Finance Act 2021

20 (1) Schedule 28 (authorised pensions: supplementary) is amended as follows.

(2) In paragraph 2 (scheme pension), after sub-paragraph (8) insert—

“(9) Where, under a collective money purchase arrangement—

(a) a scheme pension has become payable to the member, and

(b) the member subsequently becomes entitled to income payable by virtue of section 36(7)(b) or 87(7)(b) of the Pension Schemes Act 2021 (periodic income paid while pursuing continuity option 1),

the income so payable is to be treated for the purposes of this Part as a continuation of the scheme pension.

(10) Where, under a collective money purchase arrangement—

(a) the member becomes entitled to income payable by virtue of section 36(7)(b) or 87(7)(b) of the Pension Schemes Act 2021 (periodic income paid while pursuing continuity option 1), and

(b) no scheme pension was previously payable to the member,

the income so payable is to be treated for the purposes of this Part as a scheme pension.”

(3) In paragraph 2A (scheme pension), after sub-paragraph (3) insert—

“(3A) But for the purposes of sub-paragraph (2)(b), no substantial reduction occurs in the rate of a pension if—

(a) the pension is payable in respect of a collective money purchase arrangement, and

(b) the reduction is in accordance with the rules of the scheme.”