The above Order amends the Pension Schemes (Transfers, Reorganisations and Winding Up) (transitional Provisions) Order 2006, which provides that transitional protection is not lost where a member’s rights are transferred following a scheme reorganisation or wind-up in certain circumstances. The protection applies to favourable early retirement pensions and pension commencement lump sums exceeding 25 per cent of fund.
The Order extends this protection to cover further circumstances likely to occur when a scheme is reorganised or wound up, including where:
- members’ benefits are secured in the course of winding-up by assigning an existing annuity policy to the member;
- accrued contracted-out rights and accrued non-contracted-out rights are transferred out of the scheme in two separate transactions either to a new scheme or to a new scheme and another scheme;
- benefits are secured by an annuity policy on wind up of the scheme into which benefits were transferred with continuing protection from another scheme.
The Order came into force on 24 March 2010 but applies retrospectively to 6 April 2006.
View the Order and Explanatory memorandum.