RPSM13102720 - Technical Pages: International: Application of charges to non-UK schemes: Modifications: Pension rules and pension death benefit rules

Pension rules and pension death benefit rules

Pension rules 4 and 6

[s165, 167] [Paras p3(1)(b), 6(1)(c), 17(1)(b),20(1)(c) Sch 28] [The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 - SI 2006/207]

A pension payment from a relevant non-UK scheme will be an unauthorised payment if it is not made in accordance with the pension rules in section 165 (see RPSM09100140). Regulation 6 of The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (SI 2006/207) modifies pension rules 4 and 6 as they apply to a relevant non-UK scheme so as to remove the condition that a scheme pension may only be paid by a money purchase arrangement if the member had an opportunity to select a lifetime annuity (see RPSM09101700) instead. This recognises that an open market option may not be required under the regulatory regime of the country in which a relevant non-UK scheme is established.

Pension death benefit rules 3 and 5

A pension death benefit paid from a relevant non-UK scheme will be an unauthorised payment if it is not made in accordance with the pension death benefit rules in section 167 (see RPSM10100060). Regulation 7 of The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (SI 2006/207) modifies pension death benefit rules 3 and 5 as they apply to a relevant non-UK scheme so as to remove the condition that a dependants' scheme pension may only be paid by a money purchase arrangement if the member or dependant had an opportunity to select a dependants' annuity instead.

Related requirements

Similarly, because a member may not have a choice of annuity provider in some countries, regulation 14(4) of The Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (SI 2006/207) modifies paragraphs 3(1)(b), 6(1)(c), 17(1)(b) and 20(1)(c) of schedule 28 as they apply to a relevant non-UK scheme by omitting them. Those provisions require that the member had an opportunity to select the insurance company providing their lifetime annuity, short term annuity, dependants' annuity and dependants' short term annuity respectively.