Surrender and forfeiture of pension benefits


Produced in partnership with Wyn Derbyshire of gunnercooke LLP
Practice notes

Surrender and forfeiture of pension benefits


Produced in partnership with Wyn Derbyshire of gunnercooke LLP

Practice notes
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FORTHCOMING DEVELOPMENT: The Pension Schemes Bill, which was published on 5 June 2025 and is expected to receive Royal Assent in 2026, includes (among other things) provisions giving the Pensions Ombudsman powers equivalent to those of a competent court in cases involving the recovery of pension overpayments. This removes the need for trustees to apply to the County Court in such cases, thereby reducing legal costs, administrative burdens and ensuring a more efficient recovery process for schemes and their members. For further information, see LNB News 05/06/2025 42 and Pension Schemes Bill—tracker — Pensions Ombudsman and overpayments.

THIS PRACTICE NOTE APPLIES TO OCCUPATIONAL PENSION SCHEMES ONLY

This Practice Note considers the extent to which accrued pension rights under registered occupational pension schemes can be surrendered or forfeited.

The general rule against surrender—the inalienability rule

Under section 91(1) of the Pensions Act 1995 (PA 1995), a person’s entitlement in respect of accrued benefit rights under a registered occupational pension scheme cannot be assigned, commuted, surrendered or charged, and no lien or set-off

Wyn Derbyshire
Wyn Derbyshire

Partner, gunnercooke LLP

Wyn is a partner at gunnercooke LLP and specialises in pensions, trust and employment law in all industry sectors, dealing with the transactional, advisory and documentation aspects.

He also has wide experience of the pensions implications of heavyweight corporate transactions and flotations, the issues arising from the establishment and merger of pension schemes, and sex equalisation and other discrimination issues in respect of benefits provided by pension schemes. In addition, he provides advice to pension scheme trustees generally.

Recent transactions include advising Amcor on pension matters relating to the acquisition of Alcan business and the acquisition of Northern Foods PLC by Boparan Holdings.

He is a co-author (with Stephen Hardy and Stephen Maffey) of TUPE: Law and Practice, published by Spiramus Press (now in its 4th edition), and co-author (with Stephen Hardy and David Wicks) of Money & Work, published by Spiramus Press in August 2007. He has also written several other books and numerous articles on a variety of legal and non-legal topics.

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Forfeiture definition
What does Forfeiture mean?

Forfeiture is the lost right to possession.

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