House of Commons Public Bill Committee Proceedings

Session 2010 - 12
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Other Bills before Parliament

15

House of Commons

Thursday 14 July 2011

Public Bill Committee Proceedings

Pensions Bill [Lords]

[SEVENTH AND EIGHTH SITTINGS]

Steve Webb

That if, on Tuesday 19 July, references to specific times in the Standing Orders of this

House apply as if that day were a Wednesday, the Order of the Committee of 5 July shall

be amended as follows—

  (1) in paragraph (1)(e) leave out ‘10.30 am and 4.00 pm’ and insert ‘9.00 am and 1.30

pm’;

  (2) in paragraph (3) leave out ‘7.00 pm’ and insert ‘4.30 pm’.

Agreed to

Fees and charges

Teresa Pearce

Withdrawn  NC6

To move the following Clause:—

‘(1)
The Pensions Act 2008 is amended as follows.

(2)
In section 26(4)(6) after “pay reference period” insert “, taking into account the

level of charges.”.’.

Transfers

Teresa Pearce

Withdrawn  NC7

To move the following Clause:—

‘(1)
The Pensions Act 2008 is amended as follows.

(2)
After section 16(2) insert—

Public Bill Committee Proceedings: 14 July 2011
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Pensions Bill [Lords] continued

“(2A)
The Secretary of State shall make regulations to enable transfers of

qualifying pension schemes into and out of the National Employment

Savings Trust.”.’.

Information about pensions

Teresa Pearce

Withdrawn  NC8

To move the following Clause:—

‘The Secretary of State shall create a single place where all relevant information

of pensions is available for employers and employees.’.

Contribution limits

Teresa Pearce

Not called  NC9

To move the following Clause:—

‘(1)
The Pensions Act 2008 is amended as follows.

(2)
omit section 70 (Contribution Limits).’.

UK personal pension schemes: additional protection

Teresa Pearce

Not called  NC10

To move the following Clause:—

‘(1)
The Pensions Act 2008 is amended as follows.

(2)
In section 26(4)(b), at end insert “, ensuring they are protected to the same level

as stakeholder terms and conditions.”’.

Steve Webb

Agreed to  38

Clause  15,  page  10,  line  24,  at end insert—

‘( )
Schedule 3 to the 1993 Act (which sets out methods for revaluing accrued

benefits for the purposes of section 84 of the 1993 Act) is amended as follows.

( )
After paragraph 1(4) insert—

Public Bill Committee Proceedings: 14 July 2011
17

Pensions Bill [Lords] continued

  “(5)
The sub-paragraphs above are subject to sub-paragraph (6).

      (6)
If paragraph 2A applies to the pension or other benefit, the final salary

method is to apply the requirement of the rules of the scheme

mentioned in paragraph 2A(1).”

( )
After paragraph 2 insert—

“2A(1)
This paragraph applies to the pension or other benefit if the rules of the

scheme under which it is payable contain a requirement that the

accrued benefit be revalued by adding to the accrued benefit an

amount of at least the relevant amount.

      (2)
“The accrued benefit” has the same meaning as in paragraph 1.

      (3)
“The relevant amount” means the amount which, ignoring paragraph

1(5) and (6), would be the additional amount specified in paragraph

1(1A), (1B), (1C) or (1D) (as the case may be) were the appropriate

higher revaluation percentage and the appropriate lower revaluation

percentage to be determined on the following basis.

      (4)
The higher revaluation percentage and the lower revaluation

percentage for the revaluation period mentioned in paragraph 2(7) are

to be taken to be the percentages which would have been specified in

the Secretary of State’s order—

(a)
had the following been substituted for paragraph 2(3)(a)—

“(a)
the percentage increase in the retail prices index

for the reference period in relation to the

revaluation period (“the inflation percentage”),

and”,

(b)
had, in paragraph 2(3A)(a), the words “the percentage which

appears to the Secretary of State to be” been omitted,

(c)
had paragraph 2(4) been omitted,

(d)
had, in paragraph 2(5), the words “sub-paragraph (3)(a)” been

substituted for “that sub-paragraph”,

(e)
had, in paragraph (b) of the definitions of “the higher

maximum rate” and “the lower maximum rate” in paragraph

2(6), the words “retail prices index” been substituted for

“general level of prices”, and

(f)
had the following been inserted after paragraph 2(6)—

“(6A)
In this paragraph “retail prices index” means—

(a)
the general index of retail prices (for all items)

published by the Statistics Board (or any

predecessor), or

(b)
where that index is not published for a month, any

substituted index or figures published by the Board

(or any predecessor).””’.

Steve Webb

Agreed to  39

Clause  15,  page  10,  line  27,  leave out ‘subsection (4) substitute—’ and insert

‘subsections (3) and (4) substitute—

“(3)
Subsection (2) does not apply to the annual rate of a pension under an

occupational pension scheme, or to a part of that rate, if under the rules

of the scheme the rate or part is for the time being being increased at

Public Bill Committee Proceedings: 14 July 2011
18

Pensions Bill [Lords] continued

intervals of not more than twelve months by at least the relevant

percentage.’.

Steve Webb

Agreed to  40

Clause  15,  page  10,  line  33,  leave out from beginning to end of line 36 on page 11

and insert—

‘(4ZA)
Subsection (2) does not apply to the annual rate of a pension under an

occupational pension scheme, or to a part of that rate, if subsection (4ZB)

applies to the rate or part.

(4ZB)
Subject to subsection (4ZD), this subsection applies to the rate or part if,

under the rules of the scheme, the rate or part is for the time being being

increased, and since the relevant time has always been increased, at

intervals of not more than twelve months by at least—

(a)
the percentage increase in the retail prices index for the reference

period, being a period determined, in relation to each periodic

increase, under the rules, or

(b)
if lower, the default percentage for that period.

(4ZC)
In subsection (4ZB) “the relevant time” means—

(a)
the beginning of 2011 or, if later, the time when the pension

became a pension in payment, or

(b)
if the pension was transferred to the scheme from another

occupational pension scheme as a pension in payment after the

beginning of 2011, the time of the transfer.

(4ZD)
If the pension was transferred to the scheme as mentioned in subsection

(4ZC)(b), subsection (4ZB) does not apply to the rate or part unless,

immediately before the transfer, subsection (4ZB) (read with this

subsection if relevant) applied to the rate or part by reference to the

scheme from which the pension was transferred (or would have applied

had subsection (4ZB) been in force immediately before the transfer).’.

Steve Webb

Agreed to  41

Clause  15,  page  11,  line  39,  leave out ‘(4)’ and insert ‘(3)’.

Steve Webb

Agreed to  42

Clause  15,  page  11,  line  42,  leave out ‘to (4ZD)’ and insert ‘and (4ZB)’.

Steve Webb

Agreed to  43

Clause  15,  page  11,  line  46,  leave out ‘to (4ZD)’ and insert ‘and (4ZB)’.

Clause, as amended, Agreed to.

Clause 16 Agreed to on division.

Public Bill Committee Proceedings: 14 July 2011
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Pensions Bill [Lords] continued

Steve Webb

Agreed to  10

Clause  17,  page  13,  line  23,  after ‘period’, insert ‘on or after that day’.

Steve Webb

Agreed to  11

Clause  17,  page  13,  line  41,  after ‘(3)(b)’, insert ‘includes a promise that’.

Steve Webb

Agreed to  12

Clause  17,  page  13,  line  42,  leave out ‘includes a promise that’.

Steve Webb

Agreed to  13

Clause  17,  page  13,  line  44,  leave out from beginning to end of line 4 on page 14

and insert—

‘(b)
the rate or amount of a benefit will represent a particular proportion of the

available sum.’.

Steve Webb

Agreed to  14

Clause  17,  page  14,  line  4,  at end insert—

‘( )
But a pension is not prevented from being a cash balance benefit merely because

under the scheme there is a promise that—

(a)
the rate or amount of a benefit payable in respect of a deceased member

will be a particular proportion of the rate or amount of a benefit which

was (or would have been) payable to the member;

(b)
the amount of a lump sum payable to a member, or in respect of a

deceased member, will represent a particular proportion of the available

sum.’.

Clause, as amended, Agreed to.

Clause 18 Agreed to.

Schedule 4 Agreed to.

Clauses 19 to 24 Agreed to.

New cLAUSEs RELATING TO PART 3

Triennial Report

Rachel Reeves

Not called  NC11

To move the following Clause:—

‘(1)
The Secretary of State must publish a triennial report about the impact of CPI on

accrued benefits and pensions.

Public Bill Committee Proceedings: 14 July 2011
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Pensions Bill [Lords] continued

(2)
The report required under subsection (1) must, in particular, include an

assessment of the impact of the measure on—

(a)
scheme members;

(b)
employers;

(c)
tax-payers; and

(d)
pension protection fund levy-payers.’.

Occupational pensions schemes (investment)

Cathy Jamieson

Sheila Gilmore

Withdrawn  NC12

To move the following Clause:—

‘(1)
The Occupational Pension Schemes (Investment) Regulations 2005 are amended

as follows—

(a)
after regulation 4(2) insert—

“(2A)
The powers of investment, or the discretion, must be exercised in

the way considered, in good faith, most likely to promote the

interests of the scheme for the benefit of its members and

beneficiaries as a whole, having regard (amongst other matters)

to—

(a)
the likely consequences of any decision in the long term;

(b)
the impact of the scheme’s investment activities on the

stability of the financial system and on the economy;

(c)
environmental, social and governance considerations,

inlcuding the environmental and social impact of the

scheme’s investment activities;

(d)
the desirability of the scheme maintaining a reputation

for high standards of commercial conduct;

(e)
the desirablility of ascertaining and of taking into

account the views, including the ethical views, of

members and beneficiaries in relation to the scheme’s

investment policy; and

(f)
the need to act fairly as between the members and

beneficiaries, including as between present and future

members and beneficiaries.”,

(b)
in regulation (4)11, insert—

““benefit” means—

(a)
financial benefit; and

(b)
any non-financial benefit which the trustee considers

can be conferred on members and beneficiaries without

any material prejudice to their financial benefit.”’.

Clause 25 Agreed to.

Public Bill Committee Proceedings: 14 July 2011
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Pensions Bill [Lords] continued

Schedule 5 Agreed to.

Clauses 26 to 29 Agreed to.

Remaining new Clause

Allied Steel and Wire

Hywel Williams

Not selected  NC5

To move the following Clause:—

‘(1)
The Secretary of State shall commission a review of measures enabled to help

former employees of Allied Steel and Wire.

(2)
The review should be written by an independent board of experts with the aim of

ensuring the best treatment of former employees of Allied Steel and Wire and will

make recommendations for future support for former employees.

(3)
This review should be conducted and report back within six months of Royal

Assent.’.

Steve Webb

Agreed to  15

Clause  30,  page  19,  line  20,  leave out subsection (2).

Clause Agreed to.

Bill, as amended, to be reported.



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