Section 20: Pension liberation: restraining orders
78.This section gives the Regulator powers, where pension liberation has occurred, to make restraining orders on accounts with deposit takers.
79.Subsection (1) provides that the Regulator may make a restraining order in certain circumstances. Those circumstances exist if consideration is being given to the making of a repatriation order under section 21 and the Regulator is satisfied that the account contains money that has been liberated from a pension scheme and is an account held by the liberator or someone who will act on the liberator’s instructions.
80.Subsection (2) provides that during the period when the restraining order has effect no credit or debit may be made to the account.
81.Subsection (3) states that a restraining order must give the name of the deposit taker, identify the account in question and contain any other information which may be prescribed in regulations.
82.Subsection (4) provides that a restraining order will take effect when the deposit taker is notified of it by the Regulator and will cease after a period of six months from when it was made (but see subsection (7)). Subsection (5) states that the Regulator may extend or further extend the duration of a restraining order, (the Regulator does that by a further order – an “extension order”).
83.Subsection (6) states that the extension order takes effect when the deposit taker is informed of it by the Regulator provided that that happens before the expiry of the restraining order. Subsection (7) states that when an extension order takes effect, the restraining order continues for another six months after the initial six-month period but a further extension order cannot take effect until the end of the extension period.
84.Subsection (8) states that interest may be credited to an account whilst a restraining order is in effect.
85.Subsection (9) provides that if money is credited to an account in breach of the order then the deposit taker must return the money to the payer.
86.Subsection (10) allows payments to be made out of restrained accounts. An application must be made to the Regulator who will make a payment provided that the money will be used to help meet living expenses or carry on a trade, profession or occupation. In addition, the beneficial interest in the money paid out must belong to the person who applied for it (or else the person to whom the beneficial interest belongs must have consented to the application). The money paid out must not represent money liberated from a pension scheme.
87.Subsection (11) provides that section 10 of the Pensions Act 1995 (civil penalties) will apply to a deposit taker who without reasonable excuse fails to comply with any obligation imposed by a restraining order or this section.