House of Commons Public Bill Committee Proceedings

Session 2014 - 15
Internet Publications
Other Bills before Parliament

25

House of Commons

Tuesday 4 November 2014

Public Bill Committee Proceedings

Pension Schemes Bill

[NinTH AND TenTH sittings]

Steve Webb

Agreed to  58

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

Schedule (Pensions guidance)”

Clause, as amended, Agreed to.

Clause 45 Agreed to.

Clause 14 Agreed to.

NEW CLAUSES

Steve Webb

Agreed to  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.”

Steve Webb

Agreed to  Nc2

To move the following Clause—

:
26

, continued

“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”.”

Steve Webb

Agreed to  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).”

(2)
Schedule (Amendments to do with section (Pension scheme for fee-paid judges))

contains related amendments.”

Steve Webb

Agreed to  NC4

To move the following Clause—

:
27

, continued

“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.””

Steve Webb

Agreed to  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.

:
28

, continued

(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.”

Steve Webb

Agreed to  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).”

Steve Webb

Agreed to  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.”

:
29

, continued

Steve Webb

Agreed to  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.”

Steve Webb

Agreed to  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.”

Steve Webb

Agreed to  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).”

:
30

, continued

Steve Webb

Agreed to  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.”

Steve Webb

Agreed to  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.”

Gregg McClymont

Withdrawn  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.”.

Gregg McClymont

Negatived on division  NC14

To move the following Clause—

:
31

, continued

“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

Negatived on division  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—

(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.”.



© Parliamentary copyright	Revised 5 November 2014