In order to allow schemes to pay a member's annual allowance charge directly from its assets, the Occupational Pension Schemes (Assignment, Forfeiture, Bankruptcy etc) (Amendment) Regulations 2011 are due to come in to effect from 11 August 2011.
These regulations amend the 1997 regulations so that using a member's benefits to pay the scheme's annual allowance charge will not constitute an assignment of those benefits, (which is prohibited under Section 91(1) of the Pensions Act 1995). This amendment applies whether the scheme is meeting the charge in accordance with the provisions of the Finance Act 2004 or in circumstances where the member and the trustees have agreed that the annual allowance charge will be paid for through scheme benefits.
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