The Perpetuities and Accumulations Act 2009 (PAA 2009) will come into force on 6 April 2010. The exemption for pension schemes from the rule against perpetuities is to be widened and it will no longer be limited to registered pension schemes.
The PAA 2009 will introduce a single perpetuity period of 125 years for trusts created after it comes into force. However, it should be noted that:
- The new perpetuity rule will not apply to an interest or right arising under an occupational pension scheme, personal pension scheme or public service pension schemes.
- The rule will apply to interests created by nominating benefits or exercising powers of advancement under pension scheme, for example, trusts of death benefits.
In addition, the PAA 2009 will abolish restrictions on accumulation for new non-charitable trusts and wills and will change the rules on accumulation for new charitable trusts. Trustees of some existing trusts with an uncertain perpetuity period will be able to elect to apply a fixed period of 100 years.