Section 165 | Pension rules

(1)These are the rules relating to the payment of pensions by a registered pension scheme to a member of the pension scheme (“the pension rules”).

Pension rule 1No payment of pension may be made before the day on which the member reaches normal minimum pension age, unless the ill-health condition was met immediately before the member became entitled to a pension under the pension scheme.

Pension rule 2If the member dies before the end of the period of ten years beginning with the day on which the member became entitled to a scheme pension or an annuity, and if in the case of an annuity that day was before 6 April 2015, payment of the scheme pension or annuity may continue to be made (to any person) until the end of that period. If the member becomes entitled to an annuity on or after 6 April 2015 and the annuity is payable until the later of the member's death and the end of a term certain, payment of the annuity may continue to be made (to any person) until the end of that term. Except as provided by the preceding provisions of this rule, no payment of the member’s pension may be made after the member’s death.

Pension rule 3No payment of pension other than a scheme pension may be made in respect of a defined benefits arrangement or a collective money purchase arrangement.

Pension rule 4 No payment of pension other than—may be made in respect of a money purchase arrangement that is not a collective money purchase arrangement; but a scheme pension may only be paid if the member had an opportunity to select a lifetime annuity instead.

(a)a scheme pension,

(b)a lifetime annuity, or

(c)drawdown pension

Pension rule 5The total amount of drawdown pension paid in each drawdown pension year from, or under a short-term annuity purchased using sums or assets out of, the member's drawdown pension fund in respect of a money purchase arrangement must not exceed 150% of the basis amount for the drawdown pension .

(2)In this Part “pension”, in relation to a registered pension scheme, includes—

(a)an annuity, and

(b)income withdrawal.

(3)For the purposes of this Part, a person becomes entitled to a pension under a registered pension scheme—

(a)in the case of income withdrawal under the pension scheme, whenever sums or assets held for the purposes of an arrangement under the pension scheme are designated as available for the payment of drawdown pension, and

(b)in any other case, when the person first acquires an actual (rather than a prospective) right to receive the pension

and, for this purpose, the abatement of a scheme pension under a public service pension scheme is not to be taken to affect the right to receive it.

(3A)Repealed

(3B)Repealed

(4)Part 1 of Schedule 28 gives the meaning of expressions used in the pension rules.