Commentary on Sections Miscellaneous Section 25: Payment of surplus to employer: transitional power to amend scheme
148.Section 25 amends section 251 of the PA 2004. Section 251 provided trustees with a transitional power to confirm or amend powers in scheme rules to make payments to the employer in the light of changes to the taxation regime for pension schemes, and to the requirements relating to payments of surplus to employers as stated in section 37 of the PA 1995.
149.Section 251 came into force from 6 April 2006. It specifically allowed trustees to pass a resolution to confirm or amend powers in their scheme’s rules to make payments to the employer, or allow them to cease to be exercisable. Trustees were required to pass a resolution within five years of the commencement of the provision (before 6 April 2011) and to satisfy prescribed requirements for notifying scheme members.
150.This section ensures that section 251 does not apply to payments which trustees can make without having to satisfy the general requirements relating to payments of surplus in section 37 of the PA 1995. It extends the transitional period during which section 251 will apply to 6 April 2016. This will allow trustees more time to review any powers in their scheme’s rules to make payments to the employer, decide how such powers should be exercised in the future, and take whatever action they consider is necessary under section 251.