The Pension Protection Fund (General and Miscellaneous Amendments) Regulations 2006

Manner of discharge of liabilities in respect of money purchase benefits

7.—(1) Subject to regulation 8, in respect of a case to which section 170(1) of the Act (discharge of liabilities in respect of money purchase benefits) applies, the Board must secure that liabilities in respect of money purchase benefits transferred to the Board under section 161 are discharged (or in the case of protected rights, given effect to) by way of—

(a) a transfer payment to—

(i) in the case of—

(aa) protected rights, an appropriate personal pension scheme; or

(bb) rights that are not protected rights, a personal pension scheme(1); or

(ii) an occupational pension scheme(2);

(b) the purchase of a pension annuity;

(c) the taking out of a policy of insurance or a number of such policies;

(d) assuring the benefits of a policy of insurance or a number of such policies; or

(e) in the circumstances described in regulation 9, a trivial commutation lump sum payment.

(2) Where a person is entitled under the scheme rules to money purchase benefits which include protected rights and rights which are not protected rights, the Board may discharge such rights together where it discharges those rights as if all those rights were protected rights.

(3) Any transfer payment made in relation to protected rights (or, if a transfer payment gives effect to both protected rights and rights which are not protected rights, that part of it which gives effect to protected rights)—

(a) shall be of an amount at least equal to the cash equivalent of the protected rights to which effect is being given, as calculated and verified in a manner consistent with regulations made under section 97 of the 1993 Act(3) (calculation of cash equivalents); and

(b) may only be made, where the appropriate personal pension scheme, personal pension scheme or occupational pension scheme is a stakeholder pension scheme, with the written consent of the member.

(1)

The definition of “personal pension scheme” in section 1 of the Pension Schemes Act 1993 was substituted by section 239(3) of the Pensions Act 2004.

(2)

The definition of “occupational pension scheme” in section 1 of the Pension Schemes Act 1993 was substituted by section 239(1) of the Pensions Act 2004.

(3)

Section 97 was amended by paragraph 4 of Schedule 6 to the Pensions Act 1995 and paragraph 8(1) of Schedule 5 to, the Child Support, Pensions and Social Security Act 2000 (c. 19).