Q&As

In the context of reg 11 of the Registered Pension Scheme (Authorised Payments) Regulations 2009, SI 2009/1171, does the term ‘related scheme’ include a former scheme operated by the same employer which has had a bulk transfer to the scheme wanting to make a small lump sum payment or can the term be interpreted to mean only schemes that are running concurrently?

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Published on LexisPSL on 07/04/2017

The following Pensions Q&A provides comprehensive and up to date legal information covering:

  • In the context of reg 11 of the Registered Pension Scheme (Authorised Payments) Regulations 2009, SI 2009/1171, does the term ‘related scheme’ include a former scheme operated by the same employer which has had a bulk transfer to the scheme wanting to make a small lump sum payment or can the term be interpreted to mean only schemes that are running concurrently?
  • Rationale behind regs 11-12
  • Definition of ‘related scheme’

In answering this Q&A, we have assumed you are referring to regulation 11 of the Registered Pension Scheme (Authorised Payments) Regulations 2009, SI 2009/1171 (SI 2009/1171, reg 11), which—unlike its de minimis counterpart in SI 2009/1171, reg 12 (which applies to large occupational pension schemes)—does not expressly caveat bulk transfers from a ‘related scheme’ to the receiving scheme from the conditions that need to be satisfied for a small lump sum payment.

The absence of such a caveat could prevent the payment of a small pot lump sum from the receiving scheme under SI 2009/1171, reg 11, since SI 2009/1171, reg 11(1)(f) prohibits recognised transfers from that scheme or any related scheme in the three years preceding the payment of a small lump sum.

The definition of ‘related scheme’ is therefore significant.

Rationale behind regs 11-12

To provide some context in respect of SI 2009/1171, regs 11–12:

  1. SI 2009/1171, reg 11 was only ever designed to tackle the problem of small ‘stranded pots’ in occupational pension schemes where it might be difficult to transf

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