Pensions Act 2004

Pensions Act 2004

2004 CHAPTER 35

Commentary on Sections

Part 2 – the Board of the Pension Protection Fund

Chapter 3 – Pension Protection

Restrictions on schemes during the assessment period

Section 136: Power to validate contraventions of section 135

443. This section gives the Board power to validate contraventions of section 135(which places certain restrictions on schemes during the assessment period). Subsection (1) provides for the Board to validate a breach of section 135 only if to do so would be consistent with the objective of ensuring that the scheme’s protected liabilities do no exceed its assets or, if they do, that any excess is kept to a minimum. Assets for this purpose do not include assets relating to money purchase benefits.

444. Subsection (2) provides that when the Board makes a determination as to whether or not to validate a breach of section 135, it must give notice of its decision. The notice must contain the reasons for the determination. It must be given to the Regulator, the trustees or managers of the scheme, any insolvency practitioner in relation to the employer (or if there is none, the employer), and any other person who the Board considers affected by the decision.

445. Subsection (4) provides that a validation of a breach may only take effect once a notice of the Board’s decision has been given and the period for review of the notice has expired. If there is a review the validation takes effect once the review, any reconsideration, any reference to the PPF Ombudsman and any appeal against the determination has been disposed of.