Commentary on Sections Summary Pension benefits postponed at assessment date
575.Paragraph 5 provides that 100% pension compensation will be paid where before the assessment date a person had been entitled to a pension, was over normal pension age and had postponed taking that pension. The compensation is calculated by reference to the protected pension rate he would have received plus any increases under paragraph 28. This is subject to the Secretary of State’s power to vary the percentage (paragraph 30). The member may commute (convert into a lump sum) part of the pension compensation when it comes into payment (see paragraph 24). The pension compensation is paid from the assessment date, subject to any provision made to postpone entitlement under section 164 during the assessment period.
576.Paragraph 6 provides that 50% of the pension compensation in payment will be paid to the member’s widow or widower when he dies. Regulations will set out when the widow or widower will not be entitled to compensation. This will allow provision to be made for cases where the scheme rules did not pay a pension to a widow or widower.
577.Paragraph 7 provides that lump sum compensation can be paid from the Pension Protection Fund. This will be paid where the member had postponed entitlement to a lump sum from the scheme and he had attained normal pension age. 100% of the lump sum payable from the scheme will be paid at the assessment date. This is subject to the Secretary of State’s power to vary percentages (paragraph 30) and does not include a lump sum received as a result of commutation.