Code of practice 04
Early leavers
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Leaving schemes in wind-up
- Where an active member has at least three months' pensionable service and with less than two years' pensionable service and no vested rights when a scheme commences wind-up, they will be entitled only to a refund of their own contributions (if any). They will not have the option to take a cash transfer sum.13
- The refund must then be made within a reasonable time, as it would in an ongoing scheme.
- Where a member leaves a scheme in the circumstances set out in paragraph 16 above but wind-up is commenced after they have left, they still have the option to take a cash transfer sum, but this may be reduced or increased in accordance with legislation (even after the member has replied to the trustees) before the transfer is made by the trustees.
The reply date
- When a member is provided with a statement of their rights 14 they must be given a reasonable period within which to reply to the trustees or managers in order to exercise those rights15. The last date upon which the member may reply must be set out in the statement.16
- The member may exercise their rights by notifying their chosen option to the trustees or managers in writing; this can include electronic transmission (fax, email) if both parties are agreeable.
- The Regulator expects that the member would normally be given three months from the date that the statement is given to them to the reply date. The member can always respond sooner than the end of the period, but should not be pressured into making a decision without time to take proper financial advice.
- If the member requests further time to reply, the trustees or managers can extend the reply period, but they are not obliged to do so.17
- When the reply date (and any further period noted in paragraph 22 above) has passed, the member may be provided with a contributions refund under the default procedure.18
13 Regulation 5 of the Occupational Pension Schemes (Winding Up etc.) Regulations 2005 (SI 2005/706)
14 See paragraph 9
15 Section 101AC(2)(b) of PSA 93
16 Section 101AC(3)(c) of PSA 93
17 Section 101A1 (2) of PSA 93
18 See paragraph 29
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