislation in relation to contracting-out where a Member or Pensioner has benefits in excess of the Lifetime Allowance, the Member or Pensioner must take such benefits as represent the chargeable amount for the purposes of Section 215 of the Act as a lump sum payment and the benefits otherwise payable to or in respect of the Member or Pensioner shall be reduced on account of the lump sum by such amount as the Trustees decide, having taken the advice of an Actuary.

(c) Where a Lifetime Allowance Charge is paid by the Fund in respect of a Member or Pensioner the Trustees shall deduct that charge from the benefits otherwise payable to or in respect of the Member or Pensioner or reduce the value of future benefits due to him in such manner as the Trustees determine.

7. Pension Protection Lump Sum Death Benefit

Subject to the provisions of Rule 3.6 of the Final Salary Sections (Surrender of pension for additional spouse’s, Dependant’s or children’s pensions), a Member or Pensioner is not permitted to specify that any lump sum benefit payable under the Scheme on his death is to be treated as a Pension Protection Lump Sum Death Benefit.

8. Enhanced Protection

(a) The provisions of this paragraph 8 apply where any Member or Pensioner has obtained a certificate from HM Revenue & Customs to confirm that he qualifies for enhanced protection under paragraph 12 of Schedule 36 to the Finance Act 2004.

(b) Any Member or Pensioner to whom this paragraph applies is deemed to have forfeited any right to benefits under the Scheme to the extent that those benefits exceed the limits which applied to the Scheme on 5 April 2006 as a scheme which was approved by HM Revenue & Customs under Chapter I of Part XIV of the Income and Corporation Taxes Act 1988.

(c) In relation to any Active Member of a Final Salary Section in Pensionable Service on 5 April 2006 who is or becomes entitled to enhanced protection he shall continue to pay contributions under Rule 2.1 (Members’ ordinary contributions) (if applicable) and to accrue benefits in the Scheme until he leaves Pensionable Service provided that, unless the Member agrees otherwise, when his benefits come into payment the benefits shall be reduced to such extent as is necessary in order ensure that no relevant benefit accrual (as defined under paragraph 13 of Schedule 36 to the Finance Act 2004) has occurred between 6 April 2006 and the date the benefits come into payment. Any such reduction shall be calculated in such manner as the Trustees decide.

(d) In relation to any Member of the Investor Plan in Pensionable Service on 5 April 2006 who is or becomes entitled to enhanced protection, no further contributions shall be paid to the Fund (whether by the Member or by his Employer) or amounts credited to his Investment Account on or after 6 April 2006 other than amounts due but not credited to his Investment Account in respect of Service prior to that date but he shall, subject to the consent of the Principal Employer, be deemed to be in Pensionable Service for the purposes of Rule 5.1 (Lump sum benefits on death in Pensionable Service) for so long as he remains in Service.

(e) During any period after 5 April 2006 when a Member or Pensioner is entitled to enhanced protection any attempt to award additional benefits or pension increases to the Member or Pensioner, other than those permitted under paragraph (c) or (d) above, is void unless the Member or Pensioner provides consent in writing to that award and confirms that he should no longer be treated as being entitled to enhanced protection.

(f) The Trustees shall not be under any liability to any Member or Pensioner for breach of the provisions of the above paragraphs in respect of any period between 6 April 2006 and the Member or Pensioner providing to the Trustees the certificate referred to in paragraph (a) above.

(21713155.06)

APPENDIX 2 – GMP RULES

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APPENDIX 2 - GMP RULES


1. DEFINITIONS 2. OVERRIDING EFFECT OF THESE GMP RULES 3. ALTERATIONS TO THESE GMP RULES

3.1 Power to alter GMP Rules 3.2 Statutory conditions

4. ENTITLEMENT TO GMP

4.1 Guaranteed Minimum 4.2 Member’s GMP 4.3 Widow’s GMP 4.4 Payment of Widow’s GMP 4.5 Widower’s GMP 4.6 Payment of Widower’s GMP 4.7 Offsetting pension against GMP

5. REVALUATION OF GMP

5.1 Revaluation before State Pensionable Age 5.2 Transfers in 5.3 Transfers out

6. INCREASE OF GMP

6.1 Increase after State Pensionable Age 6.2 Increase after State Pensionable Age or Member’s death

7. ANTI-FRANKING 8. TRANSFERS INTO THE SCHEME

8.1 Acceptance of transfers 8.2 Effect of transfers

9. TRANSFERS OUT OF THE SCHEME

9.1 Conditions for transfer of GMPs 9.2 Effect of such transfers

10. COMMUTATION OF GMP

10.1 Circumstances in which GMP may be commuted 10.2 Commutation Condition

11. SECURING GMPS 12. SCHEME CEASES TO BE A CONTRACTED-OUT SALARY RELATED SCHEME 13. SUSPENSION AND FORFEITURE OF GMP 14. CONTRIBUTIONS EQUIVALENT PREMIUMS


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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

CONTRACTED-OUT SALARY RELATED SCHEMES

GMP RULES 1. DEFINITIONS

In these GMP Rules the following words have the following meanings:-

“the Act” means the Pension Schemes Act 1993.

“Actuary” means a Fellow of the Institute of Actuaries or a Fellow of the Faculty of Actuaries, or a person with other actuarial qualifications who is approved by the Secretary of State for Work and Pensions, at the request of the Trustees, as being a proper person to act in this capacity.

“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 Act).

“Fixed Rate Revaluation” means the method of revaluing a GMP before State Pensionable Age described in Rule 6.1 (C) below.

“GMP” means the guaranteed minimum pension of a Member, Widow or Widower as defined in the Act.

“Insurer” means an insurance company, an EC company or a friendly society as described in section 19(4)(a) of the Act.

“Limited Revaluation” means the method of revaluing a GMP before State Pensionable Age described in Rule 6.1 (B) below.

“Member” means a member of the Scheme (including a person who is not in the pensionable service of any employer participating in the Scheme but to whom, or in respect of whom, benefits are still immediately or prospectively payable under the Scheme in respect of previous membership of the Scheme or another scheme).

“Normal Retiring Date” means the day on which a Member attains normal pension age (within the meaning of the Act) under the Scheme.

“Protected Rights” has the same meaning as in section 10 of the Act.

“Qualifying Service” has the same meaning as in section 71(7) of the Act.

“Rule” (followed by a number) means the Rule (with that number) in this Appendix.

“Scheme” means this occupational pension scheme.

“Section 53 money purchase scheme” means a scheme which was a contracted-out scheme, providing protected rights and satisfying section 9(3) of the Act, and to which the Secretary of State may give directions under section 53 of the Act.

“Section 53 salary related scheme” means a scheme which was a contracted-out scheme, providing guaranteed minimum pensions and satisfying section 9(2) of the Act, and to which the Secretary of State may give directions under section 53 of the Act.

“Section 148 Revaluation” means the method of revaluing a GMP before State Pensionable Age described in Rule 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.


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“State Pensionable Age” means a man’s 65th birthday and a woman’s 60th birthday.

“Trustees” means the trustees or administrators of the Scheme.

“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 Work and Pensions and any relevant provisions of existing Social Security legislation, in particular section 17(5) of the Act and regulation 2 of the Social Security and Family Allowance (Polygamous Marriages) Regulations 1975 (SI 1975/561). A Civil Partner shall be treated as the widower of a Member.

2. OVERRIDING EFFECT OF THESE GMP RULES

These Rules shall apply if any Member’s employment becomes Contracted-out Employment by reference to the Scheme and the Scheme is not contracted-out on a money purchase basis. These Rules will only apply for so long as anyone has a GMP or a prospective right to receive a GMP under the Scheme which subjects the Scheme to the continuing supervision of the Secretary of State.

These Rules override any inconsistent provisions elsewhere in the Scheme except provisions with which the Scheme must comply to retain its tax status under Section 33 of the Act.

3. ALTERATIONS TO THESE GMP RULES

3.1 Power to alter GMP Rules. The 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 GMP Rules necessary to comply with the contracting-out requirements of the Act applicable to salary related contracted-out schemes and Section 53 salary related schemes. This power of alteration may be exercised by them without any condition except the one in 3.2 below. It is additional to, and independent of, any other power of alteration in relation to the Scheme.

3.2 Statutory conditions. No alteration to these GMP Rules may be made unless the alteration will not affect any of the matters dealt with in Part III of the Act and sections 87 to 92 (protection of increases in guaranteed minimum pensions) and 109 and 110 of the Act (annual increases of guaranteed minimum pensions) and any regulations made under these provisions which relate to guaranteed minimum pensions and the alteration will not otherwise prevent the Scheme from satisfying the conditions of section 9(2) of the Act.

4. ENTITLEMENT TO GMP

4.1 Guaranteed Minimum. This Rule 4 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 section 14 of the Act.

4.2 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.

4.3 Widow’s GMP. Where the Member is a man and dies at any time leaving a Widow, she shall be entitled, subject to 4.4 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.

4.4 Payment of Widow’s GMP. The pension shall be paid for life to any Widow.

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4.5 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 4.6 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 the guaranteed minimum which is attributable to earnings for the tax year 1988/1989 and subsequent tax years up to and including the tax year 1996/1997.

4.6 Payment of Widower’s GMP. The pension shall be paid for life to any Widower.

4.7 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 Rule 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 other pension is an increase, calculated in accordance with Schedule 3 of the Act and added to the amount that would be payable but for Chapter II of Part IV of the Act or regulations made under it; or

(3) offsetting would contravene the anti-franking legislation (see Rule 8 below).

5. REVALUATION OF GMP

5.1 Revaluation before State Pensionable Age. Where a Member ceases to be in Contracted-out Employment 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), (B) or (C) 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) Limited Revaluation

The increase will be by the lesser of:-

(1) 5 per cent (5%) compound for each tax year after that in which Contracted-out Employment ceases up to and including the last complete tax year before the Member reaches State Pensionable Age (or dies, if earlier); and

(2) 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).

The Trustees must pay a limited revaluation premium in respect of the Member to the Secretary of State for Work and Pensions.

This option is not available where a Member ceases to be in Contracted-out Employment on or after 6 April 1997.

(C) Fixed Rate Revaluation

The increase will be by such rate as regulations made under section 16(3) of the Act specify as being relevant at the date Contracted-out Employment ceases, for each complete tax year after the tax year containing that date up to and including the last complete tax year before the Member reaches State

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Pensionable Age (or dies, if earlier).

The Trustees and the principal employer participating in the Scheme shall decide which of the options (A) or (C) applies to the Scheme. They may at any time decide that one of the other 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.

5.2 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 (or includes protected rights in respect of which the receiving scheme will provide 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 5.1 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 from 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 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.

5.3 Transfers out. Where a Member’s accrued rights to GMP are transferred to another contracted-out 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 5.1 above, be revalued using another method which would be permitted if that scheme contained a rule in the same terms as 5.2 above.

6. INCREASE OF GMP

6.1 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 Act.

6.2 Increase after State Pensionable Age or Member’s death. Any GMP to which a Member, Widow or Widower is entitled under Rule 4 above shall, insofar as it is attributable to earnings in the tax years from and including 1988/1989 and subsequent tax years up to and including the tax year 1996/1997, be increased in accordance with the requirements of section 109 of the Act.

7. ANTI-FRANKING

Except as provided in sections 87-92 and 110 of the 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 Rule 5 or Rule 6 above.

8. TRANSFERS INTO THE SCHEME

8.1 Acceptance of transfers. The Trustees may accept:-

(1) a transfer payment in respect of the Member’s accrued rights to GMPs under a contracted-out salary related scheme, a Section 53 salary related scheme or a policy of insurance or an annuity contract of the type described in section 19 of the Act;

(2) a transfer of the liability for the payment of GMPs to, or in respect of, any person who has become entitled to them;

(3) a transfer of Protected Rights


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(a) in respect of the Member or a former Member from another scheme which is, or was, an appropriate personal pension scheme;

(b) in respect of the Member or a former Member from another scheme which is, or was, a scheme contracted-out on a money purchase basis or a Section 53 money purchase scheme.

Transfers may be accepted only as provided in the appropriate regulations.

8.2 Effect of transfers. Where a transfer is accepted under 8.1(1) above, the Member’s accrued rights to GMPs under the Scheme will be increased accordingly.

Where a transfer is accepted under 8.1(3) above, the Member’s, Widow’s and Widower’s GMPs under the Scheme will be increased by amounts equal to the GMPs to which they would have been treated as entitled by reason of the Member’s membership of the transferring scheme if the transfer payment had not been made.

9. TRANSFERS OUT OF THE SCHEME

9.1 Conditions for transfer of GMPs. A transfer payment made out of the Scheme may include a Member’s accrued rights to GMPs or the liability for the payment of GMPs to, or in respect of, any person who has become entitled to them only if the following conditions are fulfilled. These conditions depend on the type of scheme, policy or contract to which the transfer is being made.

(1) All schemes and arrangements

The Member must consent to the transfer unless:-

(a) it is a connected employer transfer payment which is applied to provide rights for the person concerned which, had they accrued in the receiving scheme, would be provided in accordance with the rules of the receiving scheme relating to Members who are or have been in Contracted-out Employment in relation to the receiving scheme. The transfer must be made in accordance with the appropriate regulations (SI 1991/167) which involve an actuarial certificate;

(b) it is to allow benefits to be bought out where the Member has less than 5 years Qualifying Service, or to allow the Trustees to buy out the benefits of the Widow or Widower of such a Member.

The transfer will be subject to any requirements of HM Revenue & Customs.

The receiving scheme, policy or contract must be an appropriate personal pension scheme, a contracted-out occupational pension scheme, an overseas occupational pension scheme if the conditions set out in regulation 6 of The Contracting-out (Transfer and Transfer Payment) Regulations 1996 (SI 1996/1462) are satisfied, or an insurance policy or annuity contract of the type described in section 19 of the Act.

(2) Contracted-out salary related schemes and section 19 insurance policies or annuity contracts

The receiving scheme, policy or contract must provide the Member and the Member’s Widow or Widower with GMPs equal to their accrued GMPs under the Scheme up to the date of transfer, together with revaluation until the Member reaches State Pensionable Age (or dies, if earlier). In the case of GMPs already in payment, the receiving scheme must provide for the pensions to commence from the date from which liability for payment has been assumed by it, and for the conditions of payment relating to its own GMPs to apply equally to such pensions.

(3) All occupational pension schemes (except overseas schemes covered by (5))

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The Member must have entered employment with an employer which is a contributor to the receiving scheme.

(4) Appropriate personal pension schemes and occupational pension schemes which are or were contracted-out by the money purchase test

That part of the transfer payment which relates to the Member’s accrued rights to GMPs must be of an amount at least equal to the cash value of those accrued rights and applied by the receiving scheme in providing money purchase benefits for, or in respect of, the Member.

(5) Overseas occupational pension schemes not covered by (2) or (4) above

The Member must have entered employment outside the United Kingdom to which the receiving scheme applies and the conditions set out in regulation 6 of The Contracting-out (Transfer and Transfer Payment) Regulations 1996 (SI 1996/1462) are satisfied.

9.2 Effect of such transfers. Where the Member’s accrued rights to GMPs or liability for GMPs already in payment are transferred in accordance with 9.1 above, the Member and the Member’s Widow or Widower will cease to have any entitlement to a GMP under the Scheme. If the transfer does not relate to the whole of the Member’s rights to benefits under the Scheme, the Member’s remaining benefits under the Scheme may be reduced to allow for the fact that the Member’s GMP rights have been transferred.

10. COMMUTATION OF GMP

10.1 Circumstances in which GMP may be commuted.

(1) Member’s GMP. The Member’s GMP may be commuted if the Commutation Condition is satisfied and all the Member’s other benefits under the Scheme are being commuted, and

(a) the benefits have become payable; or

(b) the Scheme is being wound-up.

(2) Widow’s or Widower’s GMP. The Widow’s or Widower’s GMP may be commuted if the Commutation Condition is satisfied and all the Widow’s or Widower’s other benefits under the Scheme are being commuted, and

(a) the benefits have become payable; or

(b) the Member’s benefits are being commuted on grounds of triviality.

(3) More than one retirement benefit scheme relating to the same employment. If the Member is a member of more than one retirement benefit scheme relating to the same employment the requirements of this Rule must be satisfied by all of the schemes.

10.2 Commutation Condition. The Commutation Condition is that lump sum qualifies as a trivial commutation lump sum for the purposes of paragraph 7 of Part 1 of Schedule 29 to the Finance Act 2004. In addition:-

(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


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the revaluation to Normal Retiring Date that the deferred pension would have attracted in accordance with Chapter II of Part IV of the 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 Member’s pension in excess of GMP must be revalued up to Normal Retiring Date in accordance with Chapter II of Part IV of the Act and the GMP revalued in accordance with (1) above.

(4) In any event, the Trustees must be satisfied that the basis of commutation is reasonable. The basis must be certified as reasonable by an Actuary.

11. 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 Insurer.

12. SCHEME CEASES TO BE A CONTRACTED-OUT SALARY RELATED SCHEME

If the Scheme ceases to be a contracted-out salary related scheme, the Trustees must seek the approval of the Secretary of State to any proposed arrangement for securing GMPs.

13. SUSPENSION AND FORFEITURE OF GMP

Suspension and forfeiture of a GMP is permitted in the circumstances set out in regulation 61 of The Occupational Pension Schemes (Contracting-out) Regulations 1996 (SI 1996/1172).

14. CONTRIBUTIONS EQUIVALENT PREMIUMS

14.1 Contributions equivalent premium

A contributions equivalent premium shall be paid, subject to 14.2 below, in respect of a Member who ceases to be in Contracted-out Employment 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 and less than 2 years’ Contracted-out Employment. A contributions equivalent premium shall not be paid where the Member’s accrued rights include rights transferred from a personal pension.

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 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.

14.2 Circumstances in which premium not payable

The premium shall not be payable if:-

its amount is less than £17 (or such greater amount as is specified in regulations made under the Act); or

the Member’s accrued rights to GMPs are transferred to another scheme, policy or contract in accordance with Rule 9 above; or

the Member has become entitled to an immediate or deferred pension under the Scheme on ceasing to be in Contracted-out Employment.

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APPENDIX 3 – PROTECTED RIGHTS RULES

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1. DEFINITIONS

2. MEMBERSHIP OF THE SCHEME

3. MINIMUM PAYMENTS

4. MEMBERS’ PROTECTED RIGHTS

4.1 Payments to which the Protected Rights Rules apply

4.2 Payments to which the Protected Rights Rules do not apply

4.3 Money Purchase Benefits

4.4 Calculation

4.5 Employee Contributions

4.6 Overriding Effect of Protected Rights Rules

5. PENSION FOR MEMBER

5.1 When Pension is paid

5.2 Providing the Pension

5.3 Member’s right to choose

5.4 Trustees’ Choice

5.5 Form of Pension

5.6 Lump Sum instead of Trivial Pension

6. MEMBER DIES AFTER PENSION STARTS

6.1 Qualifying Widow’s or Widower’s Pension

6.2 Duration of Pension

6.3 No Qualifying Widow or Widower but Dependant

6.4 No Qualifying Widow or Widower but Dependent Child(ren)

6.5 5 Year Guarantee

7. MEMBER DIES BEFORE PENSION STARTS

7.1 Qualifying Widow’s or Widower’s Pension

7.2 Duration of Pension

7.3 Qualifying Widow’s or Widower’s right to choose

7.4 Trustees’ Choice


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7.5 Child’s Pension

7.6 5 Year Guarantee

7.7 Lump Sum instead of Trivial Pension

7.8 Qualifying Widow or Widower dies before Pension starts

7.9 No Qualifying Widow or Widower

8. TRANSFER OF PROTECTED RIGHTS ASSETS OUT OF THE SCHEME

8.1 Transfer of Protected Rights Assets

8.2 Conditions for Transfer of Protected Rights Assets

8.3 Discharge of Protected Rights

9. TRANSFER INTO THE SCHEME

9.1 Acceptance of Transfer

9.2 Use of Transfer Payment to provide Protected Rights

10. GENERAL PROVISIONS ABOUT BENEFITS

10.1 Beneficiary unable to act

10.2 Prison

10.3 Whereabouts unknown

11. GENERAL PROVISIONS ABOUT PENSIONS

11.1 Payment Intervals

11.2 Increase in Payment

11.3 Enforceability

12. ALTERATIONS TO THESE PROTECTED RIGHTS RULES

12.1 Power to alter Protected Rights Rules

12.2 Statutory conditions

13. SCHEME CEASES TO BE A CONTRACTED-OUT MONEY PURCHASE SCHEME


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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

CONTRACTED-OUT MONEY PURCHASE SCHEMES

PROTECTED RIGHTS RULES

1. Definitions

In these Protected Rights Rules the following words have the following meanings:

"the Act" means the Pension Schemes Act 1993.

"Actuary" means a Fellow of the Institute of Actuaries or a Fellow of the Faculty of Actuaries, or a person with other actuarial qualifications who is approved by the Secretary of State for Work and Pensions, at the request of the Trustees, as being a proper person to act in this capacity.

"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 Minimum Pension Age. 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.

"Guaranteed Minimum Pension" has the same meaning as in the Act.

"Insurer" means an insurance company, an EU company or a friendly society as described in regulation 11 of the Personal and Occupational Pension Schemes (Protected Rights) Regulations 1996 (SI 1996/1537).

"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.

"Protected Rights" and "Protected Rights Assets" are defined in Rule 4 below.

"Qualifying Widow or Widower" means a widow or widower or surviving Civil Partner 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.

"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).

"Rule" (followed by a number) means the Rule (with that number) in this Appendix.

"Scheme" means this occupational pension scheme.

"Section 9(2B) rights" are:-

(a) rights to the payment of pensions and accrued rights to pensions (other than rights attributable to voluntary contributions) under a scheme contracted-out by virtue of section 9(2B) of the 1993 Act, so far as attributable to an earner’s service in contracted-out employment on or after 6th April 1997; and


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(b) where a transfer payment has been made to such a scheme, any rights arising under the scheme as a consequence of that payment which are derived directly or indirectly from

(i) such rights as are referred to in sub-paragraph (a) under another scheme contracted-out by virtue of section 9(2B) of that Act; or

(ii) protected rights under another occupational pension scheme or under a personal pension scheme attributable to payments or contributions in respect of contracted-out employment on or after 6th April 1997.

"State Pensionable Age" means a man's 65th birthday and in the case of a woman is determined in accordance with the rules contained in paragraph 1 of Schedule 4 to the Pensions Act 1995.

"Trustees" means the trustees of the Scheme.

2. MEMBERSHIP OF THE SCHEME

Membership of the Scheme must be open to persons who enter employment to which the Scheme relates more than 6 years before the normal retiring date of the Scheme. If the Scheme has an annual entry date, this 6 year period may be increased to a period of 6 years plus the part of a year until the next entry date. Where the Scheme and one or more other contracted-out schemes relate to employment with the same employer, those schemes may be treated as if they were a single scheme in deciding whether the requirements of this Rule are satisfied.

3. MINIMUM PAYMENTS

3.1 Minimum payments will be paid to the Scheme 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. They are inclusive of any amounts deducted from 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 Minimum payments will be credited on behalf of the Member within one month of the end of the income tax month to which they relate and any age-related payment will be credited on behalf of the member within one month of payment by the Secretary of State.

4. MEMBERS' PROTECTED RIGHTS

4.1 Payments to which the Protected Rights Rules apply. The Protected Rights Rules apply to the following payments made to the Scheme in respect of a Member and the benefits resulting from those payments:-

(1) minimum payments as described in Rule 3.1 above; and

(2) payments by the Secretary of State for Work and Pensions made under Section 42A(3) of the Act; and

(3) transfer payments received under Rule 9 below covering Protected Rights or Guaranteed Minimum Pensions or Section 9(2B) rights under other occupational or personal pension schemes or under insurance policies or annuity contracts of the type described in section 19 of the Act; and


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(4) payments of minimum contributions by the Secretary of State for Work and Pensions made under regulation 12(5) of the Personal Pension Schemes (Appropriate Schemes) Regulations 1997.

4.2 Payments to which the Protected Rights Rules 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 Rules unless the rules of the Scheme specifically state otherwise.

4.3 Money Purchase Benefits. The payments to which the Protected Rights Rules 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 Member's rights to these benefits are called "Protected Rights". The Scheme assets representing these Protected Rights are referred to in these Protected Rights Rules 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 Rules. 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 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. All employee contributions must be used to provide Money Purchase Benefits, unless the contributions additional to the minimum payments entitle the Member to benefits which are not money purchase benefits and such benefits are paid in addition to the benefits derived from minimum payments.

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

Other employee contributions do not count as minimum payments. These Protected Rights Rules only apply to them if the rules of the Scheme say that the Protected Rights Rules apply to all payments to the Scheme. But even if the Protected Rights Rules do not apply to other employee contributions, any Money Purchase Benefits from them must be calculated in the same way as Protected Rights are calculated under 4.4 above. The method of calculation, however, may be amended in this case as far as necessary to reflect the fact that the rest of these Protected Rights Rules do not apply.

4.6 Overriding Effect of Protected Rights Rules. So far as Protected Rights are concerned, these Protected Rights Rules override any inconsistent provisions elsewhere in the Scheme, except provisions which are necessary in order that Inland Revenue approval for the purposes of Chapter I Part XIV of the Income and Corporation Taxes Act 1988 is not prejudiced.

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.


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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 rate of the pension shall be determined -

(a) without regard to the Member's sex; and

(b) in the case of -

(i) Protected Rights derived from Guaranteed Minimum Pensions or payments or contributions in respect of employment in a tax year starting before 6 April 1997, without regard to the Member's marital status;

(ii) a married Member whose Protected Rights derive from Section 9(2B) rights or payments or contributions in respect of employment in a tax year starting on or after 6 April 1997, on the basis that the Member, in the event of his death, will leave a widow or widower; and

(iii) an unmarried Member whose Protected Rights derive from Section 9(2B) rights or payments or contributions in respect of employment in a tax year starting on or after 6 April 1997, as if in the event of his death he or she will leave a widow or widower, except where the Member agreed to the rate being determined on his or her life only.

The Member's sex and, where applicable, marital status must be disregarded both in offering the pension and in calculating the amount of the pension.

5.3 Member's right to choose. The Member has the right to choose any Insurer or the Scheme to provide the pension. If the Member decides to choose an Insurer, he may 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.

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 will choose an Insurer.

5.5 Form of Pension. The pension will include provision for benefits after the Member's death as described in Rule 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 Rule 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.

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 HM Revenue & Customs or had certified as reasonable by an Actuary.

The Trustees may only treat a pension as trivial in the circumstances described in paragraph 7 of Schedule 29 to the Finance Act 2004.

6. MEMBER DIES AFTER PENSION STARTS


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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 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 Rule 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


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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. 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 Rule 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.

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 in the circumstances described in paragraph 7 of Schedule 29 of the Finance Act 2004.

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.


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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 conditions set out in the Protected Rights (Transfer Payment) Regulations 1996 (SI 1996/1461) are fulfilled.

8.3 Discharge of Protected Rights. Where the Member's Protected Rights Assets are transferred in accordance with this Rule, 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:

(a) a transfer of assets representing Protected Rights for the Member from another scheme which is, or was, an appropriate personal pension scheme or an occupational pension scheme contracted-out by the money purchase test; or

(b) a transfer payment in respect of the Member's accrued rights to Guaranteed Minimum Pensions under a scheme which is, or was, a contracted-out salary related scheme, or an insurance policy or annuity contract of the type described in section 19 of the 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 Guaranteed Minimum Pensions 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 Rules 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.

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


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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. In the case of Protected Rights which are derived from Guaranteed Minimum Pensions or payments or contributions in respect of employment in any tax year before 6 April 1997 the pension must increase each year by the same percentage as a Guaranteed Minimum Pension accruing after 5 April 1988. These increases are governed by orders under section 109 of the 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.

In the case of Protected Rights which are derived from payments or contributions in respect of employment in any tax year starting on or after 6 April 1997 the pension must increase each year in accordance with sections 51 to 55 of the Pensions Act 1995.

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.

12. ALTERATIONS TO THESE PROTECTED RIGHTS RULES

12.1 Power to alter Protected Rights Rules. The 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 Rules necessary to comply with the contracting-out requirements of the Act applicable to contracted-out money purchase schemes and Section 53 money purchase schemes. The Protected Rights Rules 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 Statutory conditions. No alteration to these Protected Rights Rules may be made unless the alteration will not affect any of the matters dealt with in Part III of the Act or any regulations made under those provisions which relate to Protected Rights and the alteration will not otherwise prevent the Scheme from satisfying the conditions of section 9(3) of the Act.

13. SCHEME CEASES TO BE A CONTRACTED-OUT MONEY PURCHASE 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 the Occupational Pension Schemes (Disclosure of Information) Regulations 1996.

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This document was executed as a deed by the parties on the date set out above.

EXECUTED as a deed by SIEMENS PLC acting by:

___________________________ Director

__________________________ Director/Company Secretary

EXECUTED as a deed by SIEMENS BENEFITS SCHEME LIMITED acting by:

___________________________ Director

__________________________ Director/Company Secretary

the siemens benefits scheme definitive trust deed … deed and rules... · deed (21713155.06) 3...

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