Pension Schemes Act 1993

77 Assignment, surrender and commutation of benefit

(1) Except as provided by this section, a scheme—

(a) must contain rules preventing assignment of short service benefit; and

(b) must not enable such benefit to be surrendered or commuted.

(2) Subsection (1) does not apply to any assignment, surrender or commutation of a policy of insurance or annuity contract in accordance with conditions prescribed by regulations under section 19(4)(b) or (c).

(3) A scheme may enable assignment in favour of the member’s widow or widower or dependant (whether or not the benefit is in payment).

(4) A scheme may, at the option of the member, enable surrender—

(a) to provide benefit for the member’s widow, widower or dependant;

(b) to acquire for the member transfer credits under the rules of another occupational pension scheme or rights under the rules of a personal pension scheme or a self-employed pension arrangement;

(c) to acquire for the member entitlement to further benefits under the same scheme, relating both to a period of pensionable service previously terminated and also to a subsequent period of service in relevant employment.

(5) A scheme may enable a member’s benefit to be commuted—

(a) in a case where he opts (at any time) to commute at or after normal pension age; or

(b) in exceptional circumstances of serious ill-health; or

(c) in such other circumstances as may be prescribed.

(6) A scheme may enable benefit for a member’s widow, widower or dependant to be commuted in such circumstances as may be prescribed.

(7) In the application of this section to Scotland, for references to assignment there shall be substituted references to assignation.