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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

(3) In this Chapter “cash transfer sum” means, in relation to a member of an occupational pension scheme, the cash equivalent, at the date on which his pensionable service terminates, of the benefits mentioned in section 101AA(4)(b).

(4) In this Chapter, “contribution refund” means, in relation to a member of an occupational pension scheme, a sum representing the aggregate of—

(a) the member’s employee contributions to the scheme, and

(b) where transfer credits have been allowed to the member under the scheme by virtue of a payment (“the transfer payment”) made by the trustees or managers of another occupational pension scheme, the member’s employee contributions to that other scheme, so far as they—

(i) relate to the transfer payment, and

(ii) do not, in aggregate, exceed the amount of the transfer payment.

(5) In subsection (4), “employee contributions” means, in relation to a member of an occupational pension scheme, contributions made to the scheme by or on behalf of the member on his own account, but does not include—

(a) a transfer payment by virtue of which transfer credits have been allowed to the member under the scheme, or

(b) any pension credit or amount paid to the scheme which is attributable (directly or indirectly) to a pension credit.

Notification of right to cash transfer sum or contribution refund

101AC

(1) This section applies where the pensionable service of a member of an occupational pension scheme has terminated.

(2) The trustees or managers of the scheme must—

(a) within a reasonable period after the termination give the member a statement in writing containing information adequate to explain—

(i) the nature of the right acquired by him under section 101AB, and

(ii) how he may exercise the right,

and such other information as may be prescribed, and

(b) afford the member a reasonable period after giving him that statement within which to exercise the right.

(3) The statement given under subsection (2)(a) must specify, in particular—

(a) in relation to the cash transfer sum to which the member acquires a right under section 101AB, its amount and the permitted ways in which the member can use it,

(b) the amount of the contribution refund to which the member so acquires a right, and

(4) Information which may be prescribed under subsection (2)(a) includes, in particular—

(a) information about any tax liability in respect of, or deduction required or permitted to be made from, the cash transfer sum or contribution refund, and

(b) information about the effect on other rights of the member (whether under the applicable rules or otherwise) of exercising the right.

(5) The trustees or managers may notify the member that, if he does not exercise the right mentioned in subsection (2)(a)(i) on or before the reply date, the trustees or managers will be entitled to pay the contribution refund to him.

(6) Where the trustees or managers of the scheme fail to comply with subsection (2), 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.

Exercise of right under section 101AB

101AD

(1) This section applies where a member of an occupational pension scheme acquires a right under section 101AB.

(2) The member may exercise the right by giving a notice in writing to that effect to the trustees or managers stating—

(a) which of the options under section 101AB(1) he elects, and

(b) if he elects for the cash transfer sum, the permitted way in which he requires that sum to be used.

(3) The notice under subsection (2) must be given on or before—

(a) the reply date, or

(b) such later date as the trustees or managers may allow in his case under section 101AI(2).

Permitted ways of using cash transfer sum

101AE

(1) This section applies in relation to a cash transfer sum to which a member of an occupational pension scheme acquires a right under section 101AB.

(2) The ways in which the cash transfer sum may be used are—

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

(i) whose trustees or managers are able and willing to accept the cash transfer sum, and

(ii) which satisfies prescribed requirements,

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

(i) whose trustees or managers are able and willing to accept the cash transfer sum, and

(ii) which satisfies prescribed requirements,

(d) in such circumstances as may be prescribed, for subscribing to other pension arrangements which satisfy prescribed requirements.

(3) For the purposes of subsection (2), “appropriate annuity” means an annuity which satisfies prescribed requirements and is purchased from an insurer who—

(a) falls within section 19(4)(a),

(b) is chosen by the member, and

Calculation of cash transfer sum and contribution refund

101AF

(1) Cash transfer sums are to be calculated and verified in the prescribed manner.

(2) Any calculation of a contribution refund must conform with such requirements as may be prescribed.

(3) Regulations may provide—

(a) for amounts to be deducted in respect of administrative costs in calculating cash transfer sums;

(b) for a cash transfer sum or contribution refund to be increased or reduced in prescribed circumstances.

(4) The circumstances that may be prescribed under subsection (3)(b) include in particular—

(a) a failure by the trustees or managers of the scheme to comply with section 101AG(2) or (4) in relation to the cash transfer sum or contribution refund, and

(b) the state of funding of the scheme.

(5) Regulations under subsection (3)(b) may provide—

(a) for a cash transfer sum to be reduced so that the member has no right to have any amount paid by way of cash transfer sum in respect of him;

(b) for a contribution refund to be reduced so that the member has no right to receive any amount by way of contribution refund under this Chapter.

Duties of trustees or managers following exercise of right

101AG

(1) This section applies where a member of an occupational pension scheme has exercised a right under section 101AB in accordance with section 101AD.

(2) Where the member has elected for the cash transfer sum, the trustees or managers of the scheme must, within a reasonable period beginning with the date on which the right was exercised, do what is needed to carry out the requirement specified in the member’s notice under section 101AD(2)(b).

(3) When the trustees or managers have done what is needed to carry out that requirement, they are discharged from any obligation—

(a) in respect of any rights (including conditional rights) of, or in respect of, the member to relevant benefits under the applicable rules, and

(b) to make any other payment by way of refund to or in respect of the member of, or in respect of—

(i) the contributions, or any payment, mentioned in section 101AB(4), or

(ii) any other contributions made to the scheme, or any other scheme, in respect of the member (other than any pension credit or amount attributable (directly or indirectly) to a pension credit).

(4) Where the member has elected for the contribution refund, the trustees or managers of the scheme must, within a reasonable period beginning with the date on which the right was exercised, do what is needed to secure that the amount of the contribution refund is paid to the member or as he directs.

(5) When the trustees or managers have done what is needed to secure the payment of the contribution refund as mentioned in subsection (4)—

(a) they are discharged from any obligation in respect of any rights (including conditional rights) of, or in respect of, the member to relevant benefits under the applicable rules, and

(b) if they are required under the applicable rules, or determine in accordance with those rules, to make any payment (“the refund payment”) by way of refund to or in respect of the member of, or in respect of—

(i) the contributions, or any payment, mentioned in section 101AB(4), or

(ii) any other contributions made to the scheme, or any other scheme, in respect of the member (other than any pension credit or amount attributable (directly or indirectly) to a pension credit),

the amount of the contribution refund may be set off against the refund payment.

(6) Where the trustees or managers fail to comply with subsection (2) or (4), 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.

Powers of trustees or managers where right not exercised

101AH

(1) This section applies where—

(a) a member of an occupational pension scheme does not exercise a right acquired by him under section 101AB on or before the reply date or such later date as the trustees or managers of the scheme allow in his case under section 101AI(2), and

(b) the trustees or managers of the scheme have notified the member as mentioned in section 101AC(5).

(2) The trustees or managers may within a reasonable period beginning with—

(a) the reply date, or

(b) if a later date has been allowed as mentioned in subsection (1), that later date,

pay the contribution refund to the member.

(3) When the trustees or managers have paid the contribution refund to the member—

(a) they are discharged from any obligation in respect of any rights (including conditional rights) of, or in respect of, the member to relevant benefits under the applicable rules, and

(b) if they are required under the applicable rules, or determine in accordance with those rules, to make any payment (“the refund payment”) by way of refund to or in respect of the member of, or in respect of—

(i) the contributions, or any payment, mentioned in section 101AB(4), or

(ii) any other contributions made to the scheme, or any other scheme, in respect of the member (other than any pension credit or amount attributable (directly or indirectly) to a pension credit),

the amount of the contribution refund may be set off against the refund payment.

Rights under section 101AB: further provisions

101AI

(1) A member of an occupational pension scheme loses any right acquired by him under section 101AB—

(a) if the scheme is wound up, or

(b) subject to subsection (2), if he fails to exercise the right on or before the reply date.

(2) If the member has failed to exercise any such right on or before the reply date, the trustees or managers of the scheme may allow him to exercise it on or before such later date as they may determine on the application of the member.

(3) Where the trustees or managers determine a later date under subsection (2)—

(a) they must give a notice in writing to that effect to the member, and

(b) subsection (1)(b) applies in relation to the member as if the reference to the reply date were a reference to the later date.

(4) For the purposes of subsection (3) and sections 101AC(2) and 101AD(2), a document or notice may be given to a person—

(a) by delivering it to him,

(b) by leaving it at his proper address, or

(5) For the purposes of subsection (4), and section 7 of the Interpretation Act 1978 (service of documents by post) in its application to that subsection, the proper address of a person is—

(a) in the case of a body corporate, the address of the registered or principal office of the body, and

(b) in any other case, the last known address of the person.

(6) This Chapter is subject to any provision made by or under section 61 (deduction of contributions equivalent premium from refund of scheme contributions)—

(a) permitting any amount to be deducted from any payment of a contribution refund, or

(b) requiring the payment of a contribution refund to be delayed.

(7) In this Chapter, except where the context otherwise requires, the following expressions have the following meanings—

“the applicable rules” means—the rules of the scheme, except so far as overridden by a relevant legislative provision,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, andany 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 this Part;

“member” has the meaning given in section 101AA(5);

“permitted way”, in relation to a cash transfer sum, means any of the ways specified in section 101AE(2) in which the sum may be used;

“relevant benefits” means benefits which are not attributable (directly or indirectly) to a pension credit;

“reply date”, in relation to a member whose pensionable service has terminated, has the meaning given in section 101AC(3)(c).

(8) For the purposes of subsection (7)—

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

(i) Schedule 5 to the Social Security Act 1989 (equal treatment for men and women);

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

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

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

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

(vi) section 31 of the Welfare Reform and Pensions Act 1999 (pension debits: reduction of benefit);

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

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

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

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

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

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

(xiv) 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;

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

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

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

(x) 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;

(xi) 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.

Part IVA — Requirements relating to pension credit benefit

Chapter I — Pension credit benefit under occupational schemes

Scope of Chapter I.

101A

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

(a) payments to which subsection (2) applies made or to be made by one or more employers of earners to whom the scheme applies, or

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

(2) This subsection applies to payments—

(a) under an actual or contingent legal obligation, or

(b) 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.

Interpretation.

101B

In this Chapter—

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

“pension credit rights” means rights to future benefits under a scheme which are attributable (directly or indirectly) to a pension credit;

“pension credit benefit”, in relation to a scheme, means the benefits payable under the scheme to or in respect of a person by virtue of rights under the scheme attributable (directly or indirectly) to a pension credit;

“normal benefit age”, in relation to a pension credit benefit for a member of a scheme, is the earliest age at which the member is entitled to receive the benefit without adjustment for taking it early or late (disregarding any special provision as to early payment on the grounds of ill-health or otherwise);

“normal pension age”, in relation to a benefit for a member of a scheme, means the earliest age at which the member is entitled to receive the benefit without adjustment for taking it early or late (disregarding any special provision as to early payment on the grounds of ill-health or otherwise).

Basic principle as to pension credit benefit.

101C

(1) The normal benefit age in relation to a pension credit benefit for a member of a scheme—

(a) must not be lower than 60, and

(b) must not be higher than the permitted maximum.

(1A) The “permitted maximum” is 65 or, if higher, the highest normal pension age for any benefit that is payable under the scheme to or in respect of any of the members by virtue of rights which are not attributable (directly or indirectly) to a pension credit.

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

Form of pension credit benefit and its alternatives.

101D

(1) Subject to subsection (2) and section 101E, a person’s pension credit benefit under a scheme 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) and (4), a scheme may, instead of providing a person’s pension credit benefit, provide—

(a) for his pension credit rights under the scheme to be transferred to another occupational pension scheme or a personal pension scheme with a view to acquiring rights for him under the rules of the scheme, or

(b) for such alternatives to pension credit benefit as may be prescribed.

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

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

(a) if the person entitled to the benefit consents, or

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

Discharge of liability where pension credit or alternative benefits secured by insurance policies or annuity contracts.

101E

(1) A transaction to which section 19 applies discharges the trustees or managers of a scheme from their liability to provide pension credit benefit or any alternative to pension credit benefit for or in respect of a member of the scheme if and to the extent that—

(a) it results in pension credit benefit, or any alternative to pension credit benefit, for or in respect of the member being appropriately secured (within the meaning of that section),

(b) the transaction is entered into with the consent of the member or, if the member has died, of the member’s widow or widower or surviving civil partner, and

(2) Regulations may provide that subsection (1)(b) shall not apply in prescribed circumstances.

Chapter II — Transfer values

Power to give transfer notice.

101F

(1) An eligible member of a qualifying scheme may by notice in writing require the trustees or managers of the scheme to use an amount equal to the cash equivalent of his pension credit rights for such one or more of the authorised purposes as he may specify in the notice.

(2) In the case of a member of an occupational pension scheme, the authorised purposes are—

(a) to acquire rights allowed under the rules of an occupational pension scheme, or personal pension scheme, which is an eligible scheme,

(b) to purchase 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 the prescribed requirements, and

(c) in such circumstances as may be prescribed, to subscribe to other pension arrangements which satisfy prescribed requirements.

(3) In the case of a member of a personal pension scheme, the authorised purposes are—

(a) to acquire rights allowed under the rules of an occupational pension scheme, or personal pension scheme, which is an eligible scheme, and

(b) in such circumstances as may be prescribed, to subscribe to other pension arrangements which satisfy prescribed requirements.

(3A) An eligible member who has pension credit rights in relation to more than one category of benefits under the scheme may exercise the power to give a transfer notice in relation to the pension credit rights in relation to any one or more of those categories.

(4) The cash equivalent for the purposes of subsection (1) shall—

(a) in a case where the pension credit rights relate to a category of benefits other than money purchase benefits, be taken to be the amount shown in the relevant statement under section 101H, and

(b) in a case where the pension credit rights relate to money purchase benefits, be determined by reference to the date the notice under that subsection is given.

(5) The requirements which may be prescribed under subsection (2) or (3) include, in particular, requirements of the Inland Revenue.

(5A) The trustees or managers of the scheme may not use the amount equal to the cash equivalent for an authorised purpose under subsection (2)(a) or (c) or (3) unless prescribed conditions are satisfied.

(5B) The conditions that may be prescribed by regulations under subsection (5A) 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 right under 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.

(5C) Regulations may make provision requiring the trustees or managers of a qualifying scheme to notify an eligible member who gives a transfer notice of conditions prescribed under subsection (5A).

(6) In subsections (2) and (3), references to an eligible scheme are to a scheme—

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

(b) which satisfies the prescribed requirements.

(6A) 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.

(6B) 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) In this Chapter, “transfer notice” means a notice under subsection (1).

Restrictions on power to give transfer notice.

101G

(1) An eligible member may not give a transfer notice in relation to a category of benefits if a crystallisation event has occurred in relation to any of the member's pension credit rights to benefits in that category.

(2) An eligible member may give a transfer notice in relation to a category of benefits other than money purchase benefits only if—

(a) the member has been provided with a statement under section 101H in relation to benefits in that category, and

(b) not more than 3 months have passed since the date by reference to which the amount shown in the statement is determined.

(3) An eligible member may not give a transfer notice in relation to benefits other than flexible benefits if there is less than one year to go until the member reaches normal benefit age.

(4) Where an eligible member of a qualifying scheme—

(a) is entitled to give a transfer notice in relation to any category of benefits, and

(b) is also entitled to make an application to the trustees or managers of the scheme under section 95(1) in relation to benefits in the same category (or would be entitled to do so but for section 95(1A)(a)),

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

(5) A transfer notice may not be given if a previous transfer notice given by the member to the trustees or managers of the scheme is outstanding.

(6) Regulations may extend the period specified in subsection (2)(b) in prescribed circumstances.

(7) For the purposes of subsection (1) a crystallisation event occurs in relation to a member's pension credit 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, 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.

Benefits other than money purchase: statements of entitlement.

101H

(1) The trustees or managers of a qualifying scheme must, on the application of an eligible member, provide the member with a written statement of the amount of the cash equivalent of the member's pension credit rights in relation to categories of benefits other than money purchase benefits.

(1A) In the case of a member with pension credit rights in relation to two categories of benefits other than money purchase benefits, the application may relate to pension credit rights in relation to either or both of those categories.

(2) For the purposes of subsection (1), the amount of the cash equivalent shall be determined by reference to a date falling within—

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

(b) the prescribed period ending with the date on which the statement under that subsection is provided to the applicant.

(3) Regulations may make provision in relation to applications under subsection (1) and may, in particular, restrict the making of successive applications.

(4) If trustees or managers to whom subsection (1) applies fail to perform an obligation under that subsection, 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 secure that the obligation was performed.

Calculation of cash equivalents.

101I

Cash equivalents for the purposes of this Chapter shall be calculated and verified in the prescribed manner.

Time for compliance with transfer notice.

101J

(1) Trustees or managers of a qualifying scheme who receive a transfer notice shall comply with the notice—

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

(b) in the case of an application that relates to money purchase benefits, within 6 months of the date on which the notice is given.

(2) The Regulatory Authority may, in prescribed circumstances, by direction extend the period for complying with the notice.

(2A) Regulations may extend the period for complying with the notice in prescribed circumstances.

(2AA) Subsection (1) 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 101F(5A) has not been satisfied.

(2AB) Subsection (1) does not apply if—

(a) the member was required by section 101G(4) to make an application under section 95(1) in addition to giving a transfer notice, and

(b) the trustees or managers have been unable to carry out what the member required in the application under section 95(1) because a condition prescribed by regulations under section 95(6ZA) has not been satisfied.

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

(4) Where the trustees or managers of an occupational pension scheme have failed to comply with a transfer notice before the end of the period for compliance—

(a) they shall, 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 the notice was complied with before the end of the period for compliance.

(5) If trustees or managers to whom subsection (4)(a) applies fail to perform the obligation imposed by that provision, section 10 of the Pensions Act 1995 shall apply to any trustee or manager who has failed to take all such steps as are reasonable to ensure that the obligation was performed.

(6) Regulations may—

(a) make provision requiring applications for extensions under subsection (2) to meet prescribed requirements, and

(b) provide that subsection (4) shall not apply in prescribed circumstances.

(7) In subsection (1)(a), “valuation date” means the date by reference to which the amount shown in the relevant statement under section 101H is determined.

Withdrawal of transfer notice.

101K

(1) Subject to subsections (2) and (3), a person who has given a transfer notice may withdraw it by giving the trustees or managers to whom it was given notice in writing that he no longer requires them to comply with it.

(2) A transfer notice may not be withdrawn if the trustees or managers have already entered into an agreement with a third party to use the whole or part of the amount they are required to use in accordance with the notice.

(3) If the giving of a transfer notice depended on the making of an application under section 95, the notice may only be withdrawn if the application is also withdrawn.

Variation of the amount required to be used.

101L

(1) Regulations may make provision for the amount required to be used under section 101F(1) to be increased or reduced in prescribed circumstances.

(2) Without prejudice to the generality of subsection (1), the circumstances which may be prescribed include—

(a) failure by the trustees or managers of a qualifying scheme to comply with a notice under section 101F(1) within 6 months of the date by reference to which the amount of the cash equivalent falls to be determined, and

(b) the state of funding of a qualifying scheme.

(3) Regulations under subsection (1) may have the effect of extinguishing an obligation under section 101F(1).

Effect of transfer on trustees’ duties.

101M

Compliance with a transfer notice shall have effect to discharge the trustees or managers of a qualifying scheme from any obligation to provide the benefits to which the transfer notice relates.

Matters to be disregarded in calculations.

101N

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.

Prohibition on excluding transfers of some rights without others etc

101NA

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.

Service of notices.

101O

A notice under section 101F(1) or 101K(1) shall be taken to have been given if it is delivered to the trustees or managers personally or sent by post in a registered letter or by recorded delivery service.

Interpretation of Chapter II.

101P

(1) In this Chapter—

“category”, in relation to benefits, has the meaning given by section 101F(6B);

“eligible member”, in relation to a qualifying scheme, means a member who has pension credit rights under the scheme;

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

“normal benefit age”, in relation to an eligible member of a qualifying scheme, means the earliest age at which the member is entitled to receive a pension by virtue of his pension credit rights under the scheme (disregarding any scheme rule making special provision as to early payment of pension on grounds of ill-health or otherwise);

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

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

“qualifying scheme” means a funded occupational pension scheme and a personal pension scheme;

“transfer notice” has the meaning given by section 101F(7).

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

(3) In this Chapter, references to the relevant statement under section 101H, in relation to a transfer notice in relation to benefits other than money purchase benefits, are to the statement under that section on which the giving of the notice depended.

(4) For the purposes of this section, an occupational pension scheme is funded if it meets its liabilities out of a fund accumulated for the purpose during the life of the scheme.

Power to modify Chapter II in relation to hybrid schemes.

101Q

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

Part V — Annual Increases of Pensions in Payment

Chapter I — Pensions under Final Salary Schemes etc.

Scope of Chapter I: annual increase of certain occupational pensions.

102

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

Annual increase of later service component.

103

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

Annual increase of earlier service component where scheme is in surplus.

104

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

Proportional increase where first period is less than 12 months.

105

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

Restriction on increase where member is under 55.

106

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

Application of Chapter I to pensions not attributable to pensionable service.

107

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

No payments to employers from non-complying schemes.

108

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

Chapter II — Guaranteed minimum pensions

Annual increase of guaranteed minimum pensions.

109

(1) The Secretary of State shall in each tax year review the general level of prices in Great Britain for the period of 12 months commencing at the end of the period last reviewed under this section.

(2) Where it appears to the Secretary of State that that level has increased at the end of the period under review, he shall lay before Parliament the draft of an order specifying a percentage by which there is to be an increase of the rate of that part of guaranteed minimum pensions which is attributable to earnings factors for the tax years in the relevant period for—

(a) earners who have attained pensionable age; and

(b) widows, widowers and surviving civil partners.

(3) The percentage shall be—

(a) the percentage by which that level has increased at the end of the period under review; or

(b) 3 per cent.,

whichever is less.

(3A) The relevant period is the period—

(a) beginning with the tax year 1988-89, and

(b) ending with the last tax year that begins before the principal appointed day ...

(4) If a draft order laid before Parliament in pursuance of this section is approved by a resolution of each House, the Secretary of State shall make the order in the form of the draft.

(5) An order under this section shall be so framed as to bring the alterations to which it relates into force on the first day of the next tax year after that in which the order is made.

(6) Where the benefits mentioned in section 46(1) to (7) are not increased on the day on which an order under this section takes effect, the order shall be treated for the purposes of that section as not taking effect until the day on which those benefits are next increased.

Requirement as to resources for annual increase of guaranteed minimum pensions.

110

(1) Except as permitted by section 53 of the Pensions Act 1995, the trustees or managers of a scheme may not make an increase in a person’s pension which is required by virtue of section 109 out of money which would otherwise fall to be used for the payment of benefits under the scheme to or in respect of that person unless—

(a) the payment is to an earner in respect of the tax year in which he attains pensionable age and the increase is the one required to be made in the next tax year; or

(b) the payment is to a person as the widow, widower or surviving civil partner of an earner who died before attaining pensionable age and is in respect of the tax year in which the person became a widow, widower or surviving civil partner, and the increase is the one required to be made in the next tax year.

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

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

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

Part VI — Further Requirements for Protection of Scheme Members

Voluntary contributions.

111

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

Monitoring of employers’ payments to personal pension schemes.

111A

(1) This section applies where—

(a) an employee is a member of a personal pension scheme; and

(b) direct payment arrangements exist between the employee and his employer.

(2) In this section “direct payment arrangements” means arrangements under which contributions fall to be paid by or on behalf of the employer towards the scheme—

(a) on the employer’s own account (but in respect of the employee); or

(b) on behalf of the employee out of deductions from the employee’s earnings.

(3) The trustees or managers of the scheme must monitor the payment of contributions by or on behalf of the employer under the direct payment arrangements.

(4) The trustees or managers may request the employer to provide them, (or arrange for them to be provided) with the payment information specified in the request.

(5) For the purposes of subsection (4) “payment information” is information required by the trustees or managers to enable them to discharge the duty imposed by subsection (3).

(6) The employer must comply with a request under subsection (4) within a reasonable period.

(7) Where, as a result of the employer’s failure to so comply, the trustees or managers are unable to discharge the duty imposed by subsection (3), they must give notice to that effect to the Regulatory Authority within a reasonable period.

(7A) Where—

(a) a contribution payable under the direct payment arrangements has not been paid on or before its due date, and

(b) the trustees or managers have reasonable cause to believe that the failure to pay the contribution is likely to be of material significance in the exercise by the Regulatory Authority of any of their functions,

they must give notice to that effect to the Regulatory Authority and the employee within a reasonable period after the due date.

(8) If—

(a) the employer fails to take all such steps as are reasonable to secure compliance with subsection (6) and as a result the trustees or managers of the scheme are unable to discharge the duty imposed by subsection (3), or

(b) a contribution payable under the direct payment arrangements is not paid to the trustees or managers of the scheme on or before its due date,

section 10 of the Pensions Act 1995 (power of the Regulatory Authority to impose civil penalties) applies to the employer.

(9) If subsection (7) or (7A) is not complied with, section 10 of the Pensions Act 1995 applies to any trustee or manager of the scheme who has failed to take all such steps as are reasonable to secure compliance.

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) A person shall not be required by virtue of subsection (8)(b) above to pay a penalty under section 10 of the Pensions Act 1995 in respect of a failure if in respect of that failure he has been—

(a) required to pay a penalty under that section by virtue of section 3(7) of the Welfare Reform and Pensions Act 1999 (failures in respect of stakeholder pensions), or

(b) convicted of an offence under subsection (12) below.

(12) A person is guilty of an offence if he is knowingly concerned in the fraudulent evasion of the direct payment arrangements so far as they are arrangements for the payment by him or any other person of any such contribution towards the scheme as is mentioned in subsection (2)(b).

(13) A person guilty of an offence under subsection (12) is liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum; and

(b) on conviction on indictment, to imprisonment for a term not exceeding seven years or a fine or both.

(14) No prosecution shall be brought against the Crown for an offence under subsection (12), but that subsection applies to persons in the public service of the Crown as to other persons.

(15) In this section “due date”, in relation to a contribution payable under the direct payment arrangements, means—

(a) if the contribution falls to be paid on the employer’s own account, the latest day under the arrangements for paying it;

(b) if the contribution falls to be paid on behalf of the employee, the last day of a prescribed period.

(16) Regulations may provide for this section to apply with such modifications as may be prescribed in a case where—

(a) the direct payment arrangements give effect to a requirement arising under subsection (5) of section 3 of the Welfare Reform and Pensions Act 1999 (deduction and payment of employee’s contributions to stakeholder scheme), and

(b) in accordance with regulations under that subsection, that requirement is for the employer to pay contributions to a person prescribed by such regulations (instead of to the trustees or managers of the scheme).

(17) Nothing in this section shall be taken as varying the provisions of the direct payment arrangements or as affecting their enforceability.

(18) In this section, “employee” includes a jobholder within the meaning of section 1 of the Pensions Act 2008 and “employer” is to be read accordingly.

Obtaining information for purposes of section 111A and corresponding Northern Ireland legislation.

111B

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

112

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

Disclosure of information about schemes to members etc.

113

(1) The Secretary of State may by regulations specify requirements to be complied with in the case of an occupational pension scheme or a personal pension scheme with respect to keeping the persons mentioned in subsection (2) informed—

(a) of its constitution;

(b) of its administration and finances;

(ca) of the pensions and other benefits an entitlement to which would be likely to accrue to the member, or be capable of being secured by him, in respect of the rights that may arise under it; and

(d) of any other matters that appear to the Secretary of State to be relevant to occupational pension schemes or personal pension schemes in general or to schemes of a description to which the scheme in question belongs.

(2) The persons referred to in subsection (1) are—

(a) members and, in the case of an occupational pension scheme, prospective members of the scheme;

(b) spouses or civil partners of members and, in the case of an occupational pension scheme, of prospective members;

(d) in the case of an occupational pension scheme, independent trade unions recognised to any extent for the purposes of collective bargaining in relation to members and to prospective members of the scheme;

(e) persons of prescribed descriptions.

(2A) In complying with requirements specified in the regulations, a person must have regard to any guidance prepared from time to time by the Secretary of State.

(3) Without prejudice to the generality of section 182(2), the regulations may distinguish between—

(a) cases in which information is to be given as of course; and

(b) cases in which information need only be given on request or in other prescribed circumstances.

(3A) The regulations may provide for the information that must be given to be determined, in whole or part, by reference to guidance which is prepared and from time to time revised by a prescribed body.

(3B) The regulations may, in relation to cases where a scheme is being wound up, contain—

(a) provision conferring power on the Regulatory Authority, at times before the period expires, to extend any period specified in the regulations as the period within which a requirement imposed by the regulations must be complied with; and

(b) provision as to the contents of any application for the exercise of such a power and as to the form and manner in which, and the time within which, any such application must be made.

(4) The regulations shall make provision for referring to an industrial tribunal any question whether an organisation is such a trade union as is mentioned in subsection (2)(d).

(5) The Secretary of State must make regulations under subsection (1) requiring information about some or all of the transaction costs of a relevant scheme to be given to some or all of the persons mentioned in subsection (2).

(6) The Secretary of State must by regulations make provision requiring the publication of information about—

(a) some or all of the transaction costs of a relevant scheme, and

(b) some or all of the other administration charges imposed on members of a relevant scheme.

(7) Regulations under subsection (6) may require other relevant information to be published along with information about transaction costs or other administration charges in relation to a scheme.

(8) “Other relevant information” means other information which would or may assist in making comparisons between those costs or charges and costs or charges in relation to other schemes.

(9) Before making regulations by virtue of subsection (5) or (6), the Secretary of State must consult—

(a) the Financial Conduct Authority, and

(b) the Treasury;

(in addition to any other persons consulted in accordance with section 185(1)).

(10) In this section—

“administration charge” has the meaning given by paragraph 1(5) of Schedule 18 to the Pensions Act 2014;

“relevant scheme” means a money purchase scheme that is an occupational pension scheme.

Disclosure of information about transfers etc

113A

Regulations may provide that, where—

(a) a payment is made out of an occupational pension scheme to the trustees or managers of another occupational pension scheme, and

(b) transfer credits are allowed to a member of that other scheme in respect of the payment,

the trustees or managers of the first scheme must, in prescribed circumstances and in the prescribed manner, provide to the trustees or managers of the other scheme prescribed information relating to the payment.

Occupational pension schemes: requirements to refer members to guidance etc

113B

(1) The Secretary of State must make regulations requiring the trustees or managers of an occupational pension scheme to take the steps mentioned in subsections (2) and (3) in relation to an application from a relevant beneficiary—

(a) to transfer any rights accrued under the scheme, or

(b) to start receiving benefits provided by the scheme.

(2) As part of the application process, the trustees or managers must ensure that—

(a) the beneficiary is referred to appropriate pensions guidance, and

(b) the beneficiary is provided with an explanation of the nature and purpose of such guidance.

(3) Before proceeding with the application, the trustees or managers must ensure that the beneficiary has either received appropriate pensions guidance or has opted out of receiving such guidance.

(4) The regulations may—

(a) specify what constitutes appropriate pensions guidance;

(b) make further provision about how the trustees or managers must comply with the duties in subsections (2) and (3) (such as provision about methods of communication and time limits);

(c) make further provision about how, and to whom, a beneficiary may indicate that they have received or opted out of receiving appropriate pensions guidance for the purposes of subsection (3);

(d) specify what the duties of the trustees or managers are in the situation where a beneficiary does not respond to a communication that is made for the purposes of complying with the duty in subsection (3);

(e) provide for exceptions to the duties in subsections (2) and (3) in specified cases;

(f) provide for the Secretary of State or another prescribed person to issue guidance for the purposes of this section, to which trustees or managers must have regard in complying with their duties under the regulations.

(5) In determining what provision to include in the regulations, the Secretary of State must have regard to any rules that are for the time being in force under section 137FB(1A) of the Financial Services and Markets Act 2000.

(6) In this section—

“relevant beneficiary”, in relation to a pension scheme, means—a member of the scheme, oranother person of a prescribed description,who has a right or entitlement to flexible benefits under the scheme;

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

“pensions guidance” means information or guidance provided by any person in pursuance of the requirements mentioned in section 4 of the Financial Guidance and Claims Act 2018 (information etc about flexible benefits under pension schemes).

Additional documents for members etc. and Registrar.

114

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

Powers as respects failure to comply with information requirements.

115

(1) If the trustees or managers of an occupational pension scheme or a personal pension scheme, having made default in complying with regulations under section 113 , 113B or 114(1)(b), fail to make good the default within 14 days after the service on them of a notice requiring them to do so, an order may be made under this subsection.

(2) The Secretary of State may by regulations specify forms for notices under subsection (1).

(3) An order under subsection (1) is an order directing the trustees or managers to make good the default within such time as may be specified in the order.

(4) The power to make such an order shall be exercisable by the appropriate court on the application of any person mentioned in subsection (5).

(5) The persons referred to in subsection (4) are—

(a) the Secretary of State;

(b) any person authorised by the Secretary of State to make an application under this section; and

(6) In this section “the appropriate court” means—

(a) in England and Wales, the county court; and

(b) in Scotland, the sheriff.

(7) An application to the sheriff shall be made by summary application.

(8) An order under this section may provide that all costs (or, in Scotland, expenses) of and incidental to the application shall be borne personally by any of the trustees or managers of the scheme.

Regulations as to auditors.

116

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

Regulations as to form and content of advertisements.

117

Regulations may be made relating to the form and content of advertisements and such other material as may be prescribed issued by or on behalf of the trustees or managers of a personal or occupational pension scheme for the purposes of the scheme.

Equal access requirements.

118

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

Part VII — Insolvency of employers

Chapter I — Independent trustees

Requirement for independent trustee where employer becomes insolvent etc.

119

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

Members’ powers to apply to court to enforce duty under s. 119.

120

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

Further provisions as to appointment and powers of independent trustees.

121

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

Duty of insolvency practitioner or official receiver to give information to scheme trustees.

122

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

Chapter II — Payment by Secretary of State of unpaid scheme contributions

Interpretation of Chapter II.

123

(1) For the purposes of this Chapter, an employer shall be taken to be insolvent if, but only if, in England and Wales—

(a) he has been made bankrupt or has made a composition or arrangement with his creditors;

(b) he has died and his estate falls to be administered in accordance with an order under section 421 of the Insolvency Act 1986; ...

(i) a winding-up order ... is made or a resolution for voluntary winding up is passed with respect to it or the company enters administration,

(ii) a receiver or manager of its undertaking is duly appointed,

(iii) possession is taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the company comprised in or subject to the charge, or

(iv) a voluntary arrangement proposed for the purpose of Part I of the Insolvency Act 1986 is approved under that Part; or

(d) where subsection (2A) is satisfied.

(2) For the purposes of this Chapter, an employer shall be taken to be insolvent if, but only if, in Scotland—

(a) sequestration of his estate is awarded or he executes a trust deed for his creditors or enters into a composition contract;

(b) he has died and a judicial factor appointed under section 11A of the Judicial Factors (Scotland) Act 1889 is required by that section to divide his insolvent estate among his creditors; or

(i) a winding-up order ... is made or a resolution for voluntary winding up is passed with respect to it or the company enters administration,

(ii) a receiver of its undertaking is duly appointed, or

(iii) a voluntary arrangement proposed for the purpose of Part I of the Insolvency Act 1986 is approved under that Part.

(2A) This subsection is satisfied if—

(a) a request has been made for the first opening of collective proceedings—

(i) based on the insolvency of the employer, as provided for under the laws, regulations and administrative provisions of a member State; and

(ii) involving the partial or total divestment of the employer’s assets and the appointment of a liquidator or a person performing a similar task; and

(b) the competent authority has—

(i) decided to open the proceedings; or

(ii) established that the employer’s undertaking or business has been definitively closed down and the available assets of the employer are insufficient to warrant the opening of the proceedings.

(2B) For the purposes of subsection (2A)—

(a) “liquidator or person performing a similar task” includes the official receiver or an administrator, trustee in bankruptcy, judicial factor, supervisor of a voluntary arrangement, or person performing a similar task,

(b) “competent authority” includes—

(i) a court,

(ii) a meeting of creditors,

(iii) a creditors’ committee,

(iv) the creditors by a decision procedure, and

(v) an authority of a member State empowered to open insolvency proceedings, to confirm the opening of such proceedings or to take decisions in the course of such proceedings.

(2C) An application under section 124 may only be made in respect of a worker who worked or habitually worked in Great Britain in that employment to which the application relates.

(3) In this Chapter—

“employer”, “employment”, “worker” and “worker's contract” and other expressions which are defined in the Employment Rights Act 1996 have the same meaning as in that Act (see further subsections (3A) and (3B));

“holiday pay” means—pay in respect of holiday actually taken; orany accrued holiday pay which under the worker's contract would in the ordinary course have become payable to him in respect of the period of a holiday if his employment with the employer had continued until he became entitled to a holiday;

(3A) Section 89 of the Pensions Act 2008 (agency workers) applies for the purposes of this Chapter as it applies for the purposes of Part 1 of that Act.

(3B) References in this Chapter to a worker include references to an individual to whom Part 1 of the Pensions Act 2008 applies as if the individual were a worker because of regulations made under section 98 of that Act; and related expressions are to be read accordingly.

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

(5) Any reference in this Chapter to the resources of a scheme is a reference to the funds out of which the benefits provided by the scheme are from time to time payable.

Duty of Secretary of State to pay unpaid contributions to schemes.

124

(1) If, on an application made to him in writing by the persons competent to act in respect of an occupational pension scheme or a personal pension scheme, the Secretary of State is satisfied—

(a) that an employer has become insolvent; and

(b) that at the time he did so there remained unpaid relevant contributions falling to be paid by him to the scheme,

then, subject to the provisions of this section and section 125, the Secretary of State shall pay into the resources of the scheme the sum which in his opinion is payable in respect of the unpaid relevant contributions.

(2) In this section and section 125 “relevant contributions” means contributions falling to be paid by an employer to an occupational pension scheme or a personal pension scheme, either on his own account or on behalf of a worker; and for the purposes of this section a contribution shall not be treated as falling to be paid on behalf of a worker unless a sum equal to that amount has been deducted from the pay of the worker by way of a contribution from him.

(3) Subject to subsection (3A), the sum payable under this section in respect of unpaid contributions of an employer on his own account to an occupational pension scheme or a personal pension scheme shall be the least of the following amounts—

(a) the balance of relevant contributions remaining unpaid on the date when he became insolvent and payable by the employer on his own account to the scheme in respect of the 12 months immediately preceding that date;

(b) the amount certified by an actuary to be necessary for the purpose of meeting the liability of the scheme on dissolution to pay the benefits provided by the scheme to or in respect of the workers of the employer;

(c) an amount equal to 10 per cent. of the total amount of remuneration paid or payable to those workers in respect of the 12 months immediately preceding the date on which the employer became insolvent.

(3A) Where the scheme in question is a money purchase scheme, the sum payable under this section by virtue of subsection (3) shall be the lesser of the amounts mentioned in paragraphs (a) and (c) of that subsection

(4) For the purposes of subsection (3)(c), “remuneration” includes holiday pay, statutory sick pay, statutory maternity pay under Part V of the Social Security Act 1986 or Part XII of the Social Security Contributions and Benefits Act 1992 and any payment such as is referred to in section 184(2) of the Employment Rights Act 1996.

(5) Any sum payable under this section in respect of unpaid contributions on behalf of a worker shall not exceed the amount deducted from the pay of the worker in respect of the worker's contributions to the scheme during the 12 months immediately preceding the date on which the employer became insolvent.

(6) In this section “on his own account”, in relation to an employer, means on his own account but to fund benefits for, or in respect of, one or more workers.

Certification of amounts payable under s. 124 by insolvency officers.

125

(1) This section applies where one of the officers mentioned in subsection (2) (“the relevant officer”) has been or is required to be appointed in connection with an employer’s insolvency.

(2) The officers referred to in subsection (1) are—

(a) a trustee in bankruptcy;

(b) a liquidator;

(d) a receiver or manager; or

(e) a trustee under a composition or arrangement between the employer and his creditors or under a trust deed for his creditors executed by the employer;

and in this subsection “trustee”, in relation to a composition or arrangement, includes the supervisor of a voluntary arrangement proposed for the purposes of and approved under Part I or VIII of the Insolvency Act 1986.

(3) Subject to subsection (5), where this section applies the Secretary of State shall not make any payment under section 124 in respect of unpaid relevant contributions until he has received a statement from the relevant officer of the amount of relevant contributions which appear to have been unpaid on the date on which the employer became insolvent and to remain unpaid; and the relevant officer shall on request by the Secretary of State provide him as soon as reasonably practicable with such a statement.

(4) Subject to subsection (5), an amount shall be taken to be payable, paid or deducted as mentioned in subsection (3)(a) or (c) or (5) of section 124 only if it is so certified by the relevant officer.

(5) If the Secretary of State is satisfied—

(a) that he does not require a statement under subsection (3) in order to determine the amount of relevant contributions that was unpaid on the date on which the employer became insolvent and remains unpaid, or

(b) that he does not require a certificate under subsection (4) in order to determine the amounts payable, paid or deducted as mentioned in subsection (3)(a) or (c) or (5) of section 124,

he may make a payment under that section in respect of the contributions in question without having received such a statement or, as the case may be, such a certificate.

Complaint to industrial tribunal.

126

(1) Any persons who are competent to act in respect of an occupational pension scheme or a personal pension scheme and who have applied for a payment to be made under section 124 into the resources of the scheme may present a complaint to an industrial tribunal that—

(a) the Secretary of State has failed to make any such payment; or

(b) any such payment made by him is less than the amount which should have been paid.

(2) Such a complaint must be presented within the period of three months beginning with the date on which the decision of the Secretary of State on that application was communicated to the persons presenting it or, if that is not reasonably practicable, within such further period as is reasonable.

(3) Where an industrial tribunal finds that the Secretary of State ought to make a payment under section 124, it shall make a declaration to that effect and shall also declare the amount of any such payment which it finds that the Secretary of State ought to make.

Transfer to Secretary of State of rights and remedies.

127

(1) Where in pursuance of section 124 the Secretary of State makes any payment into the resources of an occupational pension scheme or a personal pension scheme in respect of any contributions to the scheme, any rights and remedies in respect of those contributions belonging to the persons competent to act in respect of the scheme shall, on the making of the payment, become rights and remedies of the Secretary of State.

(2) Where the Secretary of State makes any such payment as is mentioned in subsection (1) and the sum (or any part of the sum) falling to be paid by the employer on account of the contributions in respect of which the payment is made constitutes—

(a) a preferential debt within the meaning of the Insolvency Act 1986 for the purposes of any provision of that Act (including any such provision as applied by an order made under that Act) or any provision of the Companies Acts (as defined in section 2(1) of the Companies Act 2006); or

(b) a preferred debt within the meaning of the Bankruptcy (Scotland) Act 2016 for the purposes of any provision of that Act (including any such provision as applied by section 11A of the Judicial Factors (Scotland) Act 1889),

then, without prejudice to the generality of subsection (1), there shall be included among the rights and remedies which become rights and remedies of the Secretary of State in accordance with that subsection any right arising under any such provision by reason of the status of that sum (or that part of it) as a preferential or preferred debt.

(3) In computing for the purposes of any provision referred to in subsection (2)(a) or (b) the aggregate amount payable in priority to other creditors of the employer in respect of—

(a) any claim of the Secretary of State to be so paid by virtue of subsection (2); and

(b) any claim by the persons competent to act in respect of the scheme,

any claim falling within paragraph (a) shall be treated as if it were a claim of those persons; but the Secretary of State shall be entitled, as against those persons, to be so paid in respect of any such claim of his (up to the full amount of the claim) before any payment is made to them in respect of any claim falling within paragraph (b).

Chapter III — Priority in bankruptcy

Priority in bankruptcy etc.

128

Schedule 4 shall have effect for the purposes of paragraph 8 of Schedule 6 to the Insolvency Act 1986 and paragraph 1 of schedule 3 to the Bankruptcy (Scotland) Act 2016 (by virtue of which sums to which Schedule 4 to this Act applies are preferential or, as the case may be, preferred debts in cases of insolvency).

Part VIII — Relationship between requirements and scheme rules

Overriding requirements.

129

(1) Subject to subsection (2), the provisions of Chapters 2 and 3 of Part 4, Chapters 1 and 2 of Part 4ZA, Chapters I and II of Part IVA, ... section 110(1), ... and any regulations made ... under any of those Chapters or section 113 or 114 ... override any provision of a scheme to which they apply to the extent that it conflicts with them.

(2) Chapter II of Part IV (as it applies to occupational pension schemes), and Chapter III of that Part do not override a protected provision of a scheme....

(3) In subsection (2) “protected provision” means—

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

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

(c) any provision of a scheme which is included in it for the purpose of effecting a transfer of rights or liabilities authorised by regulations under section 20(1);

(d) any provision of a scheme to the extent that it deals with commutation, suspension or forfeiture of the whole or part of a pension; and

(e) any provision of a scheme whereby, as respects so much of a widow's, widower’s or surviving civil partner's pension as exceeds the guaranteed minimum pension—

(i) no pension or a pension at a reduced rate is payable if the earner and the widow, widower or surviving civil partner married or, as the case may be, formed a civil partnership not more than six months before the earner’s death;

(ii) the whole or any part of the pension is not paid to the widow, widower or surviving civil partner, but instead comparable benefits are provided for one or more dependants of the deceased earner; or

(iii) no pension, or a pension at a reduced rate, is payable to the widow, widower or surviving civil partner (or, where a provision such as is mentioned in sub-paragraph (ii) operates, to another dependant of the deceased earner) who was more than ten years younger than the deceased earner.

(4) For the purposes of the application of Chapter II of Part IV to schemes which are not contracted-out, subsection (3) shall have effect with the omission—

(a) from paragraph (c), of the words from “authorised” to the end; and

(b) from paragraph (e), of the words from “as respects” to “guaranteed minimum pension”.

Extra-statutory benefits.

130

It is hereby declared that—

(a) nothing in Part III precludes an occupational pension scheme from providing benefits that are more favourable than those required for contracting-out purposes and, in particular, nothing in section 16(3) is to be taken as preventing the scheme from providing increases above the alternative minima there mentioned; and

(b) nothing in the provisions of Chapter 2 of Part 4 or Chapter 1 or 2 of Part 4ZA precludes a scheme from being framed or managed more favourably to beneficiaries than is called for by those provisions.

Relationship of preservation requirements and scheme rules.

131

It is hereby declared that nothing in Chapter I of Part IV—

(a) applies with direct effect to any scheme, or to the rights or liabilities of any person in, under or by virtue of a scheme; or

(b) precludes a scheme from being so framed as to provide benefits on any ampler scale, or (subject to any express provision made in that Chapter) payable at any earlier time or otherwise more favourable to beneficiaries, than is called for by the preservation requirements.

Duty to bring schemes into conformity with indirectly-applying requirements.

132

Where the rules of an occupational pension scheme to which the preservation requirements,... ... apply do not comply with those requirements it shall be the responsibility of—

(a) the trustees and managers of the scheme; or

(b) in the case of a public service pension scheme, the Minister, government department or other person or body concerned with its administration,

to take such steps as are open to them for bringing the rules of the scheme into conformity with those requirements.

Advice of the Board as to conformity of schemes with requirements.

133

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

Determination of questions whether schemes conform with requirements.

134

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

Persons competent to make applications under s. 134.

135

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

Part IX — Modification and winding up of schemes

Modification

Applications to the Board to modify schemes (other than public service schemes).

136

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

Persons competent to make applications under s. 136.

137

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

Further provisions concerning the Board’s powers under s. 136.

138

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

Other functions of the Board as respects modification of schemes.

139

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

Effect of orders under ss. 136 and 139.

140

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

Modification of public service schemes.

141

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

Winding up

Powers of the Board to wind up schemes.

142

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

Winding up of public service schemes.

143

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

Deficiencies in the assets of a scheme on winding up.

144

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

Part X — Investigations: the Pensions Ombudsman

The Pensions Ombudsman.

145

(1) For the purpose of conducting investigations in accordance with this Part or any corresponding legislation having effect in Northern Ireland there shall be a commissioner to be known as the Pensions Ombudsman.

(2) The Pensions Ombudsman shall be appointed by the Secretary of State and shall hold and vacate office upon such terms and conditions as the Secretary of State may think fit.

(3) The Pensions Ombudsman may resign or be removed from office in accordance with those terms and conditions.

(4A) The Pensions Ombudsman may (with the approval of the Secretary of State as to numbers) appoint such persons to be employees of his as he thinks fit, on such terms and conditions as to remuneration and other matters as the Pensions Ombudsman may with the approval of the Secretary of State determine.

(4B) The Secretary of State may, on such terms as to payment by the Pensions Ombudsman as the Secretary of State thinks fit, make available to the Pensions Ombudsman such additional staff and such other facilities as he thinks fit.

(4C) Any function of the Pensions Ombudsman, other than the determination of complaints made and disputes referred under this Part, may be performed by any—

(a) employee appointed by the Pensions Ombudsman under subsection (4A), or

(b) member of staff made available to him by the Secretary of State under subsection (4B),

who is authorised for that purpose by the Pensions Ombudsman.

(5) The Secretary of State may—

(a) pay to or in respect of the Pensions Ombudsman such amounts by way of remuneration, compensation for loss of office, pension, allowances and gratuities, or by way of provision for any such benefits, as the Secretary of State may determine...; and

(b) reimburse him in respect of any expenses incurred by him in the performance of his functions.

(6) The Pensions Ombudsman shall prepare a report on the discharge of his functions for each financial year, and shall submit it to the Secretary of State as soon as practicable afterwards.

(7) The Secretary of State shall arrange for the publication of each report submitted to him under subsection (6).

(8) As soon as is reasonably practicable, the Pensions Ombudsman shall send to the Comptroller and Auditor General a statement of the Pensions Ombudsman’s accounts in respect of a financial year.

(9) The Comptroller and Auditor General shall—

(a) examine, certify and report on a statement received under this section; and

(b) send a copy of the statement and the report to the Secretary of State who shall lay them before Parliament.

(10) In this section “financial year” means a period of 12 months ending with 31st March.

Deputy Pensions Ombudsmen

145A

(1) The Secretary of State may appoint one or more persons to act as a deputy to the Pensions Ombudsman (“a Deputy Pensions Ombudsman”).

(2) Any such appointment is to be upon such terms and conditions as the Secretary of State thinks fit.

(3) A Deputy Pensions Ombudsman—

(a) is to hold and vacate office in accordance with the terms and conditions of his appointment, and

(b) may resign or be removed from office in accordance with those terms and conditions.

(4) A Deputy Pensions Ombudsman may perform the functions of the Pensions Ombudsman—

(a) during any vacancy in that office,

(b) at any time when the Pensions Ombudsman is for any reason unable to discharge his functions, or

(5) References to the Pensions Ombudsman in relation to the performance of his functions are accordingly to be construed as including references to a Deputy Pensions Ombudsman in relation to the performance of those functions.

(6) The Secretary of State may—

(a) pay to or in respect of a Deputy Pensions Ombudsman such amounts—

(i) by way of remuneration, compensation for loss of office, pension, allowances and gratuities, or

(ii) by way of provision for any such benefits,

as the Secretary of State may determine, and

(b) reimburse the Pensions Ombudsman in respect of any expenses incurred by a Deputy Pensions Ombudsman in the performance of any of the Pensions Ombudsman’s functions.

Functions of the Pensions Ombudsman.

146

(1) The Pensions Ombudsman may investigate and determine the following matters—

(a) a complaint made to him by or on behalf of an actual or potential beneficiary of an occupational or personal pension scheme who alleges that he has sustained injustice in consequence of maladministration in connection with any act or omission of a person responsible for the management of the scheme,

(b) a complaint made to him—

(i) by or on behalf of a person responsible for the management of an occupational pension scheme who in connection with any act or omission of another person responsible for the management of the scheme, alleges maladministration of the scheme, or

(ii) by or on behalf of the trustees or managers of an occupational pension scheme who in connection with any act or omission of any trustee or manager of another such scheme, allege maladministration of the other scheme,

and in any case falling within sub-paragraph (ii) references in this Part to the scheme to which the complaint relates are references to the other scheme referred to in that sub-paragraph,

(ba) a complaint made to him by or on behalf of an independent trustee of a trust scheme who, in connection with any act or omission which is an act or omission either—

(i) of trustees of the scheme who are not independent trustees, or

(ii) of former trustees of the scheme who were not independent trustees,

alleges maladministration of the scheme,

(i) a person responsible for the management of the scheme, and

(ii) an actual or potential beneficiary,

and which is referred to him by or on behalf of the actual or potential beneficiary, and

(d) any dispute of fact or law ... between the trustees or managers of an occupational pension scheme and—

(i) another person responsible for the management of the scheme, or

(ii) any trustee or manager of another such scheme,

and in a case falling within sub-paragraph (ii) references in this Part to the scheme to which the reference relates are references to each of the schemes,

(e) any dispute not falling within paragraph (f) between different trustees of the same occupational pension scheme,

(f) any dispute, in relation to a time while section 22 of the Pensions Act 1995 (circumstances in which Regulatory Authority may appoint an independent trustee) applies in relation to an occupational pension scheme, between an independent trustee of the scheme appointed under section 23(1) of that Act and either—

(i) other trustees of the scheme, or

(ii) former trustees of the scheme who were not independent trustees appointed under section 23(1) of that Act, and

(g) any question relating, in the case of an occupational pension scheme with a sole trustee, to the carrying out of the functions of that trustee.

(1A) The Pensions Ombudsman shall not investigate or determine any dispute or question falling within subsection (1)(c) to (g) unless it is referred to him—

(a) in the case of a dispute falling within subsection (1)(c), by or on behalf of the actual or potential beneficiary who is a party to the dispute,

(b) in the case of a dispute falling within subsection (1)(d), by or on behalf of any of the parties to the dispute,

(c) in the case of a dispute falling within subsection (1)(e), by or on behalf of at least half the trustees of the scheme,

(d) in the case of a dispute falling within subsection (1)(f), by or on behalf of the independent trustee who is a party to the dispute,

(e) in the case of a question falling within subsection (1)(g), by or on behalf of the sole trustee.

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