The Taxation of Pension Schemes (Consequential Amendments of Occupational and Personal Pension Schemes Legislation) Order 2006

Amendment of the Occupational Pension Schemes (Assignment, Forfeiture, Bankruptcy etc.) Regulations 1997

14.—(1) Amend the Occupational Pension Schemes (Assignment, Forfeiture, Bankruptcy etc) Regulations 1997(1) as follows.

(2) In regulation 1(2) (interpretation)—

(a) omit the definition of “approved scheme”;

(b) in the appropriate alphabetical place, insert—

““normal minimum pension age” has the meaning given by section 279(1) of the Finance Act 2004;

“registered scheme” means—

(a)

a scheme registered under section 153 of the Finance Act 2004;

(b)

a scheme which was formerly registered under section 153 of that Act; or

(c)

a scheme which was formerly approved under section 590 or 591 of the Income and Corporation Taxes Act 1988 immediately before 6th April 2006.”.

(3) In regulation 2 (commutation of a pension under an occupational pension scheme)—

(a) for paragraph (1), substitute—

“(1) For the purposes of section 91(5)(c)(ii) and (iii) of the 1995 Act (inalienability of occupational pension does not apply to commutation in prescribed circumstances) the prescribed circumstances are where—

(a) any amount payable as a lump sum to—

(i) the earner is permitted by the lump sum rule in section 166 of the Finance Act 2004 and qualifies as a trivial commutation lump sum for the purposes of paragraph 7 of Part 1 of Schedule 29 to that Act; or

(ii) the earner’s widow, widower or surviving civil partner is permitted by the lump sum death benefit rule in section 168 of that Act and qualifies as a trivial commutation lump sum death benefit for the purposes of paragraph 20 of Part 2 of Schedule 29 to that Act; or

(b) the scheme is being wound up and the aggregate amount of all benefits payable as a lump sum to—

(i) the earner is permitted by the lump sum rule in section 166 of that Act and qualifies as a winding-up lump sum for the purposes of paragraph 10 of Part 1 of Schedule 29 to that Act; or

(ii) the earner’s widow, widower or surviving civil partner is permitted by the lump sum death benefit rule in section 168 of that Act and qualifies as a winding-up lump sum death benefit for the purposes of paragraph 21 of Part 2 of Schedule 29 to that Act.”.

(b) after paragraph (1A)(2) insert—

“(1B) There are also prescribed for the purposes of—

(a) section 91(5)(c)(ii) of the 1995 Act the circumstances where the payment of a lump sum to a person is permitted in accordance with any of paragraphs (a) to (e) of the lump sum death benefit rule in section 168 of the Finance Act 2004 (lump sum death benefit rule);

(b) section 91(5)(c)(iii) of the 1995 Act the circumstances where a person has reached normal minimum pension age but has not retired from the employment of the employer in relation to the scheme, the payment of a lump sum to the person is permitted in accordance with paragraph (a) or (g) of the lump sum rule in section 166 of the Finance Act 2004 (lump sum rule).”;

(c) omit paragraph (2);

(d) in paragraph (3), for “paragraph (1)(a)(ii)”, substitute “paragraph (1)(b)”.

(4) In regulation 8 (exemptions from the inalienability and forfeiture provisions)—

(a) in paragraph (3), for the word “approved” substitute the word “registered”; and

(b) after paragraph (5) add—

“(6) Section 91(1)(a) of the 1995 Act (inalienability of occupational pension) shall not apply to a scheme to the extent that it would prevent the making of any arrangement to effect a surrender of excess rights, at the option of the person in question, for the purposes of paragraph 12 of Schedule 36 to the Finance Act 2004 (pension schemes etc: transitional provisions and savings).”.

(1)

S.I. 1997/785; relevant amending instruments are S.I. 1999/1849, 2002/681, 2005/438, 706 and 2877.

(2)

Paragraph 1A was inserted by S.I. 2002/681.