Session 2014 - 15
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Other Bills before Parliament


 
 

Public Bill Committee:                               

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, continued

 
 

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).”

 

(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);”.


 
 

Public Bill Committee:                               

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(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.

 


 

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


 
 

Public Bill Committee:                               

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, continued

 
 

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.”

 

(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.

 



 
 

Public Bill Committee:                               

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, continued

 
 

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.

 


 

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.


 
 

Public Bill Committee:                               

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(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.

 


 

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.


 
 

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(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.”.

 


 

Gregg McClymont

 

NC14

 

To move the following Clause—

 

“Fiduciary duty of trustees

 

(1)    

The Secretary of State may by regulations—

 

(a)    

require any pension scheme, which is not already overseen by

 

independent trustees, to appoint a board of independent trustees; and

 

(b)    

set out the powers and dutues of a board appointed under subsection

 

(1)(a).

 

(2)    

Regulations under this section—

 

(a)    

shall be made by statutory instrument, and

 

(b)    

may not be made unless a draft has been laid before and approved by

 

resolution of each House of Parliament.

 

(3)    

The board of independent trustees shall have a fiduciary duty towards members

 

of the scheme overseen by them.

 

(4)    

The fiduciary duty set out in subsection (3) shall take precedence over any duty

 

to—

 

(a)    

the shareholders in, or

 

(b)    

other owners of,

 

    

the operators of the scheme.

 

(5)    

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 analagous

 

bodies.”.

 


 

Gregg McClymont

 

nc15

 

To move the following Clause—

 

“Decumulation

 

(1)    

A qualifying money purchase scheme may not sell annuities directly to anyone

 

who has saved with the scheme unless this is the recommendation of an

 

independent annuity broker. A relevant scheme may provide an independent

 

brokerage service itself. A self-provided annuity brokerage service will be

 

considered independent for the purposes of this Act if the provision of its services

 

is subject to the direction of independent trustees.

 

(2)    

Pension schemes shall ensure that any brokerage service selected or provided

 

meets best practice in terms of providing members with—


 
 

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, continued

 
 

(a)    

an assisted path through the annuity process;

 

(b)    

ensuring access to most annuity providers; and

 

(c)    

minimising costs.

 

(3)    

The standards meeting best practice for annuity brokerage services shall be

 

defined by the Pensions Regulator after public consultation.

 

(4)    

The standards set out in subsection (3) shall be reviewed every three years and, if

 

required, updated.”.

 


 

New ScheduleS

 

Steve Webb

 

NS1

 

To move the following Schedule—

 

“Amendments to do with section (Pension Scheme for Fee-Paid Judges)

 

Pensions (Increase) Act 1971 (c. 56)

 

1          

The Pensions (Increase) Act 1971 is amended as follows.

 

2          

In section 19(2)(a) (extent to Northern Ireland)—

 

(a)    

after “or section” insert “18A or”, and

 

(b)    

after “section 10 of that Act” insert “or provision made under section

 

18A of that Act that is corresponding or similar to the provision that

 

may be made by regulations under section 10 of that Act”.

 

3          

In Schedule 2 (official pensions), after paragraph 4A insert—

 

“4AA      

A pension payable under a scheme made under section 18A of the

 

Judicial Pensions and Retirement Act 1993, other than a pension

 

payable under or by virtue of provision that is corresponding or

 

similar to the provision that may be made by regulations under

 

section 10 of that Act.”

 

Judicial Pensions and Retirement Act 1993 (c. 8)

 

4          

The Judicial Pensions and Retirement Act 1993 is amended as follows.

 

5          

In section 22 (application of the Pensions (Increase) Act 1971 to Northern

 

Ireland), in subsection (2)—

 

(a)    

after “shall include” insert “—

 

(a)    

”;

 

(b)    

at the end insert “; and

 

(b)    

pensions payable under a scheme made under section

 

18A above, other than pensions payable under or by

 

virtue of provision that is corresponding or similar to

 

the provision that may be made by regulations under

 

section 10 above.”

 

6    (1)  

Section 28 (funding arrangements) is amended as follows.,

 

      (2)  

In subsection (2) (benefits payable out of money provided by Parliament), after

 

paragraph (a) (but before the “and” at the end) insert—

 

“(aa)    

any pension or other benefits payable under a scheme made

 

under section 18A above;”.


 
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