Commentary on Sections Pension compensation Section 277: Amendments relating to the Pensions Compensation Board
1117.Subsection (2)(a) amends section 80 of the Pensions Act by inserting a new subsection (2A). This ensures that the Pensions Compensation Board may review any determination even though an application has not been made.
1118.Subsection (2)(b) replaces section 80(4) and (5) with a new subsection (4). This provides that regulations may make provision with respect to reviews applications and procedures for an application.
1119.Subsection (3) amends section 81 of that Act which sets out the conditions which must apply in order to apply for compensation. It will no longer be necessary for a scheme to be underfunded. The other conditions in section 81 will continue to apply, namely the value of the assets must have been reduced due to an act or omission and the employer must be insolvent.
1120.Subsection (4) replaces section 83(3) and (4) of that Act with a new subsection (3). This removes the requirement that the compensation paid must not exceed the amount required to eliminate the scheme’s underfunding. The amount payable is the shortfall minus any amounts recovered by the trustees plus interest on that amount (if any).
1121.These provisions will only operate until the new Board of the Pension Protection Fund takes over the functions of the Pensions Compensation Board and the latter is abolished under Part 9 of this Act.