Social Security Act 1973

15(1)Except as provided by this paragraph, a scheme must contain rules preventing assignment of short service benefit, and must not enable such benefit to be surrendered or commuted.

[F1(1A)In sub-paragraph (1) above, the references to assignment, surrender and commutation of short service benefit do not include references to any assignment, surrender or commutation of a policy of insurance or annuity contract in accordance with conditions prescribed by regulations under section 52C(4)(b) or (c) of the Social Security Pensions Act 1975 (cases where an occupational pension scheme’s liability to provide benefit is discharged).]

(2)Provisions enabling assignment are permissible (whether assignment before or after the benefit comes into payment) if it is assignment in favour of the [F2widow or widower or a dependant of the member].

(3)Provisions enabling surrender (at the option of the member) are permissible where it is—

(a)to provide benefit for the [F2widow or widower or a dependant of the member];

[F3(b)to acquire for the member transfer credits under the rules of another occupational pension scheme or rights under the rules of a personal pension scheme or a self-employed pension arrangement;]

(c)to acquire for the member entitlement to further benefits under the same scheme, relating both to a period of pensionable service previously terminated and also to a subsequent period of service in relevant employment.

(4)Provision may be made for a member’s benefit to be commuted, but only—

(a)in a case where he opts (at any time) to commute at or after normal pension age; or

(b)in exceptional circumstances of serious ill-health; or

(c)in such other circumstances as may be prescribed;

and where a scheme provides benefit for a member’s [F4widow or widower]or dependant, it may provide for commutation [F5of that benefit]in such circumstances as may be prescribed.

(5)In respect of any of the benefits or rights alternative to short service benefit provided in accordance with paragraph 9(2) above, this paragraph shall apply with such modifications as may be prescribed.

(6)In the application of this paragraph to Scotland, for reference to assignment there shall be substituted references to assignation.