Session 2014 - 15
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213

 

House of Commons

 
 

Tuesday 4 November 2014

 

Public Bill Committee

 

New Amendments handed in are marked thus Parliamentary Star

 

Parliamentary Star - whiteAmendments which will comply with the required notice period at their next appearance

 

Pension Schemes Bill


 

Steve Webb

 

Clause  44,  page  17,  line  12,  after “3” insert “and section (Pensions guidance) and

 

Schedule (Pensions guidance)”

 

Member’s explanatory statement

 

This amendment provides for the commencement of NC12 and NS2 by regulations made by the

 

Secretary of State.

 

NEW CLAUSES

 

Steve Webb

 

NC1

 

To move the following Clause—

 

“Extension to Scotland of certain provisions about marriage of same sex couples

 

Sections 17(11), 24D(5), 37(7) and 38A of the Pension Schemes Act 1993

 

(regulations about relevant gender change cases) extend to Scotland.”

 

Member’s explanatory statement

 

This amendment extends certain provisions in the Pension Schemes Act 1993, that were inserted

 

by the Marriage (Same Sex Couples) Act 2013, to Scotland to allow regulations made under

 

section 38A of the Pension Schemes Act to extend to Scotland.

 



 
 

Public Bill Committee:                               

214

 

, continued

 
 

Steve Webb

 

Nc2

 

To move the following Clause—

 

“Judicial pensions: pension sharing on divorce etc

 

In paragraph 1(5) of Schedule 2A to the Judicial Pensions and Retirement Act

 

1993 (pension credits), for the words from “in respect of the office” to the end

 

substitute “in respect of the rights from which the pension credit is derived”.”

 

Member’s explanatory statement

 

This corrects paragraph 1(5) of Schedule 2A to the Judicial Pensions and Retirement Act 1993,

 

which is about funding of pensions shared on divorce etc. The amendment ensures that the Act

 

works for cases where pension sharing is activated after a person has left judicial office.

 


 

Steve Webb

 

NC3

 

To move the following Clause—

 

“Pension scheme for fee-paid judges

 

(1)    

In the Judicial Pensions and Retirement Act 1993, after Part 1 insert—

 

Fee-paid judges

 

18A    

Pension scheme for fee-paid judges

 

(1)    

The appropriate Minister may by regulations establish a scheme for the

 

payment of pensions and other benefits to or in respect of fee-paid judges.

 

(2)    

The scheme may make provision for payments to or in respect of a person

 

in relation to the person’s service before the scheme is established.

 

(3)    

No benefits are to be provided under a new public service pension

 

scheme in relation to service in relation to which benefits are to be

 

provided under a scheme under this section.

 

    

“New public service pension scheme” means a scheme under—

 

(a)    

section 1 of the Public Service Pensions Act 2013, or

 

(b)    

section 1 of the Public Service Pensions Act (Northern Ireland)

 

2014 (c. 2).

 

(4)    

Regulations under this section may, in particular, include provision

 

corresponding or similar to—

 

(a)    

any provision made by Part 1, section 20 or Schedule 2 or 2A;

 

(b)    

any provision that may be made by regulations under Part 1,

 

section 20 or Schedule 2 or 2A.

 

(5)    

In this section—

 

“judge” means a person who holds an office specified in the regulations;

 

“fee-paid judge” means a judge whose service is remunerated by the

 

payment of fees (as opposed to the payment of a salary).”


 
 

Public Bill Committee:                               

215

 

, continued

 
 

(2)    

Schedule (Amendments to do with section (Pension scheme for fee-paid judges))

 

contains related amendments.”

 

Member’s explanatory statement

 

This clause allows a pension scheme to be established for fee-paid judges, as required by case law.

 

It is aimed at old and transitional cases. Pensions for fee-paid judges will in future be governed by

 

a new scheme under the recent public service pensions legislation.

 


 

Steve Webb

 

NC4

 

To move the following Clause—

 

“Pension sharing and normal benefit age

 

(1)    

The Pension Schemes Act 1993 is amended as follows.

 

(2)    

In section 101B (interpretation), for the definition of “normal benefit age”

 

substitute—

 

““normal benefit age”, in relation to a pension credit benefit for a member

 

of a scheme, is the earliest age at which the member is entitled to receive

 

the benefit without adjustment for taking it early or late (disregarding any

 

special provision as to early payment on the grounds of ill-health or

 

otherwise);

 

“normal pension age”, in relation to a benefit for a member of a scheme,

 

means the earliest age at which the member is entitled to receive the

 

benefit without adjustment for taking it early or late (disregarding any

 

special provision as to early payment on the grounds of ill-health or

 

otherwise);”.

 

(3)    

In section 101C (basic principle as to pension credit benefit), for subsection (1)

 

substitute—

 

“(1)    

The normal benefit age in relation to a pension credit benefit for a

 

member of a scheme—

 

(a)    

must not be lower than 60, and

 

(b)    

must not be higher than the permitted maximum.

 

(1A)    

The “permitted maximum” is 65 or, if higher, the highest normal pension

 

age for any benefit that is payable under the scheme to or in respect of

 

any of the members by virtue of rights which are not attributable (directly

 

or indirectly) to a pension credit.””

 

Member’s explanatory statement

 

This amendment allows schemes to increase beyond 65 the age at which a pension shared on

 

divorce can first be put into payment but only if the scheme has a normal pension age above 65 for

 

any benefits payable under the scheme.

 



 
 

Public Bill Committee:                               

216

 

, continued

 
 

Steve Webb

 

NC5

 

To move the following Clause—

 

“Duty to act in the best interests of members

 

(1)    

Regulations may impose a duty on the managers of a relevant non-trust based

 

scheme to act in the best interests of members when taking decisions of a

 

specified description.

 

(2)    

In this section “relevant non-trust based scheme” means a non-trust based scheme

 

that is—

 

(a)    

a shared risk scheme, or

 

(b)    

a defined contributions scheme under which any of the benefits that may

 

be provided are collective benefits.

 

(3)    

Regulations under this section—

 

(a)    

may provide for the duty to act in the best interests of members to

 

override obligations that are inconsistent with that duty (including

 

obligations imposed by any instrument, enactment or rule of law), but

 

(b)    

do not otherwise affect any duty that might arise apart from this section.

 

(4)    

Regulations under this section may provide for the consequences of a manager

 

breaching (or threatening to breach) the duty to act in the best interests of

 

members to be the same as the consequences of breaching (or threatening to

 

breach) a fiduciary duty owed by the manager to the members and, accordingly,

 

for the duty to be enforceable in the same way as a fiduciary duty.

 

(5)    

In this section—

 

“collective benefit” has the meaning given by section 19;

 

“defined contributions scheme” has the meaning given by section 4;

 

“non-trust based scheme” means a scheme that is not established under a

 

trust;

 

“shared risk scheme” has the meaning given by section 3.”

 

Member’s explanatory statement

 

This amendment inserts a new power to make regulations which may impose a duty on managers

 

of non-trust based schemes to act in members’ best interests when taking certain specified

 

decisions. This duty may apply in relation to shared-risk schemes and schemes providing collective

 

benefits.

 


 

Steve Webb

 

NC6

 

To move the following Clause—

 

“Collective benefits exempt from indexation

 

(1)    

In section 51 of the Pensions Act 1995 (annual increase in rate of pension)—

 

(a)    

in subsection (1), for “Subject to subsections (6) and (7)” substitute

 

“Subject to subsections (6) to (7A)”;

 

(b)    

after subsection (7) insert—

 

“(7A)    

This section does not apply to any pension, or part of a pension,

 

that is a collective benefit.”


 
 

Public Bill Committee:                               

217

 

, continued

 
 

(2)    

Omit section 21(2) of the Pensions Act 2011, which is no longer needed given

 

subsection (1).”

 

Member’s explanatory statement

 

This text is taken from paragraphs 1 and 2 of Schedule 4 to the Bill, which is left out by amendment

 

40. The effect is unchanged.

 


 

Steve Webb

 

NC7

 

To move the following Clause—

 

“Investment powers

 

(1)    

Regulations may make provision about—

 

(a)    

the investment powers of the trustees or managers of a pension scheme

 

in connection with collective benefit investments;

 

(b)    

their powers to delegate decisions in connection with collective benefit

 

investments (including provision as to liability for delegated decisions);

 

(c)    

the investment powers of any person to whom they have delegated

 

decisions in connection with collective benefit investments.

 

(2)    

The regulations may, in particular—

 

(a)    

make provision corresponding or similar to any provision made by

 

section 34 or 36 of the Pensions Act 1995 (powers of investment and

 

delegation and choice of investments for occupational trust-based

 

schemes);

 

(b)    

disapply those sections in relation to collective benefit investments.”

 

Member’s explanatory statement

 

This replaces clause 24 (which is left out by amendment 45) and contains additional material

 

about investment powers in relation to collective benefits.

 


 

Steve Webb

 

NC8

 

To move the following Clause—

 

“Restriction on borrowing by trustees or managers

 

(1)    

Regulations may prohibit a person to whom this section applies from borrowing

 

money or acting as a guarantor except in specified cases.

 

(2)    

This section applies to—

 

(a)    

the trustees or managers of a pension scheme under which any of the

 

benefits that may be provided are collective benefits, and

 

(b)    

any person to whom they have delegated decisions about collective

 

benefit investments.”

 

Member’s explanatory statement

 

Section 36A of the Pensions Act 1995 contains a similar power in respect of occupational trust-

 

based schemes.

 



 
 

Public Bill Committee:                               

218

 

, continued

 
 

Steve Webb

 

NC9

 

To move the following Clause—

 

“Investment powers: duty of care

 

(1)    

Regulations may make provision to prevent any instrument or agreement from

 

excluding or restricting any liability of the trustees or managers of a pension

 

scheme, or any person to whom they have delegated decisions, in respect of the

 

performance of investment functions involving collective benefit investments.

 

(2)    

The regulations may, in particular—

 

(a)    

make provision corresponding or similar to any provision made by

 

section 33 of the Pensions Act 1995 (duty of care in respect of investment

 

powers for occupational trust-based schemes);

 

(b)    

disapply that section in relation to collective benefit investments.”

 

Member’s explanatory statement

 

This amendment outlines a new regulation-making power to prevent liability being restricted in

 

respect of investment functions in schemes offering collective benefits. The regulations may make

 

corresponding or similar provision to section 33 of the Pensions Act 1995.

 


 

Steve Webb

 

NC10

 

To move the following Clause—

 

“Payment of amounts out of collective benefit funds

 

(1)    

Regulations must prohibit the making of payments out of funds held for the

 

purposes of providing collective benefits except for—

 

(a)    

payments made for the purpose of providing those benefits, or

 

(b)    

other specified payments.

 

(2)    

The regulations may, in particular, make provision corresponding or similar to

 

any provision made by section 37 of the Pensions Act 1995 (payment of surplus

 

to employer in the case of an occupational trust-based scheme).”

 

Member’s explanatory statement

 

The amendment requires regulations to be made preventing payments being made out of funds held

 

for the purposes of providing collective benefits subject to specified exceptions.

 



 
 

Public Bill Committee:                               

219

 

, continued

 
 

Steve Webb

 

NC11

 

To move the following Clause—

 

“Regulations under Part 3: overriding requirements

 

Regulations under this Part may include provision for them to override the

 

provisions of a pension scheme to the extent that there is a conflict.”

 

Member’s explanatory statement

 

The amendment allows regulations to override the scheme rules in cases where there is a conflict.

 


 

Steve Webb

 

NC12

 

To move the following Clause—

 

“Pensions guidance

 

Schedule (Pensions Guidance) contains amendments of the Financial Services

 

and Markets Act 2000, and of other legislation, that are about the giving of

 

pensions guidance to pension scheme members with a right or entitlement to cash

 

balance benefits or other money purchase benefits.”

 

Member’s explanatory statement

 

This amendment introduces the Schedule inserted by NS2.

 


 

Gregg McClymont

 

NC13

 

To move the following Clause—

 

“Scale of pension schemes

 

(1)    

The fiduciary duty of pension scheme trustees shall include a duty to consider

 

whether the scheme has sufficient scale to deliver good value for members.

 

(2)    

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.

 

(3)    

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.

 

(4)    

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.

 

(5)    

The methodology set out in subsection (4) shall be kept under regular review and

 

revised when necessary, subject to further consultation and agreement from the

 

Secretary of State.”.

 



 
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Revised 4 November 2014