Pensions Act 2004

Pensions Act 2004

2004 CHAPTER 35

Commentary on Sections

Part 5 – Occupational and Personal Pension Schemes: Miscellaneous Provisions

Contracting out

Section 284: Restrictions on commutation and age at which benefits may be received

1140. Subsection (1) amends section 21(1) of the Pension Schemes Act 1993 (which refers to commutation, surrender and forfeiture) to provide that where a scheme is required to comply with section 13 (minimum pensions for earners) or section 17 (minimum pensions for widows or widowers) of the Pension Schemes Act 1993 in providing a guaranteed minimum pension, then the scheme may provide for payment of a lump sum instead of that pension to the extent that this is permitted by regulations.

1141. Subsection (2) amends section 17 of the Pension Schemes Act 1993 (minimum pensions for widows and widowers) to provide that where a person has received a lump sum instead of a guaranteed minimum pension in circumstances prescribed by regulations, that person will be treated as if they had not received the lump sum for the purposes of calculating the minimum pension payable to their widow or widower.

1142. Subsections (3) to (7) amend sections 28 and 29 of the Pension Schemes Act 1993 to remove certain restrictions on protected rights which build up in contracted-out money-purchase occupational pension schemes and appropriate schemes (a personal pension scheme that meets the requirements of section 7(4) of the Pension Schemes Act 1993.). Subsections (3) to (5) enable regulations to provide for protected rights to be paid as lump sums in certain circumstances and subject to certain restrictions. Subsections (6) and (7) remove the restrictions as to the age at which members’ protected rights can be given effect, except in occupational pension schemes where, unless the member agrees a later date, they must be given effect to no later than the member’s 65^th birthday.