New protection for early leavers


From 6 April 2006, members who leave occupatioanl pension schemes with at least three months’ pensionable service, but without having reached the scheme’s threshold for providing accrued (or vested) benefits, will have new rights. Trustees will need to give such members the option of either a contribution refund or a cash transfer sum. Like a lot of new requirements, the Pensions Act 2004 contains the bones of the new provisions but we have been waiting for regulations and a code of practice to flesh out the detail. The draft code of practice was published for consultation by the Pensions Regulator in May, followed by the draft regulations on 29 June 2005.

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