Part 1: Public Service Pension Schemes Chapter 1: Schemes other than Judicial Schemes and Local Government Schemes Section 20: Voluntary contributions
Section 20 provides that scheme regulations may make provision about any additional pension benefits or entitlement to earlier payment of benefits that members have obtained by making additional voluntary contributions during the remediable period.
	Section 20(2) allows schemes to adjust any rights gained from voluntary contributions in a legacy scheme where a member elects to receive new scheme benefits under section 6 (immediate choice) or section 10 (deferred choice). In particular, the rights can be varied so that they are of an equivalent value to rights the member would have secured under the new scheme if the voluntary contributions had been paid to that scheme (section 20(3)).
	Section 20(4) envisages that scheme regulations for a Chapter 1 new scheme may provide for any rights to additional benefits or earlier payment of benefits to be extinguished. Section 20(5) provides that where such provision is made, scheme regulations must provide for alternative benefits to be awarded in the relevant Chapter 1 legacy scheme or compensation. This allows the voluntary contributions made by the member to be honoured. There are three permitted options: benefits of an actuarially equivalent value to the extinguished rights; benefits that are the same as the benefits that would have arisen had the voluntary contributions been made to that scheme; or compensation for the voluntary contributions made. Where compensation is provided the amount paid will be equal to the voluntary contributions paid, less any tax relief given which will place the member in the net position in which they would have been had they not made the voluntary contributions.
	The policy is to allow members to retain the benefit of any additional voluntary contributions that they have made during their remediable service. Where a member does not wish to receive additional benefits when they move to the legacy scheme in relation to their remediable service, they, or in the case of a deceased member, their personal representatives, will instead be entitled to compensation for the contributions that they have made. In some of the new schemes, members were able to make voluntary contributions to buy out an actuarial reduction to their pension benefits that would otherwise apply where their benefits were brought into payment before the scheme Normal Pension Age (NPA). This type of benefit is not necessarily appropriate in the corresponding legacy scheme, where normal retirement age is typically earlier. In such cases the member would receive an alternative additional benefit in the legacy scheme, but if an election to receive new scheme benefits in relation to the member’s remediable service were ultimately made, the policy is that the original benefit purchased would apply (i.e. the buy-out of actuarial reduction on early retirement).