12(1)Section 172B (increase in rights of connected person on death) is amended as follows.U.K.
(2)In subsection (2)(b), for “, alternatively secured pension fund, dependant's unsecured pension fund or dependant's alternatively secured” substitute “ or dependant's unsecured ”.
(3)In subsection (4), for “(6)” substitute “ (5) ”.
(4)In subsection (7)(a), after “there” insert “ are ”.
(5)After subsection (8) insert—
“(8A)Nothing in this section applies in relation to the rights representing the member's unsecured pension fund if those rights would represent the member's alternatively secured pension fund but for paragraph 11(6) and (7) of Schedule 28.”
13U.K.After that section insert—
(1)This section applies if, at any time (“the relevant time”) after the death of a member of a registered pension scheme, another member of the pension scheme becomes entitled to alternatively secured rights.
(2)“Alternatively secured rights” are rights representing the whole or part of the dead member's alternatively secured pension fund, or dependant's alternatively secured pension fund, in respect of an arrangement under the pension scheme.
(3)The pension scheme is to be treated as making an unauthorised payment to the other member (or to the other member's personal representatives).
(4)Subject to subsection (5), the amount of the unauthorised payment is the amount by which—
(a)the consideration which might be expected to be received in respect of an assignment (or assignation) of the benefits to which the other member is actually or prospectively entitled under the pension scheme immediately after the relevant time, exceeds
(b)the consideration which might be expected to be received in respect of such an assignment (or assignation) immediately before the relevant time.
(5)But that amount is to be reduced by so much (if any) of the excess as arises from the other member becoming entitled to pension death benefits or lump sum death benefits in respect of the dead member.
(6)This section does not apply if the other member's entitlement to the alternatively secured rights is brought about by an assignment (or agreement to assign) within section 172.
(7)Rights representing the member's unsecured pension fund are alternatively secured rights for the purposes of this section if they would be rights representing the member's alternatively secured pension fund but for paragraph 11(6) and (7) of Schedule 28.”