Welfare Reform and Pensions Act 1999

17 Compensating occupational pension schemes

(1) In subsection (1)(d) of section 81 of the [1995 c. 26.] Pensions Act 1995 (compensation not payable by the Pensions Compensation Board unless assets of salary-related trust scheme worth less than 90 per cent. of its liabilities), for “90 per cent. of the amount of the liabilities of the scheme” there shall be substituted “the protection level”.

(2) After subsection (2) of that section there shall be inserted—

“(2A) In subsection (1)(d) “the protection level” means the aggregate of—

(a) the amount of the liabilities of the scheme to, or in respect of, its pensioner members and such other of its members as fall within a prescribed class or description,

(b) 90 per cent. of the amount of the liabilities of the scheme to, or in respect of, any other members of the scheme, and

(c) the amount of the liabilities of the scheme which are not liabilities to, or in respect of, its members;

and references in this subsection to liabilities to, or in respect of, members of the scheme are references to liabilities in respect of pensions or other benefits.”

(3) Section 83 of that Act (amount of compensation) shall be amended as follows.

(4) In subsection (3)(a) (compensation not to exceed 90 per cent. of shortfall), the words “90 per cent. of” shall be omitted.

(5) In subsection (3)(b) (compensation not to cause value of salary-related trust scheme’s assets to exceed 90 per cent. of amount of its liabilities), for the words from “90 per cent.” onwards there shall be substituted “the aggregate of the protected liabilities.”

(6) After subsection (3) there shall be added—

“(4) In subsection (3) “the protected liabilities” means—

(a) the amount on the settlement date of the liabilities of the scheme to, or in respect of, its pensioner members and such other of its members as fall within a prescribed class or description,

(b) 90 per cent. of the amount on that date of the liabilities of the scheme to, or in respect of, any other members of the scheme, and

(c) the amount on that date of the liabilities of the scheme which are not liabilities to, or in respect of, its members;

and references in this subsection to liabilities to, or in respect of, members of the scheme are to liabilities in respect of pensions or other benefits.”