RPSM04102024 - Technical Pages: Taxation: Authorised employer payments: Authorised surplus payments: Schemes not subject to Pensions Act 1995 requirements on payments to employers: Scheme winding up

Schemes not subject to Pensions Act 1995 requirements on payments to employers - scheme winding up

[s177] [The Registered Pension Schemes (Authorised Surplus Payments) Regulations 2006 - SI 2006/574] 

Where a registered pension scheme is

• an occupational pension scheme, and
• a scheme which is winding up, but
• not a scheme to which sections 76 of the Pensions Act 1995 would apply

a surplus payment made to a sponsoring employer will be an authorised surplus payment only if

• the rules of the scheme allow for a surplus payment to be made, and
• the scheme rules limit the maximum amount of benefits that can be paid to or respect of the members (a limit in these circumstances does not include a limit on benefits solely by reference to the size of the member’s fund in the scheme, such as in the case of a money purchase arrangement), and
• the liabilities of the scheme have been fully discharged (including any tax liability), and
• there is a surplus of scheme assets over the scheme’s liabilities.

This is subject to a qualification regarding surplus payments solely in respect of the death of a member - see RPSM04102025.

Where a scheme would have been subject to Northern Ireland legislation, section 76 of the Pensions Act 1995 should be construed as a reference to the corresponding enactment in Northern Ireland.