Occupational Pension Schemes (Contracting-out) Regulations 1996

[F1 Payment of a lump sum instead of a pension payable under a relevant scheme E+W+S

20.— (1)  For the purposes of section 12C(1)(c) of the 1993 Act (regulations may prohibit or restrict the payment of a lump sum instead of a pension under a relevant scheme except in prescribed circumstances or on prescribed conditions), a relevant scheme may not provide for the payment of a lump sum instead of a pension unless the payment to be made is authorised under section 164 of the Finance Act 2004 (authorised member payments) and the payment F2 ... —

(a) [F3 is permitted] by the lump sum rule in section 166 of that Act (lump sum rule) and qualifies as—

(i) a pension commencement lump sum for the purposes of paragraph 1 of Part 1 of Schedule 29 to that Act;

(ii) a serious ill-health lump sum for the purposes of paragraph 4 of that Part;

(iii) a trivial commutation lump sum for the purposes of paragraph 7 of that Part;

(iv) a winding-up lump sum for the purposes of paragraph 10 of that Part; or

(b) [F3 is permitted] by the lump sum death benefit rule in section 168 of that Act (lump sum death benefit rule) and qualifies as—

(i) a trivial commutation lump sum death benefit for the purposes of paragraph 20 of Part 2 of Schedule 29 to that Act; or

(ii) a winding-up lump sum death benefit for the purposes of paragraph 21 of that Part[F4 ; or

(c) is—

(i) made by a registered pension scheme (within the meaning given in section 150(2) of the Finance Act 2004 (meaning of “pension scheme”));

(ii) a payment that is described in Part 2 of the 2009 Regulations; and

(iii) made to or in respect of a member.]

(2) Where under the scheme—

(a) an earner qualifies for a lump sum payment on the ground of serious ill-health; and

(b) the earner’s widow, widower or surviving civil partner qualifies for a pension (“a survivor’s pension”),

the scheme must continue to include provision for a survivor’s pension notwithstanding the payment of a lump sum to the earner.]

Textual Amendments

F1 Reg. 20 substituted (6.4.2006) by Taxation of Pension Schemes (Consequential Amendments of Occupational and Personal Pension Schemes Legislation) Order 2006 (S.I. 2006/744) , arts. 1 , 8(5)

F2 Words in reg. 20(1)(a) omitted (1.12.2009) by virtue of Occupational and Personal Pension Schemes (Authorised Payments) Amendment Regulations 2009 (S.I. 2009/2930) , regs. 1 , 4(3)(a)

F3 Words in reg. 20(1)(a)(b) inserted (1.12.2009) by Occupational and Personal Pension Schemes (Authorised Payments) Amendment Regulations 2009 (S.I. 2009/2930) , regs. 1 , 4(3)(b)

F4 Words in reg. 20(1)(c) inserted (1.12.2009) by Occupational and Personal Pension Schemes (Authorised Payments) Amendment Regulations 2009 (S.I. 2009/2930) , regs. 1 , 4(3)(c)