The Funded Public Service Pension Schemes (Reduction of Cash Equivalents) Regulations 2015

A funded public service defined benefits scheme can be designated under sections 97A and 97B of the Pension Schemes Act 1993 c. 48 (‘the 1993 Act’) if a relevant person considers that (a) there is an increased likelihood of payments out of public funds, or of increased payments out of public funds, having to be made into the scheme so that it can meet its liabilities, and (b) the increased likelihood is connected with the exercise or expected future exercise of rights to take a cash equivalent. When a member requires the trustees or managers of a scheme to use a cash equivalent for acquiring a right or entitlement to flexible benefits under the rules of another pension scheme, and the scheme was already designated on the date that the member makes his or her application under section 95(1) of the 1993 Act, these Regulations require the trustees or managers to reduce the cash equivalent. They also set out how the amount of the reduction is to be determined. The reduction must not however be made if the scheme ceases to be designated before the date on which the trustees or managers do what is needed to carry out what the member requires.