OpenLegislation

Section 37 Payment of surplus to employer.I1I2C1C2C3C4C5C6

England, Wales and Scotland

Changes not yet applied. Later legislation changes this provision in ways not yet written into the text below:

(1)

F1This section applies to a trust scheme if—

(a)

apart from this section power is conferred on the employer or any other person to make payments to the employer out of funds held for the purposes of the scheme, and

(b)

the scheme is not being wound up.

(1A)

F2But this section does not apply in the case of any of the payments listed in paragraphs (c) to (f) of section 175 of the Finance Act 2004 (authorised employer payments other than public service scheme payments or authorised surplus payments).

(2)

Where the power referred to in subsection (1)(a) is conferred by the scheme on a person other than the trustees—

(a)

it cannot be exercised by that person but may instead be exercised by the trustees, and

(b)

any restriction imposed by the scheme on the exercise of the power shall, so far as capable of doing so, apply to its exercise by the trustees.

(2A)

F3The power referred to in subsection (1)(a) may be exercised only so far as permitted by, and only in accordance with, regulations.

(2B)

Regulations must be made under subsection (2A)—

(a)

prohibiting the making of a payment unless an actuary of a prescribed description (“the relevant actuary”) is satisfied that prescribed conditions are met in relation to the value of the scheme’s assets and the amount of its liabilities,

(b)

making provision about the basis (or bases) on which the value of the scheme’s assets and the amount of its liabilities are to be determined for that purpose,

(c)

requiring the relevant actuary to give a certificate before a payment is made, and

(d)

requiring members of the scheme to be notified in relation to a payment before it is made.

(2C)

The provision that may be made by regulations under subsection (2A) includes provision—

(a)

about other conditions that must be met in order for the making of a payment to be permitted;

(b)

about the giving of certificates by the relevant actuary, including about the form and content of a certificate;

(c)

prohibiting the making of a payment without the employer’s consent;

(d)

in relation to a superfund scheme (within the meaning of Part 3 of the Pension Schemes Act 2026)—

(i)

prohibiting the making of a payment in all circumstances;

(ii)

prohibiting the making of a payment without the Authority’s consent.

(2D)

The power referred to in subsection (1)(a) may not be exercised if there is a freezing order in force in relation to the scheme under section 23 of the Pensions Act 2004.

(3)

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

(4)

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

(5)

The trustees must also comply with any other prescribed requirements in connection with the making of a payment under this section.

(6)

If the trustees—

(a)

purport to exercise the power referred to in subsection (1)(a) without complying with F6subsection (2A), or

(b)

fail to comply with any requirement of regulations under subsection (5),

section 10 applies to any of them who has failed to take all reasonable steps to secure compliance.

(7)

If a person other than the trustees purports to exercise the power referred to in subsection (1)(a), section 10 applies to him.

(8)

Regulations may provide that F7... this section does not apply, or applies with prescribed modifications, F8in prescribed circumstances or to schemes of a prescribed description.

Annotations

Textual amendments

F1

S. 37 substituted (9.3.2006 for specified purposes, 6.4.2006 in so far as not already in force) by Pensions Act 2004 (c. 35), ss. 250, 322(1) (with s. 313); S.I. 2006/560, art. 2(1)(a)(b), Sch. Pt. 1

F2

S. 37(1A) inserted (6.4.2009) by Pensions Act 2008 (c. 30), ss. 130, 149(1); S.I. 2009/82, art. 2(2)(c)

F3

S. 37(2A)-(2D) inserted (29.4.2026 for specified purposes) by Pension Schemes Act 2026 (c. 22), ss. 10(2), 133(1)(3)

F4

S. 37(3) omitted (29.4.2026 for specified purposes) by virtue of Pension Schemes Act 2026 (c. 22), ss. 10(3), 133(1)(3)

F5

S. 37(4) omitted (29.4.2026 for specified purposes) by virtue of Pension Schemes Act 2026 (c. 22), ss. 10(3), 133(1)(3)

F6

Words in s. 37(6)(a) substituted (29.4.2026 for specified purposes) by Pension Schemes Act 2026 (c. 22), ss. 10(4), 133(1)(3)

F7

Words in s. 37(8) omitted (29.4.2026 for specified purposes) by virtue of Pension Schemes Act 2026 (c. 22), ss. 10(5)(a), 133(1)(3)

F8

Words in s. 37(8) inserted (29.4.2026 for specified purposes) by Pension Schemes Act 2026 (c. 22), ss. 10(5)(b), 133(1)(3)

Modifications

C1

S. 37 excluded (31.12.2000) by The Occupational Pension Schemes (Republic of Ireland Schemes Exemption) Regulations 2000 (S.I. 2000/3198), regs. 1(1), 2, Sch.

C2

S. 37 modified (6.4.2006) by The Occupational Pension Schemes (Payments to Employer) Regulations 2006 (S.I. 2006/802), regs. 1, 2(2)(a)

C3

S. 37 excluded (6.4.2006) by The Occupational Pension Schemes (Payments to Employer) Regulations 2006 (S.I. 2006/802), regs. 1, 12(1)

C4

S. 37 modified (6.4.2006) by The Occupational Pension Schemes (Payments to Employer) Regulations 2006 (S.I. 2006/802), regs. 1, 14

C5

S. 37 modified (6.4.2006) by The Occupational Pension Schemes (Payments to Employer) Regulations 2006 (S.I. 2006/802), regs. 1, 18(6)

C6

S. 37 excluded (24.7.2014) by The Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014 (S.I. 2014/1711), regs. 1(1), 37(1)(a)

Commencement

I1

S. 37 in force at 6.4.1996 for specified purposes by S.I. 1996/778, art. 2(5)(a), Sch. Pt. V

I2

S. 37 in force at 6.4.1997 in so far as not already in force by S.I. 1997/664, art. 2(3), Sch. Pt. 3