Finance Act 2004

[F1 Alternatively secured pensions U.K.

Textual Amendments

F1 S. 181A and cross-heading inserted (19.7.2007) (with effect in accordance with Sch. 19 para. 29(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 19 para. 14

181A Minimum level of payment U.K.

(1) The total amount of alternatively secured pension paid to a member of a registered pension scheme in each alternatively secured pension year in respect of a money purchase arrangement under the pension scheme must be at least 55% of the basis amount for the alternatively secured pension year (but subject to subsection (5)).

(2) The total amount of dependants' alternatively secured pension paid to a dependant of a member of a registered pension scheme in each alternatively secured pension year in respect of a money purchase arrangement under the pension scheme must be at least 55% of the basis amount for the alternatively secured pension year (but subject to subsection (5)).

(3) If subsection (1) or (2) is not complied with in an alternatively secured pension year in the case of any arrangement under a registered pension scheme, the pension scheme is to be treated as having made a scheme chargeable payment when the alternatively secured pension year ends.

(4) The amount of the scheme chargeable payment is the difference between—

(a) the total amount of alternatively secured pension paid to the member, or of the dependants' alternatively secured pension paid to the dependant, in respect of the arrangement in the alternatively secured pension year, and

(b) 55% of the basis amount for the alternatively secured pension year,

(or, if nothing is so paid, 55% of the basis amount for the alternatively secured pension year).

(5) Subsection (1) or (2) does not apply in relation to an alternatively secured pension year if—

(a) it is the alternatively secured pension year ending immediately before the death of the member or dependant, or

(b) in the alternatively secured pension year the member’s alternatively secured pension fund, or the dependant’s alternatively secured pension fund, in respect of the arrangement is applied on pension or annuity provision (see subsection (6)).

(6) The member’s alternatively secured pension fund, or the dependant’s alternatively secured pension fund, in respect of the arrangement is applied on pension or annuity provision if all of the sums and assets representing it are applied in one or more of the following ways—

(a) towards the provision of a scheme pension or dependants' scheme pension;

(b) to purchase a scheme pension or dependants' scheme pension;

(c) to purchase a lifetime annuity or dependants' annuity.

(7) Part 1 of Schedule 28 gives the meaning of expressions used in this section so far as it relates to alternatively secured pension; and Part 2 of that Schedule gives the meaning of expressions used in this section so far as it relates to dependants' alternatively secured pension.]