In the October 2010 Pensions update we reported that the DWP had confirmed its intention to clarify the legislation relating to payments to employers from occupational pension schemes and to extend the deadline for making resolutions from April 2011 to April 2016. Those changes are in the Pensions Bill published this month. The amendments in the Bill to section 251 of the Pensions Act 2004 will mean that:
- A resolution under section 251 will be required by April 2016 if any surplus payment is to be made to an employer from an ongoing scheme at any time in the future;
- The restrictions in section 251 will not apply to schemes in winding up. Payments to employers on winding up will continue to be governed by section 76 of the Pensions Act 1995;
- Payments to employers authorised by the Finance Act 2004 (including administration payments and liens) will not be subject to section 251;
- Trustees will be able to amend or revoke resolutions passed under the current version of section 251.