Commentary on Sections No indemnification for fines or civil penalties Section 256: No indemnification for fines or civil penalties
935.This section provides that a trustee or manager of an occupational or personal pension scheme cannot be reimbursed out of scheme assets in respect of a fine imposed for an offence of which he is convicted, or a civil penalty imposed under either section 10 of the Pensions Act 1995 (civil penalties) or section 168(4) of the Pension Schemes Act 1993 regarding a failure for which he is personally liable. Subsection (2) provides that this includes a prohibition on providing for the payment of premiums in respect of an insurance policy, where the risks include the imposition of such a fine or the requirement to pay such a penalty.
936.Subsection (3) provides that where any amount is paid out of the assets of an occupational or personal pension scheme contrary to this section, section 10 of the Pensions Act 1995 (civil penalties) applies to any trustee or manager who fails to take all reasonable steps to ensure compliance.
937.Subsection (4) provides that where a trustee or manager of a scheme is reimbursed out of occupational or personal pension scheme assets for matters set out in subsection (1)(a) or (b) and he knows, or has reasonable grounds to believe, that he has been so reimbursed, he will be guilty of an offence unless he has taken all reasonable steps to ensure that he is not so reimbursed. Subsection (5) provides that a person guilty of an offence under subsection (4) is liable on summary conviction to a fine not exceeding the statutory maximum and on conviction on indictment to imprisonment for a term not exceeding two years, or a fine or both.