|
| |
|
Authorised employer payments |
| |
164 | Authorised employer payments |
| |
The only payments which a registered pension scheme that is an occupational |
| |
pension scheme is authorised to make to or in respect of a sponsoring employer |
| |
| 5 |
(a) | public service scheme payments (see section 165), |
| |
(b) | authorised surplus payments (see section 166), |
| |
(c) | compensation payments (see section 167), |
| |
(d) | authorised employer loans (see section 168), |
| |
(e) | scheme administration employer payments (see section 169), and |
| 10 |
(f) | payments of a description prescribed by regulations made by the Board |
| |
| |
165 | Public service scheme payment |
| |
A payment is a public service scheme payment if— |
| |
(a) | it is made by a public service pension scheme, and |
| 15 |
(b) | it is not of a description prescribed by regulations made by the Board of |
| |
| |
166 | Authorised surplus payment |
| |
For the purposes of this Part a payment is an authorised surplus payment if it |
| |
is of a description prescribed by regulations made by the Board of Inland |
| 20 |
| |
167 | Compensation payments |
| |
A payment is a compensation payment if it is made in respect of a member’s |
| |
liability to a sponsoring employer in respect of a criminal, fraudulent or |
| |
negligent act or omission by the member. |
| 25 |
168 | Authorised employer loan |
| |
(1) | A loan made to or in respect of a sponsoring employer is an authorised |
| |
| |
(a) | the amount loaned does not exceed an amount equal to 50% of the |
| |
aggregate of the amount of the sums, and the market value of the assets, |
| 30 |
held for the purposes of the pension scheme immediately before the |
| |
| |
(b) | the loan is secured by a charge which is of adequate value, and |
| |
(c) | the repayment terms comply with subsection (2). |
| |
(2) | The repayment terms comply with this subsection if— |
| 35 |
(a) | the rate of interest payable on the loan is not less than the rate |
| |
prescribed by regulations made by the Board of Inland Revenue, |
| |
(b) | the loan repayment date is before the end of the period of five years |
| |
beginning with the date on which the loan is made, or has been |
| |
postponed to a date after the end of that period under subsection (3), |
| 40 |
| |
|
| |
|
| |
|
(c) | the amount payable in each period beginning with the date on which |
| |
the loan is made, and ending with the last day of a loan year, is not less |
| |
than the required amount. |
| |
(3) | If on a standard loan repayment date any amount (including interest) is owing, |
| |
the loan repayment date may be postponed to a date before the end of the |
| 5 |
period of five years beginning with the standard loan repayment date. |
| |
(4) | The loan repayment date may be postponed under subsection (3) only once. |
| |
(5) | If the amount of a loan to or in respect of a sponsoring employer is increased, |
| |
the amount of the increase is to be treated as a loan made on the date of the |
| |
| 10 |
(6) | Schedule 30 gives the meaning of expressions used in this section and explains |
| |
how to calculate the amount of the unauthorised payment when a loan to or in |
| |
respect of a sponsoring employer does not comply with subsection (1). |
| |
(7) | In this section and that Schedule “charge” includes a right in security or an |
| |
agreement to create a right in security; and any reference to assets subject to a |
| 15 |
charge or assets charged includes a reference to the property over which such |
| |
| |
(8) | Schedule 34 contains (in Part 4) transitional provision about loans to |
| |
| |
169 | Scheme administration employer payments |
| 20 |
(1) | A “scheme administration employer payment” is a payment made— |
| |
(a) | by a registered pension scheme that is an occupational pension scheme, |
| |
| |
(b) | to or in respect of a sponsoring employer, |
| |
| for the purposes of the administration or management of the pension scheme. |
| 25 |
(2) | But if a payment falling within subsection (1) exceeds the amount which might |
| |
be expected to be paid to a person who was at arm’s length, the excess is not a |
| |
scheme administration employer payment. |
| |
(3) | Scheme administration employer payments include in particular— |
| |
(a) | the payment of wages, salaries or fees to persons engaged in |
| 30 |
administering the pension scheme, and |
| |
(b) | payments made for the purchase of assets to be held for the purposes |
| |
| |
(4) | A loan to or in respect of a sponsoring employer is not a scheme administration |
| |
| 35 |
(5) | Payments made to acquire shares in a sponsoring employer are not scheme |
| |
administration employer payments if, when the payment is made— |
| |
(a) | the market value of shares in the sponsoring employer held for the |
| |
purposes of the pension scheme is equal to or greater than 5% of the |
| |
aggregate of the amount of the sums, and the market value of the assets, |
| 40 |
held for the purposes of the pension scheme, or |
| |
(b) | the total market value of shares in sponsoring employers held for the |
| |
purposes of the pension scheme is equal to or greater than 20% of the |
| |
aggregate of the amount of the sums, and the market value of the assets, |
| |
held for the purposes of the pension scheme. |
| 45 |
|
| |
|
| |
|
(6) | Regulations made by the Board of Inland Revenue may provide that payments |
| |
of a description specified in the regulations are, or are not, scheme |
| |
administration employer payments. |
| |
Unauthorised employer payments |
| |
| 5 |
(1) | A registered pension scheme that is an occupational pension scheme is to be |
| |
treated as having made an unauthorised payment to a sponsoring employer if, |
| |
in connection with any of the events mentioned in subsection (2) or a change in |
| |
| |
(a) | the value of an asset held for the purposes of the pension scheme is |
| 10 |
reduced or a liability of the pension scheme is increased, and |
| |
(b) | the value of an asset held by or for the benefit of the sponsoring |
| |
employer is increased, a liability of the sponsoring employer is |
| |
reduced, or a liability of another person is reduced for the benefit of the |
| |
| 15 |
| |
(a) | the creation, alteration, release or extinction of any power, right, option |
| |
or liability relating to assets held for the purposes of the pension |
| |
scheme (whether or not provided for in the terms on which the asset is |
| |
| 20 |
(b) | the creation, alteration, release or extinction of any power, right or |
| |
option relating to a liability of the pension scheme (whether or not |
| |
provided for in the terms on which the liability is incurred), |
| |
(c) | the exercise of, or failure to exercise, any power, right or option in |
| |
relation to assets held for the purposes of the pension scheme or a |
| 25 |
liability of the pension scheme, or |
| |
(d) | the exercise of, or failure to exercise, any power, right or option which |
| |
constitutes an asset held for the purposes of the pension scheme, |
| |
| in a way which differs from that which might be expected if the parties to the |
| |
transaction were at arm’s length. |
| 30 |
(3) | The amount of the unauthorised payment is the amount by which the |
| |
reduction in value of the asset held for the purposes of the pension scheme, or |
| |
the increase in the liability of the pension scheme, exceeds that which might be |
| |
expected if the parties to the transaction were at arm’s length. |
| |
(4) | Regulations made by the Board of Inland Revenue may make provision as to |
| 35 |
how the excess is to be calculated in relation to events of a description specified |
| |
in the regulations (including provision as to the times at which the asset or |
| |
liability is to be valued). |
| |
| |
171 | Unauthorised borrowing: money purchase arrangements |
| 40 |
(1) | A registered pension scheme is not authorised to borrow an amount in respect |
| |
of a money purchase arrangement unless the arrangement borrowing |
| |
| |
|
| |
|
| |
|
(2) | The arrangement borrowing condition is met if—![equation: lessthan[id[plus[times[char[A],char[P],char[B]],times[char[P],char[B]]]],over[times[
char[V],char[A]],num[2.00000000,"2"]]]](missing.gif) |
| |
| |
| APB is the aggregate of the amounts previously borrowed in respect of the |
| |
arrangement (excluding any amounts which have been repaid), |
| |
| PB is the amount proposed to be borrowed in respect of the arrangement, |
| 5 |
| |
| VA is the value of the arrangement. |
| |
(3) | The value of the arrangement is the aggregate of— |
| |
(a) | the amount of such of the sums and the market value of such of the |
| |
assets as represent the member’s unsecured pension fund or |
| 10 |
alternatively secured pension fund in respect of the arrangement (if |
| |
| |
(b) | the amount of such of the sums and the market value of such of the |
| |
assets as represent dependants’ unsecured pension funds or |
| |
alternatively secured pension funds in respect of the arrangement (if |
| 15 |
| |
(c) | the aggregate of the value of each scheme pension or dependants’ |
| |
scheme pension payable in respect of the arrangement, and |
| |
(d) | the value of the uncrystallised rights under the arrangement. |
| |
(4) | The value of a scheme pension or dependants’ scheme pension payable in |
| 20 |
respect of the arrangement is—![equation: cross[times[char[R],char[V],char[F]],times[char[A],char[R],char[P]]]](missing.gif) |
| |
| |
| RVF is the relevant valuation factor (see section 263), and |
| |
| ARP is the annual rate at which the pension is payable. |
| |
(5) | Rights are uncrystallised if no-one has become entitled to the present payment |
| 25 |
of benefits in respect of the rights; and a person is to be treated as entitled to |
| |
the present payment of benefits in respect of the sums and assets representing |
| |
the person’s unsecured pension fund or alternatively secured pension fund. |
| |
(6) | If the arrangement is a cash balance arrangement, the value of the |
| |
uncrystallised rights under the arrangement is the amount which would be |
| 30 |
available for the provision of benefits in respect of those rights if a person |
| |
became entitled to benefits in respect of those rights. |
| |
(7) | If the arrangement is a money purchase arrangement other than a cash balance |
| |
arrangement, the value of the uncrystallised rights under the arrangement is |
| |
the aggregate of the amount of such of the sums, and the market value of such |
| 35 |
of the assets, held for the purposes of the arrangement as represent those |
| |
| |
(8) | If the arrangement is a hybrid arrangement under which either cash balance |
| |
benefits or other money purchase benefits (but not defined benefits) may be |
| |
provided, the value of the uncrystallised rights under the arrangement is the |
| 40 |
| |
(a) | their value calculated under subsection (6) (on the assumption that cash |
| |
balance benefits are provided), and |
| |
(b) | their value calculated under subsection (7) (on the assumption that |
| |
other money purchase benefits are provided). |
| 45 |
|
| |
|