Paragraph 20

England, Wales and Scotland

I1(1)

Compensation is payable in accordance with this paragraph where—

(a)

a person’s pensionable service terminates on the commencement of the assessment period,

(b)

as a result, he has rights, under the admissible rules, to—

(i)

a transfer payment calculated by reference to the value of benefits which have accrued to him under the scheme (“the protected transfer payment”), or

(ii)

a cash payment calculated by reference to the amount of contributions made by him or on his behalf to the scheme (“the protected contribution repayment”),

C1(c)

F1Chapter 2 of Part 4ZA of the Pension Schemes Act 1993 (c. 48) (early leavers: cash transfer sums and contribution refunds) does not apply to him, and

C2(d)

he does not have relevant accrued rights to benefit (within the meaning of section 101AA(4) of that Act).

(2)

That person is entitled to compensation in the form of a lump sum in respect of the protected transfer payment or protected contribution repayment.

(3)

The amount of the compensation is 90% of the amount of the protected transfer payment or protected contribution repayment (whichever is the greater).

I2(4)

For the purposes of sub-paragraph (3), the amount of the protected transfer payment or protected contribution repayment is to be calculated in accordance with the admissible rules, which are to be applied for this purpose subject to any prescribed modifications.

(5)

The compensation is payable immediately after the transfer notice given under section 160 is received by the trustees or managers of the scheme.

F2(6)

This paragraph is subject to—

paragraph 22A (calculation of compensation on and after 1 January 2024), and
paragraph 30 (power of Secretary of State to change percentage rates by order).

(7)

Regulations may modify any provision of paragraph 8, 10, 11 or 14 (compensation for persons who were active members immediately before assessment date) as it applies in the case of a person who is entitled to compensation under this paragraph.

(8)

Regulations may modify any provision of sub-paragraphs (1) to (6) as it applies in the case of a person who is entitled to compensation under paragraph 8, 10, 11 or 14.

Annotations

Textual amendments

F1: Words in Sch. 7 para. 20(1)(c) substituted (6.4.2015) by Pension Schemes Act 2015 (c. 8), s. 89(3)(b), Sch. 4 para. 42(2) (with s. 87)
F2: Sch. 7 para. 20(6) substituted (coming into force in accordance with reg. 1(b) of the amending S.I.) by The Pensions Act 2004 (Amendment) (Pension Protection Fund Compensation) Regulations 2023 (S.I. 2023/1309), reg. 3(7)

Modifications

C1: Sch. 7 para. 20(1)(c) modified (6.4.2005) by The Pension Protection Fund (Compensation) Regulations 2005 (S.I. 2005/670), regs. 1(1), 18 (with reg. 23(3))
C2: Sch. 7 para. 20(1)(d) modified (6.4.2005) by The Pension Protection Fund (Compensation) Regulations 2005 (S.I. 2005/670), regs. 1(1), 18 (with reg. 23(3))

Commencement

I1: Sch. 7 para. 20(1)-(3)(5)(6) in force at 6.4.2005 by S.I. 2005/275, art. 2(7), Sch. Pt. 7
I2: Sch. 7 para. 20(4)(7)(8) in force for the purpose only of conferring power to make regulations, orders or rules, as the case may be, 10.2.2005; and for all other purposes at 6.4.2005 in so far as not already in force by S.I. 2005/275, art. 2(3), Sch. Pt. 3

Notes on Schedule 7

Modifications

C1: Sch. 7 amendment to earlier affecting provision S.I. 2005/652, reg. 14(2) (1.4.2005) by The Occupational Pension Schemes and Pension Protection Fund (Amendment) Regulations 2005 (S.I. 2005/993), regs. 1(1), 7
C2: Sch. 7 modified (6.4.2005) by The Pension Protection Fund (Reviewable Ill Health Pensions) Regulations 2005 (S.I. 2005/652), regs. 1(1), 15
C3: Sch. 7 applied (with modifications) (6.4.2005) by The Pension Protection Fund (Reviewable Ill Health Pensions) Regulations 2005 (S.I. 2005/652), regs. 1(1), 14(2)
C4: Sch. 7 modified (6.4.2005) by The Pension Protection Fund (Compensation) Regulations 2005 (S.I. 2005/670), regs. 1(1), 12 (with reg. 23(3))
C5: Sch. 7 applied (with modifications) (6.4.2005) by The Pension Protection Fund (Hybrid Schemes) (Modification) Regulations 2005 (S.I. 2005/449), regs. 1(1), 3(2)-(4)
C6: Sch. 7 applied (with modifications) (6.4.2005) by The Pension Protection Fund (Reviewable Ill Health Pensions) Regulations 2005 (S.I. 2005/652), regs. 1(1), 13(1)
C7: Sch. 7 modified (1.8.2006) by The Pension Protection Fund (Pension Sharing) Regulations 2006 (S.I. 2006/1690), regs. 1(1), 3
C8: Sch. 7 applied (24.7.2014) by The Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014 (S.I. 2014/1711), regs. 1(1), 42(1), 53, 57 (with regs. 6, 41, 44(1), 47(1), 69(2), 72(1), 76(1)); coming into force immediately after s. 29 of 2011 c. 19 - see S.I. 2014/1683, art. 2
C9: Sch. 7 applied (24.7.2014 immediately after 2011 c. 19, s. 29, see S.I. 2014/1683, art. 2) by The Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014 (S.I. 2014/1711), regs. 1(1), 42(1), 53, 57 (with regs. 6, 41, 44(1), 47(1), 69(2), 72(1), 76(1))
C10: Sch. 7 modified by S.I. 2005/670, reg. 29 (as inserted in Pt. 12 of S.I. 2005/670 by S.I. 2018/95, reg. 2(6)) (24.2.2018) by The Pension Protection Fund (Compensation) (Amendment) Regulations 2018 (S.I. 2018/95), regs. 1, 2(6)
C11: Sch. 7 modified by S.I. 2005/670, reg. 30 (as inserted (for specified purposes and with effect in accordance with reg. 30(3)-(5) of the amending S.I.) by The Pension Protection Fund (Pensionable Service) and Occupational Pension Schemes (Investment and Disclosure) (Amendment and Modification) Regulations 2018 (S.I. 2018/988), regs. 1(2)(b), 2(3))