Commentary on Sections Powers in relation to winding-up of occupational pension schemes Section 24: Consequences of freezing order
100.Subsection (1) deals with the consequences of a freezing order. Any action taken in contravention of the freezing order is void unless it is validated by an order under section 26.
101.Subsection (2) provides that a freezing order does not prevent an increase in benefits to accrue which would accrue apart from the order unless the order specifically so provides.
102.Subsection (3) provides that a freezing order does not prevent the scheme from being wound up by virtue of an order of the Regulator under section 11 of the Pensions Act 1995 (powers to wind up schemes).
103.Subsection (4) provides that if a freezing order states that no further contributions (or specified contributions) are to be paid during the period for which the order has effect then contributions which would have been due during that period do not have to be paid and any obligation to pay those contributions is treated as if it does not arise.
104.Subsection (5) provides that pension sharing orders and pension earmarking orders are not prevented from being complied with even if a freezing order is in place preventing transfers.
105.Regulations may modify any provisions of Chapter 4 (transfer values) and 5 (early leavers: transfer sums and contribution refunds) of Part 4 (protection for early leavers) of the Pension Schemes Act 1993 in their application to an occupational pension scheme in relation to which a freezing order is made containing a direction under section 23(4)(f), (g) or (h)(no transfers etc of member’s rights from the scheme).
106.If a freezing order is not complied with then section 10 of the Pensions Act 1995 (civil penalties) will apply to a trustee or manager who fails to take all reasonable steps to comply with the order. If an employer is directed to repay certain contributions, and fails to do so without a reasonable excuse, a section 10 penalty will apply to the employer.