Q&As

Does PSA 1993, s 24G(4) exempt pension schemes in winding up that are undertaking GMP conversion from the need to satisfy condition 5 under PSA 1993, s 24B?

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Produced in partnership with Alastair Meeks of Pinsent Masons
Published on LexisPSL on 17/01/2020

The following Pensions Q&A Produced in partnership with Alastair Meeks of Pinsent Masons provides comprehensive and up to date legal information covering:

  • Does PSA 1993, s 24G(4) exempt pension schemes in winding up that are undertaking GMP conversion from the need to satisfy condition 5 under PSA 1993, s 24B?

The obligation to provide guaranteed minimum pensions (GMPs) is set out in sections 13(1) and 17(1) of the Pension Schemes Act 1993 (PSA 1993) (all the following section references are to that Act). Those two sections cover members’ GMPs and survivors’ GMPs respectively. Reference is made below just to members’ GMPs to avoid duplication, but the point is the same for both.

Section 13(1) provides:

‘Subject to the provisions of this Part, the scheme must—

(a) provide for the earner to be entitled to a pension under the scheme if he attains pensionable age; and

(b) contain a rule to the effect that the weekly rate of the pension will be not less than his guaranteed minimum (if any) under sections 14 to 16.’

That requirement is varied by s 13(1A) as follows:

‘But a scheme may be amended so as to omit provision of the kind specified in subsection (1)(a) and (b) if the conditions specified in section 24B are satisfied.’

So a scheme must provide a GMP unless PSA 1993, s 13(1A) is met, which requires the conditions specified in PSA 1993, s 24B to be met. Nothing in either PSA 1993, s 13(1) or 13(1A) makes special provision for schemes in w

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