The Pensions Regulator

Paying lump sum death benefits

Section 255

Section 255 of the Pensions Act limits the activities of schemes which have their main administration in the UK to ‘retirement-benefit activities’. These are defined as:

1. operations related to retirement benefits; and
2. activities arising from operations related to retirement benefits.

‘Retirement benefits’ are in turn defined as:

• benefits paid by reference to reaching, or expecting to reach, retirement; and
• benefits that are supplementary to benefits within paragraph (a) and that are provided on an ancillary basis:
  • in the form of payments on death, disability or termination of employment; or
  • in the form of support payments or services in the case of sickness, poverty or need, or death.

In any areas where the interpretation of legislation is in question, the trustees of a scheme may well wish to take their own professional advice.