Flowchart 2: Early leaver – the process
This is a transcript of the flowchart intended as supporting material for Code 04: Early leavers.
Please note: The following flowchart definitions are listed at the end of this document:
- Reasonable period (1)
- Reasonable period (2)
- Reasonable period (3)
- Reasonable period (4)
- Reply date
1. Member leaves pensionable service early with no vested rights but satisfying the three months condition.
If pensionable service ended because the scheme has entered wind-up – go to 3
Else go to 2
2. Trustees have a reasonable period (1), to notify the member of their rights, and that they must exercise them before the end of a reasonable period (2). The last day of this reasonable period (2) is the reply date. Either:
- Member notifies trustees that they require a cash transfer sum before the reply date. Trustees have reasonable period (3) to pay the member’s cash transfer sum as requested.
- Member fails to respond before the reply date. Trustees may allow the member more time to respond. Trustees have a reasonable period (4) after which they may pay the contribution refund to the member. (Member loses the right to a cash transfer sum.), or
- Member notifies trustees that they require a contribution refund before the reply date. Trustees have a reasonable period (3) to pay the contribution refund to the member or at their direction.
3. If pensionable service ended because the scheme has entered wind-up, the member automatically acquires a right to a refund of contributions within a reasonable period (3), under regulation 5 of the Occupational Pension Schemes (Winding up etc.) Regulations 2005 / 706.
Trustees have a reasonable period (3) to pay the contribution refund to the member or at their direction.
Definitions
Reasonable period (1)
The regulator expects that this would usually be within a period of three months from the date of the member leaving pensionable service.
Reasonable period (2)
The regulator expects that this would usually be a period of at least three months from the date that member is notified of their rights.
Reasonable period (3)
The regulator expects that this would usually be within a period of three months from the date of the member’s notification or deemed notification (regulation 5 of the Occupational Pension Schemes (Winding up etc) Regulations 2005/706) to the trustees.
Reasonable period (4)
The regulator expects that this would usually be a period of one month from the reply date or the end of any further period of time notified to the member by the trustees.
Reply date
Is the last day of the reasonable period (2)