Pension Schemes Act 1993

95 Ways of taking right to cash equivalent. E+W+S

[F1 (1) A member of a pension scheme who has acquired a right to take a cash equivalent in accordance with this Chapter may only take it by making an application in writing to the trustees or managers of the scheme requiring them to use the cash equivalent in one of the ways specified below.

(1A) In the case of a right acquired under section 94(1), the application must be made—

(a) within the period of 3 months beginning with the guarantee date shown in the relevant statement of entitlement, and

(b) if the cash equivalent relates to benefits that are not flexible benefits, by no later than the date that falls one year before the member attains normal pension age.]

(2) In the case of a member of an occupational pension scheme [F2 that is not an unfunded public service defined benefits scheme], the ways referred to in subsection (1) are—

(a) for acquiring transfer credits allowed under the rules of another occupational pension scheme—

(i) the trustees or managers of which are able and willing to accept payment in respect of the member’s [F3 transferrable rights], and

(ii) which satisfies prescribed requirements;

(b) for acquiring rights allowed under the rules of a personal pension scheme—

(i) the trustees or managers of which are able and willing to accept payment in respect of the member’s [F4 transferrable rights], and

(ii) which satisfies prescribed requirements;

(c) for purchasing from one or more [F5 insurers] such as are mentioned in section 19(4)(a), chosen by the member and willing to accept payment on account of the member from the trustees or managers, one or more annuities which satisfy prescribed requirements;

(d) for subscribing to other pension arrangements which satisfy prescribed requirements.

[F6 (2A) In the case of a member of an occupational pension scheme that is an unfunded public service defined benefits scheme, the ways referred to in subsection (1) are—

(a) for acquiring transfer credits allowed under the rules of another occupational pension scheme if—

(i) the benefits that may be provided under the other scheme by virtue of the transfer credits are not flexible benefits,

(ii) the trustees or managers of the other scheme are able and willing to accept payment in respect of the member's transferrable rights, and

(iii) the other scheme satisfies requirements prescribed in regulations made by the Secretary of State or the Treasury;

(b) for acquiring rights allowed under the rules of a personal pension scheme if—

(i) the benefits that may be provided under the personal pension scheme by virtue of the acquired rights are not flexible benefits,

(ii) the trustees or managers of the personal pension scheme are able and willing to accept payment in respect of the member's transferrable rights, and

(iii) the personal pension scheme satisfies requirements prescribed in regulations made by the Secretary of State or the Treasury;

(c) for purchasing from one or more insurers such as are mentioned in section 19(4)(a), chosen by the member and willing to accept payment on account of the member from the trustees or managers, one or more annuities which satisfy requirements prescribed in regulations made by the Secretary of State or the Treasury;

(d) for subscribing to other pension arrangements which satisfy requirements prescribed in regulations made by the Secretary of State or the Treasury.

(2B) The Treasury may by regulations provide for sub-paragraph (i) of subsection (2A)(a) or (b) not to apply in prescribed circumstances or in relation to prescribed schemes or schemes of a prescribed description.

(2C) In subsections (2) and (2A) “unfunded public service defined benefits scheme” means a public service pension scheme that—

(a) is a defined benefits scheme within the meaning given by section 37 of the Public Service Pensions Act 2013, and

(b) meets some or all of its liabilities otherwise than out of a fund accumulated for the purpose during the life of the scheme.]

(3) In the case of a member of a personal pension scheme, the ways referred to in subsection (1) are—

(a) for acquiring transfer credits allowed under the rules of an occupational pension scheme—

(i) the trustees or managers of which are able and willing to accept payment in respect of the member’s [F7 transferrable rights], and

(ii) which satisfies prescribed requirements;

(b) for acquiring rights allowed under the rules of another personal pension scheme—

(i) the trustees or managers of which are able and willing to accept payment in respect of the member’s [F8 transferrable rights], and

(ii) which satisfies prescribed requirements;

(c) for subscribing to other pension arrangements which satisfy prescribed requirements.

F9 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Except in such circumstances as may be prescribed—

(a) subsection (2) is to be construed as if paragraph (d) were omitted; and

(b) subsection (3) is to be construed as if paragraph (c) were omitted.

[F10 (5A) Except in such circumstances as may be prescribed in regulations made by the Secretary of State or the Treasury, subsection (2A) is to be construed as if paragraph (d) were omitted.]

(6) Without prejudice to the generality of subsections (2) [F11 , (2A)] and (3), the powers conferred by those subsections include power to provide that a scheme or pension arrangement or, in the case of subsection (2) [F12 or (2A)], an annuity must satisfy requirements of the Inland Revenue.

[F13 (6ZA) The trustees or managers of the scheme may not use the cash equivalent in a way specified in subsection (2)(a), (b) or (d), (2A)(a), (b) or (d) or (3) unless prescribed conditions are satisfied.

(6ZB) The conditions that may be prescribed by regulations under subsection (6ZA) include (but are not limited to) conditions about—

(a) the member's employment or place of residence;

(b) providing the trustees or managers with information or evidence about the member's employment or place of residence;

(c) the member obtaining information or guidance about exercising the option conferred by subsection (1) from a prescribed person in a prescribed case;

(d) providing the trustees or managers with evidence that—

(i) the member has complied with a prescribed condition about obtaining such information or guidance from a prescribed person, or

(ii) the member is not subject to such a prescribed condition.

(6ZC) Regulations may make provision requiring the trustees or managers of a pension scheme to notify a member who makes an application under subsection (1) of conditions prescribed under subsection (6ZA).]

[F14 (6A) Regulations may extend the period specified in subsection (1A)(a) in prescribed circumstances.]

F15 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F15 (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) An application to the trustees or managers of the scheme under subsection (1) is to be taken to have been made if it is delivered to them personally, or sent by post in a registered letter or by the recorded delivery service.

Textual Amendments

F1 S. 95(1)(1A) substituted for s. 95(1) (6.4.2015) by Pension Schemes Act 2015 (c. 8), s. 89(3)(b), Sch. 4 para. 9(2) (with s. 87)

F2 Words in s. 95(2) inserted (6.4.2015) by Pension Schemes Act 2015 (c. 8), ss. 68(2), 89(3)(b) (with ss. 68(8)(9), 87)

F3 Words in s. 95(2)(a)(i) substituted (6.4.2015) by Pension Schemes Act 2015 (c. 8), s. 89(3)(b), Sch. 4 para. 9(3) (with s. 87)

F4 Words in s. 95(2)(b)(i) substituted (6.4.2015) by Pension Schemes Act 2015 (c. 8), s. 89(3)(b), Sch. 4 para. 9(3) (with s. 87)

F5 Word in s. 95(2)(c) substituted (1.12.2001) by The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001 (S.I. 2001/3649), arts. 1, 121

F6 S. 95(2A)-(2C) inserted (3.3.2015 for specified purposes, 6.4.2015 in so far as not already in force) by Pension Schemes Act 2015 (c. 8), ss. 68(3), 89(1)(b)(3)(b) (with ss. 68(8)(9), 87)

F7 Words in s. 95(3)(a)(i) substituted (6.4.2015) by Pension Schemes Act 2015 (c. 8), s. 89(3)(b), Sch. 4 para. 9(3) (with s. 87)

F8 Words in s. 95(3)(b)(i) substituted (6.4.2015) by Pension Schemes Act 2015 (c. 8), s. 89(3)(b), Sch. 4 para. 9(3) (with s. 87)

F9 S. 95(4) repealed (1.1.2001) by Child Support, Pensions and Social Security Act 2000 (c. 19), s. 86(1)(b)(2), Sch. 5 para. 7, Sch. 9 Pt. III(7) (with s. 83(6)); S.I. 2000/3166, art. 2(3)(b)(iv)

F10 S. 95(5A) inserted (3.3.2015 for specified purposes, 6.4.2015 in so far as not already in force) by Pension Schemes Act 2015 (c. 8), ss. 68(4), 89(1)(b)(3)(b) (with ss. 68(8)(9), 87)

F11 Word in s. 95(6) inserted (6.4.2015) by Pension Schemes Act 2015 (c. 8), ss. 68(5)(a), 89(3)(b) (with ss. 68(8)(9), 87)

F12 Words in s. 95(6) inserted (6.4.2015) by Pension Schemes Act 2015 (c. 8), ss. 68(5)(b), 89(3)(b) (with ss. 68(8)(9), 87)

F13 S. 95(6ZA)-(6ZC) inserted (31.5.2021 for specified purposes, 30.11.2021 in so far as not already in force) by Pension Schemes Act 2021 (c. 1), ss. 125(2), 131(1); S.I. 2021/620, reg. 2(1)(e); S.I. 2021/1236, reg. 2

F14 Words in s. 95(6A) substituted (3.3.2015 for specified purposes, 6.4.2015 in so far as not already in force) by Pension Schemes Act 2015 (c. 8), s. 89(1)(b)(3)(b), Sch. 4 para. 9(4) (with s. 87)

F15 S. 95(7)(8) omitted (6.4.2015) by virtue of Pension Schemes Act 2015 (c. 8), s. 89(3)(b), Sch. 4 para. 9(5) (with s. 87)

Modifications etc. (not altering text)

C1 Ss. 93-101 modified (1.4.1998) by The Local Government Pension Scheme (Scotland) Regulations 1998 (S.I. 1998/366), regs. 1, 116-118

C2 Ss. 93-98 modified (30.12.2005) by The Occupational Pension Schemes (Cross-border Activities) Regulations 2005 (S.I. 2005/3381), regs. 1, 14, Sch. 2 para. 3

Commencement Information

I1 Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2