Search Legislation

Pension Schemes Act 2015

Status:

This is the original version (as it was originally enacted).

CHAPTER 3Drawdown, conversion of benefits and lump sums

Great Britain

55Sums or assets that may be designated as available for drawdown: Great Britain

(1)In the case of a member of an occupational pension scheme the only sums or assets that may be designated as available for the payment of drawdown pension for the member under the scheme are sums or assets held for the purposes of providing money purchase benefits to or in respect of the member.

(2)In the case of a survivor of a member of an occupational pension scheme the only sums or assets that may be designated as available for the payment of dependants’ drawdown pension, nominees’ drawdown pension or successors’ drawdown pension for the survivor under the scheme are sums or assets held for the purposes of providing money purchase benefits to the survivor.

(3)This section overrides any provision of an occupational pension scheme to the extent that there is a conflict.

(4)This section does not apply in relation to sums or assets designated before 6 April 2015.

56Provision about conversion of certain benefits for drawdown: Great Britain

(1)The Secretary of State may by regulations make provision about the conversion of benefits under an occupational pension scheme in circumstances where—

(a)a member of the scheme, or a survivor of a member of the scheme, has subsisting rights in respect of any flexible benefits other than money purchase benefits under the scheme, and

(b)the member or survivor exercises an option to convert any of the benefits into money purchase benefits for the purposes of enabling sums or assets to be designated as available for the payment of drawdown pension, dependants’ drawdown pension, nominees’ drawdown pension or successors’ drawdown pension.

(2)Regulations under subsection (1) may, in particular, make provision about how the rate or amount of any benefits not converted are to be calculated in future.

(3)In relation to a conversion that takes place before the member or survivor reaches normal pension age, regulations under subsection (1) may in particular make provision about—

(a)the manner in which benefits are to be calculated for the purpose of converting them into money purchase benefits;

(b)the use of any power to reduce benefits.

(4)Regulations made under this section may include provision for them to override the provisions of a pension scheme to the extent that there is a conflict.

57Provision about calculation of lump sums: Great Britain

(1)The Secretary of State may by regulations make provision about the calculation of lump sums in circumstances where—

(a)a member of an occupational pension scheme, or a survivor of a member of the scheme, has subsisting rights in respect of any flexible benefits other than money purchase benefits under the scheme, and

(b)the member or survivor exercises an option to be paid a lump sum in respect of any of those benefits.

(2)Regulations under subsection (1) may, in particular, make provision about how the rate or amount of any remaining benefits are to be calculated in future.

(3)In a case where a member or survivor exercises an option to be paid a lump sum before reaching normal pension age, regulations under subsection (1) may in particular make provision about—

(a)the manner in which benefits are to be calculated for the purpose of determining the amount available for the payment of the lump sum;

(b)the use of any power to reduce the amount of the lump sum.

(4)Regulations made under this section may include provision for them to override the provisions of a pension scheme to the extent that there is a conflict.

58Restrictions on conversion of benefits during winding up etc: Great Britain

(1)In section 73A of the Pensions Act 1995 (operation of scheme during winding up period), after subsection (6) insert—

(6A)During the winding up period no right or entitlement of any member, or of any other person in respect of a member, to a benefit that is not a money purchase benefit is to be converted into, or replaced with, a right or entitlement to a money purchase benefit under the scheme rules.

(2)In section 73B of that Act (sections 73 and 73A: supplementary), in subsections (1) and (3), after “section 73A(3)” insert “or (6A)”.

(3)In section 135 of the Pensions Act 2004 (restrictions on winding up, discharge of liabilities etc during assessment period), in subsection (4), before paragraph (a) insert—

(za)no right or entitlement of any member, or of any other person in respect of a member, to a benefit that is not a money purchase benefit is to be converted into, or replaced with, a right or entitlement to a money purchase benefit under the scheme rules,.

59Restriction on payment of lump sums during PPF assessment period: Great Britain

(1)Section 138 of the Pensions Act 2004 (payment of scheme benefits during assessment period) is amended as follows.

(2)In subsection (1), after “Subsections (2)” insert “, (2A)”.

(3)After subsection (2) insert—

(2A)Benefits in the form of a lump sum may be paid to or in respect of a member under the scheme rules during the assessment period only in the circumstances in which, and to the extent to which, lump sum compensation would be payable to or in respect of the member in accordance with this Chapter if—

(a)the Board assumed responsibility for the scheme in accordance with this Chapter, and

(b)the assessment date referred to in Schedule 7 were the date on which the assessment period began.

(4)In subsection (3), omit “But”.

(5)In subsection (5), for “subsection (2)” substitute “subsections (2) and (2A)”.

(6)In subsection (6), for “subsection (3)” substitute “subsections (2A) and (3)”.

(7)In subsection (7), after “Subsections (2),” insert “(2A),”.

(8)In subsection (8), after “subsections (2)” insert “, (2A)”.

(9)In subsection (9), for “subsections (2) and (3)” substitute “subsections (2) to (3)”.

(10)After subsection (9) insert—

(9A)Regulations may make provision as to circumstances in which benefits in the form of a lump sum are to be treated for the purposes of subsection (2A) as being paid in the circumstances in which lump sum compensation would be payable in accordance with this Chapter.

(9B)Regulations may create exceptions to subsection (2A).

(11)In subsection (12), for “subsection (2)” substitute “subsections (2) and (2A)”.

(12)In subsection (13), after “subsection (2)” insert “, (2A)”.

60Sections 55 to 57: consequential amendments

(1)In section 101AI of the Pension Schemes Act 1993 (early leavers: cash transfer sums and contribution refunds - further provisions), in subsection (8)—

(a)in paragraph (a), after sub-paragraph (ix) insert—

(x)section 55 of the Pension Schemes Act 2015;

(xi)regulations made under section 56 or 57 of the Pension Schemes Act 2015;;

(b)in paragraph (b), after sub-paragraph (vii) insert—

(viii)section 55(3) of the Pension Schemes Act 2015;

(ix)regulations made under section 56(4) or 57(4) of the Pension Schemes Act 2015.

(2)In section 67A of the Pensions Act 1995 (the subsisting rights provisions: interpretation), in subsection (9)—

(a)in paragraph (a), after sub-paragraph (x) (inserted by section 45 of this Act) insert—

(xi)section 55 of the Pension Schemes Act 2015;

(xii)regulations made under section 56 or 57 of the Pension Schemes Act 2015;;

(b)in paragraph (b), after sub-paragraph (viii) (inserted by section 45 of this Act) insert—

(ix)section 55(3) of the Pension Schemes Act 2015;

(x)regulations made under section 56(4) or 57(4) of the Pension Schemes Act 2015.

(3)In section 318 of the Pensions Act 2004 (interpretation), in subsection (3)—

(a)in paragraph (a), after sub-paragraph (x) (inserted by Schedule 2 to this Act) insert—

(xi)section 55 of the Pension Schemes Act 2015;

(xii)regulations made under section 56 or 57 of the Pension Schemes Act 2015;;

(b)in paragraph (b), after sub-paragraph (viii) (inserted by Schedule 2 to this Act) insert—

(ix)section 55(3) of the Pension Schemes Act 2015;

(x)regulations made under section 56(4) or 57(4) of the Pension Schemes Act 2015.

Northern Ireland

61Sums or assets that may be designated as available for drawdown: Northern Ireland

(1)In the case of a member of an occupational pension scheme the only sums or assets that may be designated as available for the payment of drawdown pension for the member under the scheme are sums or assets held for the purposes of providing money purchase benefits to or in respect of the member.

(2)In the case of a survivor of a member of an occupational pension scheme the only sums or assets that may be designated as available for the payment of dependants’ drawdown pension, nominees’ drawdown pension or successors’ drawdown pension for the survivor under the scheme are sums or assets held for the purposes of providing money purchase benefits to the survivor.

(3)This section overrides any provision of an occupational pension scheme to the extent that there is a conflict.

(4)This section does not apply in relation to sums or assets designated before 6 April 2015.

62Provision about conversion of certain benefits for drawdown: Northern Ireland

(1)The Department for Social Development in Northern Ireland may by regulations make provision about the conversion of benefits under an occupational pension scheme in circumstances where—

(a)a member of the scheme, or a survivor of a member of the scheme, has subsisting rights in respect of any flexible benefits other than money purchase benefits under the scheme, and

(b)the member or survivor exercises an option to convert any of the benefits into money purchase benefits for the purposes of enabling sums or assets to be designated as available for the payment of drawdown pension, dependants’ drawdown pension, nominees’ drawdown pension or successors’ drawdown pension.

(2)Regulations under subsection (1) may, in particular, make provision about how the rate or amount of any benefits not converted are to be calculated in future.

(3)In relation to a conversion that takes place before the member or survivor reaches normal pension age, regulations under subsection (1) may in particular make provision about—

(a)the manner in which benefits are to be calculated for the purpose of converting them into money purchase benefits;

(b)the use of any power to reduce benefits.

(4)Regulations made under this section may include provision for them to override the provisions of a pension scheme to the extent that there is a conflict.

63Provision about calculation of lump sums: Northern Ireland

(1)The Department for Social Development in Northern Ireland may by regulations make provision about the calculation of lump sums in circumstances where—

(a)a member of an occupational pension scheme, or a survivor of a member of the scheme, has subsisting rights in respect of any flexible benefits other than money purchase benefits under the scheme, and

(b)the member or survivor exercises an option to be paid a lump sum in respect of any of those benefits.

(2)Regulations under subsection (1) may, in particular, make provision about how the rate or amount of any remaining benefits are to be calculated in future.

(3)In a case where a member or survivor exercises an option to be paid a lump sum before reaching normal pension age, regulations under subsection (1) may in particular make provision about—

(a)the manner in which benefits are to be calculated for the purpose of determining the amount available for the payment of the lump sum;

(b)the use of any power to reduce the amount of the lump sum.

(4)Regulations made under this section may include provision for them to override the provisions of a pension scheme to the extent that there is a conflict.

64Restrictions on conversion of benefits during winding up etc: Northern Ireland

(1)In Article 73A of the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213 (N.I. 22)) (operation of scheme during winding up period), after paragraph (6) insert—

(6A)During the winding up period no right or entitlement of any member, or of any other person in respect of a member, to a benefit that is not a money purchase benefit is to be converted into, or replaced with, a right or entitlement to a money purchase benefit under the scheme rules.

(2)In Article 73B of that Order (Articles 73 and 73A: supplementary), in paragraphs (1) and (3), after “Article 73A(3)” insert “or (6A)”.

(3)In Article 119 of the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1)) (restrictions on winding up, discharge of liabilities etc during assessment period), in paragraph (4), before sub-paragraph (a) insert—

(za)no right or entitlement of any member, or of any other person in respect of a member, to a benefit that is not a money purchase benefit is to be converted into, or replaced with, a right or entitlement to a money purchase benefit under the scheme rules,.

65Restriction on payment of lump sums during PPF assessment period: Northern Ireland

(1)Article 122 of the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1)) (payment of scheme benefits during assessment period) is amended as follows.

(2)In paragraph (1), after “Paragraphs (2)” insert “, (2A)”.

(3)After paragraph (2) insert—

(2A)Benefits in the form of a lump sum may be paid to or in respect of a member under the scheme rules during the assessment period only in the circumstances in which, and to the extent to which, lump sum compensation would be payable to or in respect of the member in accordance with this Chapter if—

(a)the Board assumed responsibility for the scheme in accordance with this Chapter, and

(b)the assessment date referred to in Schedule 6 were the date on which the assessment period began.

(4)In paragraph (3), omit “But”.

(5)In paragraph (5), for “paragraph (2)” substitute “paragraphs (2) and (2A)”.

(6)In paragraph (6), for “paragraph (3)” substitute “paragraphs (2A) and (3)”.

(7)In paragraph (7), after “Paragraphs (2),” insert “(2A),”.

(8)In paragraph (8), after “paragraphs (2)” insert “, (2A)”.

(9)In paragraph (9), for “paragraphs (2) and (3)” substitute “paragraphs (2) to (3)”.

(10)After paragraph (9) insert—

(9A)Regulations may make provision as to circumstances in which benefits in the form of a lump sum are to be treated for the purposes of paragraph (2A) as being paid in the circumstances in which lump sum compensation would be payable in accordance with this Chapter.

(9B)Regulations may create exceptions to paragraph (2A).

(11)In paragraph (12), for “paragraph (2)” substitute “paragraphs (2) and (2A)”.

(12)In paragraph (13), after “paragraph (2)” insert “, (2A)”.

66Sections 61 to 63: consequential amendments

(1)In section 97AI of the Pension Schemes (Northern Ireland) Act 1993 (early leavers: cash transfer sums and contribution refunds - further provisions), in subsection (7)—

(a)in paragraph (a), after sub-paragraph (vii) insert—

(viii)section 61 of the Pension Schemes Act 2015;

(ix)regulations made under section 62 or 63 of the Pension Schemes Act 2015;;

(b)in paragraph (b), after sub-paragraph (v) insert—

(vi)section 61(3) of the Pension Schemes Act 2015;

(vii)regulations made under section 62(4) or 63(4) of the Pension Schemes Act 2015.

(2)In Article 67A of the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213 (N.I. 22)) (the subsisting rights provisions: interpretation), in paragraph (9)—

(a)in sub-paragraph (a), after head (vii) insert—

(viii)section 61 of the Pension Schemes Act 2015;

(ix)regulations made under section 62 or 63 of the Pension Schemes Act 2015;;

(b)in sub-paragraph (b), after head (v) insert—

(vi)section 61(3) of the Pension Schemes Act 2015;

(vii)regulations made under section 62(4) or 63(4) of the Pension Schemes Act 2015.

(3)In Article 2 of the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1)) (interpretation), in paragraph (4)—

(a)in sub-paragraph (a), after head (vii) insert—

(viii)section 61 of the Pension Schemes Act 2015;

(ix)regulations made under section 62 or 63 of the Pension Schemes Act 2015;;

(b)in sub-paragraph (b), after head (v) insert—

(vi)section 61(3) of the Pension Schemes Act 2015;

(vii)regulations made under section 62(4) or 63(4) of the Pension Schemes Act 2015.

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Show Explanatory Notes for Sections: Displays relevant parts of the explanatory notes interweaved within the legislation content.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Impact Assessments

Impact Assessments generally accompany all UK Government interventions of a regulatory nature that affect the private sector, civil society organisations and public services. They apply regardless of whether the regulation originates from a domestic or international source and can accompany primary (Acts etc) and secondary legislation (SIs). An Impact Assessment allows those with an interest in the policy area to understand:

  • Why the government is proposing to intervene;
  • The main options the government is considering, and which one is preferred;
  • How and to what extent new policies may impact on them; and,
  • The estimated costs and benefits of proposed measures.
Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources