Session 2013 - 14
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15

 

House of Commons

 
 

Thursday 11 July 2013

 

Public Bill Committee Proceedings

 

Pensions Bill


 

[ELEVENTH AND TWELFTH SITTINGS]


 

Gregg McClymont

 

Negatived on division  18

 

Clause  35,  page  18,  line  42,  at end insert—

 

‘(3A)    

In this section “administration charges” shall be defined in regulations by the

 

Secretary of State after public consultation and taking advice from the Financial

 

Conduct Authority and the Pensions Regulator to ensure that the definition takes

 

into consideration the Financial Conduct Authority’s definition of “ongoing

 

charges”, and shall include annual management charges, legal fees,

 

administrative fees, audit fees, marketing fees, directors’ fees, regulatory fees and

 

other expenses.

 

(3B)    

Such charges, together with any transaction charges incurred by the funds in

 

which qualifying schemes are invested, shall be declared to the Pensions

 

Regulator, which shall maintain a public register thereof. The Secretary of State

 

shall define “transaction costs” in regulations after public consultation and taking

 

advice from the Financial Conduct Authority and the Pensions Regulator. The

 

Secretary of State shall by regulation set the standards by which pension schemes

 

must declare charges and transaction costs for the purposes of the register and for

 

declaration to their members and their members’ employers. The standard shall

 

be reviewed every three years. In addition, the Secretary of State shall have power

 

to make regulations ordering other disclosure arrangements on charges.

 

(3C)    

Regulations under this section shall be laid down and approved by resolution of

 

both Houses of Parliament.’.

 

Greg McClymont

 

Negatived on division  19

 

Clause  35,  page  18,  line  42,  at end insert—

 

‘(3A)    

For the purposes of section 16, the definition of qualifying schemes shall include

 

schemes in relation to which at the date of Royal Assent there are “deferred

 

members” meaning members that have accrued rights in the scheme, but whose

 

contributions are no longer being paid into by them or on their behalf, and who

 

have not yet begun to draw pension benefits from the scheme.’.

 

Clause Agreed to.

 



 
 

Public Bill Committee Proceedings: 11 July 2013            

16

 

Pensions Bill, continued

 
 

Steve Webb

 

Agreed to  4

 

Clause  36,  page  19,  line  21,  at end insert—

 

‘(i)    

’.

 

Steve Webb

 

Agreed to  5

 

Clause  36,  page  19,  line  22,  leave out from ‘scheme’ to ‘are’ in line 23 and insert

 

‘and

 

(ii)    

all the benefits accruing in respect of his or her

 

membership’.

 

Clause, as amended, Agreed to.

 

Clauses 37 to 40 Agreed to.

 

Schedule 17 Agreed to.

 

Clauses 41 to 44 Agreed to.

 


 

Gregg McClymont

 

Negatived on division  15

 

Clause  45,  page  23,  line  36,  after ‘section 3’, insert ‘17(5)’.

 

Clause Agreed to.

 

Clauses 46 to 48 Agreed to.

 


 

New Clauses

 

Pension Protection Fund: increased compensation cap for people with long service

 

Steve Webb

 

Added  NC9

 

To move the following Clause:—

 

‘See Schedule [Pension Protection Fund: increased compensation cap for people

 

with long service] for amendments increasing the Pension Protection Fund

 

compensation cap for people with long pensionable service.’.

 



 
 

Public Bill Committee Proceedings: 11 July 2013            

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Pensions Bill, continued

 
 

Review in relation to women born on or after 6 April 1951

 

Gregg McClymont

 

Negatived on division  NC1

 

To move the following Clause:—

 

‘The Government shall conduct a review to determine whether all women born

 

on or after 6 April 1951 should be included within the scope of the new state

 

pension arrangements established by this Act. Such a review shall be conducted

 

within six months of Royal Assent of this Act and a report thereof laid before

 

Parliament.’.

 


 

Review of phasing the transition of a 35-year full pension requirement via an interim

 

requirement of 30 years

 

Gregg McClymont

 

Negatived on division  NC2

 

To move the following Clause:—

 

‘The Government shall conduct a review to determine the costs and benefits of

 

phasing the transition to a 35-year full pension requirement via an interim

 

requirement of 30 years. Such a review shall be conducted within six months of

 

Royal Assent of this Act and a report thereof laid before Parliament.’.

 


 

Review on gradual transition from certain benefit arrangements based on age.

 

Gregg McClymont

 

Negatived on division  NC3

 

To move the following Clause:—

 

‘(1)    

In relation to women without a national insurance contribution record who relied

 

on a husband’s national insurance contributions and would under existing

 

arrangements have accrued a benefit based on such spousal contributions, the

 

Government shall conduct a review to determine the costs and benefits of

 

permitting women within 15 years of state pension age as at 6 April 2016 to retain

 

their accrued rights. Such a review shall be conducted within six months of Royal

 

Assent of this Act and a report thereof laid before Parliament.

 

(2)    

The review shall also consider whether similar provision should be made in

 

relation to sections 9 and 10 of this Act.’.

 



 
 

Public Bill Committee Proceedings: 11 July 2013            

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Pensions Bill, continued

 
 

National Employment Savings Trust transfers

 

Gregg McClymont

 

Negatived on division  NC4

 

To move the following Clause:—

 

‘(1)    

In relation to NEST, the Government must by 31 December 2013 notify the

 

European Commission that it wishes to lift the ban on transfers and the

 

contribution cap.

 

(2)    

The Secretary of State must make a statement to Parliament within 14 days of the

 

Government notifying the European Commission in accordance with subsection

 

(1).’.

 


 

Fiduciary duty of independent trustees

 

Gregg McClymont

 

Not moved  NC5

 

To move the following Clause:—

 

‘Any scheme which is a qualifying scheme and which is not already overseen by

 

independent trustees shall be required from a date to be appointed by the

 

Secretary of State to appoint a board of independent trustees, the powers and

 

duties of which shall be set out in regulations to be laid before and approved by

 

resolutions of both Houses of Parliament. The board of independent trustees shall

 

have fiduciary duty towards members of the scheme overseen by them, which

 

duty shall take precedence over any duty to the shareholders in, or other owners

 

of, the operators of the scheme. In relation to any matters of member interest,

 

decisions of the board of independent trustees shall be binding on the board of

 

directors or other analogous management board of any undertaking operating a

 

pension scheme.’.

 


 

Promotion of good value in scheme size

 

Gregg McClymont

 

Not moved  NC6

 

To move the following Clause:—

 

‘The fiduciary duty of pension scheme trustees in qualifying schemes shall

 

include a duty to consider whether the scheme has sufficient scale to deliver good

 

value for members. Where trustees take the view that the scheme has insufficient

 

scale, they must consider whether merger with another scheme would be in the

 

members’ interests. The Pensions Regulator shall have power to direct merger of

 

pensions schemes where it would be in the interests of the members of each of the

 

relevant schemes for merger to take place. The Pensions Regulator shall exercise

 

this power in accordance with a methodology on which it has publicly consulted

 

and which has been agreed with the Secretary of State. It shall keep this


 
 

Public Bill Committee Proceedings: 11 July 2013            

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Pensions Bill, continued

 
 

methodology under regular review and revise it when necessary, subject to

 

further consultation and agreement from the Secretary of State.’.

 


 

Decumulation

 

Gregg McClymont

 

Not moved  NC7

 

To move the following Clause:—

 

‘Any qualifying money purchase scheme must direct its savers to an independent

 

annuity brokerage service or offer such brokerage services itself. Pension

 

schemes shall ensure that any brokerage service selected or provided meets best

 

practice in terms of providing members with an assisted path through the annuity

 

process, ensuring access to most annuity providers, and minimising costs. The

 

standards meeting best practice on decumulation shall be defined by the Pensions

 

Regulator after public consultation, reviewed every three years, and updated, if

 

required, subsequent to such reviews.’.

 


 

Equal provision of survivor benefits for same-sex couples

 

Caroline Lucas

 

Not selected  NC8

 

To move the following Clause:—

 

‘(1)    

Paragraph 18 to Schedule 9 of the Equality Act 2010 (work: exceptions) is

 

amended as follows.

 

(2)    

Omit sub-paragraph (1).’.

 


 

Review of section 29 provisions and regulations

 

Gregg McClymont

 

Negatived on division  NC10

 

To move the following Clause:—

 

‘The Secretary of State must review the effect of section 29 and any regulations

 

made under it within three years of Royal Assent.’.

 



 
 

Public Bill Committee Proceedings: 11 July 2013            

20

 

Pensions Bill, continued

 
 

New Schedule

 

Steve Webb

 

Added  NS1

 

To move the following Schedule:—

 

‘Pension Protection Fund: increased compensation cap for people with long

 

service

 

Part 1

 

The new compensation cap

 

1          

Schedule 7 to the Pensions Act 2004 (pension compensation provisions) is

 

amended as follows.

 

2          

In paragraph 26 (the compensation cap), for the definition of “the

 

compensation cap” in sub-paragraph (7) substitute—

 

““the compensation cap” has the meaning given by paragraph 26A;”.

 

3          

After paragraph 26 insert—

 

“26A (1)  

This paragraph gives the meaning of “the compensation cap” for the

 

purposes of paragraph 26.

 

      (2)  

The amount of the compensation cap for a person depends on the

 

person’s age and length of pensionable service at the time when the

 

person first becomes entitled to the relevant compensation.

 

      (3)  

“The compensation cap” for a person who has 20 or fewer years of

 

pensionable service at that time is the standard amount.

 

      (4)  

“The compensation cap” for a person who has more than 20 years

 

of pensionable service at that time is—

 

(a)    

the standard amount, plus

 

(b)    

for each additional year, an amount found by multiplying

 

the standard amount by 3%.

 

      (5)  

A person has an “additional year” for each whole year of

 

pensionable service that exceeds 20 years of pensionable service.

 

      (6)  

If the total amount calculated under sub-paragraph (4)(b) would

 

exceed the standard amount, it is to be treated as being equal to the

 

standard amount.

 

      (7)  

In sub-paragraphs (3) and (4) “the standard amount”—

 

(a)    

for a person who is 65 years old at the relevant time, means

 

 the amount specified by the Secretary of State by order,

 

and

 

(b)    

for a person of any other age at the relevant time, means the

 

amount specified under paragraph (a) as adjusted in

 

accordance with actuarial adjustment factors published by

 

the Board.

 

      (8)  

In any case where the Board is satisfied that, under the admissible

 

rules, a person is entitled to benefits that are not attributable to a

 

particular period of pensionable service, the Board may for the

 

purposes of this paragraph treat the person as having a length of


 
 

Public Bill Committee Proceedings: 11 July 2013            

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Pensions Bill, continued

 
 

pensionable service to reflect those benefits (which is in addition to

 

any other pensionable service that the person has).

 

      (9)  

In any case where the Board is satisfied that it is not possible to

 

identify the length of some or all of a person’s pensionable service

 

under the admissible rules, the Board may, having regard to those

 

rules, determine its length for the purposes of this paragraph.

 

    (10)  

Other expressions used in this paragraph have the same meaning as

 

in paragraph 26.”

 

Part 2

 

Consequential amendments to do with the new compensation cap

 

4          

The Pensions Act 2004 is amended as follows.

 

5          

In section 316(2)(s), for “paragraph 26(7)” substitute “paragraph 26A(6)”.

 

6    (1)  

Schedule 7 is amended as follows.

 

      (2)  

In paragraph 26(9), after “this paragraph” insert “and paragraph 26A”.

 

      (3)  

In paragraph 27(2), for “sub-paragraph (7) of paragraph 26” substitute “sub-

 

paragraph (6) of paragraph 26A”.’.

 

Bill, as amended, to be reported.

 


 
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Revised 12 July 2013