Pension Schemes Bill (HC Bill 12)

Pension Schemes BillPage 30

(5) In subsection (5), after “member of” insert “an occupational pension scheme
or”.

(6) In subsection (8), after “In this section—” insert—

  • “guaranteed cash equivalent”, in relation to a member of a
    5scheme who has applied for a statement of entitlement under
    section 93A, means the cash equivalent amount stated in the
    statement of entitlement;.

8 (1) Section 99 (trustees’ duties after exercise of option) is amended as follows.

(2) In subsection (2), for paragraphs (a) to (c) substitute—

(a) 10in the case of a member of a scheme to which section 93A
applies—

(i) within 6 months beginning with the guarantee date,
or

(ii) where the scheme is an occupational pension scheme,
15by the date (if earlier) on which the member attains
normal pension age;

(b) in the case of a member of an occupational pension scheme to
which section 93A does not apply, within 6 months
beginning with the date on which they receive the
20application or (if earlier) by the date on which the member
attains normal pension age;

(c) in the case of a member of a personal pension scheme to
which section 93A does not apply, within 6 months
beginning with the date on which they receive the
25application.

9 Omit the following provisions of the Pensions Act 1995, which are no longer
needed given the earlier provisions of this Schedule—

(a) section 154(1) to (3) and (5);

(b) in Schedule 6, paragraphs 4(a), 5(a) and 6(a).

Section 37

30SCHEDULE 4 Collective benefits: amendments to other legislation

Part 1 Exemption from indexation

1 (1) Section 51 of the Pensions Act 1995 (annual increase in rate of pension) is
35amended as follows.

(2) In subsection (1), for “Subject to subsections (6) and (7)” substitute “Subject
to subsections (6) to (7A)”.

(3) After subsection (7) insert—

(7A) This section does not apply to any pension, or part of a pension, that
40is a collective benefit.

Pension Schemes BillPage 31

2 Omit section 21(2) of the Pensions Act 2011, which is no longer needed given
paragraph 1.

Part 2 Rules about modification of schemes

3 (1) 5Section 67A of the Pensions Act 1995 (the subsisting rights provisions:
interpretation) is amended as follows.

(2) In subsection (3) (meaning of “protected modification”), after paragraph (aa)
(inserted by section 18 of this Act) insert—

(ab) on taking effect would or might result in any subsisting right
10of—

(i) a member of the scheme, or

(ii) a survivor of a member of the scheme,

being replaced with a right or entitlement to collective
benefits under the scheme rules,.

(3) 15In subsection (3)(b), after “rules” insert “, other than a pension that is a
collective benefit”.

(4) In subsection (5)(a), after “(aa)” (inserted by section 18 of this Act) insert “,
(ab)”.

(5) In subsection (6), for the words after paragraph (b) substitute—

20For this purpose—

  • “benefit” and “pension” do not include a collective benefit;

  • “right” includes a pension credit right.

Part 3 Funding provisions

25Duty of Secretary of State to pay unpaid contributions

4 In section 124 of the Pension Schemes Act 1993 (duty of Secretary of State to
pay unpaid contributions to schemes), in subsection (3A) as inserted by
Schedule 1 to this Act, at end the of paragraph (b) insert , or

(c) a shared risk scheme under which all the benefits that may be
30provided are money purchase benefits or collective benefits.

Exemption from employer debt provisions

5 (1) Section 75 of the Pensions Act 1995 (employer debt where deficiency in
assets on winding up etc) is amended as follows.

(2) In subsection (1), after paragraph (a) (exceptions) insert—

(aa) 35a scheme under which all the benefits that may be provided
are collective benefits,

(ab) a scheme under which all the benefits that may be provided
are money purchase benefits or collective benefits, or.

(3) After subsection (1) insert—

(1A) 40Where—

Pension Schemes BillPage 32

(a) some of the benefits that may be provided by a scheme are
collective benefits and some are not, and

(b) the scheme does not fall within paragraph (ab) or (b) of
subsection (1),

5the scheme is to be treated for the purposes of this section as two
separate schemes, one relating to the collective benefits and the other
relating to the other benefits.

Exemption from pension protection provisions

6 (1) Section 126 of the Pensions Act 2004 (schemes eligible for pension
10protection) is amended as follows.

(2) In subsection (1), after paragraph (a) (exceptions) insert—

(aa) is not a scheme under which all the benefits that may be
provided are collective benefits,

(ab) is not a scheme under which all the benefits that may be
15provided are money purchase benefits or collective benefits,
and.

(3) After subsection (1) insert—

(1A) Where—

(a) some of the benefits that may be provided by a scheme are
20collective benefits and some are not, and

(b) the scheme does not fall within paragraph (ab) or (b) of
subsection (1),

the scheme is to be treated for the purposes of this Part as two
separate schemes, one relating to the collective benefits and the other
25relating to the other benefits.

Exemption from scheme funding provisions

7 (1) Section 221 of the Pensions Act 2004 (application of scheme funding rules in
Part 3 of that Act) is amended as follows.

(2) In subsection (1), after paragraph (a) (exceptions) insert—

(aa) 30a scheme under which all the benefits that may be provided
are collective benefits,

(ab) a scheme under which all the benefits that may be provided
are money purchase benefits or collective benefits, or.

(3) After subsection (1) insert—

(1A) 35Where—

(a) some of the benefits that may be provided by a scheme are
collective benefits and some are not, and

(b) the scheme does not fall within paragraph (ab) or (b) of
subsection (1),

40the scheme is to be treated for the purposes of this Part as two
separate schemes, one relating to the collective benefits and the other
relating to the other benefits.

Pension Schemes BillPage 33

(4) In subsection (2), at the end insert “, but for the purposes of subsection
(1A)(b) a scheme falls within subsection (1)(b) only if it is exempt from all of
the provisions of this Part.”

Part 4 5Payment schedules etc

8 (1) Section 87 of the Pensions Act 1995 (schedules of payments to money
purchase schemes) is amended as follows.

(2) For subsection (1) substitute—

(1) This section applies to an occupational pension scheme that is a
10scheme under which —

(a) all the benefits that may be provided are money purchase
benefits, or

(b) all the benefits that may be provided are money purchase
benefits or collective benefits,

15 other than a scheme falling within a prescribed class or description.

(3) In subsection (2)(a), after “members of the scheme” insert “in respect of
money purchase benefits”.

(4) In the heading, for “to money purchase schemes” substitute “in respect of
money purchase benefits under certain schemes”.

9 20For the italic cross-heading above section 87 of the Pensions Act 1995
substitute “Schemes providing money purchase benefits”.

10 In the heading to section 88 of the Pensions Act 1995 (schedules of payments
to money purchase schemes: supplementary), for “to money purchase
schemes” substitute “in respect of money purchase benefits under certain
25schemes”.

11 In section 17 of the Pensions Act 2004 (power of the Regulator to recover
unpaid contributions), in subsection (3)—

(a) in paragraph (b) of the definition of “due date”, for “to money
purchase schemes” substitute “in respect of money purchase benefits
30under certain schemes”;

(b) in paragraph (a) of the definition of “employer contribution”, for “to
money purchase schemes” substitute “in respect of money purchase
benefits under certain schemes”.

12 In section 90 (codes of practice), in subsection (2)(i), for “money purchase
35schemes” substitute “certain schemes”.

Part 5 Amendments of interpretation provisions

13 In section 124 of the Pensions Act 1995 (interpretation), in subsection (1), at
the appropriate place insert—

ERROR:This is very likely an error in markup in the FM document. Amendments generally should not occur nested in this manner [\t\t\xd2 \xd2 collective benefit\xd3 has the meaning given by section 19 of the Pension Schemes Act 2014;\xd3 . ]
  • 40“collective benefit” has the meaning given by section 19 of the
    Pension Schemes Act 2014;.

14 In section 318 of the Pensions Act 2004 (interpretation), in subsection (1), at

Pension Schemes BillPage 34

the appropriate place insert—

  • “collective benefit” has the meaning given by section 19 of the
    Pension Schemes Act 2014;.