Regulation L16 Transfer of sums from the pension fund to compensate for former member’s misconduct
This regulation applies where—
a person (“the former employee”) has ceased to hold an employment in which he was a member in consequence of—
an offence of a fraudulent character, or
grave misconduct,
in connection with that employment;
the body who were his employing authority in that employment (“the former employing authority”) have suffered direct financial loss by reason of the offence or misconduct; and
the former employee—
became entitled to benefits under Part D and a direction has been given under regulation H4(1), or
he did not become so entitled and his total period of membership is less than two years.
Where this regulation applies and the former employing authority are an administering authority, they may transfer an appropriate amount from their pension fund to the appropriate fund or account.
Where this regulation applies and the former employing authority are not an administering authority, the appropriate administering authority shall, subject to paragraph (5), pay the former employing authority an appropriate amount out of the pension fund if requested to do so.
For the purposes of paragraphs (2) and (3), an appropriate amount is an amount which does not exceed—
the amount of the direct financial loss, or
the amount of any contributions which could have, but have not, been returned to the former employee, or paid to his spouse or a dependant, under regulation C21(4).
Where a payment in lieu of contributions is due or has been made in respect of the former employee, the administering authority may reduce a payment under paragraph (3) by half the amount of the payment in lieu of contributions.
If, after making a payment under paragraph (3), the appropriate administering authority are required to pay a transfer value in respect of the former employee, the former employing authority shall repay the administering authority the amount of that payment if requested to do so.