14183.1-7

House of Commons

Session 2013 - 14
Internet Publications
Other Bills before Parliament

Lords Amendments to the Pensions Bill

LORDS amendments to the
Pensions Bill
[The page and line references are to HL Bill 55, the bill as first printed for the Lords.]
Clause 2
1
Page 2, line 5, at end insert—

“( )
Regulations may provide for circumstances in which a person may opt to

have a year treated as a qualifying year if by aggregating income from two

or more jobs, that person’s earnings are equal to or greater than the lower

earnings level for that year.”
Clause 24
2
Page 11, line 42, leave out subsection (4) and insert—

“(4)
The power may not be used—

(a)
to make amendments that apply to a member who is a protected

person in relation to a scheme, or

(b)
to amend a public service pension scheme or a scheme of a

description specified in regulations under this paragraph.

(4A)
Regulations must define what is meant by a protected person in relation to

a scheme for the purposes of subsection (4)(a).”
After Clause 24
3
Insert the following new Clause—

“Part 1A

Option to boost old retirement pensions

Option to boost old retirement pensions

In Schedule (Option to boost old retirement pensions)—

Bill 183 55/3

2

Part 1 contains amendments to allow certain people to pay additional

contributions to boost their retirement pensions;

Part 2 contains amendments to allow corresponding legislation to be

put in place for Northern Ireland.”
Clause 37
4
Page 19, line 8, at end insert—

“( )
But the regulations may not provide for an exception for employers

of a particular size.”
After Clause 37
5
Insert the following new Clause—

“Alternative quality requirements for UK defined benefits schemes

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

(2)
After section 23 insert—

“23A
Alternative quality requirements for UK defined benefits schemes

(1)
The Secretary of State may by regulations provide that a defined

benefits scheme that has its main administration in the United

Kingdom satisfies the quality requirement in relation to a jobholder

if any one or more of the following is satisfied—

(a)
the scheme is of a prescribed description and satisfies the

quality requirement under section 20 in relation to that

jobholder;

(b)
the cost of providing the benefits accruing for or in respect

of the relevant members over a relevant period would

require contributions to be made of a total amount equal to

at least a prescribed percentage of the members’ total

relevant earnings over that period;

(c)
in the case of each of at least 90% of the relevant members,

the cost of providing the benefits accruing for or in respect

of the member over a relevant period would require

contributions to be made of a total amount equal to at least

a prescribed percentage of the member’s total relevant

earnings over that period.

(2)
For this purpose—

“contributions” means contributions to the scheme by, or on

behalf or in respect of, a relevant member;

“relevant earnings” means earnings of a prescribed

description;

“relevant members” means members of the scheme of a

prescribed description;

“relevant period” means a period specified in or determined in

accordance with the regulations.

(3)
A percentage prescribed under subsection (1)(b) or (c) must be at

least 8%.

(4)
Regulations under subsection (1)(b) or (c) may make provision—

3

(a)
about how to calculate whether the requirement is satisfied,

including provision requiring the calculation to be made in

accordance with prescribed methods or assumptions;

(b)
requiring benefits of a prescribed description to be

disregarded in determining whether the requirement is

satisfied;

(c)
that a scheme only satisfies the requirement if the scheme

actuary certifies that it does; and for this purpose “scheme

actuary” has the prescribed meaning.

(5)
Section 13(3) (meaning of “earnings”) applies for the purposes of

this section as it applies for the purposes of that section.

(6)
The Secretary of State must from time to time review any

regulations in force under subsection (1).

(7)
A review must be carried out—

(a)
during 2017, and

(b)
after that, no more than three years after the completion of

the previous review.”

(3)
In section 24 (quality requirement: UK hybrid schemes), in

subsection (1)(b), for “23” substitute “23A”.

(4)
In section 28 (certification that quality requirement or alternative

requirement is satisfied)—

(a)
after subsection (3A) insert—

“(3B)
This section also applies to a defined benefits scheme that

has its main administration in the United Kingdom and is of

a description prescribed under section 23A(1)(a).”;

(b)
in subsection (4), after paragraph (d) insert—

“(e)
for a scheme within subsection (3B), means the

quality requirement under section 23A(1)(a).”

(5)
In section 29 (transitional periods for money purchase and personal

pension schemes), in subsections (1) and (3) omit “for money purchase and

personal pension schemes”.

(6)
Section 30 (transitional period for defined benefits and hybrid schemes) is

amended as follows.

(7)
In subsection (3), at the end of the substituted subsection (2) insert—


“A reference in this subsection to a scheme does not include a scheme to

which section 30(11)(a) or (b) applies.”

(8)
In subsection (5), in the substituted subsection (2)—

(a)
in paragraph (a), after “defined benefits scheme” insert “other than

a scheme to which section 30(11)(a) applies”;

(b)
in paragraph (aa) (inserted by section 38 of this Act), after “a hybrid

scheme” insert “other than a scheme to which section 30(11)(b)

applies”;

(c)
after paragraph (c) (inserted by section 38 of this Act), insert—

“(d)
becomes an active member, with effect from the

automatic enrolment date, of an automatic

enrolment scheme which is a defined benefits

scheme to which section 30(11)(a) applies, or

4

(e)
becomes a defined benefits member , with effect

from the automatic enrolment date, of an automatic

enrolment scheme which is a hybrid scheme to

which section 30(11)(b) applies.”

(9)
After subsection (10) (inserted by section 38 of this Act) insert—

“(11)
In subsection (2) references to a scheme do not include—

(a)
a defined benefits scheme that satisfies the quality

requirement in relation to the jobholder by reason only of

section 23A(1)(a), or

(b)
a hybrid scheme if—

(i)
the appropriate paragraph of section 24(1) for any

provisions of the scheme is paragraph (b) (those

provisions are referred to below as “the defined

benefits section”),

(ii)
the defined benefits section satisfies

section 23A(1)(a) as applied by section 24(1)(b), and

(iii)
the defined benefits section does not satisfy any of

the other requirements mentioned in

section 24(1)(b).””
Clause 38
6
Page 19, line 38, leave out subsection (4) and insert—

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

(a)
in paragraph (a), for “or a hybrid scheme, or” substitute—

“(aa)
becomes a defined benefits member, with effect

from the closure date, of an automatic enrolment

scheme which is a hybrid scheme,”;

(b)
after paragraph (b) insert—

“(c)
becomes a money purchase member, with effect

from the automatic enrolment date, of an automatic

enrolment scheme which is a hybrid scheme.””
Clause 41
7
Page 21, line 35, leave out “work-based”
8
Page 21, line 37, leave out “work-based”
After Clause 41
9
Insert the following new Clause—

“Disclosure of information about transaction costs to members etc

(1)
In section 113 of the Pension Schemes Act 1993 (disclosure of information

about schemes to members etc), after subsection (4) insert—

“(5)
The Secretary of State must make regulations under subsection (1)

requiring information about some or all of the transaction costs of a

relevant scheme to be given to some or all of the persons mentioned

in subsection (2).

5

(6)
The Secretary of State must by regulations make provision

requiring the publication of information about—

(a)
some or all of the transaction costs of a relevant scheme, and

(b)
some or all of the administration charges imposed on

members of a relevant scheme.

(7)
Regulations under subsection (6) may require other relevant

information to be published along with information about

transaction costs or administration charges in relation to a scheme.

(8)
“Other relevant information” means other information which

would or may assist in making comparisons between those costs or

charges and costs or charges in relation to other schemes.

(9)
Before making regulations by virtue of subsection (5) or (6), the

Secretary of State must consult—

(a)
the Financial Conduct Authority, and

(b)
the Treasury;


(in addition to any other persons consulted in accordance with

section 185(1)).

(10)
In this section—

“administration charge” has the meaning given by paragraph

1(5) of Schedule 17 to the Pensions Act 2014;

“relevant scheme” means a money purchase scheme that is an

occupational pension scheme.”

(2)
In the Financial Services and Markets Act 2000, after section 137F insert—

“137FA
  FCA general rules: disclosure of information about pension

scheme transaction costs etc

(1)
The FCA must make general rules requiring information about

some or all of the transaction costs of a relevant scheme to be given

to some or all of the persons mentioned in subsection (2).

(2)
Those persons are—

(a)
members of the scheme,

(b)
spouses or civil partners of members, and

(c)
persons within the application of the scheme and qualifying

or prospectively qualifying for its benefits.

(3)
The FCA must make general rules requiring the publication of

information about—

(a)
some or all of the transaction costs of a relevant scheme, and

(b)
some or all of the administration charges imposed on

members of a relevant scheme.

(4)
Rules made by virtue of subsection (3) may require other relevant

information to be published along with information about

transaction costs or administration charges in relation to a scheme.

(5)
“Other relevant information” means other information which

would or may assist in making comparisons between those costs or

charges and costs or charges in relation to other schemes.

(6)
Before the FCA publishes a draft of any rules to be made by virtue

of this section, it must consult—

6

(a)
the Secretary of State, and

(b)
the Treasury.

(7)
In determining what provision to include in the rules, the FCA must

have regard to any regulations about the disclosure or publication

of transaction costs or administration charges that are for the time

being in force under section 113 of the Pension Schemes Act 1993.

(8)
In this section—

“administration charge” has the meaning given by

paragraph 1(5) of Schedule 17 to the Pensions Act 2014;

“money purchase scheme” has the meaning given by

section 181(1) of the Pension Schemes Act 1993;

“personal pension scheme” has the meaning given by

section 1 of the Pension Schemes Act 1993;

“relevant scheme” means a money purchase scheme that is—

(a)
a personal pension scheme where direct payment

arrangements (within the meaning of section 111A

of the Pension Schemes Act 1993) exist in respect of

one or more members of the scheme who are

workers, or

(b)
a personal pension scheme which is or has been

registered under section 2 of the Welfare Reform and

Pensions Act 1999 (stakeholder pension schemes);

“worker” means a person—

(a)
who is a worker for the purposes of Part 1 of the

Pensions Act 2008, or

(b)
to whom a provision of Part 1 of that Act applies as

if the person were a worker because of a provision of

Chapter 8 of that Part;

but for the purposes of paragraph (b), ignore section 92 of

that Act.””
After Clause 47
10
Insert the following new Clause—

“Pension Protection Fund: compensation cap to apply separately to certain

benefits

(1)
Paragraph 26 of Schedule 7 to the Pensions Act 2004 (Pension Protection

Fund: compensation cap) is amended as follows.

(2)
In sub-paragraph (1)(b), for “sub-paragraph (2)(a) or (b)” substitute “sub-

paragraph (2)(a), (b) or (c)”.

(3)
In sub-paragraph (2)(a)(ii), for “paragraph (b)(i) does not apply” substitute

“neither of paragraphs (b) and (c) applies”.

(4)
In sub-paragraph (2)(b)—

(a)
before paragraph (i) insert—

“(zi)
benefit A is attributable to the person’s

pensionable service,”;

(b)
in paragraph (i), after “one or more other benefits” insert “that are

attributable to his pensionable service”.

7

(5)
In sub-paragraph (2), after paragraph (b) insert “, and

(c)
this paragraph applies if—

(i)
benefit A is attributable to a pension credit from a

transferor,

(ii)
at the same time as the person becomes entitled to

relevant compensation in respect of benefit A he

also becomes entitled to relevant compensation in

respect of one or more other benefits that are—

(iia)
under the scheme or a connected

occupational pension scheme, and

(iib)
attributable to a pension credit from the

same transferor,


(“benefit or benefits B”), and

(iii)
the aggregate of the annual values of benefit A

and benefit or benefits B exceeds the

compensation cap.”

(6)
In sub-paragraph (5), after “sub-paragraph (2)(b)” insert “or (c)”.

(7)
The amendments made by this section are to be treated as always having

had effect.

(8)
Regulations under paragraph 26(9) of Schedule 7 to the Pensions Act 2004

(modifications for cases where compensation becomes payable on different

occasions) made in consequence of this section may be made with

retrospective effect.”
11
Insert the following new Clause—

“Public service pension schemes: transitional arrangements

(1)
Section 18 of the Public Service Pensions Act 2013 (restriction of existing

pension schemes) is amended as follows.

(2)
After subsection (5) insert—

“(5A)
Scheme regulations may also provide for exceptions to subsection

(1) in the case of—

(a)
persons who were members of a public body pension

scheme specified in the regulations, or who were eligible to

be members of such a scheme, immediately before 1 April

2012, and

(b)
such other persons as the regulations may specify, being

persons who before that date had ceased to be members of

a scheme referred to in paragraph (a) or to be eligible for

membership of such a scheme.”

(3)
In each of subsections (6) and (8), after “(5)” insert “or (5A)”.”
Clause 49
12
Page 24, line 32, leave out paragraph (a) and insert—

“(a)
regulations under section 3, 17, 18(3) or (5), 19, 20, 29, 31 or 33,”
13
Page 24, line 33, leave out “or 20”
14
Page 24, line 38, after “paragraph” insert “1 or”