# The Financial Services and Markets Act 2000 (Early Exit Pension Charges) Regulations 2016, Regulation 3: Matters not to be treated as early exit charges


(1) A charge is not to be treated as an early exit charge for the purposes of section 137FBB of the Act where that charge is the result of—
(a) adjustments made—
(i) to the value of a member’s benefits under a relevant pension scheme in order to calculate the surrender value of those benefits, or
(ii) to the means by which the surrender value is calculated, and
(b) those adjustments satisfy at least one of the conditions in paragraph (2) and the condition in paragraph (3).
(2) The conditions in this paragraph are that the adjustments—
(a) reflect a difference between the illustrative value of a member’s benefits and their market value at the point of surrender,
(b) are made so that the surrender value of the member’s benefits better reflect the member’s asset share at the point of surrender,
(c) are made—
(i) to smooth the value of the member’s benefits in consequence of market fluctuations, or
(ii) as a consequence of the previous application of adjustments to smooth the value of the member’s benefits in consequence of market fluctuations, or
(d) are otherwise necessary in order to protect the interests of—
(i) the relevant pension scheme’s remaining members, or
(ii) the policyholders of a fund, where that fund contributes to the member’s benefits under that scheme.
(3) The condition in this paragraph is that the adjustments are made—
(a) for the purpose of ensuring that—
(i) the total assets of the relevant pension scheme are fairly distributed between the members of the scheme, or
(ii) the total assets of a fund which contributes to the member’s benefits under the scheme are fairly distributed between the policyholders of that fund, and
(b) in accordance with relevant actuarial principles and the FCA’s general rules and guidance (other than the FCA’s general rules made in accordance with section 137FBB of the Act).

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Source: https://www.legislation.gov.uk/uksi/2016/1079/regulation/3 (the official version)
Page: https://openlegislation.uk/financial-services-and-markets-act-2000-early-exit-pension-charges-regulations-2016/regulation-3
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.