Section 135: Restrictions on winding up, discharge of liabilities etc
435.This section restricts the winding up of a scheme during an assessment period. It effectively takes away all the power that the trustees or managers or the employer might have under scheme rules to wind up a scheme.
436.Subsection (2) prevents the winding up of the scheme during the assessment period. It does not prevent the Regulator directing the winding up of a scheme under section 11(3A) of the Pensions Act 1995 (as inserted by section 22(power to wind up occupational pension schemes) of this Act) in order to ensure the protected liabilities do not exceed assets or to keep any excess to a minimum.
437.Subsections (4) and (5) provide that no transfers are to be made from the scheme during the assessment period. In addition no steps can be taken to discharge the scheme’s liabilities for pensions or other benefits or other liabilities prescribed in regulations. These prohibitions apply whether or not the scheme is being wound up. But these restrictions are subject to section 138 which sets out how benefits are to be paid, to or in respect of members, during an assessment period.
438.Subsection (7) applies where a member has a right to a cash transfer sum or a contribution refund (Chapter 5, Part 4 of the Pension Schemes Act 1993) and this right arises on the commencement of the assessment date, during the assessment period the right cannot be exercised and the powers and duties under Chapter 5, Part 4 of the Pension Schemes Act 1993 do not apply.
439.Subsection (8) provides that the restrictions in subsection (4) do not prevent trustees or managers from complying with a pension sharing order and discharging their liability to provide a pension credit to the member’s former spouse.
440.Subsection (9) provides that any action taken in contravention of this section is void, other than in cases where the Board validates it (see section 136(power to validate contraventions of section 135)).
441.Subsection (10) provides for section 10 of the Pensions Act 1995 (civil penalties) to apply to any trustee or manager of a scheme who fails to take all reasonable steps to secure compliance with the restriction.
442.Subsection (11) prevents the Regulator from making a freezing order (see section 23) in relation to a scheme during the assessment period.