The Pension Protection Fund (Valuation) Regulations 2005

Alternative valuation of assets and protected liabilities in specific cases

7.—(1) For the purposes of a section 143 or section 179 valuation, where arrangements are being made by the eligible scheme for the transfer to or from it, of accrued rights and any pension credit rights, until such time as the trustees or managers of the scheme to which the transfer is being made (“the receiving scheme”) have received assets of the full amount agreed by them as consideration for the transfer, it shall be assumed—

(a) that the rights have not been transferred; and

(b) that any assets transferred in respect of the transfer of those rights are assets of the scheme making the transfer and not of the receiving scheme.

(2) For the purposes of a section 143 or section 179 valuation, in the case of a contract of insurance, the value shall be—

(a) the value of the liability secured where the contract of insurance falls within the definition of a relevant contract of insurance in section 161(8) of the Act (effect of Board assuming responsibility for a scheme); or where this is not the case either—

(b) the surrender value of the contract of insurance; or

(c) where it appears to the appropriate person that the surrender value of the contract of insurance does not accurately reflect the actual value at the relevant time; then he shall adopt such a value as appears to him to be appropriate.

(3) In the case of an asset to which regulation 4 applies, the appropriate person shall adopt as the value of the asset, the amount due to the scheme given in the notice, direction or order.

(4) For the purposes of a section 143 valuation—

(a) where the appropriate person, in accordance with guidance issued by the Board in accordance with section 143(6) of the Act, holds the opinion that any section 75 debt falling due to the eligible scheme will be recouped in the future then he shall treat the proportion of the section 75 debt that he believes will be recovered as an asset of the scheme;

(b) where any section 75 debt is recouped between the relevant time and the date the valuation is approved under section 144(2) of the Act (approval of valuation), then the amount so recouped—

(i) shall be treated as an asset of the scheme; and

(ii) the section 143 valuation shall be adjusted accordingly;

(c) where an amount is due under a contribution notice, a financial support direction or a restoration order, and

(i) a proportion of the amount due has been recouped; and

(ii) the appropriate person, in accordance with any guidance issued by the Board in accordance with section 143(6) or section 179(4) of the Act as appropriate, holds the opinion that no further payments due in relation to the notice or direction will be recouped by the scheme; then

the appropriate person shall adjust the value of the asset contained in the notice or direction to the value recouped by the trustees or managers of the eligible scheme during the pre-approval period.

(d) if the appropriate person—

(i) has been given notice; or

(ii) holds the opinion;

that the value of any asset set out in the relevant accounts, that is not excluded from the actuarial valuation, is substantially different at the relevant time from that set out in the relevant accounts, then he shall adjust the value of the asset to the market value of the asset at the relevant time; or

(e) where the appropriate person—

(i) has been given notice; or

(ii) holds the opinion

in accordance with any Board guidance issued in accordance with section 143(6) of the Act , that there exists an asset of the scheme which is not listed in the relevant accounts, and which is not excluded from the actuarial valuation, then he shall adopt such a value for the asset as he considers is appropriate.

(5) The appropriate person shall not make an adjustment to the value of an interest in real property unless the adjustment reflects a more recent valuation given by a chartered surveyor in accordance with any relevant practice statements and guidance notes issued by the Royal Institution of Chartered Surveyors(1) current on the date that the valuation is signed.

(1)

The Royal Institution of Chartered Surveyors can be contacted at- RICS Contact Centre, Surveyor Court, Westwood Way, Coventry, CV4 8JE.