PART 4Pensions flexibilities

CHAPTER 2Independent advice

Great Britain

48Independent advice in respect of conversions and transfers: Great Britain

(1)

Where a member of a pension scheme has subsisting rights in respect of any safeguarded benefits, or a survivor of a member has subsisting rights in respect of any safeguarded benefits, the trustees or managers must check that the member or survivor has received appropriate independent advice before—

(a)

converting any of the benefits into different benefits that are flexible benefits under the scheme;

(b)

making a transfer payment in respect of any of the benefits with a view to acquiring a right or entitlement to flexible benefits for the member or survivor under another pension scheme;

(c)

paying a lump sum that would be an uncrystallised funds pension lump sum in respect of any of the benefits.

(2)

The Secretary of State may by regulations make provision about—

(a)

what the trustees or managers must do to check that a member or survivor has received appropriate independent advice for the purposes of subsection (1), and

(b)

when the check must be carried out for the purposes of that subsection.

(3)

The Secretary of State may by regulations—

(a)

create an exception to subsection (1) in the case of a member or survivor whose subsisting rights in respect of safeguarded benefits under the scheme, or safeguarded benefits under the scheme and any other schemes, are worth less than a specified amount;

(b)

create other exceptions to subsection (1).

(4)

Regulations under subsection (3)(a) may, in particular, make provision about—

(a)

the valuation of the subsisting rights;

(b)

the process for determining whether the exception applies.

(5)

In subsection (1)(b) the reference to another pension scheme includes a scheme established in a country or territory outside Great Britain.

(6)

Where the trustees or managers fail to carry out a check required by this section, section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager who failed to take reasonable steps to ensure that the check was carried out.

(7)

Failure to carry out a check required by this section does not affect the validity of any transaction.

(8)

In this section—

“appropriate independent advice” means advice that—

(a)

is given by an authorised independent adviser, and

(b)

meets any other requirements specified in regulations made by the Secretary of State;

“authorised independent adviser” means a person who—

(a)

has permission under Part 4A of the Financial Services and Markets Act 2000, or resulting from any other provision of that Act, to carry on a regulated activity specified in regulations made by the Secretary of State, F1or is acting as an appointed representative (within the meaning given by section 39(2) of that Act) in relation to a regulated activity so specified, and

(b)

meets such other requirements as may be specified in regulations made by the Secretary of State for the purpose of ensuring that the person is independent;

“safeguarded benefits” means benefits other than—

(a)

money purchase benefits, and

(b)

cash balance benefits.