Paragraph 2 sets out how an unfunded public service pension scheme is to discharge its liability in respect of a pension credit.
	Sub-paragraph (1) limits the application of this paragraph to unfunded public service pension schemes.
	Sub-paragraph (2): the effect of this provision is that an unfunded public service pension scheme will only be able to discharge its liability in respect of a pension credit by providing benefits under the scheme (an internal transfer), except where sub-paragraph (3) below applies.
	Sub-paragraph (3) provides that where an unfunded public service pension scheme from which a pension credit derives is closed to new members, an alternative public service scheme may be specified by the appropriate authority to provide the former spouse with pension rights.
	Sub-paragraph (4) sets out how the managers of the scheme may discharge their liability in respect of a pension credit when they specify an alternative scheme under sub-paragraph (3) above. They must ensure that the trustees or managers of the alternative scheme confer on the former spouse appropriate rights under that scheme.
	Sub-paragraph (5) provides for the Treasury to designate “the appropriate authority” for the purposes of sub-paragraph (3).
Commentary Supplementary Unfunded public service pension schemes