RPSM09208010 - Member Pages: Member benefits: What are unauthorised member payments?

What are unauthorised member payments?

Any payment made to (or in respect of) the member that does not fall within the list of authorised member payments is an unauthorised member payment.

An unauthorised member payment may also be deemed to have been made where

• value shifting of assets occurs. This is where the value attributed to an asset held by a registered pension scheme is either reduced or increased in order to either increase the liability of the scheme or reduce a liability of the member (or reduce the liability of another person for the benefit of the member).
• benefits or rights under a registered pension scheme are assigned, surrendered or re-allocated (except within specifically defined circumstances),
• an asset held for the purposes of a registered pension scheme is used to provide a benefit other than a payment to a member, or to a member of the member’s family or household (again, except within certain narrowly defined circumstances),
• a payment is made to a connected party of the member. The legislation treats a payment made by a scheme to a person connected to a scheme member (who is not a member of the scheme themselves, or a sponsoring employer) as being a payment to that scheme member, or
• in certain circumstances, unallocated employer contributions are allocated to member beyond a certain level.

More detailed information on unauthorised payments can be found at RPSM04104000.