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Pensions BillPage 90

automatic transfer scheme to be merged into a current pension account of
the member.

(2) The regulations may not require a dormant pension account to be merged
unless the accrued rights to benefits to which the account relates would be
5transferable benefits of the member if—

(a) all other accrued rights to benefits of the member, and any relevant
contributions, were ignored, and

(b) any other prescribed matter were ignored.

(3) The regulations may in particular—

(a) 10make provision for determining into which current pension account
(if the member has more than one) a dormant pension account is to
be merged;

(b) provide that the rules of the scheme that are to apply to a merged
pension account are those that apply to the current pension account
15into which a dormant pension account is being merged;

(c) require the trustees or managers of the scheme to make a transfer of
assets representing the accrued rights to benefits to which a dormant
pension account relates;

(d) include provision corresponding or similar to any provision which
20may be made by regulations under Part 1 of this Schedule.

(4) In this paragraph “pension account”, in relation to a member of a scheme,
means an account relating to the member’s accrued rights to benefits in
respect of a particular period of employment; and a pension account—

(a) is “dormant” if relevant contributions in relation to the period of
25employment to which the account relates have ceased; and

(b) is “current” if such contributions have not ceased.

(5) In this paragraph—

(a) references to “accrued rights to benefits”, in relation to a member of
a scheme, are to accrued rights to benefits under the applicable rules
30(within the meaning given by paragraph 1(6));

(b) “employment” has the prescribed meaning;

(c) “relevant contributions”, in relation to a member of a scheme, means
contributions to the scheme by, or on behalf or in respect of, the
member.

35Part 3 Interpretation etc

Interpretation etc

17 (1) In this Schedule—

(2) 5The Secretary of State may by regulations make provision about when
contributions to a pension scheme are to be regarded as having ceased for
the purposes of paragraph 1(4)(c) or 16(4).

Crown application

18 (1) This Schedule applies to a pension scheme managed by or on behalf of the
10Crown as it applies to other pension schemes.

(2) Accordingly, references in this Schedule to a person in the person’s capacity
as a trustee or manager of a pension scheme include the Crown, or a person
acting on behalf of the Crown, in that capacity.

(3) This Schedule applies to persons employed by or under the Crown as it
15applies to persons employed by a private person.

Overriding provision

19 (1) Regulations under this Schedule may provide that specified provisions
override any provision of an automatic transfer scheme or transferable
benefits scheme to the extent that it conflicts with them.

(2) 20A “specified provision” is a provision of regulations under this Schedule
specified in the regulations for the purposes of this paragraph.

Other provision relating to regulations under this Schedule

20 (1) Regulations under this Schedule may amend or otherwise modify any
enactment (whenever passed or made).

(2) 25Regulations made because of sub-paragraph (1) may in particular amend
section 175(1) of the Pension Schemes Act 1993 (levies towards certain
expenditure) so as to include expenditure of the Secretary of State under the
regulations.

(3) In this paragraph “enactment” includes an enactment contained in
30subordinate legislation within the meaning of the Interpretation Act 1978.

21 Before making any regulations under this Schedule, the Secretary of State
must consult such persons as the Secretary of State considers appropriate.

Amendments

22 (1) The Pension Schemes Act 1993 is amended as follows.

(2) 35In section 94(2A) (right to cash equivalent)—

(a) in paragraph (a), after sub-paragraph (vii) insert—

(viii) regulations made under Schedule 16 to the
Pensions Act 2013;;

(b) in paragraph (b), after sub-paragraph (v) insert—

(vi) 40regulations made under paragraph 19 of
Schedule 16 to the Pensions Act 2013.

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(3) In section 101AI(8) (rights to cash transfer sum and contribution refund:
further provisions)—

(a) in paragraph (a), after sub-paragraph (vii) insert—

(viii) regulations made under Schedule 16 to the
5Pensions Act 2013;;

(b) in paragraph (b), after sub-paragraph (v) insert—

(vi) regulations made under paragraph 19 of
Schedule 16 to the Pensions Act 2013.

Section 40

SCHEDULE 17 10Prohibition orders: consequential amendments

Pensions Act 1995 (c. 26)1995 (c. 26)

1 The Pensions Act 1995 is amended as follows.

2 In section 6 (removal or suspension of trustees: consequences)—

(a) in subsections (1) and (3), after “section 3” insert “or 3A”;

(b) 15in subsection (4), after “section 3” insert “, 3A”.

3 In section 7 (appointment of trustees), in subsection (1), after “section 3,”
insert “by section 3A”.

4 In section 9 (removal and appointment of trustees: property), after “a
trustee” insert “or a trustee is removed under section 3A”.

20Pensions Act 2004 (c. 35)2004 (c. 35)

5 The Pensions Act 2004 is amended as follows.

6 In section 10 (functions exercisable by the Determinations Panel), in
subsection (6), after paragraph (e) insert—

(ea) section 3A(3) of that Act (application for waiver of
25prohibition);.

7 In section 66 (register of prohibited trustees), in subsection (1), for the words
from “of all” to the end substitute “(“the prohibition register”) of—

(a) all persons who are prohibited under section 3 of the
Pensions Act 1995, and

(b) 30all persons appearing to the Regulator to be prohibited under
section 3A of that Act.

8 In section 96 (Pensions Regulator’s regulatory functions: standard
procedure), in subsection (6), after paragraph (i) insert—

(ia) the power under section 3A(3) of that Act to give a notice
35waiving a prohibition;.

9 In section 97 (Pensions Regulator’s regulatory functions: special procedure),
in subsection (5), after paragraph (j) insert—

(ja) the power under section 3A(3) of that Act to give a notice
waiving a prohibition;.

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10 (1) Schedule 2 (Pensions Regulator’s reserved regulatory functions) is amended
as follows.

(2) After paragraph 5 insert—

5A The power under section 3A(3) to give a notice waiving a
5prohibition.

(3) In paragraph 9(a), after “orders)” insert “or by section 3A”.

Section 44

SCHEDULE 18 Pension Protection Fund: increased compensation cap for long service

Part 1 10The 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—

3 After paragraph 26 insert—

26A (1) This paragraph gives the meaning of “the compensation cap” for
the purposes of paragraph 26.

(2) 20The 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) 25“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) 30A 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) 35In 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

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(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) 5In 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
pensionable service to reflect those benefits (which is in addition
10to 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) 15Expressions used in this paragraph have the same meaning as in
paragraph 26.

Part 2 Consequential amendments

4 The Pensions Act 2004 is amended as follows.

5 20In section 316(2)(s), for “paragraph 26(7)” substitute “paragraph 26A(7)”.

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 (7) of paragraph 26A”.

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