Transfers of dormant assets from pension schemes

The Registered Pension Schemes (Authorised Member Payments) Regulations, SI 2022/723, provide that transfers of dormant assets from registered pension schemes to the reclaim fund (so those assets can be used for good causes) are authorised member payments. This means that such transfers will not incur unauthorised payment charges.

Under the dormant assets scheme, financial institutions can transfer dormant assets to the reclaim fund, which is then used to direct those assets to worthy causes.

The Dormant Assets Act 2022 extended the scheme to include certain dormant assets from pension schemes and various financial services, meaning that those assets could be used for public benefit.

The regulations are limited to transfers of dormant eligible pension benefits as defined in the Dormant Assets Act 2022. Transfers which do not meet the specified requirements, and which are not otherwise ‘authorised’, will remain subject to unauthorised payment tax charges. The regulations come into force on 1 August 2022.