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SECTION 8: THE UNITED KINGDOM ATOMIC ENERGY AUTHORITY AND ASSOCIATED EMPLOYERS SHIFT PAY PENSION SAVINGS PLAN
  

Part 7 – Revenue Limitations.
  

Definitions.

For the purpose of Revenue Limitations the following expressions shall have the meanings ascribed to them. Certain other terms are defined in rule 2 of the foregoing Part I of these Rules.
  

  "Aggregate Retirement Benefit" shall mean the aggregate of
  
  (i) the Member’s pension under the Plan and any Associated Scheme and
 
  (ii) the pension equivalent of the Member’s Lump Sum Retirement Benefit.
  
 

"Associated Scheme" shall mean any Relevant Scheme providing benefits in respect of Revenue Service.

"Connected Scheme" shall mean any Relevant Scheme which is connected with the Plan in relation to the Member that is to say, if
  

  (a) there is a period during which the Member has been the employee of two Related Employers;
  
  (b) that period counts under both schemes as a period in respect of which benefits are payable; and
  
  (c) the period counts under one scheme for service with one employer and under the other for service with the other employer.
  
  "Final Remuneration" shall mean the greater of:
  
  (a) the highest remuneration upon which tax liability has been determined for any one of the five years preceding the Relevant Date being the aggregate of:
  
    (i) the basic pay for the year in question, and
  
    (ii) the yearly average over three or more consecutive years ending with the expiry of the corresponding basic pay year, of any Fluctuating Emoluments Provided that Fluctuating Emoluments of a year other than the basic pay year may be increased in proportion to the increase in the Index from the last day of that year up to the last day of the basic pay year. Remuneration that is received after the Relevant Date and upon which tax liability has been determined will be treated as a Fluctuating Emolument (provided it was earned or qualified for prior to the Relevant Date). In these circumstances it may be included provided the yearly average of three or more consecutive years begins no later than the commencement of the basic pay year; or
  
  (b)

the yearly average of the total emoluments from the Employers which are assessable to Income Tax under Case I or II of Schedule E and upon which tax liability has been determined for any three or more consecutive years ending not earlier than ten 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 provided that in these circumstances the yearly average of three or more consecutive years begins no later than the commencement of the year ending with the Relevant Date

Provided that
  

    (i) remuneration and total emoluments do not include any amounts which arise from the acquisition or disposal of shares or any interest in shares or from a right to acquire shares (except where the shares or rights etc which give rise to such an amount liable to tax under Schedule E had been acquired before 17 March 1987) or anything in respect of which tax is chargeable by virtue of section 148;
  
    (ii) in relation to any Member whose remuneration in any year subsequent to 5 April 1987 used for the purpose of calculating benefits has exceeded £100,000 (or such other figure as may be prescribed by the Treasury), Final Remuneration shall not exceed the amount ascertained in accordance with (b) above and (a) above shall not apply, unless the individual chooses to adopt £100,000 (or such other figure as may be prescribed by the Treasury);
  
    (iii) where Final Remuneration is computed by reference to any year other than the last complete year ending on the Relevant Date, the Member’s remuneration or total emoluments of any year may be increased in proportion to any increase in the Index from the last day of that year up to the Relevant Date. For a Class C Member this proviso shall not apply to the calculation of the maximum Lump Sum Retirement Benefit unless the Member’s Aggregate Retirement Benefit is similarly increased beyond the maximum amount which could be paid but for this proviso and/or the first sentence of (a)(ii) above and then only to the same proportionate extent;
  
    (iv) for a Class A Member Final Remuneration shall not exceed the Permitted Maximum;
  
    (v) for the purpose of calculating the maximum Lump Sum Retirement Benefit of a Class B Member Final Remuneration shall not in any event exceed £100,000 (or such other figure as may be prescribed by the Treasury);
  
    (vi) in the case of a Member who remains, or is treated as remaining, in Service but by reason of Incapacity is in receipt of a much reduced remuneration, for example under a sick pay or permanent health insurance scheme, for more than ten years up to the Relevant Date, or ceases to receive such remuneration, Final Remuneration under (a) or (b) above may be calculated as if the references to the Relevant Date were references to the date of cessation of normal pay and increased in accordance with the Index;
  
    (vii) the total amount of any profit related pay (whether relieved from Income Tax or not) may be classed as pensionable remuneration and treated as a Fluctuating Emolument;
  
    (viii) an early retirement pension in payment from the Employer may not be included in Final Remuneration;
  
    (ix) except as in proviso (i) above, benefits in kind may be taken into account when they are assessed to Income Tax as emoluments under Schedule E, and will normally be regarded as Fluctuating Emoluments. If benefits are not so assessable, they may not be included as part of Final Remuneration except with the agreement of the Pension Schemes Office.
  
   

For the purposes of providing immediate benefits at the Relevant Date it will be permitted to calculate Final Remuneration on the appropriate basis above using remuneration assessable to tax under Case I or II of Schedule E and upon which tax liability has not been determined. On determination of this liability Final Remuneration must be recalculated. Should this result in a lower Final Remuneration then benefits in payment should be reduced if this is necessary to ensure that they do not exceed the maximum approvable based on the lower Final Remuneration. Where Final Remuneration is greater it will be possible to augment benefits in payment but such augmentation must take the form of a non-commutable pension.

Where immediate benefits are not being provided or where a transfer payment is to be made in respect of accrued pension benefits then Final Remuneration may only be calculated using remuneration assessable to Income Tax under Case I or II of Schedule E and upon which tax liability has been determined.
  
 

"Fluctuating Emoluments" shall mean any part of a Member’s earnings which are not paid on a fixed basis and are additional to the basic wage or salary. They include overtime, commission, bonuses or benefits in kind as long as they are assessable to tax under Case I or II of Schedule E and profit related pay (see proviso (vii) to the definition of Final Remuneration).

"Index" shall mean the Government’s Index of Retail Prices.

"Lump Sum Retirement Benefit" shall mean the total value of all retirement benefits payable in any form other than non-commutable pension under the Plan and any Associated Scheme.

"Part-time Member" means any employee whose contract of employment provides for his normal hours of work to be less that the conditioned hours of his grade (that is to say, less than the minimum hours required of a full-time employee in that grade); and "part-time hours", in relation to that employee, means the said normal hours so provided.

"Permitted Maximum" is to be construed as defined in section 590C(2) of the Taxes Act.

"Related Employer". An employer is associated with another employer if one is controlled by the other, or both are controlled by a third party. Control has the meaning in section 840 of the Taxes Act, or in the case of a close company, section 416 of the Taxes Act.

"Relevant Date" shall mean the date of retirement, leaving Statutory Pensionable Service or death as the case may be.

"Relevant Scheme" shall mean any other scheme approved or seeking approval under the Chapter or a statutory scheme.

"Remuneration" in relation to any year shall mean the aggregate of the total emoluments for the year in question from the Employers and which are assessable to Income Tax under Schedule E but excluding any amounts which arise from the acquisition or disposal of shares or any interest in shares or a right to acquire shares (except where the shares or rights etc which give rise to such an amount liable to tax under Schedule E had been acquired before 17 March 1987) or anything in respect of which tax is chargeable by virtue of section 148 of the Taxes Act Provided that for a Class A Member there shall be disregarded any emoluments in excess of the Permitted Maximum.

"Retained Death Benefits" shall mean any lump sum benefits payable on the Member’s death (exclusive of any refund of the Member’s own contributions and any interest thereon) from:
  

  (a) retirement benefits schemes approved or seeking approval under the Chapter or relevant statutory schemes as defined in section 611A thereof,
  
  (b) funds to which section 608 of the Taxes Act applies,
  
  (c) retirement benefits schemes which have been accepted by the HM Revenue and Customs as "corresponding" in respect of a claim made on behalf of the Member for the purposes of section 596(2)(b) of the Taxes Act,
  
  (d) term life provisions under retirement annuity contracts approved under Chapter III Part XIV of the Taxes Act,
  
  (e) Personal Pension Schemes, or
  
  (f) transfer payments from overseas schemes held in a type of arrangement defined in (a) (d) or (e) above
  
 

in respect of previous employments or periods of self-employment (whether alone or in partnership)

Provided that
  

    (i) in relation to a person who becomes a Member on or after 1 April 1998, if the Member’s earnings in the twelve months after entry to the Plan (in this context including any other Relevant Scheme providing benefits in respect of service with the current Employer) total less than one quarter of the Permitted Maximum, benefits from these sources, other than those transferred into the Plan, shall not be classed as Retained Death Benefits
  
    (ii) if the Retained Death Benefits do not exceed £2,500 in total they may be ignored.
  
 

"Revenue Service" shall mean Service which is with the Employer or a Related Employer.

"Whole-time Member" means any employee whose contract of employment provides for his normal hours of work to be the conditioned hours of his grade.
  

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