Occupational Pension Schemes (Contracting-out) Regulations 1996

[F1Payment of a lump sum instead of a pension payable under a relevant schemeE+W+S

20.—(1)  For the purposes of section 12C(1)(c) of the 1993 Act (regulations may prohibit or restrict the payment of a lump sum instead of a pension under a relevant scheme except in prescribed circumstances or on prescribed conditions), a relevant scheme may not provide for the payment of a lump sum instead of a pension unless the payment to be made is authorised under section 164 of the Finance Act 2004 (authorised member payments) and the payment F2 ... —

(a)[F3is permitted] by the lump sum rule in section 166 of that Act (lump sum rule) and qualifies as—

(i)a pension commencement lump sum for the purposes of paragraph 1 of Part 1 of Schedule 29 to that Act;

(ii)a serious ill-health lump sum for the purposes of paragraph 4 of that Part;

(iii)a trivial commutation lump sum for the purposes of paragraph 7 of that Part;

(iv)a winding-up lump sum for the purposes of paragraph 10 of that Part; or

(b)[F3is permitted] by the lump sum death benefit rule in section 168 of that Act (lump sum death benefit rule) and qualifies as—

(i)a trivial commutation lump sum death benefit for the purposes of paragraph 20 of Part 2 of Schedule 29 to that Act; or

(ii)a winding-up lump sum death benefit for the purposes of paragraph 21 of that Part[F4; or

(c)is—

(i)made by a registered pension scheme (within the meaning given in section 150(2) of the Finance Act 2004 (meaning of “pension scheme”));

(ii)a payment that is described in Part 2 of the 2009 Regulations; and

(iii)made to or in respect of a member.]

(2) Where under the scheme—

(a)an earner qualifies for a lump sum payment on the ground of serious ill-health; and

(b)the earner’s widow, widower or surviving civil partner qualifies for a pension (“a survivor’s pension”),

the scheme must continue to include provision for a survivor’s pension notwithstanding the payment of a lump sum to the earner.]

Textual Amendments