Restrictions on winding up, discharge of liabilities etc16
1
Subject to F7paragraph (2) below, the prescribed circumstances in which—
F4za
a right or entitlement to benefits that are not money purchase benefits may be converted into, or replaced with, a right or entitlement to money purchase benefits under an eligible scheme are where, before the beginning of the assessment period in relation to the scheme, a person has—
i
a right or entitlement under the scheme rules in respect of flexible benefits (as defined by section 74 of the Pension Schemes Act 2015) that are not money purchase benefits;
ii
notified the trustees or managers of the scheme that the person wishes to exercise an option under the scheme rules to convert those benefits (or a portion of them) into, or replace them (or a portion of them) with, money purchase benefits for the purpose of designating sums or assets as available for the payment of drawdown pension, dependants’ drawdown pension, nominees’ drawdown pension or successors’ drawdown pension (as defined by paragraphs 4, 18, 27B and 27G of Schedule 28 to the Finance Act 2004, respectively); and
iii
complied with any requirements, and satisfied any conditions, to which the exercise of that option is subject;
a
a transfer or transfer payment in respect of a member's rights under the scheme rules may be made by the F1trustees or managers of an eligible scheme are where a member has, before the beginning of an assessment period in relation to the scheme—
i
been provided with a written statement of entitlement of the amount of the cash equivalent at the guarantee date of any benefits which have accrued to or in respect of him under the applicable rules pursuant to an application made by that member under section 93A(1) of the 1993 Act F8(right to statement of entitlement: benefits other than money purchase); and
F5ii
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
made an application under section 95 of the 1993 Act (ways of taking right to cash equivalent) requiring the F1trustees or managers of an eligible scheme to use the cash equivalent to which he has acquired a right in whichever of the ways specified in subsection (2) of that section and has not withdrawn that application; and
b
other steps may be taken by the F1trustees or managers of an eligible scheme to discharge any liability of the scheme to or in respect of a member of the scheme in respect of—
i
a pension or other benefit (except an ill health pension); and
ii
a refund of contributions,
are where the member became entitled to the pension or benefit or to the refund of contributions before the beginning of an assessment period in relation to the scheme.
2
F6A conversion or replacement of benefits under an eligible scheme under paragraph (1)(za), a transfer or transfer payment in respect of a member's rights under F2an eligible scheme or a refund of a member's contributions to F2an eligible scheme shall not be made unless the trustees or managers of the scheme—
a
are satisfied that to do so is consistent with the objective of ensuring that the scheme's protected liabilities do not exceed its assets or, if they do exceed its assets, that the excess is kept to a minimum; and
b
reduce the F3value or amount of F3the benefits (or the portion of them) to be converted or replaced, the transfer or transfer payment or the refund of contributions by the extent necessary to ensure that it does not exceed the cost of securing benefits for and in respect of members of the scheme which correspond to the compensation that would be payable, in relation to the scheme, in accordance with the pension compensation provisions if the Board were to assume responsibility for the scheme in accordance with Chapter 3 of Part 2 of the Act.
3
For the purposes of this regulation, a member is entitled to—
a
a pension or other benefit where he has reached normal pension age; and
b
a refund of contributions when he has—
i
requested and received a quotation from the trustees or managers of the scheme showing the amount of the contributions which may be refunded in respect of his accrued rights to benefits under the scheme, and
ii
notified the trustees or managers of the scheme in writing of his agreement to accept a refund of contributions on the basis of the quotation.
4
In this regulation—
“the guarantee date” has the meaning given in section 93A(2) of the 1993 Act; and
“the applicable rules” has the meaning given in section 94(2) of the 1993 Act.