The Registered Pension Schemes (Modification of Scheme Rules) Regulations 2011
These Regulations are part of a package of pension measures made in the Finance Act 2011 (“FA 2011”). Schedule 17 of FA 2011 amends Part 4 of the Finance Act 2004 (“FA 2004”) so as to reduce the annual allowance from £255,000 to £50,000 with effect from the 2011-12 tax year. In order to assist scheme members, in particular those who become liable for large one off annual allowance tax charges, the legislation contains provisions (sections 237B to 237E of FA 2004, as inserted by paragraph 15 of Schedule 17 to FA 2011) enabling the member to require the scheme administrator of a pension scheme to pay the annual allowance charge in certain circumstances. The legislation provides that a consequential adjustment must be made to the entitlement of the member to reflect the payment. It is also envisaged that scheme administrators may pay some or all of the member’s annual allowance charge on a voluntary basis in return for a consequential adjustment to the member’s benefits.