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Section 167 Pension death benefit rulesC3I1C1C2C4C5C6

United Kingdom

C7(1)

These are the rules relating to the payment of pension death benefits by a registered pension scheme in respect of a member of the pension scheme (“the pension death benefit rules”).

  • Pension death benefit rule 1

    No payment of pension death benefit may be made otherwise than to a dependantF1, or nominee or successor, of the member.

  • Pension death benefit rule 2

    No payment of pension death benefit other than a dependants' scheme pension may be made in respect of a defined benefits arrangement F2or a collective money purchase arrangement.

  • Pension death benefit rule 3

    F3No payment of pension death benefit other than—

    1. (a)

      a dependants' scheme pension,

    2. (b)

      a dependants' annuity, or

    3. (c)

      F4dependants’ drawdown pension,

    may be made to F5a dependant in respect of a money purchase arrangement F6that is not a collective money purchase arrangement; but a dependants' scheme pension may only be paid if the member or dependant had an opportunity to select a dependants' annuity instead.

  • F7Pension death benefit rule 3A

    No payment of pension death benefit, other than F8a nominees' annuity in respect of a money purchase arrangement or nominees' drawdown pension in respect of a money purchase arrangement, may be made to a nominee of the member.

  • Pension death benefit rule 3B

    No payment of pension death benefit, other than F9a successors' annuity in respect of a money purchase arrangement or successors' drawdown pension in respect of a money purchase arrangement, may be made to a successor of the member.

  • F10Pension death benefit rule 4

    The total amount of dependants’ drawdown pension paid to a dependant in each drawdown pension year F11from, or under a dependants' short-term annuity purchased using sums or assets out of, the dependant's drawdown pension fund in respect of a money purchase arrangement must not exceed F12150% of the basis amount for the drawdown pension year.

    F13...

  • F14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F15(1A)

For the purposes of this Part, a person becomes entitled to dependants' income withdrawal, nominees' income withdrawal or successors' income withdrawal under a registered pension scheme whenever sums or assets held for the purposes of an arrangement under the pension scheme are designated as available for the payment of (as the case may be) dependants' drawdown pension, nominees' drawdown pension or successors' drawdown pension.

(2)

F16In this part “pension death benefit” means a pension payable on the death of the member (other than a member’s pension payable after the member’s death under pension rule 2: see section 165)F17, or a pension payable in respect of the member on the subsequent death of a dependant, nominee or successor of the member.

F18(2A)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2B)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

Part 2 of Schedule 28 gives the meaning of expressions used in the pension death benefit rules.

Annotations

Textual amendments

F1

Words in s. 167 inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 2(2)

F2

Words in s. 167(1) inserted (1.8.2022) by Finance Act 2021 (c. 26), Sch. 5 paras. 4(2), 25(1); S.I. 2022/874, reg. 2

F3

Words in s. 167(1) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 11(2)(a)(i)

F4

Words in s. 167(1) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 11(2)(a)(ii)

F5

Words in s. 167(1) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 11(2)(a)(iii)

F6

Words in s. 167(1) inserted (1.8.2022) by Finance Act 2021 (c. 26), Sch. 5 paras. 4(3), 25(1); S.I. 2022/874, reg. 2

F7

Words in s. 167 inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 2(3)

F8

Words in s. 167(1) inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 4 para. 2(2)

F9

Words in s. 167(1) inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 4 para. 2(3)

F10

Words in s. 167(1) substituted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 11(2)(b)

F11

Words in s. 167(1) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 6

F12

Word in s. 167(1) substituted (with effect in accordance with s. 41(6) of the amending Act) by Finance Act 2014 (c. 26), s. 41(2)

F13

Words in s. 167(1) omitted (6.4.2015) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 32(1)(c)(4)

F14

Words in s. 167(1) omitted (with effect in accordance with Sch. 16 para. 85 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 16 para. 11(2)(c)

F15

S. 167(1A) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 2(4)

F16

Words in s. 167(2) substituted (retrospective to 6.4.2006) by Finance Act 2007 (c. 11), Sch. 20 paras. 22(1), 24(3)

F17

Words in s. 167(2) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 2 para. 2(5)

F18

S. 167(2A)(2B) omitted (6.4.2015) by virtue of Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 32(1)(d)(4)

Modifications

C1

S. 167 modified (6.4.2006) by The Pensions Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (S.I. 2006/207), regs. 1(1), 7

C2

S. 167 modified (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), Sch. 3 para. 2(1)(2)(c) (with Sch. 2 para. 2(1))

C3

Pt. 4 modified (19.7.2011) by Finance Act 2011 (c. 11), Sch. 18 para. 14(3)

C4

S. 167 modified (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 99(2)(a)

C5

S. 167 modified (with effect in accordance with Sch. 16 para. 85 of the amending Act) by Finance Act 2011 (c. 11), Sch. 16 para. 98(2)(a)

C6

S. 167 modified by The Pensions Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (S.I. 2006/207), reg. 7 (as substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by S.I. 2012/1795, regs. 1(1), 4)

C7

S. 167(1) modified (6.4.2006) by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), arts. 1(1), 3, 4(3)(4)

Commencement

I1

Ss. 160-274, 281, Schs. 30-35 in force at 6.4.2006 but any power to make an order or regulations under those provisions may be exercised at any time after Royal Assent, see s. 284

Notes on Part 4

Modifications

C1

Pt. 4 modified (N.I.) (1.4.2006) by The Firemens Pension Scheme Order (Northern Ireland) 2006 (S.R. 2006/210), arts. 1(2), 103

C2

Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 9, 10

C3

Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 12

C4

Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 13(5)

C5

Pt. 4 modified (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 26

C6

Pt. 4 modified (31.12.2007) by Police and Justice Act 2006 (c. 48), s. 53(1), Sch. 3 para. 7; S.I. 2007/3203, art. 3(b)

C7

Pt. 4 modified (1.7.2008) (N.I.) (with effect in accordance with reg. 1 of the amending Rule) by The Health and Social Care (Pension Scheme) Regulations (Northern Ireland) 2008 (S.R. 2008/256), regs. 1, 124(1) (with regs. 134, 258)

C8

Pt. 4 modified by The Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572), reg. 5A (as inserted (6.4.2006) by S.I. 2008/2990, arts. 1(1), 3)

C9

Pt. 4 applied (21.7.2009) by Finance Act 2009 (c. 10), Sch. 35 para. 18

C11

Pt. 4 applied (with modifications) (with application in accordance with Sch. 22 para. 1 of the amending Act) by Finance Act 2013 (c. 29), Sch. 22 para. 1(2)

C12

Pt. 4 modified (17.7.2014) by Finance Act 2014 (c. 26), Sch. 6 para. 1(2)(3)

C13

Pt. 4: power to amend conferred (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), s. 4(3)

C14

Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 1

C15

Pt. 4 modified (15.9.2016) by Finance Act 2016 (c. 24), Sch. 4 para. 9(2)

C16

Pt. 4 modified (with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 6

C17

Pt. 4 modified (14.7.2026 for the tax year 2014-15 and subsequent tax years) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2026 (S.I. 2026/673), regs. 1(2), 10

Notes on Chapter 3

Modifications

C2

Pt. 4 modified (with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 6