Loans to pay scheme benefits
123.—(1) Paragraph (2) applies where Article 122(2) applies in relation to an eligible scheme.
(2) Where the Board is satisfied that the trustees or managers of the scheme are not able to pay benefits under the scheme rules (reduced in accordance with Article 122(2)) as they fall due, it may, on an application by the trustees or managers, lend to them such amounts as the Board considers appropriate for the purpose of enabling them to pay those benefits.
(3) Where an amount lent to the trustees or managers of a scheme under paragraph (2) is outstanding at—
(a)the time the Board ceases to be involved with the scheme, or
(b)if earlier—
(i)the time during the assessment period when an order is made under Article 11(3A) of the 1995 Order directing the winding up of the scheme, or
(ii)where no such order is made during that period, the time when the assessment period ends because the conditions in Article 138(2) or (5) are satisfied,
that amount, together with the appropriate interest on it, falls to be repaid by the trustees or managers of the scheme to the Board at that time.
(4) No loan may be made under paragraph (2) after the time mentioned in paragraph (3)(b)(i).
(5) In paragraph (2) the reference to “benefits” does not include money purchase benefits.
(6) In paragraph (3) “the appropriate interest” on an amount lent under paragraph (2) means interest at the prescribed rate from the time the amount was so lent until repayment.
(7) Subject to this Article, the Board may make a loan under paragraph (2) on such terms as it thinks fit.