Part IVProtection for early leavers

Chapter Ireservation of benefit under occupational schemes

77Assignment, 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.