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Pensions Act 2011

Financial assistance scheme

Section 23: Financial assistance scheme: amount of payments

143.Section 23 amends section 286 of the PA 2004 and section 18 of the PA 2007. These amendments allow regulations to prescribe the circumstances in which the minimum percentages of annual and initial payments specified in those sections do not apply.

144.Currently certain individuals are paid less than the specified minimums where:

  • members are in receipt of an ill health payment where, because payments are being made earlier than normal, an actuarial reduction is applied. As a consequence they may get less than the 80 per cent specified in the PA 2004 by way of annual payment and less than the 90 per cent specified in the PA 2007 by way of initial payment; and

  • survivors of a polygamous marriage who share the amount payable to a single survivor. As a result each will get less than half the member’s payment specified in the PA 2007.

145.This is not intended to allow for changes in the amounts of assistance currently paid to any member of the FAS. It will allow for the FAS Regulations to be made simpler to understand.

Section 24: Financial assistance scheme: transfer of assets

146.Section 24 amends section 286(3) of the PA 2004 by providing for the property, rights and liabilities of pension schemes that qualify for the FAS to be transferred to a ‘prescribed person’ rather than ‘the scheme manager’ as currently stated. It is the intention that the prescribed person will be the Secretary of State.

147.Regulations currently provide for assets to transfer to the Secretary of State by using the FAS Regulations to modify parts of the PA 2004. This change will allow for the FAS Regulations to make it explicit that assets are transferring to the Secretary of State, making the system more transparent.

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