Section 24: Prohibitions concerning assets and liabilities

24. Prohibitions concerning assets and liabilities (1) Any contribution made towards a private pension scheme shall not be used for any purpose other than for the interest of its beneficiaries and for the defrayal of the expenses of the scheme. (2) A sponsoring employer shall not have any right in any contribution made to a private pension scheme, except in the circumstances specified in the rules of the scheme or upon winding up of the scheme, where the accrued pension benefits of the members have been fully secured. (3) Subject to subsection (8), the assets of a private pension scheme shall be held separately from and not form part of the assets of a sponsoring employer, an investment adviser, an asset manager, a CIS manager, a longterm insurer or any other person appointed for managing the assets of the scheme, or a conservator or custodian. (4) No person shall manage or invest the assets of a private pension scheme unless that person is— (a) a long-term insurer; P32A – 15 [Issue 5] Private Pension Schemes Act (b) licensed under any other enactment to conduct investment management or asset management business; or (c) authorised by the Commission. (5) An investment adviser, an asset manager, a CIS manager, a long-term insurer or any other person appointed by a private pension scheme for managing the assets of the scheme shall not— (a) encumber the assets of the scheme under its management; (b) subject to subsection (8), allow the assets of the scheme under its management to be held by a person other than a custodian; or (c) directly or indirectly borrow any asset of the scheme. (6) The assets of a private pension scheme shall not be invested in derivatives except for reducing investment risk or for efficient portfolio management. (7) Notwithstanding any other enactment and subject to subsection (8), no person shall hold the assets of a private pension scheme for safekeeping unless he is licensed by the Commission to provide custody services. (8) Where a private pension scheme purchases insurance policies providing for pension benefits from a long-term insurer, subsections (3), (5) (b) and (7) shall not apply to the long-term insurer.