Legal Status
The British Tourist Boards’ Staff Pension and Life Assurance Scheme is a registered pension scheme under the Finance Act 2004. Being registered means that full tax relief is allowed on members’ and employers’ contributions and on United Kingdom investment income, except for dividends arising from UK equities where tax relief is not available.
Until April 2016, the State Pension had two components – the Basic State Pension and an additional earnings-related pension, known as the State Second Pension or S2P. The Scheme was ‘contracted out’ of the State Second Pension. This meant that members did not build up S2P benefits while they were in the Scheme. In exchange for this, members and Employers paid reduced National Insurance (NI) contributions. However, the Scheme had to provide members with benefits broadly equivalent to the S2P benefit it replaced. It did so by meeting a ‘quality test’ set out in legislation called the Reference Scheme Test. Prior to 1997 when S2P replaced SERPS (The State Earnings-Related Pension Scheme), a different test was applied and the Scheme had to provide a Guaranteed Minimum Pension (GMP), and this part of a member’s pension had special rules that applied to it on death and retirement.
Contracting out was abolished from 6 April 2016 and a new single-tier State Pension was introduced. This means that the State Pension no longer has two components and everyone now makes the same standard rate NI contributions. Contracted out pension rights that had been built up prior to 6 April 2016, including GMPs will remain in existence so the above will apply to pension contributions built up before that date.
The Scheme is governed by a Trust Deed and Rules, a document that sets out what benefits are payable to members as well as how the Scheme must be administered. The Scheme itself is very complex, with variations in the benefits payable to members, depending on whom they work or worked for, and in the way that the assets and liabilities are calculated.
In the event of any difference between this website and the Trust Deed and Rules, the Trust Deed and Rules will override the contents of this website.