All eligible schemes have to pay levies and scheme members may be entitled to compensation if the scheme’s employer becomes insolvent.
How do schemes qualify?
These are the conditions - set out in the Pensions Act 2004 – which have to be met for us to take over responsibility for a pension scheme:
- The scheme must have commenced wind up after 6 April 2005
- The scheme’s employer has become insolvent
- The scheme can’t be rescued
- The scheme has insufficient assets to secure benefits on wind up that are at least equal to the compensation that we’d pay if we assumed responsibility for the scheme
Which schemes are not eligible?
There are schemes that can’t access our fund. These include schemes:
- With a Crown guarantee
- Which aren’t tax approved – or tax registered from April 2006
- Under the tax rules for pension schemes
- That only provide death in service benefits
- That have fewer than two members
- With fewer than 12 members, where all members are trustees of the scheme
As well as:
- Unfunded public service schemes
- Public sector schemes providing pensions to local government employees
- Relevant lump sum retirement benefit schemes
- Chatsworth Estate Settlement Pension Scheme
- Cross border schemes which are not UK registered
- A superannuation fund as mentioned in section 615(6) of the Income and Corporation Taxes Act 1988
And, except in certain circumstances, schemes where a compromise agreement has been reached between scheme trustees and employer concerning a debt under Section 75 of the Pensions Act 1995 cannot access our fund.
Please note: schemes with a partial Crown guarantee are eligible but will only be liable to pay levies for that part of the scheme that doesn’t have a Crown guarantee.
And, in certain circumstances, there are some eligible schemes that we can’t take responsibility for. One example is when a scheme has not been eligible throughout the three years previous to an assessment date.
If you want to check whether your scheme is eligible, or not, please get in touch.