The Pension Protection Fund (Compensation) Regulations 2005

Circumstances in which the portion of compensation to be commuted may exceed 25 per cent

20.—(1) The prescribed circumstances for the purposes of paragraph 24(2) of Schedule 7 to the Act are that the aggregate value of—

(a) any periodic compensation payable to the person in respect of a pension to which he is entitled under—

(i) the admissible rules of the scheme; or

(ii) the admissible rules of a connected occupational pension scheme;

(b) any compensation payable to that person as a lump sum in respect of a pension to which he is entitled under—

(i) the admissible rules of the scheme; or

(ii) the admissible rules of a connected occupational pension scheme; and

(c) any other benefits, including money purchase benefits, payable to that person under—

(i) the scheme rules; or

(ii) the rules of a connected occupational pension scheme,

is less than £260 per annum.

(2) For the purposes of this regulation—

(a) the value of any—

(i) periodic compensation;

(ii) compensation; and

(iii) other benefits,

is the value at the time at which periodic compensation becomes payable in respect of the pension under paragraph 5, 8, 11 or 15 of Schedule 7;

(b) the value of any compensation or benefit payable as a lump sum means the annualised actuarially equivalent amount of that sum determined in accordance with actuarial factors published by the Board;

(c) the scheme is connected with another occupational pension scheme if the same person is or was an employer in relation to both schemes.