20 Overseas residents

(1) Regulations may provide that an overseas resident who is entitled to a state
pension under this Part is not entitled to up-rating increases.

(2) In this section “overseas resident” means a person who is not ordinarily
5resident in Great Britain or any other territory specified in the regulations.

(3) Regulations under this section do not affect the rate of an overseas resident’s
state pension for any period during which he or she is in Great Britain or a
territory specified in the regulations (but once the overseas resident ceases to
be in Great Britain or a specified territory the rate reverts to what it would have
10been had he or she not been in Great Britain or a specified territory).

(4) Regulations under this section do not affect the rate of a person’s state pension
once the person stops being an overseas resident.

Definitions

21 “Old state pension”

(1) 15In this Part “old state pension” means a Category A retirement pension or a
Category B retirement pension.

(2) A reference in this Part to the rate of an old state pension (however expressed)
does not include—

(a) graduated retirement benefit under the National Insurance Act 1965, or

(b) 20any increase in the rate because of Schedule 5 to the Contributions and
Benefits Act (deferral increases).

22 General definitions etc

(1) In this Part—

• “the Administration Act” means the Social Security Administration Act
  251992;

• “Category A retirement pension” means a Category A retirement pension
  under Part 2 of the Contributions and Benefits Act;

• “Category B retirement pension” means a Category B retirement pension
  under Part 2 of the Contributions and Benefits Act;

• 30“the Contributions and Benefits Act” means the Social Security
  Contributions and Benefits Act 1992;

• “enactment” includes an enactment contained in subordinate legislation
  within the meaning of the Interpretation Act 1978;

• “full rate” means the rate mentioned in section 3(1);

• 35“old state pension” has the meaning given by section 21 (and references to
  the rate of an old state pension are to be read in accordance with that
  section);

• “pensionable age” has the meaning given by section 122(1) of the
  Contributions and Benefits Act; and a person is “over” pensionable age
  40if the person has reached that age (and is otherwise “under” that age);

• “post-commencement qualifying year” has the meaning given by
  section 4(4);

• “pre-commencement qualifying year” is to be read in accordance with
  section 4(4) and (5);

Pensions BillPage 11

• “qualifying earnings factor” has the meaning given by section 122(1) of
  the Contributions and Benefits Act;

• “qualifying year” has the meaning given by section 2(4);

• “reduced rate” means the rate mentioned in section 3(2);

• 5“regulations” means regulations made by the Secretary of State;

• “state scheme pension credit”, and related expressions, have the meaning
  given by section 13;

• “state scheme pension debit”, and related expressions, have the meaning
  given by section 14;

• 10“tax year” has the meaning given by section 122(1) of the Contributions
  and Benefits Act;

• “transitional rate” means the rate mentioned in section 5;

• “up-rating increase”, in relation to a state pension under this Part,
  means—

  (a)

  15an increase in the rate of the state pension because of an increase
  in the amount specified in regulations under section 3(1), or

  (b)

  an increase in the rate of the state pension because of
  section 9(3), 12(3) or 17(6) or Schedule 2, 4 or 9;

• “working life” has the meaning given by section 122(1) of the
  20Contributions and Benefits Act.

(2) For the purposes of any other provision of this Part two people are to be treated
as if they are not married to each other in relation to times when either of them
is married to a third person.

Consequential and other amendments

23 25Amendments

In Schedule 12—

• Part 1 contains amendments to do with state pensions under this Part;

• Part 2 contains key amendments to do with the old state pension system;

• Part 3 contains amendments to do with state pension credit;

• 30Part 4 contains other amendments to do with this Part.

24 Abolition of contracting-out for salary related schemes etc

(1) Schedule 13 contains amendments to abolish contracting-out for salary related
schemes.

(2) An employer may amend an occupational pension scheme in relation to some
35or all of its members to take account of increases in the employer’s national
insurance contributions in respect of those members because of the repeal of
section 41 of the Pension Schemes Act 1993 (by Schedule 13 to this Act).

(3) The power may not be used to amend—

(a) a public service pension scheme, or

(b) 40a scheme of a description specified in regulations under this paragraph.

(4) Schedule 14 contains more detail about the power.

(5) In this section and Schedule 14—

Pensions BillPage 12

• “employer”, in relation to a scheme, means the employer of persons in the
  description of employment to which the scheme relates;

• “member” has the meaning given by section 124(1) of the Pensions Act
  1995;

• 5“national insurance contributions”, in relation to an employer, means
  secondary Class 1 national insurance contributions payable by the
  employer;

• “occupational pension scheme” has the meaning given by section 1 of the
  Pension Schemes Act 1993;

• 10“public service pension scheme” has the meaning given by that section.

(6) Subsections (2) to (5) and Schedule 14 are repealed at the end of the period of 5
years beginning with 6 April 2016.

(7) The Secretary of State may by order amend subsection (6) to extend the period
for the time being mentioned there.

15Part 2 Pensionable age

25 Increase in pensionable age to 67

(1) Paragraph 1 of Schedule 4 to the Pensions Act 1995 is amended as follows.

(2) In sub-paragraph (6) for “6th April 1968” substitute “6th April 1960”.

(3) 20For sub-paragraph (7) and table 3 substitute—

“(7) A person born on any day in a period mentioned in column 1 of table  3
attains pensionable age when the person attains the age shown against that
period in column 2.

(7A) 5For the purposes of table 3—

(a) a person born on 31st July 1960 is to be taken to attain the age of 66
years and 4 months at the commencement of 30th November 2026;

(b) a person born on 31st December 1960 is to be taken to attain the age
of 66 years and 9 months at the commencement of 30th September
102027;

(c) a person born on 31st January 1961 is to be taken to attain the age
of 66 years and 10 months at the commencement of 30th November
2027.”

(4) In sub-paragraph (8) for “5th April 1969” substitute “5th March 1961”.

26 15Periodic review of rules about pensionable age

(1) The Secretary of State must from time to time—

(a) review whether the rules about pensionable age are appropriate, having regard
to life expectancy and other factors that the Secretary of State considers
relevant, and

(b) 20prepare and publish a report on the outcome of the review.

(2) The first report must be published before 7 May 2017.

(3) Each subsequent report must be published before the end of the period of
6 years beginning with the day on which the previous report was published.

(4) For the purposes of each review, the Secretary of State must require the
25Government Actuary or Deputy Government Actuary to prepare a report for
the Secretary of State on—

(a) whether the rules about pensionable age mean that, on average, a
person who reaches pensionable age within a specified period can be
expected to spend a specified proportion of his or her adult life in
30retirement, and

(b) if not, ways in which the rules might be changed with a view to
achieving that result.

(5) The Secretary of State must, for the purposes of a review, appoint a person or
persons to prepare a report for the Secretary of State on other specified factors
35relevant to the review.

(6) The Secretary of State must lay before Parliament any report prepared under
this section.

(7) For the purposes of subsection (4)—

(a) a person’s adult life is the part of the person’s life after he or she reaches
40the specified age;

(b) the proportion of a person’s adult life spent in retirement is the
proportion of his or her adult life spent after reaching pensionable age.

(8) In this section—

• “pensionable age” has the meaning given by the rules in paragraph 1 of
  Schedule 4 to the Pensions Act 1995 (and “the rules about pensionable
  age” means those rules);

• 5“specified” means specified by the Secretary of State.

Part 3 Bereavement support payment

27 Bereavement support payment

(1) A person is entitled to a benefit called bereavement support payment if—

(a) 10the person’s spouse or civil partner dies,

(b) the person is under pensionable age when the spouse or civil partner dies, and

(c) the contribution condition is met (see section 28).

(2) Regulations are to specify—

(a) the rate of the benefit, and

(b) 15the period for which it is payable.

(3) The regulations may specify different rates for different periods.

(4) In the case of a person who is pregnant or entitled to child benefit in specified
circumstances, the regulations may—

(a) specify a higher rate;

(b) 20provide for the allowance to be payable for a longer period.

(5) A person is not entitled to bereavement support payment for periods after the
person has reached pensionable age.

(6) A person is not entitled to bereavement support payment if the death occurred
before this section came fully into force.

(7) 25In this section “pensionable age” has the meaning given by the rules in
paragraph 1 of Schedule 4 to the Pensions Act 1995.

28 Bereavement support payment: contribution condition and amendments

(1) For the purposes of section 27(1)(c) the contribution condition is that, for at
least one tax year during the deceased’s working life—

(a) 30he or she actually paid Class 1 or Class 2 national insurance
contributions, and

(b) those contributions give rise to an earnings factor (or total earnings
factors) equal to or greater than 25 times the lower earnings limit for the
tax year.

(2) 35For earnings factors, see sections 22 and 23 of the Social Security Contributions
and Benefits Act 1992.

(3) For the purposes of section 27(1)(c) the contribution condition is to be treated
as met if the deceased was an employed earner and died as a result of—

(a) a personal injury of the kind mentioned in section 94(1) of the Social
40Security Contributions and Benefits Act 1992, or

(b)

a disease or personal injury of the kind mentioned in section 108(1) of
that Act.

(4) In this section the following expressions have the meaning given by
section 122(1) of the Social Security Contributions and Benefits Act 1992—

• 5“employed earner”,

• “lower earnings limit”,

• “tax year”, and

• “working life”.

(5) Schedule 15 contains amendments to do with bereavement support payment.

10Part 4 Private pensions

Transfer of pension benefits

29 Automatic transfer of pension benefits etc

Schedule 16—

(a) 15requires the Secretary of State to make regulations under which, in
certain circumstances, the cash equivalent of a person’s accrued rights
to benefits under a pension scheme must be transferred to another
scheme of which the person is an active member;

(b) permits the Secretary of State to make regulations requiring accounts
20relating to a person’s accrued rights to benefits under a pension scheme
to be merged in certain circumstances.

30 Power to prohibit offer of incentives to transfer pension rights

(1) The Secretary of State may by regulations make provision prohibiting a person
from offering an incentive to another person with the intention of inducing a
25member of a salary related occupational pension scheme to—

(a) exercise a right to require a pensions transfer, or

(b) agree to a pensions transfer.

(2) “Pensions transfer” means a transfer of sums or assets representing any of the
member’s pension rights to be used for one or more of the following—

(a) 30acquiring rights (whether to present or future benefit) for the member
under the rules of another occupational pension scheme or a personal
pension scheme;

(b) purchasing one or more annuities for the member;

(c) subscribing to other pension arrangements for the member.

(3) 35“Pension right” means, at any time—

(a) any right which at that time has accrued to or in respect of the member
to future benefits under the scheme rules, or

(b) any entitlement to the present payment of a pension or other benefit
which the member has at that time, under the scheme rules;

40and for this purpose “right” includes a pension credit right.

(4) Regulations under this section may in particular—

(a) provide for the prohibition to apply whether the incentive offered is to
be provided by the person making the offer or another person;

(b) create exceptions to the prohibition;

(c) provide for section 10 of the Pensions Act 1995 (civil penalties) to apply
5to a person who contravenes the regulations.

(5) Regulations made by virtue of subsection (4)(c) may in particular provide that
for the purposes of section 10 of the Pensions Act 1995 the offer of an incentive
is to be regarded as a separate act in relation to each member of a scheme to
whom the incentive relates.

(6) 10Nothing in any regulations made under this section affects the validity of a
pensions transfer (or of the exercise of a right to require a transfer or of an
agreement to a transfer).

(7) In this section—

• “incentive” means a financial or other advantage;

• 15“member” has the meaning given by section 124(1) of the Pensions Act
  1995;

• “occupational pension scheme” and “personal pension scheme” have the
  meanings given by section 1 of the Pension Schemes Act 1993;

• “pension credit right” has the meaning given by section 124(1) of the
  20Pensions Act 1995;

• “salary related occupational pension scheme” has the meaning given by
  section 93(1A) of the Pension Schemes Act 1993;

• “scheme rules” has the meaning given by section 67A(8) of the Pensions
  Act 1995.

(8) 25This section binds the Crown.

31 Expiry of power in section 30

If no regulations have been made under section 30 by the end of the period of
7 years beginning with the day on which it comes into force, that section is
repealed at the end of that period.

32 30Short service benefit for scheme member with money purchase benefits

(1) Section 71 of the Pension Schemes Act 1993 (basic principle as to short service
benefit) is amended as follows.

(2) In subsection (1), omit the “or” at the end of paragraph (a) and at the end of
paragraph (b) insert “or

(c) 35relevant contributions have been made to the scheme and, if the
person were entitled to benefit because of this paragraph, all of
it would necessarily be money purchase benefit,”.

(3) After subsection (1) insert—

“(1A) For the purposes of subsection (1)(b) or (c), it does not matter whether
40the transfer payment or relevant contributions were made before or
after the termination of the member’s pensionable service.”

(4) After subsection (9) insert—

“(10) In subsection (1) “relevant contributions” means contributions by, or on
behalf or in respect of, the member.

(11) Subsection (1)(c) does not apply in relation to a person’s membership
5of a scheme if any period of relevant service began before the day on
which section 32 of the Pensions Act 2013 came into force (whether or
not it also ended before that date).

“Relevant service” means service that counts towards the 2 years’
qualifying service for the purposes of subsection (1).

10“Relevant service” means service that counts towards the 2 years’
qualifying service for the purposes of subsection (1).”

(5) In section 101AA of the 1993 Act (early leavers: cash transfer sums and
contribution refunds), in subsection (4)(b), for “(a) and (b)” substitute “(a) to
(c)”.

15Automatic enrolment

33 Automatic re-enrolment: exceptions where automatic enrolment deferred

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

(2) In section 5 (automatic re-enrolment), after subsection (3) insert—

“(3A) Subsection (2) does not apply if the jobholder’s automatic enrolment
20date is deferred under section 4 from a date before the automatic re-
enrolment date to a date after the automatic re-enrolment date.”

(3) In section 30(7) (transitional period for defined benefits and hybrid schemes),
at the end insert—

“(c) section 5(2) does not apply in relation to an automatic re-
25enrolment date that falls before the day with effect from which
arrangements would by virtue of this section fall to be made in
respect of the jobholder.”

34 Automatic enrolment: powers to create general exceptions

(1) In section 10 of the Pensions Act 2008 (information to be given to workers)—

(a) 30in subsection (1)—

(i) for “must” substitute “may”;

(ii) in paragraphs (a) and (b), omit “all”;

(b) in subsection (2) for “must state” substitute “may in particular make
provision about”.

(2) 35In Chapter 8 of Part 1 of the Pensions Act 2008, before section 88 (and the
heading “Workers” above it) insert—

“Exceptions

87A Power to create exceptions from the employer duties etc

(1) The Secretary of State may by regulations provide for exceptions to the
40employer duties; and an exception may in particular—

(a) turn an employer duty into a power;

(b) be framed by reference to a description of worker, particular
circumstances or in some other way.

(2) Regulations which make provision under subsection (1)(a) may make
provision modifying this Part or regulations made under it in
5connection with that provision.

(3) The regulations may make provision in connection with the coming to
an end of the state of affairs that caused an exception to apply,
including provision—

(a) modifying this Part or regulations made under it in relation to a
10person;

(b) for the purpose of putting a person, wholly or partly, in the
position he or she would have been in if the exception had never
applied.

(4) In this section “employer duties” means any duty of an employer under
15any provision of sections 2 to 11 and 54 or of regulations made under
those sections.”

(3) In consequence of subsection (2), the following are repealed—

(a) section 292A of the Pensions Act 2004;

(b) section 5(4) of the Pensions Act 2008;

(c) 20section 18 of the Pensions Act 2011.

35 Qualifying schemes: administration charges

(1) Section 16 of the Pensions Act 2008 (qualifying schemes) is amended as
follows.

(2) In subsection (3) for paragraphs (a), (aa) and (ab) substitute—

“(a) 25administration charges due from J or other prescribed persons
while J is an active member exceed prescribed limits or are of a
prescribed class or description,

(aa) while J is an active member, the scheme contains provision
under which—

(i) 30administration charges exceeding prescribed limits will
or may become due from J when J is no longer an active
member, or

(ii) administration charges of a prescribed class or
description will or may become due from J when J is no
35longer an active member,”.

(3) After that subsection insert—

“(3A) Regulations under subsection (3)(a) and (aa) may make provision for
the manner of, and criteria for, determining whether administration
charges exceed prescribed limits or are of a prescribed class or
40description; and the regulations may provide for the determination to
be made in accordance with guidance issued from time to time by the
Secretary of State.”

(4) Omit subsection (5).

(5) In consequence of these amendments, section 10(2) of the Pensions Act 2011 is
45repealed.

36 Automatic enrolment: transitional period for hybrid schemes

(1) Section 30 of the Pensions Act 2008 (transitional period for defined benefits and
hybrid schemes) is amended as follows.

(2) In subsection (2)(b) and (c), for “a hybrid scheme” substitute “a defined benefits
5member of a hybrid scheme”.

(3) In subsection (3), in the substituted subsection (2)—

(a) after “becomes” insert “(a)”;

(b) for “or a hybrid scheme” substitute “, or

(b) a defined benefits member, with effect from the end of
10that period, of an automatic enrolment scheme which is
a hybrid scheme.”

(4) In subsection (5), in the substituted subsection (2)—

(a) in paragraph (a), for “a hybrid scheme” substitute “becomes a defined
benefits member, with effect from that date, of an automatic enrolment
15scheme which is a hybrid scheme”;

(b) in paragraph (b), after “personal pension scheme” insert “or becomes a
money purchase member, with effect from that date, of an automatic
enrolment scheme which is a hybrid scheme.”

(5) After subsection (9) insert—

“(10) 20For the purposes of this section—

(a) a person is a “money purchase member” of a hybrid scheme if
the person is an active member of the scheme in respect of
whom all the benefits that may be provided are money
purchase benefits, and

(b) 25a person is a “defined benefits member” of a hybrid scheme if
the person is an active member of the scheme other than a
money purchase member.”

(6) Subsection (7) applies if—

(a) an employer whose first enrolment date is before the date on which the
30amendments made by this section come into force (“the
commencement date”) has given a jobholder notice under section 30(3)
of the 2008 Act,

(b) the conditions in section 30(2) of that Act have continued to be satisfied
during the period beginning with the employer’s first enrolment date
35and ending with the day before the commencement date, and

(c) had the amendments made by this section come into force on
19 December 2012, the condition in section 30(2)(c) of that Act would
not have been satisfied at a time during that period.

(7) Section 30(5) to (7) of the 2008 Act (as amended by this section) applies in
40relation to the jobholder with the following modifications—

(a) references in section 30(5) and (6) of that Act to the closure date are to
be read as references to the commencement date, and

(b) references in section 30(5) and (6) of that Act to the automatic
enrolment date are to be read as references to—

(i) 4519 December 2012, or

(ii) if later, the employer’s first enrolment date;

and section 30(3) and (4) of that Act does not apply.