RPSM04102023 - Technical Pages: Taxation: Authorised employer payments: Authorised surplus payments: Schemes not subject to Pensions Act 1995 requirements on payments to employers: Scheme not winding up

Schemes not subject to Pensions Act 1995 requirements on payments to employers - scheme not 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 not winding up, but
• not a scheme to which section 37 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 in 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 payment is made in accordance with the requirements of section 37 of the Pensions Act 1995, as if the requirements set out in that section had ordinarily applied to the scheme.

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 37 of the Pensions Act 1995 should be construed as a reference to the corresponding enactment in Northern Ireland.