The Pension Protection Fund (Compensation) Regulations 2005

[F1 Circumstances in which the portion of compensation to be commuted may exceed 25 per cent E+W+S

20.— (1) The prescribed circumstances for the purposes of paragraph 24(2) of Schedule 7 to the Act (commutation of periodic compensation) are that the portion to be commuted is a PPF trivial commutation lump sum, in accordance with paragraph (2).

(2) A payment is a PPF trivial commutation lump sum if—

(a) either—

(i) no trivial commutation lump sum or PPF trivial commutation lump sum has previously been paid to the person—

(aa) by a registered pension scheme; or

(bb) the Board; or

(ii) if such a lump sum has previously been paid; that lump sum is paid before the end of the commutation period;

(b) on the nominated date, the value of the member's entitlement to PPF compensation and pension rights do not exceed the commutation limit;

(c) it is paid when all or part of the member's standard lifetime allowance is available; and

(d) it extinguishes the member's entitlement to PPF compensation.

(3) The nominated date is—

(a) the day within the period of three months ending with the first day of the commutation period nominated by the person; or

(b) if no day is nominated, the first day of the commutation period.

F2 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) The value of the member's pension rights on the nominated date is the aggregate of—

(a) the value of the member's relevant crystallised pension rights on that date; and

(b) the value of the member's uncrystallised rights on that date.

(6) For the purposes of paragraph (5)—

(a) relevant crystallised pension rights shall be calculated in accordance with paragraph 8 of Schedule 29 to the 2004 Act (trivial commutation lump sum); and

(b) a member's uncrystallised rights shall be calculated in accordance with paragraph 9 of Schedule 29 to the 2004 Act.

(7) The value of the member's entitlement to PPF compensation shall be calculated by adding any entitlement he may have to lump sum compensation and any entitlement he may have to periodic compensation.

(8) For the purposes of paragraph (7), the value of any entitlement to—

(a) lump sum compensation, shall be the full amount of the lump sum compensation to which that member would be entitled on the nominated date; and

(b) periodic compensation, shall be calculated by multiplying the annual periodic compensation to which that member would be entitled on the nominated date by 20.]

Textual Amendments

F1 Reg. 20 substituted (6.4.2006) by The Pension Protection Fund (General and Miscellaneous Amendments) Regulations 2006 (S.I. 2006/580), regs. 1(1)(b), 22(4)

F2 Reg. 20(4) omitted (30.4.2013) by virtue of The Pension Protection Fund, Occupational and Personal Pension Schemes (Miscellaneous Amendments) Regulations 2013 (S.I. 2013/627), regs. 1(1), 3(9)