SCHEDULES

SCHEDULE 30Registered pension schemes: employer loans

Definitions

Charge of adequate value

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1

A charge is of adequate value if it meets conditions A, B and C.

2

Condition A is that, at the time the charge is given, the market value of the assets subject to the charge—

a

in the case of the first charge to secure the loan, is at least equal to the amount owing (including interest), and

b

in any other case, is at least equal to the lower of that amount and the market value of the assets subject to the previous charge.

3

Condition B is that if, at any time after the charge is given, the market value of the assets charged is less than would be required under condition A if the charge were given at that time, the reduction in value is not attributable to any step taken by the pension scheme, the sponsoring employer or a person connected with the sponsoring employer.

4

Condition C is that the charge takes priority over any other charge over the assets.