When a scheme is being assessed or has entered the Pension Protection Fund can a scheme member transfer out?
When a scheme is in an assessment period, the trustees may only pay a transfer value where, before the assessment date, the member has requested and accepted the transfer value in writing and has designated a scheme willing to accept that transfer value.
Further, the trustees may only pay that transfer value if:
- they are satisfied that to do so is consistent with the objective of ensuring protected liabilities do not exceed assets (or that where they do, the excess is kept to a minimum); and
- they reduce the transfer payment to the extent necessary to ensure that it does not exceed the cost of securing the benefits which correspond to the compensation that would be payable if the Pension Protection Fund were to assume responsibility.
Where the assessment period has come to an end and the Pension Protection Fund has assumed responsibility for a scheme, the member will become entitled to compensation at normal pension age. Once the Pension Protection Fund has assumed responsibility for the scheme, a member would not be entitled to a transfer payment unless pensionable service was ended by the start of the assessment period and at that time the member had less than 3 months’ pensionable service in the scheme.
Published: Wednesday, April 06, 2005
Associated Subjects: Compensation;Assessment Period
Associated Roles: Scheme members;Trustees;Pensions Professionals
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