Social Security Act 1973

[F1 69 Rule against perpetuities. U.K.

(1) At any time when [F2 a personal or occupational]pension scheme qualifies under this section it shall be exempt from the operation of any rules of law relating to perpetuities which would otherwise invalidate, or might be taken to invalidate, any of the trusts of the scheme or any disposition made under it or for its purposes (whether trusts created, or dispositions made, before or after the scheme first qualified under this section).

(2) A public service pension scheme qualifies under this section at all times; and otherwise a scheme qualifies at any time when—

(a) it is [F3 contracted-out][F4 or an appropriate scheme under Part I of the Social Security Act 1986]in relation to any employment; or

(b) it satisfies the requirements of regulations under this subsection.

(3) Regulations under subsection (2) above may require a scheme—

(a) to contain provisions in any prescribed form, or to any prescribed effect; or

(b) to have, or to be such that it may be expected to qualify for, tax-exemption or tax-approval;

and the regulations may be so framed that, in prescribed circumstances, the requirements can be treated as satisfied if application has been duly made to the Inland Revenue with a view to obtaining tax-approval for the scheme.

(4) In subsection (3) above, “tax-exemption” and “tax-approval” mean respectively exemption from tax and approval of the Inland Revenue in either case under any such provision of the Income Tax Acts as may be prescribed by regulations.

(5) Regulations may include provision whereby a scheme [F4 which ceases—

(a) if it is an occupational pension scheme, to be contracted-out; or

(b) if it is a personal pension scheme, to be an appropriate scheme,

or]ceases to satisfy the requirements of regulations under subsection (2) above, may nevertheless be treated as continuing to qualify under this section for a further period of 2 years from the cesser, or for such longer period as the Occupational Pensions Board consider to be reasonable in the case of a particular scheme.

(6) As respects the operation of the rules of law referred to in subsection (1) above—

(a) this section does not validate with retrospective effect any trusts created or dispositions made under or for the purpose of a scheme if (taking into account, where applicable, section 3(1) of the M1 Perpetuities and Accumulations Act 1964 (“wait and see”) or the corresponding Northern Ireland enactment) those trusts or dispositions were already required to be treated as void under the rules before the scheme qualified under this section; and

(b) if a scheme ceases to qualify, trusts so created and dispositions so made shall then again be subject to the rules as if the scheme had never qualified (but without prejudice to any rights which vested during the period of qualification).

(7) There shall cease to have effect—

(a) the M2 Superannuation and other Trust Funds (Validation) Act 1927 (power to register superannuation schemes, with consequent exemption from the rule against perpetuities), except section 9 and section 11 so far as it provides for citation and extends section 9 to Northern Ireland; and

(b) the corresponding Northern Ireland enactment, that is to say the M3 Superannuation and other Trust Funds (Validation) Act (Northern Ireland) 1928;

but regulations may provide, in relation to a scheme whose fund was registered under either Act immediately before its repeal took effect, for the scheme to retain the benefit of the Act, subject to prescribed conditions and either indefinitely or for a prescribed period.

(8) The said Acts of 1927 and 1928 shall each, until its repeal by subsection (7) above, have effect with the following modifications—

(a) no new application shall be made under section 3 of the Act for the registration of any fund (without prejudice to the effectiveness of any application previously made or pending); and

(b) the registration of a fund may be cancelled notwithstanding that the fund has not been wound up, if the trustees apply in writing to the registrar stating that they desire its cancellation.]

Textual Amendments

F1 S. 69 repealed (N.I.), except so far as it relates to so much of the Superannuation and other Trust Funds (Validation) Act 1927 (c. 41) as extends to Northern Ireland, by S.I. 1975/1503 (N.I. 15), art. 74(2), Sch. 6

F2 Words substituted by Social Security Act 1986 (c. 50), Sch. 10, para. 6, w.e.f. 1.5.87

F3 Words substituted by Social Security Pensions Act 1975 (c. 60), Sch. 4 Pt. I para. 28 w.e.f. 21.11.75.

F4 Words substituted by Social Security Act 1986 (c. 50), Sch. 10, para. 6, w.e.f. 1.5.87

Modifications etc. (not altering text)

C1 Section 69(7) has not yet commenced.

Marginal Citations

M1 1964 c. 55.

M2 1927 c. 41.

M3 1928 c. 6 (N.I.)