Pension Schemes Act 2021

44 Pause orders

(1) This section applies during a triggering event period for a collective money purchase scheme.

(2) The Pensions Regulator may make a pause order in relation to the scheme if either of the following two conditions is met.

(3) Condition 1 is that the Pensions Regulator is satisfied that making a pause order will help the trustees to carry out the implementation strategy.

(4) Condition 2 is that the Pensions Regulator is satisfied that—

(a) there is, or is likely to be if a pause order is not made, an immediate risk to the interests of members of the scheme or the assets of the scheme, and

(b) it is necessary to make a pause order to protect the interests of the generality of the members of the scheme.

(5) A pause order is an order that during the period for which it has effect one or more of the following directions has effect—

(a) a direction that no new members (or no new members of a specified description) are to be admitted to the scheme;

(b) a direction that no further payments (or no further payments of a specified description) are to be made towards the scheme—

(i) by or on behalf of employers or relevant former employers (or employers or relevant former employers of a specified description), or

(ii) by or in respect of members (or members of a specified description);

(c) a direction that an amount (or specified amount) which—

(i) corresponds to a payment that would be due to be made towards the scheme in respect of a member but for a direction under paragraph (b), and

(ii) has been deducted from a payment of earnings in respect of an employment,

is to be repaid to the member in question by the employer;

(d) a direction that no benefits (or no benefits of a specified description) are to be paid to or in respect of members (or members of a specified description) under the scheme rules;

(e) a direction that—

(i) no transfers (or no transfers of a specified description) of or in respect of a member’s rights under the scheme rules are to be made from the scheme,

(ii) no transfer payments (or no transfer payments of a specified description) in respect of a member’s rights under the scheme rules are to be made from the scheme, or

(iii) no other steps (or no other steps of a specified description) are to be taken to discharge a liability of the scheme to or in respect of a member of the scheme in respect of pensions or other benefits.

(6) In subsection (5)(b)—

(a) a reference to payments does not include payments due to be made before the order takes effect, and

(b) a reference to payments towards a scheme includes payments in respect of pension credits where the person entitled to the credit is a member of the scheme.

(7) A direction under subsection (5)(e) may provide that—

(a) no transfers of or in respect of a member’s rights under the scheme rules, or no such transfers of a specified description, may be made from the scheme, or

(b) no transfer payments in respect of such rights, or no such transfer payments of a specified description, may be made from the scheme,

unless the amounts paid out from the scheme in respect of the transfers or transfer payments are determined in a specified manner and the transfers or transfer payments satisfy such other conditions as may be specified.

(8) A pause order may also require the trustees of the scheme to obtain an actuarial valuation within a specified period.

(9) A pause order containing such a requirement must specify—

(a) the date by reference to which the matters to be set out in the valuation must be determined;

(b) the information and statements that the valuation must contain;

(c) any other requirements that the valuation must satisfy.

(10) Schedule 2 makes further provision about pause orders.

(11) In this section—

• “earnings” has the meaning given in section 181(1) of the Pension Schemes Act 1993;

• “pension credit” means a credit under section 29(1)(b) of the Welfare Reform and Pensions Act 1999 or Article 26(1)(b) of the Welfare Reform and Pensions (Northern Ireland) Order 1999 (S.I. 1999/3147 (N.I. 11));

• “specified” means specified in the pause order.