C1C2C3C4C6C7C8C9C10C13C14C15C16C17C18Part 4Pension schemes etc

Annotations:
Modifications etc. (not altering text)
C8

Pt. 4 modified (1.7.2008) (N.I.) (with effect in accordance with reg. 1 of the amending Rule) by The Health and Social Care (Pension Scheme) Regulations (Northern Ireland) 2008 (S.R. 2008/256), regs. 1, 124(1) (with regs. 134, 258)

C10

Pt. 4 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 35 para. 18

C13

Pt. 4 modified (19.7.2011) by Finance Act 2011 (c. 11), Sch. 18 para. 14(3)

C14

Pt. 4 applied (with modifications) (with application in accordance with Sch. 22 para. 1 of the amending Act) by Finance Act 2013 (c. 29), Sch. 22 para. 1(2)

C15

Pt. 4 modified (17.7.2014) by Finance Act 2014 (c. 26), Sch. 6 para. 1(2)(3)

C16

Pt. 4: power to amend conferred (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), s. 4(3)

C17

Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 1

C18

Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 9(2)

C13Chapter 3Payments by registered pension schemes

Borrowing

I1C5C12C11182Unauthorised borrowing: money purchase arrangements F8other than collective money purchase arrangements

1

A registered pension scheme is not authorised to borrow an amount in respect of a money purchase arrangement F9that is not a collective money purchase arrangement unless the arrangement borrowing condition is met.

2

The arrangement borrowing condition is met if—

(APB+PB)<VA2math

where—

APB is the aggregate of the amounts previously borrowed in respect of the arrangement (excluding any amounts which have been repaid),

PB is the amount proposed to be borrowed in respect of the arrangement, and

VA is the value of the arrangement.

3

The value of the arrangement is the aggregate of—

a

the amount of such of the sums and the market value of such of the assets as represent the F1member's drawdown pension fund in respect of the arrangement (if any),

F4aa

the amount of such of the sums and the market value of such of the assets as represent the member's flexi-access drawdown fund in respect of the arrangement (if any),

b

the amount of such of the sums and the market value of such of the assets as represent F2dependants' drawdown pension fundsF5or dependants' flexi-access drawdown funds in respect of the arrangement (if any),

F6ba

the amount of such of the sums and the market value of such of the assets as represent nominees' flexi-access drawdown funds in respect of the arrangement (if any),

bb

the amount of such of the sums and the market value of such of the assets as represent successors' flexi-access drawdown funds in respect of the arrangement (if any),

c

the aggregate of the value of each scheme pension or dependants' scheme pension payable in respect of the arrangement, and

d

the value of the uncrystallised rights under the arrangement.

4

The value of a scheme pension or dependants' scheme pension payable in respect of the arrangement is—

RVF×ARPmath

where—

RVF is the relevant valuation factor (see section 276), and

ARP is the annual rate at which the pension is payable.

5

Rights are uncrystallised if no-one has become entitled to the present payment of benefits in respect of the rights; and a person is to be treated as entitled to the present payment of benefits in respect of the sums and assets representing the person’s F3drawdown pension fundF7or the person's flexi-access drawdown fund.

6

If the arrangement is a cash balance arrangement, the value of the uncrystallised rights under the arrangement is the amount which would, on the valuation assumptions (see section 277), be available for the provision of benefits in respect of those rights if a person became entitled to benefits in respect of those rights.

7

If the arrangement is a money purchase arrangement other than a cash balance arrangement, the value of the uncrystallised rights under the arrangement is the aggregate of the amount of such of the sums, and the market value of such of the assets, held for the purposes of the arrangement as represent those rights.

8

If the arrangement is a hybrid arrangement under which either cash balance benefits or other money purchase benefits (but not defined benefits F10or collective money purchase benefits) may be provided, the value of the uncrystallised rights under the arrangement is the greater of—

a

their value calculated under subsection (6) (on the assumption that cash balance benefits are provided), and

b

their value calculated under subsection (7) (on the assumption that other money purchase benefits are provided).