Citation, commencement and interpretation

1. —(1) These Regulations may be cited as the Registered Pension Schemes (Authorised Surplus Payments) Regulations 2006 and shall come into force on 6th April 2006.

(2) In these Regulations—

“the 1995 Act” means the Pensions Act 1995 ( 3 );

“the 1988 Act” means the Income and Corporation Taxes Act 1988 ( 4 );

“controlling director” means a director to whom subsection (5)(b) of section 417 of the 1988 Act (read with sections (3),(4) and (6) of that section) applies.

(3) In the application of these Regulations to Northern Ireland, a reference to an enactment applying only in Great Britain shall be construed as a reference to the corresponding enactment in Northern Ireland.

Payments falling within section 37 or 76 of the Pensions Act 1995

2. —(1) A payment is an authorised surplus payment if it satisfies either paragraph (2) or (3).

(2) A payment satisfies this paragraph if it is made in compliance with the requirements contained in section 37 (payment of surplus to employer) of the 1995 Act( 5 ).

• This paragraph is subject to paragraph (4).

(3) A payment satisfies this paragraph if—

(a) it is made in connection with the winding up of an occupational pension scheme and

(b) the scheme making it satisfies the requirements set out in section 76 (excess assets on winding up) of the 1995 Act( 6 ).

• This paragraph is subject to paragraph (4).

(4) A payment made by an occupational pension scheme to a sponsoring employer, solely in respect of the death of a member is an authorised surplus payment if it satisfies the conditions in paragraphs (2) or (3) and—

(a) in a case where the deceased member’s fund was an alternatively secured pension fund, it satisfies conditions A and B, and

(b) in other cases, it satisfies condition B.

Condition A

The scheme administrator has been unable to identify any dependants of the deceased member.

Condition B

The member was not connected to the sponsoring employer at the date of his death.

(5) For the purposes of this regulation and regulation 3 a member is connected to a sponsoring employer if—

(a) the employer is a partnership and he is connected with—

(i) a partner in the partnership, or

(ii) a person who has been a partner in the partnership at any time during the preceding year, or

(b) the employer is a company and the member, or a person connected with him, is, or at any time during the preceding year has been, a controlling director of the company.

• For the purposes of paragraph (5) any question whether a person is connected with another shall be determined in accordance with section 839(2) of the 1988 Act.

Payments falling outside section 37 or 76 of the Pensions Act 1995

3. —(1) A payment made by an occupational pension scheme to a sponsoring employer which does not satisfy paragraph (2) or (3) of regulation 2 is an authorised surplus payment if it satisfies the following conditions.

Condition A

The rules of the scheme permit such a payment to be made.

Condition B

The rules of the scheme contain a limit, calculated other than by reference to the size of the member’s fund, on the maximum amount of benefits that may be paid to, or in respect of, members of the scheme.

Condition C

If the scheme is being wound up, the liabilities of the scheme have been fully discharged including any tax that may be due and there is a surplus of assets over liabilities.

Condition D

If the scheme is not being wound up, the requirements set out in section 37 of the 1995 Act would have been met if the scheme had been one to which the section applied.

This paragraph is subject to paragraph (2).

(2) A payment made by an occupational pension scheme to a sponsoring employer solely in respect of the death of a member is an authorised surplus payment if it satisfies the conditions in paragraph (1) and—

(a) in a case where the deceased member’s fund was an alternatively secured pension fund, it satisfies conditions E and F, and

(b) in other cases, it satisfies condition F.

Condition E

The scheme administrator has been unable to identify any dependants of the deceased member.

Condition F

The member was not connected to the sponsoring employer at the date of his death.