Legalize / United Kingdom / Public General Act

Pension Schemes Act 1993

Type Public General Act

Publication 1993-11-05

Last updated 2025-04-07

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(a) any earnings factor shall be taken to be that factor as increased by the last order under section 21 of the Social Security Pensions Act 1975 or section 148 of the Social Security Administration Act 1992 to come into force before those five tax years; and

(b) any relevant earnings factors derived from contributions or earnings in respect of any year (“the relevant contributions year”) shall be treated as increased by 12 per cent. compound for each of those five tax years, other than any of those years which—

(i) constitutes or begins before the relevant contributions year, or

(ii) begins after the final relevant year in relation to the earner.

(3) Subsection (2) shall not apply in any case where its application would result in the amount of the guaranteed minimum being greater than it would have been apart from that subsection.

(4) Regulations may provide that subsections (1) to (3) shall have effect with prescribed modifications in relation to a scheme which, immediately before it ceased to be contracted-out, contained provisions authorised by section 16(2).

(5) In this section “relevant year” and “final relevant year” have the same meanings as in section 16.

Supervision of formerly certified schemes

52

Section 53 shall apply for the purpose of making provision for securing the continued supervision of any scheme that was a salary related contracted-out scheme, other than a public service pension scheme, if any person is entitled to receive or has accrued rights to—

(a) a guaranteed minimum pension under the scheme, or

(b) a pension under the scheme attributable to service on or after the principal appointed day but before the scheme ceased to be contracted-out.

Supervision: former contracted-out schemes.

53

(1) The Inland Revenue may direct the trustees or managers of the scheme, or the employer, to take or refrain from taking such steps as the Inland Revenue may specify in writing; and such a direction shall be final and binding on the person directed and any person claiming under him.

(1A) An appeal on a point of law shall lie to the High Court or, in Scotland, the Court of Session from a direction under subsection (1) at the instance of the trustees or managers or the employer, or any person claiming under them.

(1B) A direction under subsection (1) shall be enforceable—

(a) in England and Wales, in the county court as if it were an order of that court, and

(b) in Scotland, by the sheriff, as if it were an order of the sheriff and whether or not the sheriff could himself have given such an order

(1C) But where a direction under subsection (1) conflicts with a freezing order made by the Regulatory Authority under section 23 of the Pensions Act 2004 in relation to the scheme then, during the period for which the freezing order has effect, the direction to the extent that it conflicts with the freezing order—

(a) is not binding as described in subsection (1), and

(b) is not enforceable as described in subsection (1B).

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supervision: former appropriate personal pension schemes.

54

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State scheme premiums

Payment of state scheme premiums on termination of certified status.

55

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Provisions supplementary to s. 55.

56

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Elections to pay contributions equivalent premiums.

57

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Amount of premiums payable under s. 55.

58

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Alternative basis for revaluation of earnings factors for calculation of certain premiums.

59

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Effect of payment of premiums on rights.

60

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Deduction of contributions equivalent premium from refund of scheme contributions.

61

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No recovery of state scheme premiums from earners etc.

62

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Further provisions concerning calculations relating to premiums.

63

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Actuarial tables for purposes of calculations relating to premiums.

64

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Inclusion of former and future earners for some purposes of this Chapter.

65

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Power to apply certain provisions to widowers.

66

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Non-payment of contributions equivalent premiums.

67

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Unpaid premiums: supplementary.

68

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Part IIIA — Safeguarded rights

Safeguarded rights.

68A

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Requirements relating to safeguarded rights.

68B

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Reserve powers in relation to non-complying schemes.

68C

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Power to control transfer or discharge of liability.

68D

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Part IV — Protection for early leavers

Chapter I — preservation of benefit under occupational schemes

Scope of Chapter I: the preservation requirements.

69

(1) This Chapter has effect in relation to the preservation of benefit under occupational pension schemes to which it applies.

(2) In this Act “the preservation requirements” means the requirements specified in or under sections 71 to 82.

(3) This Chapter applies to any occupational pension scheme whose resources are derived in whole or in part from—

(a) payments made or to be made by one or more employers of earners to whom the scheme applies, being payments either—

(i) under an actual or contingent legal obligation; or

(ii) in the exercise of a power conferred, or the discharge of a duty imposed, on a Minister of the Crown, government department or any other person, being a power or duty which extends to the disbursement or allocation of public money; or

(b) such other payments by the earner or his employer, or both, as may be prescribed for different categories of scheme.

Interpretation.

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(1) In this Chapter—

“scheme” means an occupational pension scheme to which this Chapter applies;

“relevant employment”, in relation to a scheme, means any employment to which the scheme applies;

“long service benefit”, in relation to a scheme, means the benefits which will be payable under the scheme, in accordance with legal obligation, to or in respect of a member of the scheme on the assumption—that he remains in relevant employment, andthat he continues to render service which qualifies him for benefits,until he attains normal pension age; and in this definition “benefits” means—retirement benefit for the member himself at normal pension age, orbenefit for the member’s wife, husband, civil partner, widow, widower, or surviving civil partner, or dependants, or others, on his attaining that age or his later death, orboth such descriptions of benefit.

(2) In this Act, unless the context otherwise requires, “pensionable service”, in relation to a scheme and a member of it, means, subject to subsection (3), service in relevant employment which qualifies the member (on the assumption that it continues for the appropriate period) for long service benefit under the scheme.

(3) There shall be taken into account as pensionable service only actual service, that is to say—

(a) service notionally attributable for any purposes of the scheme is not to be regarded as pensionable service; and

(b) no account is to be taken of scheme rules by which a period of service can be treated for any purpose as being longer or shorter than it actually is.

Basic principle as to short service benefit.

71

(1) A scheme must make such provision that where a member’s pensionable service is terminated before normal pension age and—

(a) he has at least 2 years’ qualifying service,

(aa) he has at least 30 days' qualifying service and, if he were entitled to benefit because of this paragraph, all of it would necessarily be money purchase benefit, or

(b) a transfer payment in respect of his rights under a personal pension scheme has been made to the scheme,

he is entitled to benefit consisting of or comprising benefit of any description which would have been payable under the scheme as long service benefit, whether for himself or others, and calculated in accordance with this Chapter.

(2) The benefit to which a member is entitled under subsection (1) is referred to in this Act as “short service benefit”.

(3) Subject to subsections (4) and (5A), short service benefit must be made payable as from an age which is no greater than—

(a) the age of 65, or

(b) if in the member’s case normal pension age is greater than 65, normal pension age.

(4) Short service benefit payable on or in respect of the member’s death after normal pension age must be made payable as from his death or within such time after it as long service benefit payable on or in respect of his death would be payable.

(5) In applying subsections (3) and (4), no regard is to be had to the operation of any scheme rule, taking effect at any time after termination of the member’s pensionable service, as to what is normal pension age under the scheme.

(5A) Subsection (3) does not apply in relation to a scheme under section 1 of the Public Service Pensions Act 2013.

(6) A scheme must not provide for payment of short service benefit in the form of a lump sum at any time before normal pension age, except in such circumstances as may be prescribed.

(7) In subsection (1) “2 years’ qualifying service” means 2 years (whether a single period of that duration or two or more periods, continuous or discontinuous, totalling 2 years) in which the member was at all times employed either—

(a) in pensionable service under the scheme; or

(b) in service in employment which was contracted-out by reference to the scheme; or

(8) For the purposes of subsection (7), no regard shall be had to whether or not the service was of the same description in the whole of the 2 years.

(9) A period of service previously terminated is not to count towards the 2 years’ qualifying service unless it counts towards qualification for long service benefit, and need then count only to the same extent and in the same way.

(10) Subsections (7) to (9) apply, with the substitution for references to 2 years of references to 30 days, for determining whether a person has at least 30 days' qualifying service for the purposes of subsection (1).

(11) Subsection (1)(aa) does not apply in relation to a person's membership of a scheme if any period of relevant service began before the day on which section 36 of the Pensions Act 2014 came into force (whether or not it also ended before that date).

“Relevant service” means service that counts towards the 30 days' qualifying service for the purposes of subsection (1).

No discrimination between short service and long service beneficiaries.

72

(1) A scheme must not contain any rule which results, or can result, in a member being treated less favourably for any purpose relating to short service benefit than he is, or is entitled to be, treated for the corresponding purpose relating to long service benefit.

(2) Subsection (1) does not apply to any rule in its application to members whose pensionable service terminated before the rule came into force, unless the rule—

(a) was made after the termination of a member’s pensionable service; and

(b) results, or is capable of resulting, in any treatment less favourable for him than that to which he would have been entitled but for the rule.

(3) Subsection (1) does not apply to a rule which merely confers discretion on the scheme’s trustees or managers, or others, so long as it is not a rule requiring the discretion to be exercised in any discriminatory manner against members in respect of their short service benefit.

(4) This section is subject to subsections (3) and (6) of section 71 (age at which short service benefit is to be payable).

Form of short service benefit and its alternatives.

73

(1) Subject to subsection (2) and section 81, a member’s short service benefit must be—

(a) payable directly out of the resources of the scheme; or

(b) assured to him by such means as may be prescribed.

(2) Subject to subsections (3) to (5), a scheme may, instead of providing short service benefit, provide—

(a) for the member’s accrued rights (including any transfer credits allowed under the scheme)—

(i) to be transferred to another occupational pension scheme with a view to acquiring transfer credits for the member under the other scheme, or

(ii) to be transferred to a personal pension scheme ... with a view to acquiring rights for the member under the rules of the scheme ...; or

(b) for such alternatives to short service benefit as may be prescribed.

(3) The option conferred by subsection (2)(a) is additional to any obligation imposed by Chapter 1 of Part 4ZA.

(4) The alternatives specified in subsection (2)(a) and (b) may only be by way of complete or partial substitute for short service benefit—

(a) if the member consents; or

(b) in such other cases as may be prescribed.

(5) An alternative prescribed under subsection (2)(b) may only include payment by way of return of contributions—

(a) if they relate to a period of service before 6th April 1975; or

(b) if there has been such a payment relating to a period of service before that date and the contributions relate to a period of service of less than 5 years after that date.

Computation of short service benefit.

74

(1) Subject to the provisions of this section, a scheme must provide for short service benefit to be computed on the same basis as long service benefit.

(2) For that purpose, no account is to be taken of any rule making it (directly or indirectly) a condition of entitlement to benefit that pensionable service shall have been of any minimum duration.

(3) Subsection (1) does not apply to so much of any benefit as accrues at a higher rate, or otherwise more favourably, in the case—

(a) of members with a period of pensionable service of some specified minimum length, or

(b) of members remaining in pensionable service up to some specified minimum age.

(4) Subsection (1) does not apply to so much of any benefit as is of an amount or at a rate unrelated to length of pensionable service or to the number or amount of contributions paid by or for the member.

(5) Regulations may provide that subsection (1) shall not apply to any category of schemes or members, or description of benefit.

(6) So far as any short service benefit is not required to be computed in accordance with subsection (1), it must be computed on the basis of uniform accrual, so that at the time when pensionable service is terminated, it bears the same proportion to long service benefit as the period of that service bears to the period from the beginning of that service to the time when the member would attain normal pension age or such lower age as may be prescribed.

(7) Where long service benefit is related to a member’s earnings at, or in a specified period before, the time when he attains normal pension age, short service benefit must be related, in a corresponding manner, to his earnings at, or in the same period before, the time when his pensionable service is terminated.

(8) A scheme must comply with any regulations relating to the basis of computation of short service benefit, including regulations providing for the avoidance of fractional amounts and otherwise to facilitate computation.

Credits.

75

(1) In this section—

“supplementary credits”, in relation to a scheme and a member’s entitlement to its benefits, means any increase of benefit or additional benefit to which the member may become entitled—in consequence of any provision made by or under the scheme after he becomes a member of it (to the extent that it applies to any previous pensionable service of his); orby reference to previous service of his (whether or not pensionable service); orin such other circumstances as may be prescribed,including under paragraph (b) any transfer credits;

“purchased credits” means supplementary credits for which, under the rules of the scheme, a member may or must make a payment in whole or in part (whether by means of additional contributions, or of deduction from benefit, or otherwise, and whether separately for each credit or by one or more payments for one or more credits);

“bonus credits” means supplementary credits other than purchased credits or transfer credits.

(2) Subject to subsections (3) to (7), if a scheme provides for long service benefit to include supplementary credits, it must—

(a) provide for such credits to be included in short service benefit, and

(b) provide for all credits to be so included.

(3) Where purchased credits have not been paid for in full at or before termination of pensionable service, the short service benefit must include the appropriate proportion of the credits.

(4) In subsection (3) “the appropriate proportion of the credits” means—

(a) if they were to be paid for by a fixed amount, the same proportion as the amount paid bears to the full amount payable; and

(b) otherwise, the same proportion as the period between the time when the first payment became due and the termination of the member’s pensionable service bears to the whole period over which payment was to be made.

(5) If the benefit includes bonus credits, or credits for which payment is to be made by deduction from that or another benefit, the credits to be included in the benefit and (where applicable) the amount of the deduction must be computed on the assumption—

(a) that the credits accrue in full only to a member remaining in pensionable service until normal pension age; and

(b) that the amount of any such credit, and also of any relevant deduction, accrues at a uniform rate from the time when the credit was awarded up to the time of his attaining that age.

(6) Where any such deduction is a percentage of benefit, the percentage must be the same for short service as for long service benefit.

(7) A scheme must comply with any regulations made with respect to the manner in which supplementary credits are to be included in short service benefit, including regulations providing for the avoidance of fractional amounts and otherwise to facilitate computation.

Pension increases.

76

(1) A scheme which by its rules provides for increases of long service benefit from time to time (whether by way of upwards revaluation or otherwise) must provide for corresponding increases of short service benefit in the case of members whose pensionable service terminates at any time after the coming into force of any such rule.

(2) Where the provision for increasing long service benefit involves the exercise of a discretion, a corresponding discretion must be conferred in relation to short service benefit.

(3) If an increase of long service benefit is to take effect at a specified time after termination of service, the corresponding increase of short service benefit must take effect at the same time after the time when short service benefit becomes payable.

(4) Where provision is made for increase of long service benefit otherwise than at a fixed rate, short service benefit may nevertheless be subject to increase at a fixed rate, if the rate is at least 3 per cent. a year compound.

Assignment, surrender and commutation of benefit.

77

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Forfeiture, etc.

78

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Charges, liens and set-offs.

79

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Power to modify ss. 77 to 79 as respects alternative benefits.

80

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Discharge of liability where short service or alternative benefits secured by insurance policies or annuity contracts.

81

A transaction to which section 19 applies discharges the trustees or managers of an occupational pension scheme from their liability to provide for or in respect of any person short service benefit or any alternative to short service benefit—

(a) if it is carried out not earlier than the time when that person’s pensionable service terminates; and

(b) if and to the extent that it results in short service benefit or any alternative to short service benefit for or in respect of that person being appropriately secured (within the meaning of that section); and

Supplementary regulations.

82

(1) Regulations may provide that a scheme is not to be treated as conforming with the preservation requirements unless it contains express rules to the effect (but not necessarily in the words) of any specified provision contained in sections 71 to 79.

(2) Regulations may make provision as to the circumstances in which, for the purposes of sections 70 to 79—

(a) a period of a person’s service in two or more different employments is to be treated as a period of service in one or more of those employments; or

(b) a person’s service in any employment is to be treated as terminated or not terminated.

Chapter II — Revaluation of accrued benefits (excluding guaranteed minimum pensions)

Scope of Chapter II.

83

(1) This Chapter applies for the purpose of revaluing—

(a) relevant benefits payable to or in respect of a member of an occupational pension scheme where—

(i) his pensionable service ends on or after 1st January 1986;

(ii) on the date on which his pensionable service ends (in this Chapter referred to as “the termination date”) he has accrued rights to benefit under the scheme;

(iii) the period beginning with the day after the termination date and ending with the date on which he attains normal pension age (in this Chapter referred to as “the pre-pension period”) is at least 365 days; and

(iv) in the case of benefit payable to any other person in respect of the member, the member dies after attaining normal pension age; and

(b) relevant benefits payable to or in respect of a member of a personal pension scheme—

(i) in respect of whom contributions to the scheme have ceased to be paid; and

(ii) who has accrued rights to benefit under the scheme.

(1A) The following are relevant benefits for the purposes of subsection (1)—

(a) any benefits payable otherwise than by virtue of rights which are attributable (directly or indirectly) to a pension credit, and

(b) in the case of a salary related occupational pension scheme, any benefits payable by virtue of such rights, to the extent that the rights involve the member being credited by the scheme with notional pensionable service.

(1B) The reference in subsection (1)(a)(iii) to normal pension age is to be read, in relation to a person who is an active or deferred member of a scheme under section 1 or 31(7) of the Public Service Pensions Act 2013, as—

(a) the member's normal pension age within the meaning of that Act, or

(b) the member's deferred pension age within the meaning of that Act, if that is later.

In this subsection “active member” and “deferred member”, in relation to such a scheme, have the meanings given by section 124(1) of the Pensions Act 1995.

(2) In calculating 365 days for the purpose of subsection (1)(a)(iii), any day which is 29th February shall be disregarded.

(3) In subsection (1)(b)—

(a) the reference to a personal pension scheme does not include a scheme which is comprised in an annuity contract made before 4th January 1988; and

(b) the reference to contributions includes any minimum contributions.

(4) For the purposes of this section, an occupational pension scheme is salary related if—

(a) it is not a money purchase scheme, and

(b) it does not fall within a prescribed class.

Basis of revaluation.

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(1) Subject to subsections (2) to (3B), in the case of such benefits as are mentioned in section 83(1)(a), any pension or other retirement benefit payable under the scheme in question to the member and any pension or other benefit payable under it to any other person in respect of him, is to be revalued by the final salary method.

(2) If—

(a) any such benefit is an average salary benefit or flat rate benefit; and

(b) it appears to the trustees or managers of the scheme under which it is payable that it is appropriate to revalue the benefit by the average salary method or, as the case may be, the flat rate method,

then the benefit shall be revalued using that method.

(3) If any benefit such as is mentioned in paragraph (a) of section 83(1) is a money purchase benefit other than a collective money purchase benefit, and in the case of such benefit as is mentioned in paragraph (b) of that section, the benefit shall be revalued using the money purchase method.

(3A) If—

(a) any such benefit as is mentioned in section 83(1)(a) is a cash balance benefit in respect of which the available sum is not calculated by reference to final salary;

(b) the benefit is attributable to periods of pensionable service falling on or after the day on which section 29 of the Pensions Act 2011 (definition of money purchase benefits) comes into force; and

(c) it appears to the trustees or managers of the scheme under which it is payable that it is appropriate to revalue the benefit by the cash balance method,

then the benefit shall be revalued using that method.

(3AA) If any such benefit as is mentioned in section 83(1)(a) is a collective money purchase benefit, the benefit shall be revalued using the cash balance method.

(3B) Where a cash balance benefit in respect of which the available sum is not calculated by reference to final salary—

(a) is attributable to periods of pensionable service falling partly before and partly on or after the day on which section 29 of that Act comes into force; and

(b) it appears to the trustees or managers of the scheme under which it is payable that it is appropriate to revalue so much of the benefit as is attributable to the member’s pensionable service falling on or after that day by the cash balance method,

then so much of the benefit as is attributable to the member’s pensionable service falling on or after that day shall be revalued using that method.

(4) In this section—

“average salary benefit” means benefit the rate or amount of which is calculated by reference to the average salary of a member over the period of service on which the benefit is based;

“cash balance benefit” has the meaning given by regulation 2 of the Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014;

“final salary”, in relation to a member to or in respect of whom benefits under a pension scheme are payable, means the member’s pensionable earnings, or highest, average or representative pensionable earnings, in a specified period ending at, or defined by reference to, the time when the member’s pensionable service in relation to that scheme ends;

“flat rate benefit” means any benefit the rate or amount of which is calculated by reference solely to the member’s length of service;

“average salary method”, “cash balance method”, “final salary method”, “flat rate method” and “money purchase method” have the meanings given in Schedule 3.

“pensionable earnings”, in relation to a member of a pension scheme, means earnings by reference to which benefits under the scheme are calculated.

(5) The fact that a scheme provides for the amount of the pension or other benefit for a member or for any other person in respect of him to be increased during the pre-pension period—

(a) by the percentages specified during that period under section 151(1) of the Social Security Administration Act 1992 (directions specifying percentage increases for up-rating purposes); ... or

(b) under any arrangement which , in the opinion of the Secretary of State, maintains the value of the pension or other benefit by reference to the rise in the general level of prices in Great Britain during that period,

does not in itself result in conflict with this section, if the increase falls to be determined by reference to an amount from which the guaranteed minimum for a member or a member’s widow, widower , surviving same sex spouse or surviving civil partner has not been deducted.

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Revaluation not to apply to substituted benefit.

85

Nothing in this Chapter is to be construed as requiring the revaluation of any pension or other benefit provided by virtue of section 73(2)(b) or 101D(2)(b) by way of complete substitute for another pension or benefit.

Supplementary provisions.

86

(1) In making any calculation for the purposes of this Chapter in relation to any occupational pension scheme—

(a) any commutation, forfeiture or surrender of,

(b) any charge or lien on, and

the whole or part of a pension shall be disregarded.

(2) The same money may not be treated as providing both the increase in benefit required by this Chapter and the benefit required by Chapter III.

Chapter III — Protection of increases in guaranteed minimum pensions (“anti-franking”)

General protection principle.

87

(1) This subsection applies where—

(a) there is an interval between—

(i) the date (“the cessation date”) which is the earlier of—

(a) the date on which an earner ceases to be in pensionable service under a scheme that was, before the second abolition date, a salary related contracted-out scheme; and

(b) the date on which the earner attains pensionable age; and

(ii) the date on which his guaranteed minimum pension under that scheme commences (“the commencement of payment date”);

(b) the relevant sum exceeds his guaranteed minimum on the day after the cessation date; and

(c) on the commencement of payment date or at any time after it his guaranteed minimum pension under the scheme exceeds the amount of his guaranteed minimum under it on the day after the cessation date.

(2) This subsection applies where—

(a) there is an interval between the earner’s cessation date and whichever of the following is the earlier—

(i) the date of his death; or

(ii) his commencement of payment date;

(b) the relevant sum exceeds one half of the earner’s guaranteed minimum on the day after the cessation date; and

(c) at any time when a pension under the occupational pension scheme is required to be paid to the earner’s widow, widower or surviving civil partner, the widow's, widower’s or surviving civil partner’s (as the case may be) guaranteed minimum pension under the scheme exceeds one half of the earner’s guaranteed minimum on the day after the cessation date.

(3) Where subsection (1) or (2) applies, the weekly rate of the pension payable to the member at any time when that pension is required to be paid or, as the case may be, payable to the widow, widower or surviving civil partner at any such time as is mentioned in subsection (2)(c) shall be an amount not less—

(a) in a case where by virtue of section 73(2)(b) a pension is provided by way of complete substitute for short service benefit or, as the case may be, for widow's, widower’s or surviving civil partner's pension, than the weekly rate of that pension; and

(b) in any other case, than the relevant aggregate.

(4) In subsection (3) “the relevant aggregate” means the aggregate of the following—

(a) the relevant sum;

(b) the excess mentioned in subsection (1)(c) or, as the case may be, subsection (2)(c);

(d) where the scheme provides that part of the earner’s or, as the case may be, the widow's, widower’s or surviving civil partner's pension shall accrue after the cessation date by reason of the earner’s employment after that date, the later earnings addition.

(5) To the extent that amounts attributable to transfer credits have accrued by reason of any transfer before 1st January 1985, they are to be disregarded for the purposes of subsections (1)(c), (2)(c) and (4)(b).

(6) Nothing in this section shall be construed as entitling an earner who has not reached normal pension age to any portion of a pension under a scheme to which he would not otherwise be entitled.

(7) This section does not apply to a pension to which a person is entitled in respect of employment if—

(a) the earner left the employment or left it for the last time before 1st January 1985; or

(b) the employment ceased, or ceased for the last time, to be contracted-out in relation to him before that date.

The relevant sum.

88

(1) For the purposes of this Chapter “the relevant sum” means—

(a) in a case where subsection (1) of section 87 applies—

(i) if the earner reaches normal pension age on or before the cessation date, an amount equal to the weekly rate of his pension on the day after the cessation date; and

(ii) if he reaches normal pension age after the cessation date, an amount equal to the weekly rate of any short service benefit which has accrued to him on the cessation date or, where no such benefit has then accrued, any other benefit to which this sub-paragraph applies and which has then accrued to him; and

(b) in a case where subsection (2) of that section applies, an amount equal to the weekly rate at which, on the prescribed assumptions, a pension would have begun to be paid to the widow, widower or surviving civil partner if that person had satisfied the conditions for entitlement to a pension which are specified in the scheme.

(2) Paragraph (a) of subsection (1) has effect subject to subsection (5) and to sections 87(5) and 91(1), and paragraph (b) of subsection (1) has effect subject to section 87(5).

(3) The benefit other than short service benefit to which subsection (1)(a)(ii) applies is benefit—

(a) which would have been provided as either the whole or part of the earner’s short service benefit; or

(b) of which the earner’s short service benefit would have formed part,

if section 71(1)(a) had effect with the substitution of a reference to the service which the earner had on the cessation date for the reference to 2 years’ qualifying service.

(4) Any such benefit is only to be included in the relevant sum to the extent that it does not exceed the amount which the scheme would have had to provide as short service benefit if section 71(1) had effect as mentioned in subsection (3).

(5) If the payment of any part of the earner’s pension is postponed beyond the cessation date, the relevant sum is an amount equal to what would have been the weekly rate of his pension on the day after the cessation date if there had been no such postponement.

The appropriate addition.

89

(1) For the purposes of this Chapter “appropriate addition” means—

(a) where a scheme provides that part of an earner’s or, as the case may be, a widow's, widower’s or surviving civil partner's pension shall accrue after the cessation date by reason of the earner’s employment after that date, an amount equal to the part which has so accrued; and

(b) where a scheme provides that an earner’s or, as the case may be, a widow's, widower’s or surviving civil partner's pension which has accrued before that date shall be enhanced after that date if payment of the earner’s pension is postponed, the amount by which the unguaranteed element of the pension has been enhanced by reason of the postponement.

(2) For the purposes of subsection (1)(b) the unguaranteed element of a pension is—

(a) in the case of an earner’s pension, the excess of the pension on the day after the cessation date over the earner’s guaranteed minimum on that day; and

(b) in the case of the widow's, widower’s or surviving civil partner's pension, the excess of that pension on that day over one half of the earner’s guaranteed minimum on that day.

The later earnings addition.

90

(1) For the purposes of this Chapter “the later earnings addition” means the amount (if any) by which the assumed later unguaranteed element exceeds the unguaranteed element.

(2) In subsection (1)—

(a) “the unguaranteed element” means the amount by which the relevant sum exceeds the earner’s guaranteed minimum on the day after his cessation date or, in the case of a widow's, widower’s or surviving civil partner's pension, one half of that minimum; and

(b) “the assumed later unguaranteed element” means the amount by which the relevant sum would exceed the earner’s guaranteed minimum (or, in the case of a widow's, widower’s or surviving civil partner's pension, one half of that minimum) on the assumptions mentioned in subsection (3).

(3) The assumptions mentioned in subsection (2) are—

(a) that the relevant sum were calculated on the basis that the weekly rate of the pension or benefit which determines that sum had been calculated by reference to the level of earnings by reference to which that rate would have been calculated if the earner’s cessation date had fallen on the earlier of—

(i) the earner’s commencement of payment date, or

(ii) the date on which the earner ceased to be in pensionable service under the scheme; and

(b) that the earner’s guaranteed minimum were such sum as bears the same proportion to the assumed later unguaranteed element as the guaranteed minimum mentioned in subsection (2)(a) bears to the unguaranteed element.

Special provision where employment continues after it ceases to be contracted-out by reference to scheme.

91

(1) If—

(a) an earner’s employment ceases to be contracted-out by reference to an occupational pension scheme but the scheme continues to apply to it; or

(b) an earner transfers from employment which is contracted-out by reference to an occupational pension scheme to employment to which the scheme applies but which is not contracted-out by reference to it,

the amount of any short service or other benefit which has accrued to the earner shall be computed for the purposes of section 88(1)(a)(ii) as it would be computed if he had ceased on the cessation date to be in employment to which the scheme applies.

(2) If—

(a) a benefit under a scheme is conditional on an earner attaining a particular age or having a particular length of service; and

(b) one of the events mentioned in subsection (1) occurs before he has fulfilled the condition; but

the earner shall be treated for the purposes of the previous provisions of this Chapter as if that benefit had accrued to him.

Supplementary provisions.

92

(1) In making any calculation for the purposes of this Chapter—

(a) any commutation, forfeiture or surrender of,

(b) any charge or lien on, and

the whole or part of a pension shall be disregarded.

(2) In calculating an earner’s guaranteed minimum for the purposes of this Chapter his earnings factor shall be taken to be that factor as increased, except as provided by subsection (3), by the last order under section 21 of the Social Security Pensions Act 1975 or section 148 of the Social Security Administration Act 1992 to come into force before the end of the tax year in which the cessation date falls.

(3) If an earner’s cessation date falls in the tax year in which he attains pensionable age, subsection (2) shall have effect in relation to him as if for the words from “tax year” onwards there were substituted the words “ final relevant year ”.

(4) In this section “final relevant year” has the same meaning as in section 16.

(5) Any reference in this Chapter to the weekly rate of a pension is to be construed, in relation to a pension payable otherwise than weekly, as a reference to the weekly sum which would be payable in respect of a pension of that amount payable weekly.

Chapter IV — Transfer values

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 5 — Early leavers: cash transfer sums and contribution refunds

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 4ZA — Transfers and contribution refunds

Chapter 1 — Transfer rights: general

Scope of Chapter 1.

93

(1) This Chapter applies to a member of a pension scheme if all of the following conditions are met.

(2) Condition 1 is that the member has accrued rights to any category of benefits under the scheme rules.

(3) Condition 2 is that no crystallisation event has occurred in relation to the member's accrued rights to benefits in that category (see subsection (7)).

(4) Condition 3 is that—

(a) the member is no longer accruing rights to benefits in that category (see subsection (8)), and

(b) in the case of benefits that are not flexible benefits, the member stopped accruing those rights at least one year before normal pension age.

(5) But this Chapter does not apply to—

(a) a member of a salary related occupational pension scheme whose pensionable service terminated before 1 January 1986 and in respect of whom prescribed requirements are satisfied;

(b) a member of a personal pension scheme which is comprised in an annuity contract made before 4 January 1988.

(6) In this Chapter a reference to a “category” of benefits is to one of the following three categories—

(a) money purchase benefits;

(b) flexible benefits other than money purchase benefits;

(7) For the purposes of Condition 2 a crystallisation event occurs in relation to a member's accrued rights to benefits in a category when—

(a) payment of a pension in respect of any of the benefits has begun,

(b) in the case of money purchase benefits other than collective money purchase benefits, sums or assets held for the purpose of providing any of the benefits are designated as available for the payment of drawdown pension (as defined by paragraph 4 of Schedule 28 to the Finance Act 2004), or

(c) in the case of a personal pension scheme, sums or assets held for the purpose of providing any of the benefits are applied for purchasing an annuity or insurance policy.

(8) For the purposes of Condition 3 a member stops accruing rights to a category of benefits when there are no longer arrangements in place for the accrual of rights to benefits in that category for or in respect of the member.

(9) In this section a reference to accrued rights does not include pension credit rights.

(10) Regulations may—

(a) provide for this Chapter not to apply in relation to a person of a prescribed description;

(b) provide for this Chapter not to apply in prescribed circumstances in relation to a member of a prescribed scheme or schemes of a prescribed description;

(c) modify the application of this Chapter in relation to a member who has accrued rights to benefits of a prescribed description.

(10A) Where a pension scheme is divided into sections, each section that is a collective money purchase scheme for the purposes of Part 1 of the Pension Schemes Act 2021 (see section 1(2)(b) of that Act) is to be treated as a separate scheme for the purposes of this Chapter.

(11) In the following provisions of this Chapter—

(a) a reference to a “member” of a pension scheme is a reference to a member to whom this Chapter applies, and

(b) a reference to a member's “transferrable rights” are to any rights in relation to a category of benefits by virtue of which this Chapter applies to the member.

Right to statement of entitlement: benefits other than money purchase

93A

(1) The trustees or managers of a pension scheme must, on the application of any member, provide the member with a statement of entitlement in respect of the member's transferrable rights in relation to categories of benefits other than money purchase benefits.

(2) In the case of a member with transferrable rights in relation to two categories of benefits other than money purchase benefits, the application may relate to transferrable rights in relation to either or both of those categories.

(3) For the purposes of this Chapter a member's “statement of entitlement” is a written statement of the amount of the cash equivalent at the guarantee date of the transferrable rights to which the application under subsection (1) relates.

(4) In this Chapter “the guarantee date” means the date by reference to which the value of the cash equivalent is calculated, and must be—

(a) within the prescribed period beginning with the date of the application, and

(b) within the prescribed period ending with the date on which the statement of entitlement is provided to the member.

(5) Regulations may make provision in relation to applications under this section and may, in particular, restrict the making of successive applications.

(6) If the trustees or managers of a pension scheme fail to comply with subsection (1), section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.

Right to cash equivalent.

94

(1) A member of a pension scheme who has received a statement of entitlement under section 93A acquires a right to take the cash equivalent shown in that statement in accordance with this Chapter.

(2) A member of a pension scheme who has transferrable rights in relation to money purchase benefits acquires a right to take their cash equivalent in accordance with this Chapter.

Ways of taking right to cash equivalent.

95

(1) A member of a pension scheme who has acquired a right to take a cash equivalent in accordance with this Chapter may only take it by making an application in writing to the trustees or managers of the scheme requiring them to use the cash equivalent in one of the ways specified below.

(1A) In the case of a right acquired under section 94(1), the application must be made—

(a) within the period of 3 months beginning with the guarantee date shown in the relevant statement of entitlement, and

(b) if the cash equivalent relates to benefits that are not flexible benefits, by no later than the date that falls one year before the member attains normal pension age.

(2) In the case of a member of an occupational pension scheme that is not an unfunded public service defined benefits scheme, the ways referred to in subsection (1) are—

(a) for acquiring transfer credits allowed under the rules of another occupational pension scheme—

(i) the trustees or managers of which are able and willing to accept payment in respect of the member’s transferrable rights, and

(ii) which satisfies prescribed requirements;

(b) for acquiring rights allowed under the rules of a personal pension scheme—

(i) the trustees or managers of which are able and willing to accept payment in respect of the member’s transferrable rights, and

(ii) which satisfies prescribed requirements;

(c) for purchasing from one or more insurers such as are mentioned in section 19(4)(a), chosen by the member and willing to accept payment on account of the member from the trustees or managers, one or more annuities which satisfy prescribed requirements;

(d) for subscribing to other pension arrangements which satisfy prescribed requirements.

(2A) In the case of a member of an occupational pension scheme that is an unfunded public service defined benefits scheme, the ways referred to in subsection (1) are—

(a) for acquiring transfer credits allowed under the rules of another occupational pension scheme if—

(i) the benefits that may be provided under the other scheme by virtue of the transfer credits are not flexible benefits,

(ii) the trustees or managers of the other scheme are able and willing to accept payment in respect of the member's transferrable rights, and

(iii) the other scheme satisfies requirements prescribed in regulations made by the Secretary of State or the Treasury;

(b) for acquiring rights allowed under the rules of a personal pension scheme if—

(i) the benefits that may be provided under the personal pension scheme by virtue of the acquired rights are not flexible benefits,

(ii) the trustees or managers of the personal pension scheme are able and willing to accept payment in respect of the member's transferrable rights, and

(iii) the personal pension scheme satisfies requirements prescribed in regulations made by the Secretary of State or the Treasury;

(c) for purchasing from one or more insurers such as are mentioned in section 19(4)(a), chosen by the member and willing to accept payment on account of the member from the trustees or managers, one or more annuities which satisfy requirements prescribed in regulations made by the Secretary of State or the Treasury;

(d) for subscribing to other pension arrangements which satisfy requirements prescribed in regulations made by the Secretary of State or the Treasury.

(2B) The Treasury may by regulations provide for sub-paragraph (i) of subsection (2A)(a) or (b) not to apply in prescribed circumstances or in relation to prescribed schemes or schemes of a prescribed description.

(2C) In subsections (2) and (2A) “unfunded public service defined benefits scheme” means a public service pension scheme that—

(a) is a defined benefits scheme within the meaning given by section 37 of the Public Service Pensions Act 2013, and

(b) meets some or all of its liabilities otherwise than out of a fund accumulated for the purpose during the life of the scheme.

(3) In the case of a member of a personal pension scheme, the ways referred to in subsection (1) are—

(a) for acquiring transfer credits allowed under the rules of an occupational pension scheme—

(i) the trustees or managers of which are able and willing to accept payment in respect of the member’s transferrable rights, and

(ii) which satisfies prescribed requirements;

(b) for acquiring rights allowed under the rules of another personal pension scheme—

(i) the trustees or managers of which are able and willing to accept payment in respect of the member’s transferrable rights, and

(ii) which satisfies prescribed requirements;

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Except in such circumstances as may be prescribed—

(a) subsection (2) is to be construed as if paragraph (d) were omitted; and

(b) subsection (3) is to be construed as if paragraph (c) were omitted.

(5A) Except in such circumstances as may be prescribed in regulations made by the Secretary of State or the Treasury, subsection (2A) is to be construed as if paragraph (d) were omitted.

(6) Without prejudice to the generality of subsections (2) , (2A) and (3), the powers conferred by those subsections include power to provide that a scheme or pension arrangement or, in the case of subsection (2) or (2A), an annuity must satisfy requirements of the Inland Revenue.

(6ZA) The trustees or managers of the scheme may not use the cash equivalent in a way specified in subsection (2)(a), (b) or (d), (2A)(a), (b) or (d) or (3) unless prescribed conditions are satisfied.

(6ZB) The conditions that may be prescribed by regulations under subsection (6ZA) include (but are not limited to) conditions about—

(a) the member's employment or place of residence;

(b) providing the trustees or managers with information or evidence about the member's employment or place of residence;

(c) the member obtaining information or guidance about exercising the option conferred by subsection (1) from a prescribed person in a prescribed case;

(d) providing the trustees or managers with evidence that—

(i) the member has complied with a prescribed condition about obtaining such information or guidance from a prescribed person, or

(ii) the member is not subject to such a prescribed condition.

(6ZC) Regulations may make provision requiring the trustees or managers of a pension scheme to notify a member who makes an application under subsection (1) of conditions prescribed under subsection (6ZA).

(6A) Regulations may extend the period specified in subsection (1A)(a) in prescribed circumstances.

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) An application to the trustees or managers of the scheme under subsection (1) is to be taken to have been made if it is delivered to them personally, or sent by post in a registered letter or by the recorded delivery service.

Further provisions concerning exercise of option under s. 95.

96

(1) A member who has acquired a right to take a cash equivalent under section 94(1) or (2) may exercise the option conferred by section 95(1) in relation to different portions of that cash equivalent in different ways, but a member who exercises that option must do so—

(a) in relation to the whole of that cash equivalent, or

(b) if subsection (2) applies, in relation to the whole of the balance mentioned in subsection (3).

(2) This subsection applies where—

(a) the trustees or managers—

(i) of an occupational pension scheme ... , or

(ii) of a personal pension scheme ... , ...

(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

are able or willing to accept a transfer payment only in respect of a member’s rights other than his transferrable rights to guaranteed minimum pensions, his transferrable rights so far as attributable to service in contracted-out employment on or after the principal appointed day ... ; and

(b) the member has not required the trustees or managers of the scheme from which he is being transferred to use the portion of his cash equivalent which represents those transferrable rights in any of the ways specified in subsection (2) , subsection (2A) or, as the case may be, subsection (3) of section 95.

(3) Where subsection (2) applies, this section and sections 94, 95 and 97 are to be construed as conferring on the member an option only in respect of the balance of the cash equivalent to which the member would otherwise be entitled, after deduction of an amount sufficient for the trustees or managers of the scheme from which he is being transferred to meet their liability—

(a) in the case of a transfer from an occupational pension scheme, in respect of the member’s and the member’s widow's, widower’s or surviving civil partner’s (as the case may be) pensions, being guaranteed minimum pensions or pensions so far as attributable to service in contracted-out employment on or after the principal appointed day ...

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Where a member of a pension scheme—

(a) is entitled to make an application under section 95(1) in relation to any category of benefits, and

(b) is also entitled to give a transfer notice under section 101F(1) to the trustees or managers of the scheme in relation to benefits in the same category (or would be entitled to do so but for section 101G(2)),

the member may not, if the scheme so provides, make an application under section 95(1) in relation to that category of benefits without also giving a transfer notice under section 101F(1) in relation to that category of benefits.

Calculation of cash equivalents.

97

(1) Cash equivalents are to be calculated and verified —

(a) in the prescribed manner , and

(b) where a designation has been made under section 97A or 97B, in accordance with regulations under section 97C.

(1A) Where a member applies under section 95 to take a cash equivalent that relates to money purchase benefits, the cash equivalent is to be calculated by reference to the date of the application.

(2) Regulations may provide—

(a) that in calculating cash equivalents that relate to money purchase benefits account shall be taken—

(i) of any surrender, commutation or forfeiture of the whole or part of a member’s pension which occurs before the trustees or managers of the scheme of which he is a member do what is needed to comply with what he requires under section 95;

(ii) in a case where subsection (2) of section 96 applies, of the need to deduct an appropriate amount to provide for the liabilities mentioned in subsection (3) of that section;

(aa) for a cash equivalent that relates to any category of benefits to be reduced so as to take account of the extent (if any) to which an entitlement has arisen under the scheme to the present payment of the whole or any part of—

(i) any pension; or

(ii) any benefit in lieu of pension; and

(b) that in prescribed circumstances a cash equivalent shall be increased or reduced.

(3) Without prejudice to the generality of subsection (2), the circumstances that may be specified by virtue of paragraph (b) of that subsection include—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) failure by the trustees or managers of the scheme to do what is needed to carry out what a member of the scheme requires within 6 months of the appropriate date; and

(3ZA) Where, in the case of an application from a member under section 95 that relates to money purchase benefits that are collective money purchase benefits, regulations under section 99(2)(c) provide for a period longer than 6 months, subsection (3)(b) is to be read as if the reference to 6 months were a reference to that longer period.

(3A) For the purposes of subsection (3), the “appropriate date”—

(a) in relation to a cash equivalent that relates to benefits other than money purchase benefits, means the guarantee date for the purposes of the relevant statement of entitlement under section 93A, and

(b) in relation to a cash equivalent that relates to money purchase benefits, means the date on which the trustees or managers receive an application from the member under section 95.

(3B) Where regulations under subsection (2)(b) provide for the cash equivalent shown in a statement of entitlement to be increased or reduced after the member has made an application under section 95, the regulations may provide for the application under section 95 to lapse (but this does not prevent the member making a fresh application in respect of the increased or reduced cash equivalent).

(4) Regulations under subsection (2) may specify as the amount by which a cash equivalent is to be reduced such an amount that a member has no right to receive anything.

Designation of funded public service defined benefits schemes

97A

(1) This section applies to funded public service defined benefits schemes other than schemes to which section 97B applies (equivalent provision for certain Scottish schemes).

A scheme to which this section applies is referred to below as an “eligible scheme”.

(2) The relevant person may designate an eligible scheme as a scheme to which regulations under section 97C are to apply for a specified period of no more than 2 years.

(3) The power under subsection (2) may be exercised only if the relevant person considers that—

(a) there is an increased likelihood of payments out of public funds, or 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 acquired under section 94.

(4) The power under subsection (2) may be exercised in relation to the whole or any part of a scheme.

(5) In the application of subsection (3) to part of a scheme, paragraph (a) is to be read as if it referred to the scheme's liabilities relating to that part.

(6) A designation under subsection (2)—

(a) may be extended (on more than one occasion) for a period of no more than 2 years;

(b) may be revoked.

(7) The relevant person must give notice in writing of a designation or its extension or revocation to the trustees or managers of the scheme (except in a case where the relevant person is the trustees or managers).

(8) If the trustees or managers of an eligible scheme, or part of such a scheme, which is not designated under this section consider that the conditions in paragraphs (a) and (b) of subsection (3) are met in relation to the scheme or part they must notify—

(a) the Treasury, and

(b) (where relevant) each Minister of the Crown by whom, or with whose approval, the scheme was established.

(9) If the trustees or managers of a scheme, or part of a scheme, which is designated under this section consider that the conditions in paragraphs (a) and (b) of subsection (3) are no longer met in relation to the scheme or part they must notify—

(a) the Treasury, and

(b) (where relevant) each Minister of the Crown by whom, or with whose approval, the scheme was established.

(10) In this section—

“eligible scheme” has the meaning given by subsection (1);

“funded public service defined benefits scheme” means a public service pension scheme that—is a defined benefits scheme within the meaning given by section 37 of the Public Service Pensions Act 2013, andmeets its liabilities out of a fund accumulated for the purpose during the life of the scheme;

“local authority” means—a county or district council in England,a county or county borough council in Wales,a London borough council,the Greater London Authority,the Common Council of the City of London in its capacity as a local authority, orthe Council of the Isles of Scilly;

“payment out of public funds” means a payment provided directly or indirectly—out of—the Consolidated Fund or any other account or source of money which cannot be drawn or spent other than by, or with the authority of, the Treasury, orthe Welsh Consolidated Fund, orby a local authority;

“the relevant person” means—in relation to a scheme established by virtue of paragraph 12 of Schedule 6 to the Constitutional Reform and Governance Act 2010 (or treated as so established), the Independent Parliamentary Standards Authority and the trustees of the Parliamentary Contributory Pension Fund;in relation to a scheme established by virtue of paragraph 16 of Schedule 6 to the Constitutional Reform and Governance Act 2010 (or treated as so established), the trustees of the Parliamentary Contributory Pension Fund;in any other case, either of the following—the Treasury, orany Minister of the Crown by whom, or with whose approval, the scheme was established.

(11) The Treasury may by regulations modify the definitions of “local authority” and “the relevant person” in subsection (10).

Designation of funded public service defined benefits schemes: Scotland

97B

(1) This section applies to a funded public service defined benefits scheme that is—

(a) a scheme established by, or with the approval of, the Scottish Ministers;

(b) a scheme established by virtue of section 81(4)(b) of the Scotland Act 1998.

A scheme to which this section applies is referred to below as an “eligible scheme”.

(2) The relevant person may designate an eligible scheme as a scheme to which regulations under section 97C are to apply for a specified period of no more than 2 years.

(3) The power under subsection (2) may be exercised only if the relevant person considers that—

(a) there is an increased likelihood of payments out of public funds, or 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 acquired under section 94.

(4) The power under subsection (2) may be exercised in relation to the whole or any part of a scheme.

(5) In the application of subsection (3) to part of a scheme, paragraph (a) is to be read as if it referred to the scheme's liabilities relating to that part.

(6) A designation under subsection (2)—

(a) may be extended (on more than one occasion) for a period of no more than 2 years;

(b) may be revoked.

(7) The relevant person must give notice in writing of a designation or its extension or revocation to the trustees or managers of the scheme (except in a case where the relevant person is the trustees or managers).

(8) If the trustees or managers of an eligible scheme, or part of such a scheme, which is not designated under this section consider that the conditions in paragraphs (a) and (b) of subsection (3) are met in relation to the scheme or part they must notify the Scottish Ministers.

(9) If the trustees or managers of a scheme, or part of a scheme, that is designated under this section consider that the conditions in paragraphs (a) and (b) of subsection (3) are no longer met in relation to the scheme or part they must notify the Scottish Ministers.

(10) In this section—

“eligible scheme” has the meaning given by subsection (1);

“funded public service defined benefits scheme” means a public service pension scheme that—is a defined benefits scheme within the meaning given by section 37 of the Public Service Pensions Act 2013, andmeets its liabilities out of a fund accumulated for the purpose during the life of the scheme;

“payment out of public funds” means a payment provided directly or indirectly—out of the Scottish Consolidated Fund, orby a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994;

“the relevant person” means—in relation to a scheme falling within subsection (1)(a), the Scottish Ministers;in relation to a scheme falling with subsection (1)(b), the trustees of the Scottish Parliamentary Contributory Pension Fund.

(11) The Scottish Ministers may by regulations modify the definition of “the relevant person” in subsection (10).

Reduction of cash equivalents in case of designated schemes

97C

(1) The Treasury may by regulations provide that where, under section 95(1), a member of a designated scheme requires the trustees or managers to use a cash equivalent for acquiring a right or entitlement to flexible benefits under the rules of another pension scheme the cash equivalent must be reduced by an amount determined in accordance with the regulations.

(2) Regulations under subsection (1) may not require a reduction in cases where a scheme ceases to be a designated scheme before the date on which the trustees or managers do what is needed to carry out what the member requires.

(3) Regulations under subsection (1) may produce the result (alone or in conjunction with regulations under section 97) that the amount by which a cash equivalent is to be reduced is such an amount that a member has no right to receive anything.

(4) In subsection (1), “designated scheme” means a funded public service defined benefits scheme, or part of such a scheme, that (on the date of the application under section 95(1)) is designated under section 97A or 97B.

Loss of right to cash equivalent

98

(1) A member of a pension scheme who acquires the right to take a cash equivalent under section 94(1) loses that right if no application to take the cash equivalent is made within the period required by section 95(1A) or (6A).

(2) A member of a pension scheme loses the right to take a cash equivalent in accordance with this Chapter if, after the member makes an application under section 95, the duty of the trustees or managers to do what is needed to carry out what the member requires is extinguished by section 99(2ZA) or (2A).

(3) Nothing in subsection (1) or (2) prevents the member from later acquiring a new right to take a cash equivalent in relation to the same benefits.

(4) A member of a pension scheme loses the right to take a cash equivalent in accordance with this Chapter if the scheme is wound up.

Trustees’ duties after exercise of option.

99

(1) Where—

(a) a member has exercised the option conferred by section 95; and

(b) the trustees or managers of the scheme have done what is needed to carry out what the member requires,

the trustees or managers shall be discharged from any obligation to provide benefits to which the cash equivalent related except, in such cases as are mentioned in section 96(2), to the extent that an obligation to provide such guaranteed minimum pensions ... continues to subsist.

(2) Subject to the following provisions of this section, if the trustees or managers of a scheme receive an application under section 95 they must do what is needed to carry out what the member requires—

(a) in the case of an application that relates to benefits other than money purchase benefits, within 6 months beginning with the guarantee date shown in the relevant statement of entitlement, ...

(b) in the case of an application that relates to money purchase benefits other than collective money purchase benefits, within 6 months beginning with the date of the application , and

(c) in the case of an application which relates to money purchase benefits that are collective money purchase benefits, within 6 months beginning with the date of the application or such longer period beginning with that date as may be prescribed.

(2ZA) Subsection (2) does not apply if the trustees or managers have been unable to carry out what the member requires because a condition prescribed by regulations under section 95(6ZA) has not been satisfied.

(2ZB) Subsection (2) does not apply if—

(a) the member was required by section 96(4) to give a transfer notice under section 101F(1) in addition to making an application, and

(b) the trustees or managers have been unable to carry out what the member required in the transfer notice under section 101F(1) because a condition prescribed by regulations under section 101F(5A) has not been satisfied.

(2A) Subsection (2) does not apply if—

(a) the trustees or managers have been unable to carry out the check required by section 48 of the Pension Schemes Act 2015 by reason of factors outside their control, or

(b) the trustees or managers have carried out the check required by section 48 of the Pension Schemes Act 2015 but the check did not confirm that the member had received appropriate independent advice.

(3) If—

(a) disciplinary proceedings or proceedings before a court have been begun against a member of an occupational pension scheme ... ; and

(b) it appears to the trustees or managers of the scheme that the proceedings may lead to the whole or part of the pension or benefit in lieu of a pension payable to the member or his or her surviving spouse or civil partner being forfeited; and

(c) the date before which they would (apart from this subsection) be obliged under subsection (2) to carry out what the member requires is earlier than the end of the period of 3 months after the conclusion of the disciplinary or court proceedings (including any proceedings on appeal),

then, subject to the following provisions of this section, they must instead do so before the end of that period of 3 months.

(3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The Regulatory Authority may, in prescribed circumstances, by direction grant an extension of the period within which the trustees or managers of the scheme are obliged to do what is needed to carry out what a member of the scheme requires.

(4A) Regulations may make provision requiring applications for extensions under subsection (4) to meet prescribed requirements.

(4B) Regulations may extend the period for compliance under subsection (2) or (3) in prescribed circumstances.

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) Where the trustees or managers of an occupational pension scheme have not done what is needed to carry out what a member of the scheme requires within six months of the date mentioned in paragraph (a) or (b) of subsection (2)—

(a) they must, except in prescribed cases, notify the Regulatory Authority of that fact within the prescribed period, and

(b) section 10 of the Pensions Act 1995 (power of the Regulatory Authority to impose civil penalties) shall apply to any trustee or manager who has failed to take all such steps as are reasonable to ensure that it was so done.

(8) Regulations may provide that in prescribed circumstances subsection (7) shall not apply in relation to an occupational pension scheme.

Trustees' further duties: collective money purchase benefits

99A

(1) If the trustees receive an application under section 95 relating to money purchase benefits that are collective money purchase benefits—

(a) they must give the member notice in writing of the cash equivalent that relates to those benefits, and

(b) they must not without the written consent of the member enter into an agreement with a third party to use the member's cash equivalent in a way specified in section 95(2) before the end of the period mentioned in subsection (2).

(2) The period referred to in subsection (1)(b) is—

(a) the period of 3 weeks beginning with the day after the day on which the notice is given, or

(b) such other period as may be specified in regulations.

(3) Any action taken in contravention of subsection (1)(b) is void.

Withdrawal of applications.

100

(1) Subject to subsections (2) and (2A), a member of a scheme may withdraw an application under section 95 by giving the trustees or managers of the scheme notice in writing that he no longer wishes them to do what is needed to carry out what he previously required.

(2) Such a notice shall be of no effect if it is given to the trustees or managers at a time when, in order to comply with what the member previously required, they have already entered into an agreement with a third party to use the whole or part of the member’s cash equivalent in a way specified in subsection (2) , subsection (2A) or, as the case may be, subsection (3) of section 95.

(2A) If the making of the application depended on the giving of a notice under section 101F(1), the application may only be withdrawn if the notice is also withdrawn.

(3) A member who withdraws an application may make another.

(4) A notice to the trustees or managers of a scheme under this section is to be taken to have been given if it is delivered to them personally, or sent by post in a registered letter or by recorded delivery service.

Prohibition on excluding future accruals etc

100A

Except as mentioned in sections 96(4) and 101G(4), a pension scheme may not contain rules that would have the effect of—

(a) preventing a member from exercising a right under this Chapter in relation to a category of benefits without also exercising a right under this Chapter or otherwise to require a transfer payment to be made in respect of another category of benefits, or

(b) preventing a member who exercises a right under this Chapter in relation to a category of benefits from accruing rights to benefits in another category.

Meaning of “scheme rules”: occupational pension schemes

100B

(1) In this Chapter references to the scheme rules, in relation to a pension scheme, are references to—

(a) the rules of the scheme, except so far as overridden by a relevant legislative provision,

(b) the relevant legislative provisions, to the extent that they have effect in relation to the scheme and are not reflected in the rules of the scheme, and

(c) any provision which the rules of the scheme do not contain but which the scheme must contain if it is to conform with the requirements of Chapter 1 of Part 4 of this Act.

(2) For the purposes of subsection (1)—

(a) “relevant legislative provision” means any provision contained in any of the following provisions—

(i) Schedule 5 to the Social Security Act 1989;

(ii) Chapter 2 or 3 of Part 4 of this Act or regulations made under either of those Chapters;

(iii) this Part of this Act or regulations made under this Part;

(iv) Part 4A of this Act or regulations made under that Part;

(v) section 110(1) of this Act;

(vi) Part 1 of the Pensions Act 1995 or subordinate legislation made or having effect as if made under that Part;

(vii) section 31 of the Welfare Reform and Pensions Act 1999;

(viii) any provision mentioned in section 306(2) of the Pensions Act 2004;

(ix) regulations made under Schedule 17 to the Pensions Act 2014;

(x) regulations made under Schedule 18 to the Pensions Act 2014;

(xi) regulations made under Part 2 of the Pension Schemes Act 2015;

(xii) section 55 of the Pension Schemes Act 2015;

(xiii) regulations made under section 56 or 57 of the Pension Schemes Act 2015;

(xiv) sections 21, 23, 26, 28, 29 and 33 of and Schedule 1 to the Pension Schemes Act 2017;

(xv) regulations made under section 18(4) of or paragraph 1(6) of Schedule 2 to the Pension Schemes Act 2021;

(xvi) sections 34, 39, 41, 42 and 45 of the Pension Schemes Act 2021;

(b) a relevant legislative provision is to be taken to override any of the provisions of the scheme if, and only if, it does so by virtue of any of the following provisions—

(i) paragraph 3 of Schedule 5 to the Social Security Act 1989;

(ii) section 129(1) of this Act;

(iii) section 117(1) of the Pensions Act 1995;

(iv) section 31(4) of the Welfare Reform and Pensions Act 1999;

(v) section 306(1) of the Pensions Act 2004;

(vi) regulations made under paragraph 17 of Schedule 17 to the Pensions Act 2014;

(vii) regulations made under paragraph 6 of Schedule 18 to the Pensions Act 2014;

(viii) regulations made under section 34 of the Pension Schemes Act 2015;

(ix) section 55(3) of the Pension Schemes Act 2015;

(x) regulations made under section 56(4) or 57(4) of the Pension Schemes Act 2015;

(xi) sections 21(7), 23(7), 26(9), 28(6), 29(2) and 33(5) of and paragraph 1(7) of Schedule 1 to the Pension Schemes Act 2017;

(xii) sections 18(7)(b), 34(5), 39(6), 41(6), 42(2) and 45(5) of and paragraph 1(7) of Schedule 2 to the Pension Schemes Act 2021.

Meaning of “normal pension age” in this Chapter

100C

(1) In this Chapter “normal pension age”, in relation to a category of benefits under a pension scheme, means—

(a) in a case where the scheme is an occupational pension scheme and those benefits consist only of a guaranteed minimum pension, the earliest age at which the member is entitled to receive the guaranteed minimum pension on retirement from any employment to which the scheme applies,

(b) in any other case where the scheme is an occupational pension scheme and the scheme provides for the member to become entitled to receive any of those benefits at a particular age on retirement from any employment to which the scheme applies, the earliest age at which the member becomes entitled to receive any of the benefits, and

(c) in a case not falling within paragraph (a) or (b), normal minimum pension age as defined by section 279(1) of the Finance Act 2004.

(2) For the purposes of subsection (1) any scheme rule making special provision as to early retirement on grounds of ill-health or otherwise is to be disregarded.

Interpretation of Chapter

100D

In this Chapter—

“accrued rights”, in relation to a member of a pension scheme, means rights that have accrued to or in respect of the member to benefits under the scheme;

“category”, in relation to benefits, has the meaning given by section 93(6);

“flexible benefit” has the meaning given by section 74 of the Pension Schemes Act 2015;

“guarantee date”, in relation to a member who has received a statement of entitlement, has the meaning given by section 93A;

“member” is to be read in accordance with section 93(11);

“normal pension age” has the meaning given by section 100C;

“pension credit rights”, in relation to a member of a pension scheme, means rights to benefits under the scheme which are attributable (directly or indirectly) to a pension credit;

“salary related occupational pension scheme”: an occupational pension scheme is “salary related” if—the scheme is not a scheme under which all the benefits that may be provided are money purchase benefits, andthe scheme does not fall within a prescribed class;

“scheme rules”, in relation to a pension scheme, has the meaning given by section 100B;

“statement of entitlement” has the meaning given by section 93A;

“transferrable rights” is to be read in accordance with section 93(11).

Supplementary provisions.

101

In making any calculation for the purposes of this Chapter—

(a) any charge or lien on, and

(b) any set-off against,

the whole or part of a pension shall be disregarded.

Chapter 2 — Early leavers: cash transfer sums and contribution refunds

Scope of Chapter 5

101AA

(1) This Chapter applies to any member of an occupational pension scheme to which Chapter 1 applies (see section 69(3)) if—

(a) his pensionable service terminates before he attains normal pension age, and

(b) on the date on which his pensionable service terminates—

(i) the three month condition is satisfied, but

(ii) he does not have relevant accrued rights to benefit under the scheme.

(2) For the purposes of subsection (1), the three month condition is that the period of the member’s pensionable service under the scheme, taken together with—

(a) any previous period of his pensionable service under the scheme, and

(b) any period throughout which he was employed in linked qualifying service under another scheme,

amounts to at least three months.

(3) A period counts for the purposes of paragraph (a) or (b) of subsection (2) only so far as it counts towards qualification for long service benefit within the meaning of Chapter 1.

(4) For the purposes of subsection (1), “relevant accrued rights to benefit under the scheme”, in relation to a member of a scheme, means rights which—

(a) have accrued to or in respect of him under the scheme, and

(b) entitle him to the relevant benefits which would have accrued to or in respect of him under the applicable rules if paragraphs (a) , (aa) and (b) of section 71(1) (and the word “and” immediately preceding them) did not have effect.

(5) References in the following provisions of this Chapter to a member, in relation to an occupational pension scheme, are to a member of the scheme to whom this Chapter applies.

Right to cash transfer sum and contribution refund

101AB

(1) On the termination of his pensionable service, a member of an occupational pension scheme acquires a right to whichever one he elects of the following options—

(a) a cash transfer sum;

(b) a contribution refund.

(2) Subsection (1) is subject to the following provisions of this Chapter.

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Pension Schemes Act 1993

Supervision of formerly certified schemes

Supervision of former salary related contracted-out schemes

52

Supervision: former contracted-out schemes.

53

Supervision: former appropriate personal pension schemes.

54

State scheme premiums

Payment of state scheme premiums on termination of certified status.

55

Provisions supplementary to s. 55.

56

Elections to pay contributions equivalent premiums.

57

Amount of premiums payable under s. 55.

58

Alternative basis for revaluation of earnings factors for calculation of certain premiums.

59

Effect of payment of premiums on rights.

60

Deduction of contributions equivalent premium from refund of scheme contributions.

61

No recovery of state scheme premiums from earners etc.

62

Further provisions concerning calculations relating to premiums.

63

Actuarial tables for purposes of calculations relating to premiums.

64

Inclusion of former and future earners for some purposes of this Chapter.

65

Power to apply certain provisions to widowers.

66

Non-payment of contributions equivalent premiums.

67

Unpaid premiums: supplementary.

68

Part IIIA — Safeguarded rights

Safeguarded rights.

68A

Requirements relating to safeguarded rights.

68B

Reserve powers in relation to non-complying schemes.

68C

Power to control transfer or discharge of liability.

68D

Part IV — Protection for early leavers

Chapter I — preservation of benefit under occupational schemes

Scope of Chapter I: the preservation requirements.

69

Interpretation.

70

Basic principle as to short service benefit.

71

No discrimination between short service and long service beneficiaries.

72

Form of short service benefit and its alternatives.

73

Computation of short service benefit.

74

Credits.

75

Pension increases.

76

Assignment, surrender and commutation of benefit.

77

Forfeiture, etc.

78

Charges, liens and set-offs.

79

Power to modify ss. 77 to 79 as respects alternative benefits.

80

Discharge of liability where short service or alternative benefits secured by insurance policies or annuity contracts.

81

Supplementary regulations.

82

Chapter II — Revaluation of accrued benefits (excluding guaranteed minimum pensions)

Scope of Chapter II.

83

Basis of revaluation.