The Pension Protection Fund (Entry Rules) Regulations 2005

Restrictions on winding up, discharge of liabilities etc

16.—(1) Subject to subsection (2) below, the prescribed circumstances in which—

(a) a transfer or transfer payment in respect of a member’s rights under the scheme rules may be made by the trustees or managers of the scheme are where a member has, before the beginning of an assessment period in relation to the scheme—

(i) been provided with a written statement of entitlement of the amount of the cash equivalent at the guarantee date of any benefits which have accrued to or in respect of him under the applicable rules pursuant to an application made by that member under section 93A(1) of the 1993 Act(1) (salary related schemes: right to a statement of entitlement);

(ii) acquired a right to a guaranteed cash equivalent by virtue of section 94(1)(a) of the 1993 Act (right to a cash equivalent); and

(iii) made an application under section 95 of the 1993 Act (ways of taking right to cash equivalent) requiring the trustees or managers of the scheme to use the cash equivalent to which he has acquired a right in whichever of the ways specified in subsection (2) of that section and has not withdrawn that application; and

(b) other steps may be taken by the trustees or managers of the scheme to discharge any liability of the scheme to or in respect of a member of the scheme in respect of—

(i) a pension or other benefit (except an ill health pension); and

(ii) a refund of contributions,

are where the member became entitled to the pension or benefit or to the refund of contributions before the beginning of an assessment period in relation to the scheme.

(2) A transfer or transfer payment in respect of a member’s rights under a scheme or a refund of a member’s contributions to a scheme shall not be made unless the trustees or managers of the scheme—

(a) are satisfied that to do so is consistent with the objective of ensuring that the scheme’s protected liabilities do not exceed its assets or, if they do exceed its assets, that the excess is kept to a minimum; and

(b) reduce the amount of the transfer or transfer payment or the refund of contributions by the extent necessary to ensure that it does not exceed the cost of securing benefits for and in respect of members of the scheme which correspond to the compensation that would be payable, in relation to the scheme, in accordance with the pension compensation provisions if the Board were to assume responsibility for the scheme in accordance with Chapter 3 of Part 2 of the Act.

(3) For the purposes of this regulation, a member is entitled to—

(a) a pension or other benefit where he has reached normal pension age; and

(b) a refund of contributions when he has—

(i) requested and received a quotation from the trustees or managers of the scheme showing the amount of the contributions which may be refunded in respect of his accrued rights to benefits under the scheme, and

(ii) notified the trustees or managers of the scheme in writing of his agreement to accept a refund of contributions on the basis of the quotation.

(4) In this regulation—

“the guarantee date” has the meaning given in section 93A(2) of the 1993 Act; and

“the applicable rules” has the meaning given in section 94(2) of the 1993 Act.

(1)

Section 93A was inserted by section 153 of the Pensions Act 1995.